FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-707
KANSAS CITY POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
Missouri 44-0308720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Walnut Street
Kansas City, Missouri 64106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 816-556-2200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Cumulative Preferred Stock New York Stock Exchange
par value $100 per share -
3.80%, 4.50%, 4.35%
Common Stock without par value New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. Yes X No
On March 23, 1995, the Company had 61,902,078 outstanding shares of common stock
without par value, and the aggregate market value (based upon the closing price
of these shares on the New York Stock Exchange) of voting securities held by
nonaffiliates of the Company was approximately $1,369,583,476.
Documents Incorporated by Reference
Portions of the Company's 1995 Notice of Annual Meeting of Stockholders and
Proxy Statement are incorporated by reference in Part III of this report.
<PAGE>
TABLE OF CONTENTS
Page
Number
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . 1
The Company . . . . . . . . . . . . . . . . . . . 1
Regulation . . . . . . . . . . . . . . . . . . . . 1
Rates . . . . . . . . . . . . . . . . . . . 1
Environmental Matters. . . . . . . . . . . . 2
Air. . . . . . . . . . . . . . . . . . . . . 2
Water. . . . . . . . . . . . . . . . . . . . 2
Waste Disposal . . . . . . . . . . . . . . . 2
Fuel Supply. . . . . . . . . . . . . . . . . . . . 3
Coal . . . . . . . . . . . . . . . . . . . . 3
Nuclear. . . . . . . . . . . . . . . . . . . 3
High-Level Waste . . . . . . . . . . . 4
Low-Level Waste . . . . . . . . . . . . 4
Employees . . . . . . . . . . . . . . . . . . . . 4
Subsidiaries . . . . . . . . . . . . . . . . . . . 5
Officers of the Registrant . . . . . . . . . . . . 5
Company Officers . . . . . . . . . . . . . . 5
KLT Inc. Officers. . . . . . . . . . . . . . 6
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . 6
Generation Resources . . . . . . . . . . . . . . . 6
Transmission and Distribution Resources . . . . . 7
General . . . . . . . . . . . . . . . . . . . . . 7
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote of Security Holders. . . 8
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . 8
Market Information . . . . . . . . . . . . . . . . 8
Holders. . . . . . . . . . . . . . . . . . . . . . 8
Dividends. . . . . . . . . . . . . . . . . . . . . 8
Item 6. Selected Financial Data . . . . . . . . . . . . . . . .10
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . .10
Item 8. Financial Statements . . . . . . . . . . . . . . . . . .18
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . .38
Item 10. Directors and Executive Officers of the Registrant . . .38
Item 11. Executive Compensation . . . . . . . . . . . . . . . . .38
Item 12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . .38
Item 13. Certain Relationships and Related Transactions . . . . .38
Item 14. Exhibits and Reports on Form 8-K . . . . . . . . . . . .39
<PAGE>
PART I
ITEM 1. BUSINESS
The Company
Kansas City Power & Light Company (Company) was incorporated in
Missouri in 1922 and is headquartered in downtown Kansas City, Missouri.
The Company is a medium-sized public utility engaged in the generation,
transmission, distribution and sale of electricity to over 424,000
customers in a 4,700 square mile area located in all or portions of 23
counties in western Missouri and eastern Kansas. About two-thirds of the
total retail kilowatt-hour sales and revenue are from Missouri customers
and the remainder from Kansas customers. Customers include 372,000
residences, 50,000 commercial firms, 2,000 industries, 12 municipalities
and 32 other electric utilities. Retail revenues in Missouri and Kansas
accounted for approximately 90% of the Company's total revenues in 1994.
Wholesale firm power, bulk power sales and miscellaneous electric revenues
accounted for the remainder of revenues. The Kansas City metropolitan
area, from which about 95% of the Company's retail revenues are derived,
is an agribusiness center and a major regional commercial center for
wholesale, retail and service companies.
The Company as a regulated utility does not have direct competition
for retail electric service in its service territory; however, there is
competition in the generation of electricity and between electric and gas
as an energy source.
KLT Inc., a wholly-owned subsidiary of the Company, was formed in
1992 as a holding company for various non-regulated business
opportunities. See "Subsidiaries" on page 5 of this report. The Company
also owns 47% of Wolf Creek Nuclear Operating Corporation, the operating
company for the Wolf Creek Generating Station (Wolf Creek).
Regulation
The Company is subject to the jurisdiction of the Public Service
Commission of the State of Missouri (MPSC), the State Corporation
Commission of the State of Kansas (KCC), the Federal Energy Regulatory
Commission (FERC), the Nuclear Regulatory Commission (NRC) and certain
other governmental regulatory bodies as to various phases of its
operations, including rates, service, safety and nuclear plant operations,
environmental matters and issuances of securities.
Rates
The Company's retail electric rates are regulated by the MPSC and KCC
for sales within the respective states of Missouri and Kansas. FERC
approves the Company's rates for wholesale bulk electricity sales. Firm
electric sales are made by contractual arrangements between the entity
being served and the Company.
The Company has not increased any of its retail or wholesale rates
since 1988. Pursuant to a stipulation and agreement with the MPSC, the
Company reduced Missouri retail rates by about 2.7 percent effective
January 1, 1994 and agreed to a moratorium through 1995 on the filing of
general retail rate increases or decreases in Missouri.
Environmental Matters
The Company, like other electric utilities, is subject to regulation
by various federal, state and local authorities with respect to air and
water emissions, waste disposal and other environmental matters.
Environmental regulations and standards are subject to continual review
and the Company cannot presently estimate any additional cost of meeting
such new regulations or standards which might be established in the
future, nor can it estimate the possible effect which any new regulations
or standards could have upon its operations. However, the Company
currently estimates that expenditures necessary to comply with
environmental regulations during 1995 will not be material with the
possible exceptions set forth below.
Air
The Clean Air Act Amendments of 1990 (Act) contain acid rain, air
toxic and permitting provisions that affect the Company. The acid rain
provisions established a two-phase utility pollution control program for
reducing national SO2 emissions by 10 million tons and Nox emissions by
2 million tons from 1980 levels. Compliance required the Company to
install continuous emission monitoring equipment (CEM) at all of its coal-
fired electric generating facilities. The Company has completed the
installation task and is currently involved with certifying this
equipment. As of December 31, 1994, the Company had spent $3.6 million of
a budgeted $5.245 million on this project. The Clean Air Act also calls
for a study by the Environmental Protection Agency (EPA) of certain toxic
emissions into the air. Based on the outcome of these studies, regulation
of certain air toxic emissions, including mercury, could be required in
the future. This study is scheduled to be completed in November of 1995.
A final provision of the Act establishes a state operating permit program
and annual state emission fees. Compliance costs and emission fees for
meeting the requirements of this program are estimated at $500,000
annually.
Water
The Company commissioned an environmental assessment of its Northeast
Station and of its Spill Prevention Control and Countermeasure plan as
required by the Clean Water Act. The assessment revealed contamination of
the site by petroleum products, heavy metals, volatile and semi-volatile
organic compounds, asbestos, pesticides and other regulated substances.
Based upon studies and discussions with Burns & McDonnell, the cost of the
cleanup could range between $1.5 million and $6 million.
Also, groundwater analysis has indicated that certain volatile
organic compounds are moving through the Northeast site, just above
bedrock, from unidentified sources off-site. The Missouri Department of
Natural Resources (MDNR) was notified of the possible release of petroleum
products and the presence of volatile organic compounds moving under the
site. Monitoring and removal of free petroleum products continues at the
site. MDNR has concluded that the volatile organic compounds originated
from a source off-site. MDNR stated it will continue to investigate the
source of the compounds. Because the Company believes it will not have
liability in this matter, it has not performed a study regarding the
possible cost of remediation of the flow of organic compounds.
Waste Disposal
The Comprehensive Environmental Response, Compensation and Liability
Act (Superfund) established joint and several liability for persons and
entities that generate, transport or deposit hazardous waste at
contaminated sites, as well as the current owners of such sites and
predecessors in title since the time such sites were contaminated.
Interstate Power Company of Dubuque, Iowa (Interstate) filed a
lawsuit in 1989 against the Company in the Federal District Court for the
District of Iowa seeking from the Company contribution and indemnity under
the Superfund for cleanup costs of hazardous substances at the site of a
demolished gas manufacturing plant in Mason City, Iowa. The plant was
operated by the Company for very brief periods of time before the plant
was demolished in 1952. The site and all other properties the Company
owned in Iowa were sold to Interstate in 1957. On November 3, 1994, KCPL
filed a feasibility study of potential remediation techniques for the site
with the U. S. Environmental Protection Agency (EPA). EPA subsequently
proposed that the contaminated soil should be incinerated. The court has
set the issue of the allocation among the parties of cleanup costs for
trial in September 1995. Management believes that its share of the
estimated $8 million clean-up costs will be between $1 million to $3
million.
Fuel Supply
The Company's principal sources of fuel for electric generation are
coal and nuclear fuel. These fuels are expected to satisfy over 99% of
the 1995 fuel requirements with the remainder provided by other sources
including natural gas, oil and steam. The 1994 and estimated 1995 fuel
mix, based on total Btu generation, are as follows:
Estimated
1994 1995
Coal 75.4% 71.4%
Nuclear 24.2% 28.1%
Other 0.4% 0.5%
The fuel mix varies depending on the operation of Wolf Creek which
requires a refueling and maintenance outage about every 18 months. The
plant's next refueling and maintenance outage is scheduled for the spring
of 1996.
Coal
The Company's average cost per million Btu of coal burned, excluding
fuel handling costs, was $0.89 in 1994, $0.96 in 1993 and $1.02 in 1992.
The Company's cost of delivered coal is about two-thirds that of the
regional average.
During 1995, approximately 10.6 million tons of coal (7.1 million
tons, Company's share) are projected to be burned at the Company's
generating units, including jointly-owned units. The Company has entered
into coal-purchase contracts with various suppliers in Wyoming's Powder
River Basin, the nation's principal supplier of low-sulfur coal. These
contracts, with expiration dates ranging from 1996 through 2003, will
satisfy approximately 95% of the projected coal requirements for 1995, 70%
for 1996 and 1997, and 20% thereafter.
Nuclear
The Wolf Creek Nuclear Operating Corporation (WCNOC), which operates
Wolf Creek, has on hand or under contract 63% of the uranium required to
operate Wolf Creek through the year 2001, and the balance is expected to
be obtained through open market or contract purchases.
Contracts are in place for 100% of Wolf Creek's uranium fuel
enrichment services requirements for 1995-1997, 90% of such requirements
for 1998-1999, and 95% of such requirements for 2000-2001, 0% for 2002-
2004, and 100% for 2005-2014. The balance of the requirements is expected
to be obtained through a combination of open market and contract
purchases.
Contracts are in place for the conversion of sufficient uranium to
uranium hexaflouride to meet Wolf Creek's uranium fuel requirements
through 1996 as well as for the fabrication of uranium fuel assemblies to
meet Wolf Creek's requirements through 2012.
High-Level Waste
The Nuclear Waste Policy Act of 1982 established schedules,
guidelines and responsibilities for the United States Department of Energy
(DOE) to develop and construct repositories for the ultimate disposal of
spent nuclear fuel and nuclear high-level waste. A permanent disposal
site may not be available for the industry until 2010 or later, although
an interim facility may be available earlier. Once a permanent site is
available, the DOE will require spent nuclear fuel to be accepted on a
priority basis with the owners of the oldest spent fuel given the highest
priority. As a result, disposal services for Wolf Creek may not be
available prior to 2027. Wolf Creek contains a temporary on-site spent
nuclear fuel storage facility which, under current regulatory guidelines,
provides space for the storage of spent nuclear fuel from plant operation
until approximately 2006, while still maintaining full core off-load
nuclear fuel storage capability. The Company believes adequate additional
temporary storage space for Wolf Creek's nuclear waste can be obtained, as
necessary.
Low-Level Waste
The Low-Level Radioactive Waste Policy Amendments Act of 1985
mandated that the various states, individually or through interstate
compacts, develop alternative low-level radioactive waste disposal
facilities. The states of Kansas, Nebraska, Arkansas, Louisiana and
Oklahoma formed the Central Interstate Low-Level Radioactive Waste Compact
and selected a site in northern Nebraska to locate a disposal facility.
The present estimate of the cost for such a facility is about $147
million. WCNOC and the owners of the other five nuclear units in the
compact have provided most of the pre-construction financing for this
project. To date, the compact has spent in excess of $64 million, of
which $9.5 million was WCNOC's share.
There is uncertainty as to whether this project will be completed.
Significant opposition to the project has been raised by the residents in
the area of the proposed facility and attempts have been made through
litigation and proposed legislation to slow down or stop development of
the facility. WCNOC has expanded its on-site temporary storage capacity
in order to handle its low-level radioactive waste until such time as a
disposal facility becomes available.
Employees
At December 31, 1994, the Company had 2,355 employees (including
temporary employees), 1,570 of which were represented by three local
unions of the International Brotherhood of Electrical Workers (IBEW).
Included in the total number of employees are 304 located at LaCygne
Generating Station (LaCygne), 50% of whose services are attributable to
Kansas Gas and Electric Company for its 50% share of LaCygne, and 130
located at Iatan Generating Station (Iatan), 30% of whose services are
attributable to St. Joseph Light & Power Company and the Empire District
Electric Company for their 18% and 12% shares of Iatan, respectively. The
Company has labor agreements with Local 1613, representing clerical
employees (which expires March 29, 1996), with Local 1464, representing
outdoor workers (which expires January 8, 1997), and with Local 412,
representing power plant workers (which expires February 28, 1998). The
Company is also a 47% owner of WCNOC, which employs 1,184 persons to
operate Wolf Creek, 310 of which are represented by the IBEW.
Subsidiaries
KLT Inc. had four wholly-owned subsidiaries as of December 31, 1994,
which included KLT Investments Inc., a passive investor in affordable
housing tax credit investments; KLT Energy Services Inc., a partner in an
energy management services business; KLT Power Inc., a participant in
independent power and cogeneration projects; and KLT Gas Inc., formed in
1994 to participate in oil and gas reserves and exploration. Since
December 31, 1994, two additional subsidiaries have been incorporated.
They are KLT Investments II Inc., which was formed to make additional
passive investments in economic and community-development and energy-
related fields, and KLT Telecom Inc., which will take advantage of
investment opportunities in telecommunications and fiber optics. KCPL's
equity investment in KLT Inc. at December 31, 1994, was $37 million.
Officers of the Registrant
Company Officers
Year Named
Name Age Positions Currently Held Officer
Drue Jennings 48 Chairman of the Board, President 1980
and Chief Executive Officer
Marcus Jackson 43 Senior Vice President-Power Supply 1989
J. Turner White 46 Senior Vice President-Retail 1990
Services
Frank L. Branca 47 Vice President-Wholesale and 1989
Transmission Services
Steven W. Cattron 39 Vice President-Marketing and 1994
Regulatory Affairs
Charles R. Cole 48 Vice President-Customer Services 1990
John J. DeStefano 45 Vice President-Finance and 1989
Treasurer
Jeanie Sell Latz 43 Vice President-Law and Corporate 1991
Secretary
Douglas M. Morgan 52 Vice President-Technical Services 1995
Richard A. Spring 40 Vice President-Production 1994
Bailus M. Tate 48 Vice President-Human Resources 1994
Neil Roadman 49 Controller 1980
Mark C. Sholander 49 General Counsel and Assistant 1986
Secretary
KLT Inc. Officers
Year Named
Name Age Positions Currently Held Officer
Bernard J. Beaudoin 54 President 1992
Ronald G. Wasson 50 Executive Vice President 1995
Floyd R. Pendleton 51 Vice President-Business 1992
Development
Mark G. English 43 Vice President and General 1995
Counsel
Janee C. Rosenthal 33 Corporate Secretary and Treasurer 1992
All of the foregoing persons have been officers of the Company or
employees in a responsible position with the Company for the past five
years except for Mr. Spring. Mr. Spring was an employee of the Company
from 1978 to 1993, when he left the Company to join Northern Indiana
Public Service Company as Director of Electric Production. In July 1994,
he rejoined the Company as Vice President-Production.
The term of office of each officer commences with his or her
appointment by the Board of Directors and ends at such time as the Board
of Directors may determine.
ITEM 2. PROPERTIES
Generation Resources
The Company's generating facilities consist of the following:
Estimated
1995
Year Megawatt(mw)
Unit Completed Capacity Fuel
Existing Units
Base Load..Wolf Creek(a) 1985 548(b) Nuclear
Iatan 1980 469(b) Coal
LaCygne 2 1977 331(b) Coal
LaCygne 1 1973 341(b) Coal
Hawthorn 5 1969 457 Coal/Gas
Montrose 3 1964 161 Coal
Montrose 2 1960 152 Coal
Montrose 1 1958 150 Coal
Peak Load..Northeast 13 and 14(c) 1976 112 Oil
Northeast 17 and 18(c) 1977 108 Oil
Northeast 15 and 16(c) 1975 111 Oil
Northeast 11 and 12(c) 1972 99 Oil
Grand Avenue (2 units) 1929 & 1948 64 Gas
Total 3,103
(a) This unit is one of the Company's principal generating facilities
and has the lowest fuel cost of any of its generating facilities.
Any extended shutdown of the unit for any reason could have a
substantial adverse effect on the operations of the Company and
its financial condition.
(b) Company's share of jointly-owned unit.
(c) Combustion turbines.
The Company's maximum system net hourly peak load of 2,819 mw
occurred on August 17, 1993. The maximum winter peak load of 1,829 mw
occurred on December 21, 1989. The accredited generating capacity of the
Company's electric facilities in the summer (when peak loads are
experienced) of 1994 under MOKAN Power Pool standards was 3,098 mw.
The Company owns the Hawthorn Station (Jackson County, Missouri),
Montrose Station (Henry County, Missouri), Northeast Station (Jackson
County, Missouri) and two Grand Avenue Station turbine generators (Jackson
County, Missouri). The Company also owns 50% of the 682-mw LaCygne 1 Unit
and 662-mw LaCygne 2 Unit in Linn County, Kansas; 70% of the 670-mw Iatan
Station in Platte County, Missouri; and 47% of the 1,167 mw Wolf Creek in
Coffey County, Kansas.
The Company has entered into a contract with Siemens Power
Corporation for the purchase of a V.84.3A combustion turbine-generator, to
be installed by the year 1997, with an anticipated accredited capacity of
approximately 136 mw.
Transmission and Distribution Resources
The Company's electric transmission system is interconnected with
systems of other utilities to permit bulk power transactions with other
electricity suppliers in Kansas, Missouri, Iowa, Nebraska and Minnesota.
The Company is a member of the MOKAN Power Pool, which is a contractual
arrangement among eleven utilities in western Missouri and Kansas which
interchange electric energy, share reserve generating capacity, and
provide emergency and standby electricity services to each other.
The Company owns approximately 1,700 miles of transmission lines and
approximately 8,900 miles of overhead distribution lines, and
approximately 2,900 miles of underground distribution lines. The Company
has all franchises necessary to sell electricity within the territories
from which substantially all of its gross operating revenue is derived.
General
The Company's principal plants and properties, insofar as they
constitute real estate, are owned in fee; certain other facilities are
located on premises held under leases, permits or easements; and its
electric transmission and distribution systems are for the most part
located over or under highways, streets, other public places or property
owned by others for which permits, grants, easements or licenses (deemed
satisfactory but without examination of underlying land titles) have been
obtained.
Substantially all of the fixed property and franchises of the
Company, which consists principally of electric generating stations,
electric transmission and distribution lines and systems, and buildings
(subject to exceptions and reservations) are subject to a General Mortgage
Indenture and Deed of Trust dated as of December 1, 1986.
ITEM 3. LEGAL PROCEEDINGS
Inter-City Beverage Co., Inc. et. al vs. Kansas City Power & Light Company
On August 13, 1993, a lawsuit was filed by nine customers in the
Circuit Court of Jackson County, Missouri against the Company. The suit
alleged the misapplication of certain of the Company's electric rate
tariffs resulting in overcharges to industrial and commercial customers
which have been provided service under those tariffs and requested
certification as a class action. On December 3, 1993, the Court dismissed
the matter for lack of subject matter jurisdiction. Plaintiffs appealed
to the Missouri Court of Appeals, Western District. The Court of Appeals
upheld the dismissal. Plaintiffs then filed a motion to transfer the case
with the Missouri Supreme Court. The motion was denied on January 24,
1995.
See "Environmental Matters - Waste Disposal" on page 3 and "Notes to
Consolidated Financial Statements - Tax Matters" on page 32 of this
report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information:
(1) Principal Market:
Common Stock of the Company is listed on the New York Stock
Exchange and the Chicago Stock Exchange.
(2) Stock Price Information:
Common Stock Price Range
1994 1993
Quarter High Low High Low
First $23-1/4 $20-5/8 $25-1/8 $22
Second 23 18-5/8 25-1/4 23-1/2
Third 22-1/2 19-1/4 26-1/4 24-3/8
Fourth 23-7/8 21-1/8 25 21-3/4
Holders:
At December 31, 1994, the Company's Common Stock was held by 31,613
shareholders of record.
Dividends:
Common Stock dividends were declared as follows:
Quarter 1995 1994 1993
First $0.38 $0.37 $0.36
Second 0.37 0.36
Third 0.38 0.37
Fourth 0.38 0.37
The Company's Restated Articles of Consolidation contains certain
restrictions on the payment of dividends on the Company's Common
Stock.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31
1994 1993 1992 1991 1990
(thousands)
Operating revenues $ 868,272 $ 857,450 $ 802,668 $ 825,101 $ 815,570
Net income $ 104,775 $ 105,772 $ 86,334 $ 103,893 $ 102,732
Earnings per common
share $ 1.64 $ 1.66 $ 1.35 $ 1.58 $ 1.56
Total assets at
year-end $2,770,397 $2,755,068 $2,646,923 $2,615,039 $2,598,859
Total redeemable
preferred stock and
long-term debt
(including current
maturities) $ 833,485 $ 869,908 $ 816,625 $ 824,756 $ 852,645
Cash dividends per
common share $ 1.50 $ 1.46 $ 1.43 $ 1.37 $ 1.31
Ratio of earnings to
fixed charges 4.07 3.80 3.12 3.22 2.96
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
REGULATION AND COMPETITION
The electric utility industry is currently undergoing fundamental changes
in response to increasing competition. To achieve its desired market position
in this changing environment, the Company continues to modify its business
processes to operate more efficiently and cost effectively, and is developing
energy related businesses through its subsidiary, KLT Inc. In order to take
advantage of opportunities presented through increased competition, the
Company may, from time to time, consider various business strategies including
partnerships, acquisitions, combinations, additions to or dispositions of
service territory, and restructuring of wholesale and retail businesses.
The National Energy Policy Act of 1992 (NEPA) gave the Federal Energy
Regulatory Commission (FERC) the authority to require electric utilities to
provide wholesale transmission line access (wholesale wheeling) to independent
power producers (IPPs) and other utilities. Although NEPA prohibits FERC from
ordering retail wheeling (allowing retail customers to select a different
power producer and use the transmission facilities of the host utility to
deliver the energy), it does not prevent the state commissions from doing so.
The state commissions however, may be preempted by other provisions of the
Federal Power Act or relevant provisions of state laws.
<PAGE>
Although the Missouri Public Service Commission (MPSC) and the Kansas
Corporation Commission (KCC) have not changed regulatory policy relating to
mandated wholesale or retail competition, certain other state commissions are
actively planning the transition to a competitive environment. If retail
wheeling were allowed or mandated, the competition would present growth
opportunities for low-cost energy producers and risks for higher-cost
producers with large industrial customers able to select less expensive
providers. The loss of major customers could result in under-utilized assets
(stranded investment) placing a costly burden on the remaining customer base
or shareholders. The Company believes it is positioned well and has a diverse
customer mix with less than 16% of total sales derived from industrial
customers as compared to the utility average of approximately 35%. Its
industrial rates are competitively priced compared to the regional average and
its rate structure allows flexibility in setting rates. In addition, long-
term contracts are in place or under negotiation for a significant portion of
the Company's industrial sales.
Increased competition could also force utilities to change accounting
methods. Financial Accounting Standards Board (FASB) Statement No. 71-
Accounting for Certain Types of Regulation, applies to regulated entities
whose rates are designed to recover the costs of providing service. An
entity's operations could cease to meet the requirements of FASB 71 for
various reasons, including a change in regulation or a change in the
competitive environment for a company's regulated services. For those
operations no longer meeting the requirements of regulatory accounting,
regulatory assets would be written off and other assets adjusted and evaluated
for impairment. In a competitive environment, asset recoverability would be
determined using market-based rates which could be lower than traditional
cost-based rates. The Company has not had direct competition for retail
electric service in its service territory although there has been competition
in the bulk power market and between alternative fuels. See Note 1 to the
Consolidated Financial Statements for a discussion of the Company's regulatory
assets which will be maintained as long as the Company continues to meet the
requirements of FASB 71.
NON-REGULATED OPPORTUNITIES
KLT Inc. was formed in 1992 as a holding company to pursue non-regulated,
energy related business ventures to supplement the growth from electric
utility operations. KLT Inc. has invested in the following wholly-owned, non-
regulated subsidiaries: KLT Power Inc. (non-regulated power production), KLT
Energy Services Inc. (energy services including energy audits and efficient
equipment), KLT Gas Inc. (oil and gas reserves), and KLT Investments Inc.
(passive investment opportunities including affordable housing limited
partnerships). As of December 31, 1994, the consolidated assets of KLT Inc.
totaled approximately $90 million, including capital contributions from Kansas
City Power & Light Company of $37 million. Management anticipates total
subsidiary assets of up to $800 million within the next 10 years, consisting
of approximately $200 million in equity investment from Kansas City Power &
Light Company and the remainder through subsidiary borrowings.
<PAGE>
KILOWATT-HOUR (KWH) SALES AND ELECTRIC OPERATING REVENUES
Sales and revenue data:
Increase (Decrease) from Prior Year
1994 1993
Kwh Revenues Kwh Revenues
(millions) (millions)
Retail sales:
Residential 2 % $ 1 13 % $ 30
Commercial 3 % 1 3 % 9
Industrial 2 % (5) 3 % 3
Other (4)% - 1 % -
Total retail 2 % (3) 6 % 42
Sales for resale:
Bulk power sales 27 % 15 27 % 13
Other (20)% (1) 5 % -
Total operating revenues $ 11 $ 55
Effective January 1, 1994, Missouri retail rates were reduced 2.66%, or
approximately $12.5 million annually, resulting from the end of the Wolf Creek
Generating Station (Wolf Creek) rate phase-in amortization. Other tariffs
have not changed materially since 1988. However, the amortization of the
Regulatory Asset-Deferred Wolf Creek Costs ends in 1996 and may result in
future rate adjustments. By agreement with the MPSC and public counsel, none
of the parties can unilaterally file for a general increase or decrease in
Missouri retail rates to be effective prior to January 1, 1996. Approximately
two-thirds of the Company's retail sales are to Missouri customers.
Despite the Missouri rate reduction, residential and commercial revenues
increased in 1994 reflecting load growth and more normal weather patterns
compared to 1993 and 1992. Based on cooling degree days above 65 degrees
Fahrenheit, summer temperatures remained below normal for the third
consecutive year, although 1994 temperatures increased slightly over the mild
temperatures of 1993 and significantly over the abnormally cool temperatures
of 1992.
While industrial kwh sales continued to increase, 1994 industrial
revenues decreased from 1993 reflecting the 2.66% Missouri rate reduction,
customized long-term sales contracts and additional load management
curtailment credits. The Company has entered into long-term sales contracts
with major industrial customers to respond to their needs in return for their
commitment to purchase energy from the Company. Long-term contracts are in
place or under negotiation for a significant portion of the Company's
industrial sales. Curtailment credits were granted to certain industrial
customers in exchange for reduced energy consumption during peak periods.
Both programs have enhanced the Company's competitive position and improved
overall power generating efficiencies and load factors, while boosting
consumption and providing short-term and long-term capacity savings.
Increases in bulk power sales during 1994 and 1993 reflect higher unit
availability and greater emphasis on new interchange markets.
Total revenue per kwh sold varies with changes in the mix of kwh sales
among customer classifications and the effect on certain classifications of
declining price per kwh as usage increases. An automatic fuel adjustment
provision applies to less than 1% of revenues.
<PAGE>
Future kwh sales and revenues per kwh will be affected by national and
local economic conditions, weather conditions and customer conservation
efforts. Competitive forces, including alternative sources of energy such as
natural gas, cogeneration, IPPs and other electric utilities, may also affect
future sales and revenue. The level of bulk power sales in the future will
depend upon system requirements, generating unit availability, fuel costs and
the requirements of other electric systems.
FUEL AND PURCHASED POWER
Although combined fuel and purchased power costs have increased since
1992 to support additional sales, the price of delivered coal has decreased
more than 13% during that time. This decrease is due largely to reduced
freight rates and favorable spot market conditions during recent years. Spot
market purchases have allowed the Company to acquire coal at prices below
long-term contract rates. However, due to increasing demand for low-sulfur
coal, the Company is again securing a larger percentage of coal through
medium-term agreements. The cost of nuclear fuel has increased more than 10%
since 1992. Based on contract prices and projected future spot market prices,
the cost of nuclear fuel is expected to increase from its current level of 40%
to roughly 50% of the price of coal by 1996. Coal accounts for approximately
75% of generation and nuclear fuel about 25%.
Increases in fuel costs during 1994 and 1993 were also partially offset
by lower replacement power expenses associated with Wolf Creek outages
(including the ongoing accrual discussed in Note 1 to the Consolidated
Financial Statements-Wolf Creek Refueling Outage Costs). Replacement power
expenses for 1994 decreased $2 million from 1993 reflecting Wolf Creek's 47
day refueling and maintenance outage versus the 73 day refueling outage in
1993. The 1993 expenses decreased $6 million from 1992 when the unit
experienced unexpected outages.
The Company has entered into capacity purchase contracts to provide a
cost-effective alternative to constructing new capacity. These purchases,
included in purchased power, have increased from $7 million in 1992 to
$13 million in 1994.
OTHER OPERATION AND MAINTENANCE EXPENSES
Other operation expenses for 1994 increased over 1993 due primarily to
the costs associated with a voluntary early retirement program. The Company
expensed $22.5 million ($0.22 per share) during 1994 representing total
program costs. These costs were partially offset by the savings from reduced
payroll and benefits after the June 30, 1994 retirements. Savings are
expected to offset the program costs in less than two years.
Other operation expenses increased during 1993 reflecting increased
generating plant production expenses and higher levels of administrative and
general expenses. These increases are due mainly to increased wages and
employee benefits, and the accrual of postretirement benefits which began in
1993 (see Note 2 to the Consolidated Financial Statements).
The Company continues to place increased emphasis on new technologies,
improved methods and cost control. Processes are being changed to provide
increased efficiencies and improved operations. Through the use of cellular
technology, a majority of customer meters will be read automatically by the
end of 1996. These types of changes have allowed the Company to assimilate
work performed by those who elected to participate in the early retirement
program.
<PAGE>
GENERAL TAXES
Components of general taxes (in thousands):
1994 1993 1992
Property taxes $ 46,895 $ 45,545 $ 44,300
Gross receipts taxes 40,397 40,659 39,232
Other general taxes 9,070 9,455 8,929
Total general taxes $ 96,362 $ 95,659 $ 92,461
Increases in property taxes since 1992 reflect increases in state and
local tax levies and assessments. Gross receipts tax varies directly with
Missouri billed revenues.
OTHER INCOME AND DEDUCTIONS
The 1994 income tax benefit includes amounts related to corporate-owned
life insurance contracts, and tax benefits resulting from affordable housing
credits and interest deductions. Miscellaneous for 1992 includes gains from
the sale of property and other contract settlements.
INTEREST CHARGES
Declines in long-term interest expense since 1992 reflect lower average
interest rates and the retirement, repayment or refinancing of debt. The
Company's average interest rate on long-term debt, including current
maturities, declined to 5.4% in 1994 compared to 6.0% in 1993 and 6.6% in
1992.
Variances in short-term interest expense reflect the changing levels of
short-term debt outstanding. The average daily outstanding balance of short-
term debt was $23, $16 and $60 million in 1994, 1993, and 1992, respectively.
EARNINGS PER SHARE (EPS)
EPS for 1994 decreased only $0.02 from 1993 despite the one-time
$22.5 million ($0.22 per share) impact of the voluntary early retirement
program (see Note 2 to the Consolidated Financial Statements).
Summer temperatures remained below normal in 1994 and 1993, despite an
increase in both years over the abnormally cool summer temperatures of 1992.
Based on a statistical relationship between kwh sales and the differences in
actual and normal temperatures for the year, the effects of abnormal weather
for the last three years were estimated as follows:
1994 1993 1992
Estimated decrease in EPS
due to abnormal weather $ (0.07) $ (0.10) $ (0.35)
Compared to the prior year, EPS for 1994 and 1993 also reflects
increasing bulk power sales, decreasing delivered coal costs, and lower
average interest rates resulting from the refinancing of a significant portion
of long-term debt. Both years reflect heavy emphasis on cost control,
minimizing the effects of inflation on operating expenses. In addition,
expenses associated with Wolf Creek outages decreased from 1992, positively
affecting 1993 EPS by $0.06.
<PAGE>
WOLF CREEK
Wolf Creek is one of the Company's principal generating facilities
representing approximately 18% of accredited generating capacity. The plant's
operating performance has remained strong, contributing approximately 25% of
the Company's annual kwh generation while operating at an average capacity of
83% over the last three years. It has the lowest fuel cost of any of the
Company's generating units. During 1994, Wolf Creek completed its seventh
scheduled refueling and maintenance outage in 47 days, a plant record. The
plant's next refueling and maintenance outage is scheduled for the spring of
1996.
Wolf Creek's assets and operating expenses represent approximately 50%
and 20% of the Company's total assets and operating expenses, respectively.
Currently no major equipment replacements are anticipated, but an extended
shut-down of the unit could have a substantial adverse effect on the Company's
business, financial condition and results of operations. Higher replacement
power and other costs would be incurred as a result. Although not expected,
an unscheduled plant shut-down could be caused by actions of the Nuclear
Regulatory Commission reacting to safety concerns at the plant or other
similar nuclear facilities. If a long-term shut-down occurred, the state
regulatory commissions could consider reducing rates by excluding Wolf Creek
investment from rate base.
Ownership and operation of a nuclear generating unit exposes the Company
to potential retrospective assessments and property losses in excess of
insurance coverage. These risks are more fully discussed in Note 4 to the
Consolidated Financial Statements-Commitments and Contingencies-Nuclear
Liability and Insurance.
ENVIRONMENTAL MATTERS
The Company's policy is to act in an environmentally responsible manner
and utilize the latest technological processes available to avoid and treat
contamination. The Company continually conducts environmental audits designed
to assure compliance with governmental regulations and detect contamination.
However, these regulations are constantly evolving; governmental bodies may
impose additional or more rigid environmental regulations which could require
substantial changes to operations or facilities.
See Note 4 to the Consolidated Financial Statements-Commitments and
Contingencies-Environmental Matters for a discussion of costs of compliance
with environmental laws and regulations and a potential liability (which
management believes is not material to its financial condition or results of
operations) for cleanup costs under the Federal Superfund law.
Clean Air Act Amendments of 1990 contain two programs significantly
affecting the utility industry. The Company has spent $3.6 million for the
installation of continuous emission monitoring equipment to satisfy the
requirements under the acid rain provision. Future acid rain program
regulations may require further capital expenditures, which cannot be
estimated at this time. The other utility-related program calls for a study
of certain air toxic substances. Based on the outcome of this study,
regulation of air toxic substances, including mercury, could be required.
Management cannot predict the likelihood of any such regulations or compliance
costs.
<PAGE>
PROJECTED CONSTRUCTION EXPENDITURES
Construction expenditures, excluding subsidiaries and allowance for funds
used during construction, were $125 million in 1994 and are projected for the
next five years as follows:
Construction Expenditures
1995 1996 1997 1998 1999 Total
(millions)
Generating facilities $ 47 $ 63 $ 52 $ 54 $ 134 $350
Nuclear fuel 21 5 23 20 9 78
Transmission facilities 9 10 6 15 19 59
Distribution and
general facilities 65 56 47 48 49 265
Total $ 142 $134 $ 128 $137 $ 211 $752
This five year resource plan includes $146 million of forecasted costs
for three new 136 megawatt gas-fired combustion turbines scheduled to be
completed from 1997 through 2000. The need for generating capacity additions
has been delayed through fixed-price purchased capacity contracts (see Note 4
to the Consolidated Financial Statements-Commitments and Contingencies-Long-
Term Coal Contracts). Management believes these contracts provide a more
cost-effective approach to meeting uncertain levels of sales demand growth
when compared to the long-term fixed costs associated with building new
capacity, despite risks associated with market price fluctuations. This
resource plan is subject to periodic review and modification. The next plan
will be submitted to the MPSC in July 1997.
CAPITAL REQUIREMENTS AND LIQUIDITY
Management believes it will be able to meet a significant portion of the
projected construction expenditures with internally-generated funds. It is
anticipated that funds for $208 million of maturing debt through 1999 will be
provided from operations, refinancings or short-term debt. As of December 31,
1994, the Company had $157 million of registered but unissued Medium-Term
Notes and $159 million of unused bank lines of credit. Uncertainties
affecting the Company's ability to meet these requirements with internally-
generated funds include such items as the effect of inflation on operating
expenses, the level of kwh sales, regulatory actions, compliance with future
environmental regulations, and the availability of generating units. The
Company might incur additional debt and/or issue additional equity to finance
growth or take advantage of new opportunities.
In January 1994, Moody's Investors Service upgraded the credit ratings of
the Company's bonds due to improved financial profile and low-cost operations.
The Company's long-term debt was upgraded as follows: secured pollution
control bonds to A1 from A2; general mortgage bonds-medium-term notes to A1
from A3; unsecured pollution control bonds to A2 from Baa1; and, preferred
stock to a2 from a3. In addition, in 1993 Standard & Poor's Corporation and
Duff & Phelps upgraded the Company's general mortgage bonds as follows:
Standard & Poor's from A- to A; and Duff & Phelps from A to A+. Improved
ratings will make it less costly to raise funds when needed and will
contribute to continued strength while meeting the challenge of increased
competition in the utility industry.
The capital structure at December 31, 1994 (including current maturities
of long-term debt) consisted of approximately 50% common stock equity, 5%
preferred stock and 45% long-term debt. Management's intent is to maintain a
capital structure with approximately equal percentages of common stock equity
and long-term debt.
<PAGE>
The Company currently uses an accelerated depreciation method for tax
purposes. Application of this method on the Wolf Creek plant has reduced the
Company's tax payments during the last three years by approximately $30
million per year. Accelerated depreciation on Wolf Creek ended in 1994.
Management is implementing various tax planning strategies, including
investing in affordable housing partnerships and purchasing corporate-owned
life insurance contracts, to minimize future tax payments resulting from the
loss of this depreciation deduction.
See Note 4 to the Consolidated Financial Statements-Commitments and
Contingencies-Tax Matters for a discussion of the Company's federal income tax
returns for the years 1985 through 1992 which are presently under audit by the
Internal Revenue Service.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31
1994 1993 1992
(Thousands)
ELECTRIC OPERATING REVENUES $868,272 $857,450 $802,668
OPERATING EXPENSES
Operation
Fuel 135,106 130,117 130,032
Purchased power 33,929 31,403 21,868
Other 202,304 184,633 175,937
Maintenance 72,468 78,550 81,163
Depreciation 94,361 91,110 88,768
Taxes
Income (Note 3) 70,949 69,502 51,691
General 96,362 95,659 92,461
Amortization of:
MPSC rate phase-in plan (Note 1) 0 7,072 7,072
Deferred Wolf Creek costs (Note 1) 13,102 13,102 13,102
Total 718,581 701,148 662,094
OPERATING INCOME 149,691 156,302 140,574
OTHER INCOME AND DEDUCTIONS
Allowance for equity funds
used during construction 2,087 2,846 1,073
Miscellaneous (4,159) (2,486) 2,595
Income taxes (Note 3) 4,572 1,549 (505)
Total 2,500 1,909 3,163
INCOME BEFORE INTEREST CHARGES 152,191 158,211 143,737
INTEREST CHARGES
Long-term debt 43,962 50,118 54,266
Short-term notes 1,170 750 2,749
Miscellaneous 4,128 4,113 2,173
Allowance for borrowed funds
used during construction (1,844) (2,542) (1,785)
Total 47,416 52,439 57,403
YEARLY RESULTS
Net income 104,775 105,772 86,334
Preferred stock
dividend requirements 3,457 3,153 3,062
Earnings available for
common stock 101,318 102,619 83,272
Average number of common
shares outstanding 61,903,437 61,908,726 61,908,726
Earnings per common share $1.64 $1.66 $1.35
Cash dividends per
common share $1.50 $1.46 $1.43
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
December 31 December 31
1994 1993
ASSETS (Thousands)
UTILITY PLANT, at original cost (Notes 1, 8 and 9)
Electric $3,330,478 $3,240,384
Less-Accumulated depreciation 1,092,436 1,019,714
Net utility plant in service 2,238,042 2,220,670
Construction work in progress 57,294 67,766
Nuclear fuel, net of amortization of
$66,773,000 and $ 76,722,000 40,806 29,862
Total 2,336,142 2,318,298
REGULATORY ASSET - DEFERRED WOLF CREEK COSTS (Note 1) 18,752 29,118
REGULATORY ASSET - RECOVERABLE TAXES (Note 1) 120,000 122,000
INVESTMENTS AND NONUTILITY PROPERTY 98,429 28,454
CURRENT ASSETS
Cash and cash equivalents 20,217 1,539
Special deposits 0 60,118
Receivables
Customer accounts receivable (Note 5) 24,513 29,320
Other receivables 22,604 19,340
Fuel inventories, at average cost 16,570 14,550
Materials and supplies, at average cost 44,953 44,157
Prepayments 5,138 4,686
Deferred income taxes (Note 3) 1,444 3,648
Total 135,439 177,358
DEFERRED CHARGES
Regulatory assets (Note 1)
Settlement of fuel contracts 16,625 20,634
KCC Wolf Creek carrying costs 6,839 9,575
Other 27,909 31,899
Other deferred charges 10,262 17,732
Total 61,635 79,840
Total $2,770,397 $2,755,068
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
LIABILITIES
CAPITALIZATION (Notes 7 and 8) (See Statements)
Common stock-authorized 150,000,000 shares
without par value-61,908,726 shares issued -
stated value $449,697 $449,697
Retained earnings 426,738 418,201
Capital stock premium and expense (1,736) (1,747)
Common stock equity 874,699 866,151
Cumulative preferred stock 89,000 89,000
Cumulative redeemable preferred stock 1,596 1,756
Long-term debt 798,470 733,664
Total 1,763,765 1,690,571
CURRENT LIABILITIES
Notes payable to banks (Note 6) 1,000 4,000
Commercial paper (Note 6) 31,000 25,000
Current maturities of long-term debt 33,419 134,488
Accounts payable 73,486 59,421
Dividends payable 423 423
Accrued taxes 24,684 27,800
Accrued interest 12,209 15,575
Accrued payroll and vacations 19,594 20,127
Accrued refueling outage costs (Note 1) 2,120 7,262
Other 7,221 8,531
Total 205,156 302,627
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes (Note 3) 644,139 627,819
Deferred investment tax credits 82,840 87,185
Other 74,497 46,866
Total 801,476 761,870
COMMITMENTS AND CONTINGENCIES (Note 4)
Total $2,770,397 $2,755,068
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
1994 1993 1992
(thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $104,775 $105,772 $86,334
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 94,361 91,110 88,768
Amortization of:
Nuclear fuel 10,136 8,705 9,583
Deferred Wolf Creek costs 13,102 13,102 13,102
MPSC rate phase-in plan 0 7,072 7,072
Other 9,608 8,234 5,921
Deferred income taxes (net) 20,524 25,502 23,979
Deferred investment tax credits (net) (4,345) (4,345) (4,521)
Allowance for equity funds used
during construction (2,087) (2,846) (1,073)
Cash flows affected by changes in:
Receivables 1,543 (10,245) 2,848
Fuel inventories (2,020) 6,075 (859)
Materials and supplies (796) 1,106 654
Accounts payable 14,065 (17,741) 4,838
Accrued taxes (3,116) 7,936 2,404
Accrued interest (3,366) 2,626 488
Wolf Creek refueling outage
accrual (5,142) (5,338) 12,600
Pension and postretirement benefit
obligations (Note 2) 32,203 1,905 (2,753)
Other operating activities (2,860) 4,514 4,352
Net cash provided by operating
activites 276,585 243,144 253,737
CASH FLOWS FROM INVESTING ACTIVITIES
Construction expenditures (124,965) (129,199) (129,559)
Allowance for borrowed funds used
during construction (1,844) (2,542) (1,785)
Purchases of investments (67,560) (7,351) (2,396)
Other investing activities 5,624 7,657 (2,193)
Net cash used in investing
activities (188,745) (131,435) (135,933)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt 133,793 324,846 134,750
Issuance of preferred stock 0 0 50,000
Retirement of long-term debt (170,170) (271,480) (143,230)
Retirement of preferred stock 0 0 (13,000)
Special deposit for the
retirement of debt 60,118 (60,118) 0
Premium on reacquired stock and
long-term debt 0 (4,077) (2,321)
Increase (decrease) in short-term
borrowings 3,000 (4,000) (53,000)
Dividends paid (96,238) (93,556) (91,277)
Other financing activities 335 (1,913) 274
Net cash used in financing
activities (69,162) (110,298) (117,804)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 18,678 1,411 0
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 1,539 128 128
CASH AND CASH EQUIVALENTS
AT END OF YEAR $20,217 $1,539 $128
CASH PAID DURING THE YEAR FOR:
Interest, net of amount capitalized $48,246 $47,361 $55,223
Income taxes $53,720 $40,141 $32,995
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND LONG-TERM DEBT
December 31
1994 1993
CUMULATIVE PREFERRED STOCK (Note 7) (thousands)
$100 Par
3.80% - 100,000 shares issued $10,000 $10,000
4.50% - 100,000 shares issued 10,000 10,000
4.20% - 70,000 shares issued 7,000 7,000
4.35% - 120,000 shares issued 12,000 12,000
No Par
4.80%* - 500,000 shares issued 50,000 50,000
Total $89,000 $89,000
CUMULATIVE REDEEMABLE PREFERRED STOCK (Note 7)
$100 Par
4.00% - 15,957 and 17,557 shares issued $1,596 $1,756
LONG-TERM DEBT (EXCLUDING CURRENT MATURITIES) (Note 8)
First Mortgage Bonds
5.875% series due 2007 $0 $21,940
General Mortgage Bonds
Medium-Term Notes due 1996-2008, 6.82% and
6.78% weighted average rate at December 31 395,500 378,750
5.25%* Environmental Improvement Revenue
Refunding Bonds due 2012-23 158,768 122,846
Guaranty of Pollution Control Bonds
5.75% series due 2003 0 13,742
4.31%* due 2015-17 196,500 196,500
Subsidiary Obligations
Notes due 2000-04, 8.38% weighted average
rate at December 31 47,702 0
Unamortized Discount 0 (114)
Total $798,470 $733,664
* Variable rate securities, weighted average rate as of December 31, 1994
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Year Ended December 31
1994 1993 1992
(thousands)
Beginning Balance $418,201 $405,985 $411,161
Net Income 104,775 105,772 86,334
522,976 511,757 497,495
Premium on Reacquired Preferred Stock 0 0 233
Dividends Declared:
Preferred Stock, at required rates 3,384 3,169 2,747
Common Stock - $1.50, $1.46 and $1.43
per share 92,854 90,387 88,530
Ending Balance (Note 7) $426,738 $418,201 $405,985
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
Notes to Consolidated Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
The consolidated financial statements include the accounts of Kansas City
Power & Light Company and KLT Inc., a wholly-owned, nonutility subsidiary.
KLT Inc. was formed in 1992 as a holding company for various non-regulated
business ventures.
Intercompany balances and transactions have been eliminated. Kansas City
Power & Light Company's equity investment in KLT Inc. was $37 and $5 million
at December 31, 1994 and 1993, respectively. KLT Inc.'s revenues and expenses
have been classified under Other Income and Deductions and Interest Charges in
the Consolidated Statements of Income.
Accounting records are maintained in accordance with the Uniform System
of Accounts prescribed by the Federal Energy Regulatory Commission (FERC) and
generally accepted accounting principles.
Cash and Cash Equivalents
Cash and cash equivalents consists of highly liquid investments with
maturities of three months or less.
Fair Value of Financial Instruments
The stated values of financial instruments at December 31, 1994 and 1993
approximate fair market values. If quoted market prices were not available,
the Company's incremental borrowing rate for similar types of debt was used to
determine fair value.
Investments in Affordable Housing Limited Partnerships
Through December 31, 1994, KLT Investments Inc., a subsidiary of KLT
Inc., had invested $54 million in affordable housing limited partnerships.
The investments are recorded at cost and tax credits are recognized in the
year utilized.
Utility Plant
Utility plant is stated at historical costs of construction. These costs
include taxes, an allowance for funds used during construction (AFDC) and
payroll-related costs including pensions and other fringe benefits. Additions
of, and replacements and improvements to units of property are capitalized.
Repairs of property and replacements of items not considered to be units of
property are expensed as incurred (except as discussed under Wolf Creek
Refueling Outage Costs). When property units are retired or otherwise
disposed, the original cost, including removal charges, net of salvage is
charged to accumulated depreciation.
AFDC represents the cost of borrowed funds and a return on equity funds
used to finance construction projects and is capitalized as a cost of
construction work in progress. The portion attributable to borrowed funds is
reflected as a reduction of interest charges while the portion applicable to
equity funds is shown as a non-cash item of other income. When a
construction project is placed in service, the related AFDC, as well as other
construction costs, is used to establish rates under regulatory rate
practices. The rates used to compute gross AFDC are compounded semi-annually
and averaged 7.8% for 1994, 8.3% for 1993 and 6.6% for 1992.
<PAGE>
Depreciation is computed on a straight-line basis over the estimated
lives of depreciable property based on rates approved by state regulatory
authorities. Average annual composite rates approximated 2.9% during the last
three years.
Wolf Creek Refueling Outage Costs
Forecasted incremental costs to be incurred during scheduled Wolf Creek
Generating Station (Wolf Creek) refueling outages are accrued evenly (monthly)
over the unit's operating cycle, normally about 18 months. These incremental
costs include operating, maintenance and replacement power expenses.
Nuclear Plant Decommissioning Costs
Estimated decommissioning costs for Wolf Creek were revised in 1994 by
the Missouri Public Service Commission (MPSC) and the Kansas Corporation
Commission (KCC). The estimates for decontamination, dismantlement and site
restoration costs were based on the immediate dismantlement method.
Decommissioning of the plant is not expected to start before 2025. The
following table shows each commission's estimated costs and assumptions (in
1993 dollars):
KCC MPSC
Undiscounted decommissioning costs:
Total Station $1.3 billion $1.8 billion
47% share $595 million $859 million
Discounted decommissioning costs:
Total Station $370 million $370 million
47% share $174 million $174 million
Annual escalation factor 3.45% 4.50%
Annual return on trust assets 6.48% 7.66%
These estimated costs are higher than prior estimates primarily due to
significant increases in assumed disposal costs for low-level radioactive
waste. Previously, total discounted decommissioning costs were estimated by
the KCC in 1989 to be $206 million (in 1988 dollars) and, by the MPSC in 1992
to be $347 million (in 1990 dollars).
The Company contributes to a tax-qualified decommissioning trust fund
(approximately $3 million for each of the last three years) to be used to
decommission the unit. These costs are charged to other operation expenses
and recovered over the expected life of the plant. Recent tax law changes
regarding nuclear decommissioning trust funds allow for investments in higher
yielding securities. Increases in annual contributions are not anticipated
during the next two years.
As of December 31, 1994 and 1993, the trust fund balance, including
reinvested earnings, was $19 and $14 million, respectively. These amounts are
reflected in the Consolidated Balance Sheets under Investments and Nonutility
Property with the related liabilities for decommissioning included in Deferred
Credits and Other Liabilities-Other.
The Financial Accounting Standards Board (FASB) is currently reviewing
the accounting for nuclear plant decommissioning obligations including the
balance sheet presentation of estimated decommissioning costs and the
accounting treatment of trust fund earnings.
<PAGE>
Nuclear Fuel
Nuclear fuel is amortized to fuel expense based on the quantity of heat
produced for the generation of electricity. Under the Nuclear Waste Policy
Act of 1982, the Department of Energy (DOE) is responsible for the permanent
disposal of spent nuclear fuel. Currently, the Company pays a quarterly fee
of one mill per kilowatt-hour of net nuclear generation to the DOE for future
disposal of spent nuclear fuel. These disposal costs are charged to fuel
expense and recovered through rates.
A permanent disposal site may not be available for the industry until
2010 or later, although an interim facility may be available earlier. Once a
permanent site is available, the DOE will require spent nuclear fuel to be
accepted on a priority basis with the owners of the oldest spent fuel given
the highest priority. As a result, disposal services for Wolf Creek may not
be available prior to 2027. Wolf Creek has an on-site, temporary storage
facility for spent nuclear fuel which, under current regulatory guidelines,
can provide storage space until approximately 2006. Management believes
additional temporary storage space can be constructed or obtained as
necessary.
Regulatory Assets
FASB Statement No. 71-Accounting for Certain Types of Regulation applies
to regulated entities whose rates are designed to recover the cost of
providing service. FASB 71 allows certain items that would normally be
reflected in net income to be deferred on the balance sheet. These items are
then amortized as the related amounts are reflected in rates. The Company
recognizes regulatory assets when authorized by a commission's rate order or
when it is probable, based on historical regulatory precedent, that future
rates will recover amortization of the costs. If subsequent recovery is no
longer probable, any unamortized balance, net of tax, would reduce net income.
Deferred Wolf Creek Costs
KCC and MPSC orders provided for continued construction accounting
for ratemaking purposes after Wolf Creek's September 3, 1985 commercial
in-service date through September 30, 1985 and May 5, 1986, respectively.
The commissions also authorized the deferral of certain other carrying
costs. These deferrals are being amortized and recovered in rates over
an approximate 10 year period.
Recoverable Taxes
See Income Taxes below for discussion.
Settlement of Fuel Contracts
The Company deferred the cost incurred to terminate certain coal
purchase contracts. These costs are being amortized over various periods
ending in 2002.
KCC Wolf Creek Carrying Costs
As ordered by the KCC, certain Wolf Creek carrying costs were
deferred through June 1991. The recovery and corresponding amortization
of this deferral over six years began in July 1991.
<PAGE>
MPSC Rate Phase-In Plan
Under the MPSC's 1986 Wolf Creek rate phase-in plan, the Company
deferred a cash recovery of a portion of the cost of equity plus carrying
costs on the deferral. The amortization and recovery were completed in
December 1993 resulting in a 2.66% rate reduction effective January 1,
1994 (approximately $12.5 million annually) applied evenly to the
Company's Missouri retail customer classes. By agreement with the MPSC
and public counsel, none of the parties can unilaterally file for a
general increase or decrease in Missouri retail electric rates prior to
January 1, 1996. Approximately two-thirds of total retail sales are to
Missouri customers.
Other
Other regulatory assets include premium on redeemed debt, deferred
flood costs, the deferral of costs to decommission and decontaminate
federal uranium enrichment facilities and other costs. These deferrals
are amortized over various periods extending to 2023.
Revenue Recognition
The Company utilizes cycle billing and accrues an estimate for unbilled
revenue at the end of each reporting period.
Income Taxes
FASB Statement No. 109-Accounting for Income Taxes requires deferred tax
liabilities and assets be established for all temporary differences caused
when the tax basis of an asset or liability differs from that reported in the
financial statements. These deferred tax assets and liabilities are
determined using the tax rates scheduled by the tax law to be in effect when
the temporary differences reverse.
Regulatory Asset-Recoverable Taxes primarily reflects the future revenue
requirements necessary to recover the tax benefits of existing temporary
differences flowed through to ratepayers in the past. During 1993, the net
change in Regulatory Asset-Recoverable Taxes and Deferred income taxes
included a $40 million increase resulting from the changes in the federal and
Missouri state income tax laws effective January 1, 1993 and January 1, 1994,
respectively. Although the Company calculates its deferred tax assets and
liabilities pursuant to FASB 109, operating income tax expense is recorded in
accordance with ratemaking principles. However, if FASB 109 were reflected in
the Consolidated Statements of Income, net income would remain the same.
Investment tax credits are deferred when utilized and amortized to income
over the remaining service lives of the related properties.
Environmental Matters
Environmental costs are accrued when it is probable a liability has been
incurred and the amount of the liability can be reasonably estimated.
Management believes it has recorded all appropriate costs related to
environmental matters.
<PAGE>
2. PENSION PLANS AND OTHER EMPLOYEE BENEFITS
Early Retirement Program
In March 1994, the Company offered a voluntary early retirement program
to 411 eligible management and union employees. On June 30, 1994, 332
employees, or 81%, of eligible employees retired under the program. The
Company expensed estimated program costs of $14 million ($0.14 per share)
during the first quarter of 1994 and $10.2 million ($0.10 per share) during
the second quarter. Based on a final actuarial valuation, a $1.7 million
($0.02 per share) reduction in expense was recorded during the fourth quarter
resulting in total pension and postretirement program costs to the Company of
$16.5 and $6.0 million, respectively ($0.22 per share).
Pension Plans
The Company has defined benefit pension plans for all its regular
employees, including officers, providing benefits upon retirement. In
accordance with the Employee Retirement Income Security Act of 1974, the
Company has satisfied its minimum funding requirements. Benefits under these
plans reflect the employee's compensation, years of service and age at
retirement.
Funded status of the plans:
December 31
1994 1993
(thousands)
Accumulated Benefit Obligation:
Vested $ 219,111 $ 209,193
Non-vested 4,595 6,296
Total $ 223,706 $ 215,489
Determination of Plan Assets
less Obligations:
Fair value of plan assets (a) $ 301,245 $ 315,179
Projected benefit obligation (b) 269,124 279,525
Difference $ 32,121 $ 35,654
Reconciliation of Difference:
Contributions to trusts
Prepaid $ - $ 10,677
Accrued liability (18,401) (6,304)
Unrecognized transition obligation 14,684 16,756
Unrecognized net gain 39,570 18,197
Unrecognized prior service cost (3,732) (3,672)
Difference $ 32,121 $ 35,654
(a) Plan assets are invested in insurance contracts, corporate bonds, equity
securities, U.S. Government securities, notes, mortgages and short-term
investments.
(b) Based on discount rates of 8.5% in 1994 and 7% in 1993; and increases in
future salary levels of 4% to 5% in 1994 and 1993.
<PAGE>
Components of provisions for pensions (excluding early retirement program
costs):
1994 1993 1992
(thousands)
Service cost $ 8,193 $ 8,671 $ 7,301
Interest cost on projected benefit
obligation 20,759 19,521 17,903
Actual return on plan assets (1,143) (49,875) (24,541)
Other (22,297) 27,715 3,653
Net periodic pension cost $ 5,512 $ 6,032 $ 4,316
Long-term rates of return on plan assets of 8% to 8.5% were used.
Postretirement Benefits Other Than Pensions
In addition to providing pension benefits, certain postretirement health
care and life insurance benefits are provided for substantially all retired
employees.
FASB Statement No. 106-Employers' Accounting for Postretirement Benefits
Other Than Pensions requires companies to accrue the cost of postretirement
health care and life insurance benefits during an employee's active years of
service. Until 1993, these costs were expensed as paid (pay-as-you-go). The
Company currently recovers these costs through rates on a pay-as-you-go basis.
Net periodic postretirement benefit cost (excluding early retirement
program costs):
1994 1993
(thousands)
Service cost $ 645 $ 616
Interest cost on accumulated
postretirement benefit obligation (APBO) 2,305 1,893
Amortization of unrecognized
transition obligation 1,175 1,175
Other 75 -
Net periodic postretirement cost 4,200 3,684
Less: Pay-as-you-go costs 1,097 1,109
Net increase in cost due to FASB 106 $ 3,103 $ 2,575
Actuarial assumptions include an increase in the annual health care cost
trend rate for 1995 of 12%, decreasing gradually over a six year period to its
ultimate level of 6%. The health care plan requires retirees to participate
in the cost when premiums exceed a certain amount. Because of this provision,
an increase in the assumed health care cost trend rate by 1% per year would
only increase the APBO as of December 31, 1994 by approximately $575,000 and
the aggregate service and interest cost components of net periodic
postretirement benefit cost for 1994 by approximately $65,000.
<PAGE>
Reconciliation of postretirement benefits to amounts recorded in the
Consolidated Balance Sheets:
December 31
1994 1993
(thousands)
APBO (a):
Retirees $ 20,813 $10,672
Fully eligible active plan participants 1,304 6,405
Other active plan participants 7,159 10,501
Unfunded APBO 29,276 27,578
Unrecognized transition obligation (21,139) (22,314)
Unrecognized net gain (loss) 5,220 (2,689)
Unrecognized prior service cost (863) -
Accrued postretirement benefit obligation
(included in Deferred Credits
and Other Liabilities-Other) $ 12,494 $ 2,575
(a) Based on weighted average discount rates of 8.5% in 1994 and 7% in 1993;
and increases in future salary levels of 4% to 5% in 1994 and 1993.
Long-Term Incentive Plan
The shareholders adopted a Long-Term Incentive Plan in 1992 for officers
and key employees. Awards issued under the Plan cannot exceed three million
common stock shares.
Under the stock option provision of the Plan, recipients are entitled to
receive shares of stock, and accumulated dividends as though reinvested if the
granted options are exercised within 10 years and the market price at the time
of exercise equals or exceeds the grant price. Because of the dividend
provision, the Company was required to expense $0.4, $0.1 and $0.2 million for
1994, 1993, and 1992, respectively. The expense represents accumulated and
reinvested dividends in addition to the appreciation in stock price since the
date of grant. If the stock price falls below the grant price, the cumulative
expense associated with those options is reversed.
Summarized information regarding the stock option shares granted and
outstanding:
1994 1993 1992
(shares under option)
Outstanding at January 1 145,125 86,000 -
Granted 69,125 63,125 86,000
Exercised (6,000) - -
Canceled (10,875) (4,000) -
Outstanding at December 31 197,375 145,125 86,000
Exercisable at December 31 102,125 41,000 -
Weighted average grant price of
shares outstanding $ 21.870 $ 22.604 $ 21.625
Option price of shares exercised $ 21.625 $ - $ -
<PAGE>
3. INCOME TAXES
Income tax expense consists of:
1994 1993 1992
(thousands)
Current income taxes:
Federal $ 42,736 $ 41,207 $ 28,081
State 7,462 5,589 4,657
Total 50,198 46,796 32,738
Deferred income taxes, net:
Federal 17,005 22,274 20,488
State 3,519 3,228 3,491
Total 20,524 25,502 23,979
Investment tax credits, net (4,345) (4,345) (4,521)
Total income tax expense $ 66,377 $ 67,953 $ 52,196
The following table shows a reconciliation of the federal statutory
income tax rate to the effective rate reflected in the Consolidated Statements
of Income. See Note 1 to the Consolidated Financial Statements for a
discussion of the Company's income tax policies.
1994 1993 1992
Federal statutory income tax rate 35.0 % 35.0 % 34.0 %
Differences between book and tax
depreciation not normalized 1.2 1.3 1.7
Amortization of investment tax
credits (2.5) (2.5) (3.3)
State income taxes 4.2 3.3 3.9
Other 0.9 2.0 1.4
Effective income tax rate 38.8 % 39.1 % 37.7 %
The significant temporary differences resulting in deferred tax assets
and liabilities in the Consolidated Balance Sheets are as follows:
December 31
1994 1993
(thousands)
Depreciation differences $ 507,964 $ 476,637
Recoverable taxes 120,000 122,000
Other 14,731 25,534
Net deferred income tax liability $ 642,695 $ 624,171
The net deferred income tax liability consists of the following:
December 31
1994 1993
(thousands)
Gross deferred income tax assets $ (61,623) $ (63,187)
Gross deferred income tax liabilities 704,318 687,358
Net deferred income tax liability $ 642,695 $ 624,171
<PAGE>
4. COMMITMENTS AND CONTINGENCIES
Nuclear Liability and Insurance
Liability Insurance
The Price-Anderson Act currently limits the combined public
liability of nuclear reactor owners to $8.9 billion for claims that could
arise from a single nuclear incident. The owners of Wolf Creek (the
Owners) carry the maximum available commercial insurance of $200 million.
The balance is provided by Secondary Financial Protection (SFP), an
assessment plan mandated by the Nuclear Regulatory Commission.
Under SFP, if there were a catastrophic nuclear incident involving
any of the nation's licensed reactors, the Owners would be subject to a
maximum retrospective assessment per incident of up to $79.3 million
($37.3 million, Company's share). The Owners are jointly and severally
liable for these charges, payable at a rate not to exceed $10 million
($4.7 million, Company's share) per incident per year, excluding
applicable premium taxes. The assessment, most recently revised in 1993,
is subject to an inflation adjustment every five years based on the
Consumer Price Index.
Property, Decontamination and Premature Decommissioning Insurance
The Owners also carry $2.8 billion ($1.3 billion, Company's share)
of property damage, decontamination and premature decommissioning
insurance for loss resulting from damage to the Wolf Creek facilities.
Nuclear insurance pools provide $0.5 billion of coverage, while Nuclear
Electric Insurance Limited (NEIL) provides $2.3 billion.
In the event of an accident, insurance proceeds must first be used
for reactor stabilization and site decontamination. The Company's share
of any remaining proceeds can be used for up to $1.2 billion of property
damage and up to $118 million in premature decommissioning costs to cover
a trust fund shortfall (see Note 1-Nuclear Plant Decommissioning Costs).
However, premature decommissioning coverage applies only if an accident
at Wolf Creek exceeds $500 million in property damage and decontamination
expenses.
Extra Expense Insurance Including Replacement Power
The Owners also carry additional insurance from NEIL to cover costs
of replacement power and other extra expenses incurred in the event of a
prolonged outage resulting from accidental property damage at Wolf Creek.
Under both NEIL policies, the Company is subject to retrospective
assessment if NEIL losses, with respect to each policy year, exceed the
accumulated funds available to the insurer under that policy. The
estimated maximum retrospective assessments for the Company's share under
the policies total approximately $13 million per year.
In the event of a catastrophic loss at Wolf Creek, the amount of
insurance available may not be adequate to cover property damage and
extra expenses incurred. Uninsured losses, to the extent not recovered
through rates, would be assumed by the Company and could have a material,
adverse effect on its financial condition and results of operations.
<PAGE>
Nuclear Fuel Commitments
As of December 31, 1994, the Company's portion of Wolf Creek nuclear fuel
commitments included $180 million for enrichment and fabrication through 2014
and $12 million for uranium concentrates through 1997.
Tax Matters
The Company's federal income tax returns for 1985 through 1992 are
presently under examination by the Internal Revenue Service (IRS). The IRS
has issued Revenue Agent's Reports for the years 1985 through 1990. The
Reports include proposed adjustments that would reduce the Company's Wolf
Creek investment tax credit (ITC) by 25% or approximately $20 million and tax
depreciation by 23% or approximately $210 million. These amounts include the
continuing effect of the adjustments through December 31, 1994. These
adjustments, principally, are based upon the IRS's contention that (i) certain
start-up and testing costs considered to be costs of the plant, should be
treated as licensing costs, which do not qualify for ITC or accelerated
depreciation, and (ii) certain cooling and generating facilities should not
qualify for ITC or accelerated depreciation.
If the IRS were to prevail on all of these proposed adjustments, the
Company would be obligated to make cash payments, calculated through December
31, 1994, of approximately $105 million for additional federal and state
income taxes and $60 million for corresponding interest. After offsets for
deferred income taxes, these payments would reduce net income by approximately
$35 million.
The Company has filed a protest and is currently negotiating with the
appeals division of the IRS. Based upon their interpretation of applicable
tax principles, the tax treatment of similar costs and facilities with respect
to other plants, and discussions to date with the IRS appeals division, it is
the opinion of management and outside tax counsel that the IRS's proposed Wolf
Creek adjustments are substantially overstated. Management believes any
additional taxes and interest resulting from the final resolution of the
matter will not be material to the Company's financial condition or results of
operations.
Environmental Matters
The Company's operations must comply with federal, state and local
environmental laws and regulations. The generation of electricity utilizes,
produces and requires disposal of certain products and by-products including
polychlorinated biphenyl (PCB's), asbestos and other potentially hazardous
materials. The Federal Comprehensive Environmental Response, Compensation and
Liability Act (the Superfund law) imposes strict joint and several liability
for those who generate, transport or deposit hazardous waste as well as the
current property owner and predecessor owner at the time of contamination.
The Company continually conducts environmental audits designed to detect
contamination and assure compliance with governmental regulations. However,
compliance programs necessary to meet future environmental laws and
regulations governing water and air quality, including carbon dioxide
emissions, hazardous waste handling and disposal, toxic substances and the
effects of electromagnetic fields, could require substantial changes to
operations or facilities.
<PAGE>
Interstate Power Company of Dubuque, Iowa (Interstate) filed a lawsuit in
1989 against the Company in the Federal District Court for the District of
Iowa seeking contribution and indemnity under the Superfund law for cleanup
costs of hazardous substances at the site of a demolished gas manufacturing
plant in Mason City, Iowa. The plant was operated by the Company for very
brief periods of time before it was demolished in 1952. The site and all
other properties owned in Iowa were sold to Interstate in 1957. Management
estimates that the cleanup could cost up to $8 million. This estimate is
based upon an evaluation of available information from on-going site
investigation and assessment activities, including the costs of such
activities.
In 1993, the Company, along with other parties to the lawsuit, received a
letter from the Environmental Protection Agency (EPA) notifying each such
party that it was considered a potentially responsible party for cleanup costs
at the site. In December 1994, the EPA listed the site on the National
Priorities List.
Management believes it has several valid defenses to this action. Even
if unsuccessful on the liability issue, management does not believe its
allocated share of the cleanup costs will be material to its financial
condition or results of operations.
Long-Term Coal Contracts
The Company's share of coal purchased under long-term contractual
arrangements was $21, $17, and $21 million in 1994, 1993 and 1992,
respectively. Under existing coal contracts, the Company's remaining share of
purchase commitments totals $152 million with obligations for the years 1995
through 1999 totaling $41, $30, $26, $9 and $9 million, respectively. Coal is
also purchased on the spot market.
Leases
The Company has a transmission line lease with another utility whereby,
with FERC approval, the rental payments can be increased by the lessor, after
which the Company is entitled to cancel the lease if able to secure an
alternative transmission path. Total commitments under this lease are
$2 million per year and $58 million over the remaining life of the lease if
the lease is not canceled.
Rental expense for other leases including railcars, computer equipment,
buildings, a transmission line and similar items was $16 to $19 million per
year during the last three years. Rental commitments under these leases total
$134 million over the remaining life of the leases with obligations for the
years 1995 through 1999 averaging $12 million per year. Capital leases are
not material and are included in these amounts.
<PAGE>
Purchased Capacity Commitments
As of December 31, 1994, contracts to purchase capacity through 2016 from
other utilities totaled $262 million. During 1994, 1993 and 1992, capacity
purchases were $13, $10 and $7 million, respectively. For each of the next
five years these obligations include:
Cost Megawatts
(millions)
1995 $ 16 520
1996 25 530
1997 24 530
1998 24 530
1999 24 530
For the years 2000 through 2009, the Company has purchase capacity
contracts for approximately 179 megawatts per year at an average annual cost
of $13 million.
Other
As of December 31, 1994, KLT Investments Inc. has subscribed to an
additional $19 million investment in affordable housing partnerships and
intends to fund these investments through long-term borrowings.
5. SALE OF ACCOUNTS RECEIVABLE
As of December 31, 1994 and 1993, an undivided interest in $60 million of
designated customer accounts receivable was sold with limited recourse. Costs
of $2.8, $2.2 and $2.6 million for 1994, 1993 and 1992, respectively,
associated with the sale are included in Other Income and Deductions-
Miscellaneous.
6. SHORT-TERM BORROWINGS
Short-term borrowings consist of funds borrowed from banks or through the
sale of commercial paper as needed. The weighted average interest rate on
short-term debt outstanding at December 31, 1994 and 1993 was 6.2% and 4.0%,
respectively. As of December 31, 1994, under minimal fee arrangements, unused
bank lines of credit totaled $159 million.
7. COMMON STOCK EQUITY, PREFERRED STOCK AND REDEEMABLE PREFERRED STOCK
Common Stock Equity
In 1994, 2,000,000 shares of common stock were registered with the
Securities and Exchange Commission for a Dividend Reinvestment and Stock
Purchase Plan (the Plan). Under the Plan, common shareholders, directors and
employees have the opportunity to purchase shares of the common stock by
reinvesting dividends and/or making optional cash payments. The Company is
currently purchasing shares for the Plan on the open market.
At December 31, 1994, the Company held approximately 6,600 shares of its
common stock to be used for future distribution. The reacquired shares are
included in Investments and Nonutility Property on the Consolidated Balance
Sheets.
The Restated Articles of Consolidation contain a restriction relating to
the payment of dividends in the event common equity falls to 25% of total
capitalization.
<PAGE>
If preferred stock dividends are not declared and paid when scheduled,
the Company cannot declare or pay its common stock dividends or purchase any
common shares. If the unpaid preferred stock dividends equal four or more
full quarterly dividends, the holders of preferred stock, voting as a single
class, could elect representatives to the Board of Directors.
Preferred Stock and Redeemable Preferred Stock
During 1992, the 130,000 shares of 7.72% Cumulative Preferred Stock
($13 million par value) were redeemed and retired. The $0.3 million premium
paid to redeem this stock was charged against retained earnings. Also, in
1992, $50 million Cumulative No Par Preferred Stock, Auction Series A
($100 per share stated value) was issued. The $0.9 million in costs
associated with this issue were charged to capital stock premium and expense.
Scheduled mandatory sinking fund requirements for the outstanding
redeemable 4% Cumulative Preferred Stock are $160,000 per year. The Company
has the option to redeem the $91 million Cumulative Preferred Stock at prices
approximating par or stated value.
As of December 31, 1994, 405,957 shares of $100 par Cumulative Preferred
Stock, 1,572,000 shares of Cumulative No Par Preferred Stock and 11,000,000
shares of no par Preference Stock were authorized.
8. LONG-TERM DEBT
Mortgage Bonds
In 1994, the remaining First Mortgage Bonds were retired resulting in the
retirement of the Indenture of Mortgage and Deed of Trust dated December 1,
1946. The Company is now authorized to issue mortgage bonds under the General
Mortgage Indenture and Deed of Trust dated December 1, 1986, as supplemented.
The Indenture constitutes a mortgage lien on substantially all utility plant.
As of December 31, 1994, $582 million of General Mortgage Bonds were
pledged under the Indenture to secure outstanding and unissued Medium-Term
Notes of $425 and $157 million, respectively.
Scheduled Maturities
Long-term debt maturities for the years 1995 through 1999 are $33, $74,
$24, $69, and $8 million, respectively.
<PAGE>
Interest Rate Swap and Cap Agreements
As of December 31, 1994, the Company had entered into eight interest rate
swap contracts and one cap agreement with financial institutions to limit the
interest rate on $110 million of long-term debt. The swap agreements mature
from 1996 through 1998 and effectively fix interest rates on $90 million of
variable rate debt to a weighted average rate of 3.7% through 1996. The cap
agreement limits the interest rate on $20 million of variable rate debt to
4.5% in 1995, increasing to 5.5% through 1997. Had these agreements been
terminated at December 31, 1994, the Company would have realized a gain.
<PAGE>
9. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
Joint ownership agreements with other utilities provide undivided
interests in utility plants at December 31, 1994 as follows (in millions of
dollars):
Wolf Creek LaCygne Iatan
Unit Units Unit
Company's share 47% 50% 70%
Utility plant in service $ 1,337 $ 286 $ 248
Estimated accumulated depreciation
(Production plant only) $ 299 $ 157 $ 119
Nuclear fuel, net $ 41 $ - $ -
Company's accredited
capacity-megawatts 545 678 469
Each participant must fund their own portion of the plant's operating
expenses and capital expenditures. The Company's share of direct expenses is
included in the corresponding operating expenses in the Consolidated
Statements of Income.
10. QUARTERLY OPERATING RESULTS (UNAUDITED)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
(thousands)
1994
Operating revenues $199,295 $223,108 $253,771 $ 192,098
Operating income $ 20,603 $ 36,121 $ 61,458 $ 31,509
Net income $ 9,891 $ 24,776 $ 50,099 $ 20,009
Earnings per common share $ 0.15 $ 0.38 $ 0.80 $ 0.31
1993
Operating revenues $191,380 $208,323 $256,919 $ 200,828
Operating income $ 29,624 $ 38,878 $ 57,865 $ 29,935
Net income $ 15,800 $ 25,731 $ 44,920 $ 19,321
Earnings per common share $ 0.24 $ 0.40 $ 0.72 $ 0.30
The quarterly data is subject to seasonal fluctuations with peak periods
occurring during the summer months. See Note 2 to the Consolidated Financial
Statements-Pension Plans and Other Employee Benefits for a discussion of
quarterly costs associated with the 1994 early retirement program.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Kansas City Power & Light Company:
We have audited the consolidated financial statements of Kansas City
Power & Light Company and Subsidiary listed in the index on page 39 of this
Form 10-K. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Kansas City Power & Light Company and Subsidiary as of December 31, 1994 and
1993, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
January 30, 1995<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors
The information concerning directors required by Item 401 of Regulation
S-K has been furnished by the Company in its definitive proxy statement dated
March 10, 1995, filed with the Securities and Exchange Commission pursuant to
Regulation 14A under the Securities Exchange Act of 1934, and is incorporated
herein by reference.
Executive Officers
See Part I, page 5, entitled "Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K has been furnished
by the Company in its definitive proxy statement dated March 10, 1995, filed
with the Securities and Exchange Commission pursuant to Regulation 14A under the
Securities and Exchange Act of 1934, and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 403 of Regulation S-K has been furnished
by the Company in its definitive proxy statement dated March 10, 1995, filed
with the Securities and Exchange Commission pursuant to Regulation 14A under the
Securities and Exchange Act of 1934, and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.<PAGE>
PART IV
ITEM 14.EXHIBITS AND REPORTS ON FORM 8-K
Page
No.
Financial Statements
a. Consolidated Balance Sheets - December 31, 1994, and 1993 18-19
b. Consolidated Statements of Income for the years ended 20
December 31, 1994, 1993, and 1992
c. Consolidated Statements of Cash Flows for the years ended 21
December 31, 1994, 1993, and 1992
d. Consolidated Statements of Cumulative Preferred Stock & 22
Long-Term Debt - December 31, 1994 and 1993
e. Consolidated Statements of Retained Earnings for the 22
years ended December 31, 1994, 1993, and 1992
f. Notes to Consolidated Financial Statements 23-36
g. Report of Independent Accountants 37
Exhibits
Exhibit
Number Description of Document
3-a *Restated Articles of Consolidation of the Company dated as of May 5, 1992
(Exhibit 4 to Registration Statement, Registration No. 33-54196).
3-b *By-laws of the Company, as amended and in effect on December 31, 1993
(Exhibit 3-b to Form 10-K for the year ended 1993).
4-a *General Mortgage and Deed of Trust dated as of December 1, 1986, between
the Company and United Missouri Bank N.A. (formerly United Missouri
Bank) of Kansas City, N.A., Trustee (Exhibit 4-bb to Form 10-K for
the year ended December 31, 1986).
4-b *Third Supplemental Indenture dated as of April 1, 1991, to Indenture
dated as of December 1, 1986 (Exhibit 4-aq to Registration
Statement, Registration No. 33-42187).
4-c *Fourth Supplemental Indenture dated as of February 15, 1992, to Indenture
dated as of December 1, 1986 (Exhibit 4-y to Form 10-K for year
ended December 31, 1991).
4-d *Fifth Supplemental Indenture dated as of September 15, 1992, to Indenture
dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q dated
September 30, 1992).
4-e *Sixth Supplemental Indenture dated as of November 1, 1992, to Indenture
dated as of December 1, 1986 (Exhibit 4-z to Registration Statement,
Registration No. 33-54196).
4-f *Seventh Supplemental Indenture dated as of October 1, 1993, to Indenture
dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q dated
September 30, 1993).
4-g *Eighth Supplemental Indenture dated as of December 1, 1993, to Indenture
dated as of December 1, 1986 (Exhibit 4 to Registration Statement,
Registration No. 33-51799).
4-h *Ninth Supplemental Indenture dated as of February 1, 1994, to
Indenture dated as of December 1, 1986 (Exhibit 4-h to Form 10-K for
year ended December 31, 1993).
4-i Tenth Supplemental Indenture dated as of November 1, 1994, to
Indenture dated as of December 1, 1986.
4-j *Resolution of Board of Directors Establishing 3.80% Cumulative Preferred
Stock (Exhibit 2-R to Registration Statement, Registration No. 2-
40239).
4-k *Resolution of Board of Directors Establishing 4% Cumulative Preferred
Stock (Exhibit 2-S to Registration Statement, Registration No. 2-
40239).
4-l *Resolution of Board of Directors Establishing 4.50% Cumulative Preferred
Stock (Exhibit 2-T to Registration Statement, Registration No. 2-
40239).
4-m *Resolution of Board of Directors Establishing 4.20% Cumulative Preferred
Stock (Exhibit 2-U to Registration Statement, Registration No. 2-
40239).
4-n *Resolution of Board of Directors Establishing 4.35% Cumulative Preferred
Stock (Exhibit 2-V to Registration Statement, Registration No. 2-
40239).
4-o *Certificate of Designation of Board of Directors Establishing the
$50,000,000 Cumulative No Par Preferred Stock, Auction Series A
(Exhibit 4-a to Form 10-Q dated March 31, 1992).
4-p *Indenture for Medium-Term Note Program dated as of April 1, 1991, between
the Company and The Bank of New York (Exhibit 4-bb to Registration
Statement, Registration No. 33-42187).
4-q *Indenture for Medium-Term Note Program dated as of February 15, 1992,
between the Company and The Bank of New York (Exhibit 4-bb to
Registration Statement, Registration No. 33-45736).
4-r *Indenture for Medium-Term Note Program dated as of November 15, 1992,
between the Company and The Bank of New York (Exhibit 4-aa to
Registration Statement, Registration No. 33-54196).
4-s Indenture for Medium-Term Note Program dated as of November 17,
1994, between the Company and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Smith Barney Inc.
10-a *Copy of Wolf Creek Generating Station Ownership Agreement between Kansas
City Power & Light Company, Kansas Gas and Electric Company and
Kansas Electric Power Cooperative, Inc. (Exhibit 10-d to Form 10-K
for the year ended December 31, 1981).
10-b *Copy of Receivables Purchase Agreement dated as of September 27, 1989,
between the Company, Commercial Industrial Trade-Receivables
Investment Company and Citicorp North America, Inc., (Exhibit 10-p
to Form 10-K for year ended December 31, 1989).
10-c *Copy of Amendment to Receivables Purchase Agreement dated as of August 8,
1991, between the Company, Commercial Industrial Trade-Receivables
Investment Company and Citicorp North America, Inc. (Exhibit 10-m to
Form 10-K for year ended December 31, 1991).
10-d *Long-Term Incentive Plan (Exhibit 28 to Registration Statement,
Registration 33-42187).
10-e *Copy of Indemnification Agreement entered into by the Company with each
of its officers and directors (Exhibit 10-O to Form 10-K for year
ended December 31, 1986).
10-f *Copy of Executive Incentive Compensation Plan (Exhibit 10-g to form 10-K
for year ended December 31, 1986).
10-g *Copy of Severance Agreement entered into by the Company with certain of
its executive officers (Exhibit 10 to Form 10-Q dated June 30,
1993).
10-h *Copy of Supplemental Executive Retirement and Deferred Compensation Plan
(Exhibit 10-h to Form 10-K for year ended December 31, 1993).
10-i *Copy of $50 million Letter of Credit and reimbursement agreement dated as
of August 19, 1993, with The Toronto-Dominion Bank (Exhibit 10-i to
Form 10-K for year ended December 31, 1993).
10-j *Copy of $56 million Letter of Credit and Reimbursement Agreement dated as
of August 19, 1993, with Societe Generale, Chicago Branch (Exhibit
10-j to Form 10-K for year ended December 31, 1993).
10-k *Copy of $50 million Letter of Credit and Reimbursement Agreement dated as
of August 19, 1993, with The Toronto-Dominion Bank (Exhibit 10-k to
Form 10-K for year ended December 31, 1993).
10-l *Copy of $40 million Letter of Credit and Reimbursement Agreement dated as
of August 19, 1993, with Deutsche Bank AG, acting through its New
York and Cayman Islands Branches (Exhibit 10-l to Form 10-K for year
ended December 31, 1993).
10-m *Copy of Railcar Lease dated as of April 15, 1994, between Shawmut Bank
Connecticut, National Association, and the Company (Exhibit 10 to
Form 10-Q for period ended June 30, 1994).
10-n *Copy of Amendment No. 2 to Receivables Purchase Agreement between the
Company and Ciesco L.P. and Citicorp North America, Inc. (Exhibit 10
to Form 10-Q for period ended September 30, 1994).
10-o Copy of Railcar Lease dated as of January 31, 1995, between First
Security Bank of Utah, National Association, and the Company.
12 Computation of Ratios of Earnings to Fixed Charges.
23-a Consent of Counsel.
23-b Consent of Independent Accountants--Coopers & Lybrand L.L.P.
24 Powers of Attorney.
* Filed with the Securities and Exchange Commission as exhibits to prior
registration statements (except as otherwise noted) and are incorporated herein
by reference and made a part hereof. The exhibit number and file number of the
documents so filed, and incorporated herein by reference, are stated in
parenthesis in the description of such exhibit.
Copies of any of the exhibits filed with the Securities and Exchange
Commission in connection with this document may be obtained from the Company
upon written request.
Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Kansas
City, and State of Missouri on the 28th day of March, 1995.
KANSAS CITY POWER & LIGHT COMPANY
By /s/Drue Jennings
(Drue Jennings)
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
Chairman of the Board and )
/s/Drue Jennings President (Principal )
(Drue Jennings) Executive Officer) )
)
Vice President-Finance and )
/s/John DeStefano Treasurer (Principal )
(John DeStefano) Financial Officer )
)
/s/Neil Roadman Controller (Principal )
(Neil Roadman) Accounting Officer )
)
David L. Bodde* Director )
)
William H. Clark* Director ) March 28, 1995
)
Robert J. Dineen* Director )
)
Arthur J. Doyle* Director )
)
W. Thomas Grant II* Director )
)
George E. Nettels, Jr.* Director )
)
Dr. Linda Hood Talbott* Director )
)
Robert H. West* Director )
)
*By /s/Drue Jennings
(Drue Jennings)
Attorney-in-fact
TENTH SUPPLEMENTAL INDENTURE
KANSAS CITY POWER & LIGHT COMPANY
UMB BANK, N.A.
DATED AS OF NOVEMBER 1, 1994
CREATING A MORTGAGE BOND
MEDIUM-TERM SERIES E
SUPPLEMENTAL TO GENERAL MORTGAGE INDENTURE AND
DEED OF TRUST DATED AS OF DECEMBER 1, 1986
<PAGE>
TENTH SUPPLEMENTAL INDENTURE, dated as of November 1, 1994, between
KANSAS CITY POWER & LIGHT COMPANY, a Missouri corporation ("Company"), and
UMB BANK, N.A. (formerly United Missouri Bank of Kansas City, N.A.), as
Trustee ("Trustee") under the Indenture hereinafter mentioned.
WHEREAS, all capitalized terms used in this Supplemental Indenture
have the respective meanings set forth in the Indenture;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a General Mortgage Indenture and Deed of Trust ("Indenture"),
dated as of December 1, 1986, to secure Mortgage Bonds issued by the
Company pursuant to the Indenture, unlimited in aggregate principal amount
except as therein otherwise provided.
WHEREAS, the Company has heretofore executed and delivered to the
Trustee, a First Supplemental Indenture, dated as of December 1, 1986,
creating a first series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee, a Second Supplemental Indenture, dated as of April 1, 1988,
creating a second series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Third Supplemental Indenture, dated as of April 1, 1991,
creating a third series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Fourth Supplemental Indenture, dated as of February 15, 1992,
creating a fourth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Fifth Supplemental Indenture, dated as of September 1, 1992,
creating a fifth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Sixth Supplement Indenture, dated as of November 1, 1992,
creating a sixth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Seventh Supplemental Indenture, dated as of October 1, 1993,
creating a seventh series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Eighth Supplemental Indenture, dated as of December 7, 1993,
creating an eighth series of Mortgage Bonds;
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Ninth Supplemental Indenture, dated as of February 1, 1994,
creating a ninth series of Mortgage Bonds;
WHEREAS, the Company desires in and by this Supplemental Indenture
to create a tenth series of Mortgage Bonds to be issued under the
Indenture, to designate such series, to set forth maturity date or dates,
interest rate or rates and the form and other terms of such Mortgage
Bonds;
WHEREAS, all acts and things necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein
expressed, have been done and performed; and the execution and delivery of
this Supplemental Indenture have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the premises and in further
consideration of the sum of One Dollar in lawful money of the United
States of America paid to the Company by the Trustee at or before the
execution and delivery of this Supplemental Indenture, the receipt whereof
is hereby acknowledged, and of other good and valuable consideration, it
is agreed by and between the Company and the Trustee as follows:
DESCRIPTION OF CERTAIN PROPERTY SUBJECT
TO THE LIEN OF THE INDENTURE
The Company hereby confirms unto the Trustee, and records the
description of the property described in Schedule A attached and expressly
made a part hereof, which property is subject to the lien of the Indenture
in all respects as if originally described herein.
ARTICLE I.
MORTGAGE BOND, MEDIUM-TERM SERIES E
SECTION 1. (a) There is hereby created a tenth series of Mortgage
Bonds to consist of one Mortgage Bond issued under and secured by the
Indenture, to be designated as "Mortgage Bond, Medium-Term Series E", of
the Company ("Bond of Tenth Series").
(b) The Bond of Tenth Series shall be issued in the principal
amount of $125,000,000 as provided in the Indenture and in this
Supplemental Indenture, but the principal amount of the Bond of Tenth
Series actually outstanding as of any particular time shall be equal to
the principal amount of securities titled "Secured Medium-Term Notes"
("Notes") which at such particular time are outstanding under the
Indenture dated as of November 1, 1994 ("Note Indenture"), between the
Company and The Bank of New York, as trustee ("Note Trustee").
(c) The Bond of Tenth Series shall be a registered Bond without
coupons and shall be dated November 10, 1994.
(d) The principal of the Bond of Tenth Series shall be paid in
installments ("Installments").
(e) Each Installment (i) shall be equal to the principal amount
of, and any premium on, a particular Note which the Company is obligated
to pay on a particular day, (ii) shall be payable on the date or dates on
which, and at the same place or places as, the principal of, and any
premium on, such Note is payable, (iii) shall bear interest, if any, from
the date of such Note at the rate of interest borne by such Note, and
interest, if any, on such Installment shall be paid on the date or dates
on which, and at the same place or places as, interest is payable on such
Note.
(f) The principal of and interest on the Bond of Tenth Series
shall be payable in lawful money of the United States of America.
SECTION 2. At such time or times that the Company (a) delivers to
the Note Trustee and the Trustee an Officers' Certificate which reduces
the maximum aggregate principal amount of Notes which may be issued
pursuant to the Note Indenture by a specific principal amount or (b) pays,
is deemed to have paid or otherwise satisfies and discharges its
obligation to pay any Installment, the principal amount of the Bond of
Tenth Series shall be reduced by such specific principal amount or such
Installment, and such specific principal amount and Installment shall be
deemed for all purposes of the Indenture, including Article IV and Article
XI of the Indenture, to be Retired Bonds.
SECTION 3. The Bond of Tenth Series is not transferable except to
a successor Note Trustee under the Note Indenture.
SECTION 4. The Company covenants and agrees that (a) it will not
issue or permit to be outstanding at any time an aggregate principal
amount of Notes in excess of $125,000,000, or such lesser amount as may
from time to time be established by an Officers' Certificate delivered by
the Company to the Trustee and the Note Trustee, (b) it will not issue or
permit to be outstanding any Note which matures later than November 1,
2026, and (c) it will not issue any Notes payable other than in lawful
money of the United States of America.
SECTION 5. (a) The Bond of Tenth Series shall be pledged by the
Company with and delivered to the Note Trustee to secure payment of the
principal of and any premium or interest on the Notes.
(b) The obligation of the Company to make any payment of the
principal of or any premium or interest on the Bond of Tenth Series shall
be fully or partially, as the case may be, paid, deemed to have been paid
or otherwise satisfied and discharged to the extent that at the time any
such payment shall be due, the then due principal of and any premium or
interest on the Notes shall have been fully or partially paid, deemed to
have been paid or otherwise satisfied and discharged.
(c) The obligation of the Company to make any payment of the
principal of or premium or interest on any Installment shall be satisfied
and discharged if the Note to which such Installment relates is no longer
outstanding under the Note Indenture.
(d) The Trustee shall conclusively presume that the obligation of
the Company to make payments of the principal of or any premium or
interest on the Bond of Tenth Series shall have been fully paid, deemed to
have been paid or otherwise satisfied and discharged when due unless and
until the Trustee shall have received written notice from the Note
Trustee, signed by a responsible officer (as defined in the Note
Indenture) of the Note Trustee, stating that the payments of principal of
and premium or interest on Notes specified in such notice were not fully
paid, deemed to have been paid or otherwise satisfied and discharged when
due and remain unpaid at the date of such notice.
SECTION 6. The form of the Bond of Tenth Series shall be
substantially as follows:
(FORM OF BOND OF TENTH SERIES)
KANSAS CITY POWER & LIGHT COMPANY
MORTGAGE BOND, MEDIUM-TERM SERIES E
$125,000,000
Bond Number R-1
Kansas City Power & Light Company, a Missouri corporation
("Company"), for value received, hereby promises to pay to The Bank of New
York, as Trustee under the Indenture dated as of November 1, 1994, between
the Company and such Trustee ("Note Indenture"), or the successor Trustee
under the Note Indenture, the sum of $125,000,000, or, if less, the
aggregate unpaid principal amount of all Secured Medium-Term Notes
("Notes") outstanding under the Note Indenture, in installments, each of
which (i) shall be equal to the principal amount of, and any premium on,
a particular Note which the Company is obligated to pay on a particular
day, (ii) shall be payable on the date or dates on which, and at the same
place or places as, the principal of, and any premium on, such Note is
payable, and (iii) shall bear interest, if any, from the date or dates
specified in such Note at the rate of interest borne by such Note, and
interest, if any, on such installment shall be paid on the date or dates
on which, and at the same place or places as, interest is payable on such
Note. The principal of and any premium or interest on this Bond of Tenth
Series are payable in lawful money of the United States of America.
THIS BOND OF TENTH SERIES IS NOT TRANSFERABLE EXCEPT TO A
SUCCESSOR TRUSTEE UNDER THE NOTE INDENTURE.
The obligation of the Company to make any payment of the principal
of or any premium or interest on this Bond of Tenth Series shall be fully
or partially, as the case may be, paid, deemed to have been paid or
otherwise satisfied and discharged to the extent that at the time any such
payment shall be due, the then due principal of and any premium or
interest on the Notes shall have been fully or partially paid, deemed to
have been paid or otherwise satisfied and discharged.
By acceptance of, and in consideration for this Bond of Tenth
Series, the Registered Holder of this Bond of Tenth Series agrees to
record on the Schedule to this Bond of Tenth Series which is a part
hereof, (a) the date each Note is issued under the Note Indenture, (b) the
principal amount of such Note, (c) the interest rate, if any, payable on
such Note, (d) the date or dates upon which principal of and any premium
or interest on such Note are payable, (e) the redemption date and price or
prices, if any, of such Note, and (f) the date on which such Note ceases
to be outstanding under the Note Indenture, and such record shall be
conclusive and binding on the Company except in the case of manifest
error, but the failure of such Registered Holder to record any of the
foregoing shall not limit or otherwise affect the obligation of the
Company to pay when due all principal of and any premium or interest on
this Bond of Tenth Series or any Note.
This Bond of Tenth Series is one, of the series hereinafter
specified, of the bonds of the Company ("Bonds") known as its "Mortgage
Bonds," issued and to be issued in one or more series under and secured by
a General Mortgage Indenture and Deed of Trust dated as of December 1,
1986 ("Indenture"), duly executed by the Company to UMB Bank, N.A.,
(formerly United Missouri Bank of Kansas City, N.A.) Trustee ("Trustee"),
to which Indenture and all indentures supplemental thereto reference is
hereby made for a description of the property mortgaged and pledged, the
nature and extent of the security, the terms and conditions upon which the
Bonds are, and are to be, issued and secured, and the rights of the owners
of the Bonds and of the Trustee in respect of such security, and the prior
liens to which the security for the Bonds are junior; capitalized terms
used in this Bond of Tenth Series have the respective meanings set forth
in the Indenture. As provided in the Indenture, the Bonds may be various
principal sums, are issuable in series, may mature at different times, may
bear interest at different rates and may otherwise vary as therein
provided; and this Bond of Tenth Series is the only one of the series
entitled "Mortgage Bond, Medium-Term Series E," created by a Tenth
Supplemental Indenture dated as of November 1, 1994, as provided for in
the Indenture. With the consent of the holders of more than 50% in
aggregate principal amount of the Outstanding Bonds, the Company and the
Trustee may from time to time and at any time, enter into a Supplemental
Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any provision of the Indenture or of any
Supplemental Indenture or of modifying in any manner the rights of the
holders of the Bonds and any coupons; provided, however, that (i) no such
Supplemental Indenture shall, without the consent of the holder of each
Outstanding Bond affected thereby (A) extend the fixed maturity of any
Bonds, change any terms of any sinking fund or analogous fund or
conversion rights with respect to any Bonds, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount
thereof, or, subject to certain exceptions, limit the right of a holder of
Bonds to institute suit for the enforcement of payment of principal of or
any premium or interest on such Bonds in accordance with the terms of said
Bonds, or (B) reduce the aforesaid percentage of Bonds, the holders of
which are required to consent to any such Supplemental Indenture, or (C)
permit the creation by the Company of any Prior Lien, and (ii) no such
action which would affect the rights of the holders of Bonds of only one
series may be taken unless approved by the holders of more than 60% in
aggregate principal amount of the Outstanding Bonds of such series
affected, but if any such action would affect the Bonds of two or more
series, the approval of such action on behalf of the holders of Bonds of
such two or more series may be effected by holders of more than 60% in
aggregate principal amount of the Outstanding Bonds of such two or more
series, which need not include 60% in principal amount of Outstanding
Bonds of each of such series; provided, however, that, in no event shall
such action be effective unless approved by holders of more than 50% in
aggregate principal amount of all the then Outstanding Bonds of all such
series.
In the event that this Bond of Tenth Series shall not be presented
for payment when all Notes theretofore issued are no longer outstanding
under the Note Indenture, then all liability of the Company to the
Registered Holder of this Bond of Tenth Series for the payment of the
principal hereof and any premium or interest hereon shall forthwith cease,
determine and be completely discharged and the right of such Registered
Holder of this Bond of Tenth Series for the payment of the principal
hereof and any premium or interest hereon shall forthwith cease, determine
and be completely discharged and such Registered Holder shall no longer be
entitled to any lien or benefit of the Indenture.
In case an event of Default shall occur, the principal of this Bond
of Tenth Series may become or be declared due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture.
This Bond of Tenth Series is transferable by the Registered Holder
hereof in person or by attorney duly authorized in writing, only to a
successor to the Note Trustee under the Note Indenture, at the principal
office of the Trustee in Kansas City, Missouri, (or at the principal
office of any successor in trust), upon surrender and cancellation of this
Bond of Tenth Series, and upon any such transfer a new registered Bond of
Tenth Series without coupons of the same series for the same principal
amount will be issued to the transferee in exchange herefor.
The Company and the Trustee may deem and treat the person in whose
name this Bond of Tenth Series is registered as the absolute owner hereof
for the purpose of receiving payment and for all other purposes, and
neither the Company nor the Trustee shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or any
premium or interest on this Bond of Tenth Series, or for any claim based
hereon or otherwise in respect hereof or of the Indenture or any
Supplemental Indenture, against any incorporator, stockholder, director or
officer, past, present or future, of the Company or of any predecessor
corporation, as such, either directly or through the Company or of any
such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability of incorporators,
stockholders, directors and officers being waived and released by every
owner hereof by the acceptance of this Bond of Tenth Series and as part of
the consideration for the issue hereof, and being likewise waived and
released by the terms of the Indenture.
<TABLE>
<CAPTION>
<PAGE>
SCHEDULE
OF
NOTES
<S> <C> <C> <C> <C> <C> <C> <C>
Date
Original Interest Principal No Record
Issue Principal Interest Payment Payment Redemption Longer Made
Date Amount Rate Dates Dates Date Outstanding By
</TABLE>
This Bond of Tenth Series shall not be valid or become obligatory
for any purpose unless and until the certificate of authentication hereon shall
have been executed by the Trustee or its successor in trust under said
Indenture.
IN WITNESS WHEREOF, KANSAS CITY POWER & LIGHT COMPANY has caused
this Bond of Tenth Series to be executed in its name by the manual or facsimile
signature of its Chairman of the Board or its President or one of its Vice
Presidents, and its corporate seal to be impressed or imprinted hereon and
attested by the manual or facsimile signature of its Secretary or one of its
Assistant Secretaries.
KANSAS CITY POWER & LIGHT COMPANY,
Dated: By____________________________
Authorized Signature
________________________________
Attest:
________________________________
Secretary or Assistant Secretary
The form of Trustee's certificate to appear on the Bond of Tenth
Series shall be substantially as follows:
(FORM OF TRUSTEE'S CERTIFICATE)
This Bond of Tenth Series is the Bond of the series designated therein,
described in the within-mentioned Indenture and Tenth Supplemental Indenture.
UMB BANK, N.A.,
as Trustee,
By_____________________________
Authorized Signature
ARTICLE II.
ISSUE OF BOND OF TENTH SERIES.
SECTION 1. The Bond of Tenth Series may be executed, authenticated and
delivered as permitted by the provisions of Article III, IV, V or VI of the
Indenture.
ARTICLE III.
THE TRUSTEE.
SECTION 1. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company, or for or in respect of the recitals
and statements contained herein, all of which recitals and statements are made
solely by the Company.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Supplemental Indenture other than as set forth in the Indenture;
and this Supplemental Indenture is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Indenture, as
fully to all intents as if the same were herein set forth at length.
ARTICLE IV.
MISCELLANEOUS PROVISIONS.
SECTION 1. On or before the 45th day after the end of each fiscal quarter
of the Company, it shall deliver to the Trustee an Officers' Certificate which
shall disclose the aggregate principal amount of Notes which were outstanding as
of the last day of such fiscal quarter.
SECTION 2. Except insofar as herein otherwise expressly provided, all the
provisions, definitions, terms and conditions of the Indenture, as amended,
shall be deemed to be incorporated in, and made a part of, this Supplemental
Indenture; and the Indenture as supplemented and amended by this Supplemental
Indenture is in all respects ratified and confirmed; and the Indenture, as
amended, and this Supplemental Indenture shall be read, taken and construed
as one and the same instrument.
SECTION 3. Nothing in this Supplemental Indenture is intended, or shall
be construed to give to any person or corporation, other than the parties hereto
and the holders of Bond of Tenth Series issued and to be issued under and
secured by the Indenture, any legal or equitable right, remedy or claim under
or in respect of this Supplemental Indenture, or under any covenant, condition
or provision herein contained, all the covenants, conditions and provisions of
this Supplemental Indenture being intended to be, and being, for the sole and
exclusive benefit of the parties hereto and of the holders of Bond of Tenth
Series issued and to be issued under the Indenture and secured thereby.
SECTION 4. All covenants, stipulations and agreements in this
Supplemental Indenture contained by or on behalf of the Company shall bind
and (subject to the provisions of the Indenture, as amended) inure to the
benefit of its successors and assigns, whether so expressed or not.
SECTION 5. The headings of the several Articles of this Supplemental
Indenture are inserted for convenience of reference, and shall not be deemed to
be any part hereof.
SECTION 6. This Supplemental Indenture may be executed in any number of
counterparts, and each of such counterparts shall together constitute but one
and the same instrument.<PAGE>
IN WITNESS WHEREOF, KANSAS CITY POWER & LIGHT COMPANY has caused this
Supplemental Indenture to be executed by its Chairman of the Board or one of its
Vice Presidents and its corporate seal to be hereunto affixed, duly attested by
its Secretary or one of its Assistant Secretaries, and UMB BANK, N.A., as
Trustee as aforesaid, has caused the same to be executed by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed,
duly attested by one of its Assistant Secretaries, as of the day and year
first above written.
KANSAS CITY POWER & LIGHT COMPANY,
By /s/B. J. Beaudoin
ATTEST:
/s/Jeanie Sell Latz
UMB BANK, N.A.,
By /s/Frank C. Bramwell
ATTEST:
/s/R. William Bloemker
<PAGE>
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 4th day of November, 1994, before me, a Notary Public in and for
said County in the State aforesaid, personally appeared B. J. Beaudoin, to me
personally known, who, being by me duly sworn, did say that he is Senior Vice
President-Finance and Business Development and Chief Financial Officer of KANSAS
CITY POWER & LIGHT COMPANY, a Missouri corporation, one of the corporations
described in and which executed the foregoing instrument, that the seal affixed
to the foregoing instrument is the corporate seal of said corporation, and that
said instrument was signed and sealed on behalf of said corporation by authority
of its Board of Directors; and said B. J. Beaudoin acknowledged said instrument
and the execution thereof to be the free and voluntary act and deed of said
corporation by it voluntary executed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid the day and year first above written.
/s/Janee C. Rosenthal
Notary Public, Clay
County, Missouri
(SEAL)
My commission expires
February 25, 1995<PAGE>
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 4th day of November, 1994, before me, a Notary Public in and for
said County in the State aforesaid, personally appeared Frank C. Bramwell, to me
personally known, who, being by me duly sworn, did say that he is a Vice
President of UMB BANK, N.A., a national banking association organized and
existing under the laws of the United States of America, one of the corporations
described in and which executed the foregoing instrument, that the seal affixed
to the foregoing instrument is the corporate seal of said corporation, and that
said instrument was signed and sealed on behalf of said corporation by authority
of its Board of Directors; and said Frank C. Bramwell acknowledged said
instrument and the execution thereof to be the free and voluntary act and deed
of said corporation by it voluntary executed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid the day and year first above written.
/s/Janee C. Rosenthal
Notary Public, Clay
County, Missouri
(SEAL)
My commission expires
February 25, 1995
SCHEDULE A
Real Estate in Missouri
All of the following-described real estate of the Company situated in the
State of Missouri:
Tiffany Substation site, Platte County, Missouri:
A tract of land located in and being a part of the Northwest Quarter
Section of the Southeast Quarter Section of Section 1, Township 51, Range 34,
Kansas City, Platte County, Missouri, and more particularly described as
follows:
Beginning at the intersection of the West line of said Quarter Quarter
(1/4 1/4) Section, and the Southerly right-of-way line of Northwest Tiffany
Springs Road, as now established, thence South eight-nine degrees, fifty-nine
minutes, thirty-six seconds East (S 89o 59'36" E) along said Southerly right of
way line a distance of six hundred sixty (660) feet, thence South zero degrees,
fifteen minutes, fifty-nine seconds West (S 00o 15'59" W) a distance of six
hundred forty-seven (647) feet, thence North eight-nine degrees fifty-nine
minutes, thirty-six seconds West (N 89o 59'36" W) to a point on the West line of
said quarter quarter (1/4 1/4) section, thence North along the West line of said
quarter quarter (1/4 1/4) section, to the point of beginning, containing 10
acres more or less.
KANSAS CITY POWER & LIGHT COMPANY
AND
THE BANK OF NEW YORK
Trustee
INDENTURE
Dated as of November 1, 1994
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated
as of November 1, 1994, between Kansas City Power & Light Company
and The Bank of New York, Trustee:
Section of Act Section of Indenture
310(a)(1)(2) and (5) ................ 9.09
310(a)(3) and (4) ................... Not applicable
310(b) .............................. 9.08 and 9.10
310(c) .............................. Not applicable
311(a) and (b) ...................... 9.14
311(c) .............................. Not applicable
312(a) .............................. 7.01
312(b) and (c) ...................... 7.01
313(a) .............................. 7.03
313(b)(1) ........................... Not applicable
313(b)(2) ........................... 7.03
313(c) .............................. 7.03
313(d) .............................. 7.03
314(a) .............................. 6.04, 7.02
314(b) .............................. 6.05
314(c)(1) and (2) ................... 15.05
314(c)(3) ........................... Not applicable
314(d) .............................. Not applicable
314(e) .............................. 15.05
314(f) .............................. Not applicable
315(a), (c) and (d) ................. 9.01
315(b) .............................. 8.09
315(e) .............................. 8.10
316(a)(1) ........................... 8.01 and 8.08
316(a)(2) ........................... Omitted
316(a) last sentence ................ 10.04
316(b) .............................. 8.04
316(c) .............................. 10.06
317(a) .............................. 8.02
317(b) .............................. Omitted
318(a) .............................. 15.07
____________________________
This tie-sheet does not constitute a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
Parties . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE.
Definitions.
SECTION 1.01. Definitions . . . . . . . . . . . . . . . 1
Accrued Interest . . . . . . . . . . . . . . . 2
Accrued Interest Factor . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . 2
Authorized Agent . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . 3
Base Rate. . . . . . . . . . . . . . . . . . 3
Basis Point. . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . 3
Calculation Agent. . . . . . . . . . . . . . . 3
Calculation Date . . . . . . . . . . . . . . . 4
Commercial Paper Rate. . . . . . . . . . . . . 4
Commercial Paper Rate Interest
Determination Date . . . . . . . . . . . . . 4
Commercial Paper Rate Notes. . . . . . . . . . 4
Company. . . . . . . . . . . . . . . . . . . . 5
Company Order . . . . . . . . . . . . . . . . 5
Composite Quotations . . . . . . . . . . . . . 6
Corporate Trust Office of Trustee. . . . . . . 6
CUSIP. . . . . . . . . . . . . . . . . . . . . 6
Depositary . . . . . . . . . . . . . . . . . . 6
Discharged . . . . . . . . . . . . . . . . . . 6
Event of Default . . . . . . . . . . . . . . . 6
Fixed Rate Note . . . . . . . . . . . . . . . 7
Floating Rate Note . . . . . . . . . . . . . . 7
Global Note . . . . . . . . . . . . . . . . . 7
H.15(519). . . . . . . . . . . . . . . . . . . 7
Indenture. . . . . . . . . . . . . . . . . . . 7
Index Maturity . . . . . . . . . . . . . . . . 7
Initial Interest Date. . . . . . . . . . . . . 7
Interest Accrual Period. . . . . . . . . . . . 7
Interest Determination Date. . . . . . . . . . 8
Interest Factor. . . . . . . . . . . . . . . . 8
Interest Payment Date. . . . . . . . . . . . . 8
Interest Payment Period. . . . . . . . . . . . 8
Interest Rate. . . . . . . . . . . . . . . . . 9
Interest Reset Date. . . . . . . . . . . . . . 10
LIBOR. . . . . . . . . . . . . . . . . . . . . 10
LIBOR Interest Determination Date. . . . . . . 11
LIBOR Notes. . . . . . . . . . . . . . . . . . 11
London Banking Day . . . . . . . . . . . . . . 11
Maturity . . . . . . . . . . . . . . . . . . . 11
Maximum Interest Rate. . . . . . . . . . . . . 11
Minimum Interest Rate. . . . . . . . . . . . . 12
Money Market Yield . . . . . . . . . . . . . . 12
Mortgage . . . . . . . . . . . . . . . . . . . 12
Mortgage Bonds . . . . . . . . . . . . . . . . 12
Mortgage Supplemental Indenture. . . . . . . . 12
Mortgage Trustee . . . . . . . . . . . . . . . 12
Note or Notes; Outstanding . . . . . . . . . . 12
Noteholder . . . . . . . . . . . . . . . . . . 13
Officers' Certificate. . . . . . . . . . . . . 13
Opinion of Counsel . . . . . . . . . . . . . . 13
Original Issue Date . . . . . . . . . . . . . 14
Person . . . . . . . . . . . . . . . . . . . . 14
Pledged Bond . . . . . . . . . . . . . . . . . 14
Principal Executive Offices of the Company . . 14
Record Date. . . . . . . . . . . . . . . . . . 14
Redemption Date. . . . . . . . . . . . . . . . 15
Responsible Officer. . . . . . . . . . . . . . 15
Spread . . . . . . . . . . . . . . . . . . . . 15
Spread Multiplier. . . . . . . . . . . . . . . 15
Treasury . . . . . . . . . . . . . . . . . . . 15
Treasury Bills . . . . . . . . . . . . . . . . 15
Treasury Rate. . . . . . . . . . . . . . . . . 15
Treasury Rate Interest
Determination Date . . . . . . . . . . . . . 16
Treasury Rate Notes. . . . . . . . . . . . . . 16
Trustee. . . . . . . . . . . . . . . . . . . . 16
U.S. Government Obligations. . . . . . . . . . 16
ARTICLE TWO.
Form, Issue, Execution, Note Registration and
Exchange of Notes.
Section 2.01. Form Generally. . . . . . . . . . . . . . 17
Section 2.02. Form of Trustee's Certificate of
Authentication. . . . . . . . . . . . . 17
Section 2.03. Amount Limited. . . . . . . . . . . . . . 18
Section 2.04. Denominations, Dates, Interest Payment
and Record Dates. . . . . . . . . . . . 18
Section 2.05. Execution, Authentication, Delivery
and Dating. . . . . . . . . . . . . . . 20
Section 2.06. Exchange and Registration of Transfer
of Notes. . . . . . . . . . . . . . . . 23
Section 2.07. Mutilated, Destroyed, Lost or
Stolen Notes. . . . . . . . . . . . . . 24
Section 2.08. Temporary Notes . . . . . . . . . . . . . 25
Section 2.09. Cancellation of Notes Paid, etc.. . . . . 25
Section 2.10. Interest Rights Preserved . . . . . . . . 25
Section 2.11. Payment of Notes. . . . . . . . . . . . . 25
Section 2.12. Notes Issuable in the Form of
a Global Note . . . . . . . . . . . . 26
Section 2.13. CUSIP Numbers . . . . . . . . . . . . . . 29
ARTICLE THREE.
Redemption of Notes.
Section 3.01. Applicability of Article . . . . . . . . 29
Section 3.02. Notice of Redemption; Selection
of Notes . . . . . . . . . . . . . . . 29
Section 3.03. Payment of Notes on Redemption;
Deposit of Redemption Price. . . . . . 30
ARTICLE FOUR.
Pledged Bond.
Section 4.01. Pledge. . . . . . . . . . . . . . . . . . 31
Section 4.02. Receipt . . . . . . . . . . . . . . . . . 31
Section 4.03. Trustee to Exercise rights of Mortgage
Bondholder. . . . . . . . . . . . . . . 31
Section 4.04. No Transfer of Pledged Bond, Exception . 31
Section 4.05. Release of Pledged Bond . . . . . . . . . 32
Section 4.06. Voting of Pledged Bond. . . . . . . . . . 32
Section 4.07. Note Issuances Recorded on
Pledged Bond. . . . . . . . . . . . . . 32
Section 4.08. Further Assurances. . . . . . . . . . . . 32
ARTICLE FIVE.
Satisfaction and Discharge; Unclaimed Moneys.
Section 5.01. Satisfaction and Discharge. . . . . . . . 33
Section 5.02. Deposited Moneys to Be Held in
Trust by Trustee. . . . . . . . . . . . 35
Section 5.03. Return of Unclaimed Moneys. . . . . . . . 35
Section 5.04. Reinstatement . . . . . . . . . . . . . . 36
ARTICLE SIX.
Particular Covenants Of The Company.
Section 6.01. Payment of Principal, Premium and
Interest. . . . . . . . . . . . . . . . 36
Section 6.02. Office for Notices and Payments, etc. . . 36
Section 6.03. Appointments to Fill Vacancies in
Trustee's Office. . . . . . . . . . . . 37
Section 6.04. Annual Statement and Notice . . . . . . . 37
Section 6.05. Opinions of Counsel . . . . . . . . . . . 37
ARTICLE SEVEN.
Noteholder Lists And Reports By The Company
And The Trustee.
Section 7.01. Noteholder Lists. . . . . . . . . . . . . 38
Section 7.02. Securities and Exchange
Commission Reports. . . . . . . . . . . 38
Section 7.03. Reports by the Trustee. . . . . . . . . . 38
ARTICLE EIGHT.
Remedies Of The Trustee And Noteholders
On Event Of Default.
Section 8.01. Events of Default . . . . . . . . . . . . 38
Section 8.02. Payment of Notes on Default;
Suit Therefor . . . . . . . . . . . . . 41
Section 8.03. Application of Moneys Collected
by Trustee . . . . . . . . . . . . . . 42
Section 8.04. Proceedings by Noteholders. . . . . . . . 43
Section 8.05. Proceedings by Trustee. . . . . . . . . . 44
Section 8.06. Remedies Cumulative and Continuing. . . . 44
Section 8.07. Restoration of Rights and Remedies. . . . 44
Section 8.08. Direction of Proceedings and Waiver
of Defaults by Majority Noteholders . . 45
Section 8.09. Notice of Default . . . . . . . . . . . 45
Section 8.10. Undertaking to Pay Costs . . . . . . . . 46
ARTICLE NINE.
Concerning The Trustee.
Section 9.01. Duties and Responsibilities of Trustee. . 46
Section 9.02. Reliance on Documents, Opinions, etc. . . 47
Section 9.03. No Responsibility for Recitals, etc. . . 49
Section 9.04. Trustee, Authenticating Agent
or Registrar May Own Notes. . . . . . 49
Section 9.05. Moneys to Be Held in Trust. . . . . . . . 49
Section 9.06. Compensation and Expenses of Trustee. . . 49
Section 9.07. Officers' Certificate Evidence. . . . . . 50
Section 9.08. Conflicting Interest of Trustee . . . . . 50
Section 9.09. Eligibility of Trustee. . . . . . . . . . 50
Section 9.10. Resignation or Removal of Trustee . . . 51
Section 9.11. Appointment of Successor Trustee . . . . 52
Section 9.12. Acceptance by Successor Trustee . . . . . 52
Section 9.13. Succession by Merger, etc. . . . . . . . 53
Section 9.14. Limitations on Rights of Trustee
as a Creditor . . . . . . . . . . . . . 54
Section 9.15. Authenticating Agent. . . . . . . . . . . 54
Section 9.16. Trustee's Application for Instructions
from the Company. . . . . . . . . . . . 55
ARTICLE TEN.
Concerning The Noteholders.
Section 10.01. Action by Noteholders. . . . . . . . . . 55
Section 10.02. Proof of Execution by Noteholders. . . . 56
Section 10.03. Who Deemed Absolute Owners . . . . . . . 56
Section 10.04. Company-Owned Notes Disregarded. . . . . 56
Section 10.05. Revocation of Consents; Future . . . . . 56
Holders Bound. . . . . . . . . . . . . 56
Section 10.06. Record Date for Noteholder Acts. . . . . 57
ARTICLE ELEVEN.
Noteholders' Meetings.
Section 11.01. Purposes of Meetings . . . . . . . . . . 57
Section 11.02. Call of Meetings by Trustee. . . . . . . 58
Section 11.03. Call of Meetings by Company or
Noteholders. . . . . . . . . . . . . . 58
Section 11.04. Qualifications for Voting. . . . . . . . 58
Section 11.05. Regulations. . . . . . . . . . . . . . . 58
Section 11.06. Voting . . . . . . . . . . . . . . . . . 59
Section 11.07. Right of Trustee or Noteholders
not Delayed. . . . . . . . . . . . . . 60
ARTICLE TWELVE.
Consolidation, Merger, Conveyance, Transfer or Lease.
Section 12.01. Company May Consolidate, etc., only
on Certain Terms . . . . . . . . . . . 60
Section 12.02. Successor Corporation Substituted. . . . 61
ARTICLE THIRTEEN.
Supplemental Indentures.
Section 13.01. Supplemental Indentures without
Consent of Noteholders . . . . . . . . 61
Section 13.02. Supplemental Indentures with Consent
of Noteholders . . . . . . . . . . . . 62
Section 13.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures. . . 63
Section 13.04. Notation on Notes. . . . . . . . . . . . 64
Section 13.05. Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee. . . 64
ARTICLE FOURTEEN.
Immunity of Incorporators, Stockholders,
Officers And Directors.
Section 14.01 Indenture and Notes Solely Corporate
Obligations . . . . . . . . . . . . . . 64
ARTICLE FIFTEEN.
Miscellaneous Provisions.
Section 15.01. Provisions Binding on Company's
Successors . . . . . . . . . . . . . . 64
Section 15.02. Official Acts by Successor Corporation . 65
Section 15.03. Addresses for Notices, etc.. . . . . . . 65
Section 15.04. Governing Law. . . . . . . . . . . . . . 65
Section 15.05. Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . 65
Section 15.06. Business Days. . . . . . . . . . . . . . 66
Section 15.07. Trust Indenture Act to Control . . . . . 67
Section 15.08. Table of Contents, Headings, etc. . . . 67
Section 15.09. Execution in Counterparts. . . . . . . . 67
Section 15.10. Manner of Mailing Notice to
Noteholders. . . . . . . . . . . . . . 67
EXHIBITS.
Exhibit A Form of Bond of Tenth Series
Exhibit B Form of Global Fixed Rate Note
Exhibit C Form of Fixed Rate Note
Exhibit D Form of Global Floating Rate Note
Exhibit E Form of Floating Rate Note
<PAGE>
THIS INDENTURE, dated as of November 1, 1994, between
Kansas City Power & Light Company, a corporation duly organized
and existing under the laws of the State of Missouri (hereinafter
sometimes called the "Company"), and The Bank of New York, a New
York banking corporation organized and existing under the laws of
the State of New York (hereinafter called the "Trustee").
Witnesseth:
WHEREAS, for its lawful corporate purposes, the Company
has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its Secured
Medium-Term Notes, (hereinafter sometimes called "Notes"), to be
issued as in this Indenture provided;
AND WHEREAS, all acts and things necessary to make this
Indenture a valid agreement according to its terms have been done
and performed, and the execution of this Indenture and the issue
hereunder of the Notes have in all respects been duly authorized;
NOW THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon
which the Notes are, and are to be authenticated, issued and
delivered, and in consideration of the premises, of the purchase
and acceptance of the Notes by the holders thereof and of the sum
of one dollar duly paid to it by the Trustee at the execution of
these presents, the receipt whereof is hereby acknowledged, the
Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time
of the Notes, as follows:
ARTICLE ONE.
Definitions.
Section 1.01. Definitions. The terms defined in this
Article One (except as herein otherwise expressly provided or
unless the context otherwise requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Article One.
Section 1.02. (a) Whenever this Indenture refers to a
provision of the Trust Indenture Act of 1939, as amended ("TIA"),
such provision is incorporated by reference in and made a part of
this Indenture. The following TIA terms incorporated in this
Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture note holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the
Company.
(b) All terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by a rule of the Securities and Exchange Commission have
the meanings assigned to them in the TIA or such statute or rule
as in force on the date of execution of this Indenture.
Section 1.03. For purposes of this Indenture, the
following terms have the following meanings.
Accrued Interest:
The term "Accrued Interest" at any Interest Payment
Date (a) for a Floating Rate Note shall mean the amount obtained
by multiplying the principal amount of such Floating Rate Note by
its Accrued Interest Factor, and (b) for a Fixed Rate Note, shall
mean the amount obtained by multiplying the principal amount of
such Fixed Rate Note by its Interest Rate, and multiplying the
product thus obtained by a fraction, the numerator of which is
the number of days in the Interest Payment Period for such Note
ended on such Interest Payment Date, and the denominator of which
is 360.
Accrued Interest Factor:
The term "Accrued Interest Factor" at any Interest
Payment Date for a Floating Rate Note shall mean the sum of the
Interest Factors for such Floating Rate Note calculated for each
day in the Interest Payment Period for such Note ended on such
Interest Payment Date or the prior Record Date, as the case may
be.
Authenticating Agent:
The term "Authenticating Agent" shall mean the agent of
the Trustee which shall be appointed and acting pursuant to
Section 9.15.
Authorized Agent:
The term "Authorized Agent" shall mean an agent of the
Company designated by an Officers' Certificate to give to the
Trustee the information specified in clause (a) of "Company
Order" for the issuance of a Note.
Authorized Newspaper:
The term "Authorized Newspaper" shall mean a newspaper
of general circulation in the relevant area, printed in the
English language and customarily published on each Business Day;
whenever successive publications in an Authorized Newspaper are
required by this Indenture, such publications may be made on the
same or different days and in the same or in different Authorized
Newspapers.
Base Rate:
The term "Base Rate" shall mean with respect to (a)
Commercial Paper Rate Notes, the Commercial Paper Rate, (b) LIBOR
Notes, LIBOR and (c) Treasury Rate Notes, the Treasury Rate.
Basis Point:
The term "Basis Point" shall mean one-one hundredth of
a percentage point.
Board of Directors:
The term "Board of Directors" shall mean the Board of
Directors of the Company or the Executive Committee of such Board
or any other duly authorized Committee of such Board.
Board Resolution:
The term "Board Resolution" shall mean a copy of a
resolution certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Direc-
tors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
Business Day:
The term "Business Day" shall mean each Monday, Tues-
day, Wednesday, Thursday and Friday which is not a day on which
banking institutions or trust companies in the Borough of Manhat-
tan, the City and State of New York, are obligated or authorized
by law or executive order to close.
Calculation Agent:
The term "Calculation Agent" for a particular Floating
Rate Note shall mean the Trustee, unless otherwise provided for
in the applicable Company Order.
Calculation Date:
The term "Calculation Date" shall mean with regard to
any particular Interest Determination Date, the tenth calendar
day after such Interest Determination Date, or, if any such day
is not a Business Day, the next succeeding Business Day.
Commercial Paper Rate:
The term "Commercial Paper Rate" for a particular
Floating Rate Note, unless otherwise indicated in the applicable
Company Order, shall mean, with respect to any Commercial Paper
Rate Interest Determination Date, the Money Market Yield on such
date of the rate for commercial paper having the Index Maturity
specified in such Company Order, as such rate shall be published
in H.15(519) under the heading "Commercial Paper". In the event
that such rate is not published prior to 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Commercial Paper
Rate Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield on such Commercial Paper Rate In-
terest Determination Date of the rate for commercial paper of the
specified Index Maturity as published in Composite Quotations
under the heading "Commercial Paper". If by 3:00 P.M., New York
City time, on such Calculation Date such rate is not published in
either H.15(519) or Composite Quotations, then the Commercial Pa-
per Rate for such Commercial Paper Rate Interest Determination
Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 A.M., New York City time, on such Commercial
Paper Rate Interest Determination Date of three leading dealers
of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the specified Index
Maturity placed for an industrial issuer whose bond rating is
"AA", or the equivalent, from a nationally recognized rating
agency; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as set forth
above, the Commercial Paper Rate will be the Commercial Paper
Rate in effect on such Commercial Paper Rate Interest Determina-
tion Date.
Commercial Paper Rate Interest Determination Date:
The term "Commercial Paper Rate Interest Determination
Date" for a Commercial Paper Rate Note shall mean the second
Business Day preceding its Interest Reset Date.
Commercial Paper Rate Notes:
The term "Commercial Paper Rate Notes" shall mean
Floating Rate Notes which are specified in the applicable Company
Order as having interest computed with reference to the Commer-
cial Paper Rate.
Company:
The term "Company" shall mean the corporation named as
the "Company" in the first paragraph of this Indenture, and its
successors and assigns.
Company Order:
The term "Company Order" shall mean:
(a) a written order signed in the name of the Company
by the Chairman of the Board, the President or any Vice President
and by the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee, to authenticate a Note and to make
it available for delivery, and specifying for such Note the
following information:
(1) the name of the Person in which a Note to be
issued and authenticated shall be registered;
(2) the address of such Person;
(3) the taxpayer identification number of such Person;
(4) the principal amount of such Note and, if multiple
Notes are to be issued to such Person, the denominations of
such Notes;
(5) the Original Issue Date of such Note;
(6) the date upon which such Note is scheduled to
mature;
(7) the Redemption Date and the price or prices at
which such Note is redeemable at the option of the Company;
(8) if the Note is a Fixed Rate Note, the rate of
interest on such Note and the Interest Payment Dates, if
other than May 1 and November 1;
(9) if the Note is a Floating Rate Note, its:
(A) Base Rate (G) Interest Reset Dates
(B) Index Maturity (H) Initial Interest Reset
(C) Interest Payment Dates Date
(D) Initial Interest Rate (I) Interest Payment Dates
(E) Maximum Interest Rate (J) Spread
(F) Minimum Interest Rate (K) Spread Multiplier
(10) all other information necessary for the issuance
of such Note; or
(b) confirmation given to the Trustee by an officer of
the Company designated by an Officers' Certificate, by telephone,
confirmed by telex or facsimile or similar writing, of the
information given to the Trustee by an Authorized Agent for the
issuance of a Note, and the written order of the Company to
authenticate such Note and to make it available for delivery.
Composite Quotations:
The term "Composite Quotations" shall mean the daily
statistical release "Composite 3:30 P.M. Quotations for U.S.
Government Securities" or any successor publication published by
the Federal Reserve Bank of New York.
Corporate Trust Office of the Trustee:
The term "corporate trust office of the Trustee," or
other similar term, shall mean the principal corporate trust
office of the Trustee in the Borough of Manhattan, the City and
State of New York, at which at any particular time its corporate
trust business shall be administered, which office is at the date
of the execution of this Indenture located at 101 Barclay Street,
21 W, New York, New York 10286.
CUSIP:
The term "CUSIP" shall mean the registered trademark
"Committee on Uniform Securities Identification Procedures" or
"CUSIP" and a unique system of identification of each public
issue of a security owned by the American Bankers Association and
administered by Standard and Poor's Corporation, as agent of the
American Bankers Association.
Depositary:
The term "Depositary" shall mean, unless otherwise
specified by the Company pursuant to Section 2.05 hereof, The
Depository Trust Company, New York, New York, or any successor
thereto registered and qualified under the Securities and Ex-
change Act of 1934, as amended, or other applicable statute or
regulation.
Discharged:
The term 'Discharged" shall have the meaning specified
in Section 5.01(c).
Event of Default:
The term "Event of Default" shall mean any event
specified in Section 8.01, continued for the period of time, if
any, and after the giving of the notice, if any, therein desig-
nated.
Fixed Rate Note:
The term "Fixed Rate Note" shall mean a Note which
bears interest at a fixed rate specified in the applicable
Company Order.
Floating Rate Note:
The term "Floating Rate Note" shall mean a Commercial
Paper Rate Note, a LIBOR Note or a Treasury Rate Note.
Global Note:
The term "Global Note" shall mean a single Note that
pursuant to Section 2.05 is issued to evidence Notes having
identical terms and provisions, which is delivered to the Deposi-
tary or pursuant to instructions of the Depositary and which
shall be registered in the name of the Depositary or its nominee.
H.15(519)
The term "H.15(519)" shall mean the publication
"Statistical Release H.15(519), Selected Interest Rates" or any
successor publication published by the Board of Governors of the
Federal Reserve System.
Indenture:
The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.
Index Maturity:
The term "Index Maturity" of a particular Floating Rate
Note shall mean the period to Maturity of the instrument or
obligation from which the Base Rate of such Floating Rate Note is
calculated, as specified in the applicable Company Order.
Initial Interest Rate:
The term "Initial Interest Rate" for a particular
Floating Rate Note shall mean the interest rate specified in the
applicable Company Order as in effect from the Original Issue
Date of such Floating Rate Note to its First Interest Reset Date.
Interest Accrual Period:
The term "Interest Accrual Period" for a particular
Floating Rate Note shall mean the period from the date of issue
of such Floating Rate Note, or from an Interest Reset Date, if
any, to its next subsequent Interest Reset Date.
Interest Determination Date:
The term "Interest Determination Date" shall mean each
Commercial Paper Rate Interest Determination Date, LIBOR Interest
Determination Date and Treasury Rate Interest Determination Date.
Interest Factor:
The term "Interest Factor" for a Floating Rate Note for
each day in an Interest Accrual Period for such Floating Rate
Note shall be computed by dividing the Interest Rate applicable
to such day by 360 in the case of Commercial Paper Rate Notes and
LIBOR Notes or by the actual number of days in the year in the
case of Treasury Rate Notes.
Interest Payment Date:
(a) The term "Interest Payment Date" shall mean with
respect to a Floating Rate Note which has an Interest Reset Date
which is (1) daily, weekly or monthly: the third Wednesday of
each month or the third Wednesday of March, June, September and
December of each year, as specified in the applicable Company
Order, (2) quarterly: the third Wednesday of March, June,
September and December of each year, (3) semiannually: the third
Wednesday of the two months of each year specified in the
applicable Company Order; (4) annually: the third Wednesday of
the month specified in the applicable Company Order and, in each
case, at Maturity. If any Interest Payment Date (other than at
Maturity) for any Floating Rate Note would fall on a day that is
not a Business Day with respect to such Floating Rate Note, such
Interest Payment Date will be the following day that is a
Business Day with respect to such Floating Rate Note, except
that, in the case of a LIBOR Note, if such Business Day is in the
next succeeding calendar month, such Interest Payment Date shall
be the immediately preceding day that is a Business Day with
respect to such LIBOR Note;
(b) the term "Interest Payment Date" shall mean with
respect to a Fixed Rate Note each May 1 and November 1, or such
other dates which are specified in the applicable Company Order
during the period such Fixed Rate Note is outstanding, the date
of Maturity of such Fixed Rate Note, and with respect to
defaulted interest on such Fixed Rate Note, the date established
by the Company for the payment of such defaulted interest.
Interest Payment Period:
The term "Interest Payment Period" shall mean for:
(a) each Floating Rate Note on which interest is reset
monthly, quarterly, semiannually or annually, and each Fixed
Rate Note, the period:
(1) beginning on and including the Original Issue
Date of such Note or the most recent Interest Payment
Date on which interest was paid on such Note, and
(2) ending on but not including the next Interest
Payment Date or, for the last Interest Payment Period,
Maturity, of such Note;
(b) each Floating Rate Note on which interest is reset
daily or weekly, the period:
(1) beginning on and including the Original Issue
Date of such Floating Rate Note, or beginning on but
excluding the most recent Record Date through which
interest was paid on such Note, and
(2) ending on and including the next Record Date
or, for the last Interest Payment Period, ending on but
excluding Maturity, of such Note;
provided, however, that the first Interest Payment Period for any
Note which has its Original Issue date after a Record Date and
prior to its next Interest Payment Date, shall begin on and
include such Original Issue Date and (i) end on and include the
next Record Date for Floating Rate Notes on which interest is
reset daily or weekly, and (ii) end on but not include the second
Interest Payment Date after the Original Issue Date for all other
Notes.
Interest Rate:
(a) The term "Interest Rate" for a particular Floating
Rate Note shall mean (1) from the date of issue of such Floating
Rate Note to the first Interest Reset Date for such Floating Rate
Note, the Initial Interest Rate, and (2) each Interest Accrual
Period commencing on or after such First Interest Reset Date, the
Base Rate with reference to the Index Maturity for such Floating
Rate Note as specified in the applicable Company Order plus or
minus the Spread, if any, multiplied by the Spread Multiplier, if
any; provided, in the event no Spread or Spread Multiplier is
provided in such Company Order, the Spread and Spread Multiplier
shall be zero and one, respectively; provided, further, in no
event shall the Interest Rate be greater than the Maximum
Interest Rate, if any, or less than the Minimum Interest Rate, if
any; and provided, further, the Interest Rate in effect for the
ten days immediately prior to Maturity will be the Interest Rate
in effect on the tenth day preceding such Maturity and provided,
further, the Interest Rate will in no event be higher than the
maximum rate permitted by applicable state law, as the same may
be modified by United States laws of general application.
(b) The term "Interest Rate" for a particular fixed
Rate Note shall mean the interest rate specified in the
applicable Company Order.
Interest Reset Date:
The term "Interest Reset Date" shall mean, in the case
of a Floating Rate Note specified in the applicable Company Order
as being reset (a) daily: each Business Day; (b) weekly: the
Wednesday of each week (with the exception of weekly reset
Treasury Rate Notes which reset the Tuesday of each week, except
as specified below); (c) monthly: the third Wednesday of each
month; (d) quarterly: the third Wednesday of March, June, Septem-
ber and December; (e) semiannually: the third Wednesday of the
two months specified in the applicable Company Order; and (f)
annually: the third Wednesday of the month specified in the
applicable Company Order. If any Interest Reset Date for a
Floating Rate Note would otherwise be a day which is not a Busi-
ness Day, such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that in the case of
a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the next
preceding Business Day. If, in the case of a Treasury Rate Note,
an Interest Reset Date shall fall on a day on which the Treasury
auctions Treasury Bills, then such Interest Reset Date shall
instead be the first Business Day following such auction.
LIBOR:
The term "LIBOR" for a particular Floating Rate Note,
unless otherwise indicated in the applicable Company Order, shall
mean, with respect to any LIBOR Interest Determination Date, the
rate determined on the basis of the offered rates for deposits
(in United States dollars and in a principal amount equal to an
amount of not less than $1,000,000 that is representative for a
single transaction in such market at such time for the period of
the Index Maturity specified in the applicable Company Order),
commencing on the second London Banking Day immediately following
such LIBOR Interest Determination Date, which appears as of 11:00
A.M., London time, on the Reuters Screen LIBO Page on the Reuters
Monitor Rates Service on the LIBOR Interest Determination Date.
If at least two such offered rates appear on the Reuters Screen
LIBO Page, LIBOR for such LIBOR Interest Determination Date will
be the arithmetic mean (rounded, if necessary, to the nearest one
hundred-thousandth of a percent) of such offered rates as deter-
mined by the Calculation Agent. If fewer than two such offered
rates appear, the Calculation Agent shall request the principal
London office of four major banks in the London interbank market
selected by the Calculation Agent to provide the Calculation
Agent with a quotation of their offered rates for deposits (in
United States dollars for the period of the applicable Index
Maturity and in a principal amount equal to an amount of not less
than $1,000,000 that is representative for a single transaction
in such market at such time) at approximately 11:00 A.M., London
time, on such LIBOR Interest Determination Date commencing on the
second London Banking Day immediately following such LIBOR
Interest Determination Date. If at least two such quotations are
provided, LIBOR for such LIBOR Interest Determination Date will
equal the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such LIBOR Interest Determina-
tion Date will equal the arithmetic mean of the rates quoted by
three major banks in The City of New York, as selected by the
Calculation Agent, at approximately 11:00 A.M., New York City
time, on such LIBOR Interest Determination Date for loans to
leading European banks (in United States dollars for the period
of the applicable Index Maturity and in a principal amount equal
to an amount of not less than $1,000,000 that is representative
for a single transaction in such market at such time) commencing
on the second London Banking Day following such LIBOR Interest
Determination Date; provided, however, that if the banks selected
as aforesaid by the Calculation Agent are not quoting as set
forth above, LIBOR will be LIBOR in effect on such LIBOR Interest
Determination Date.
LIBOR Interest Determination Date:
The term "LIBOR Interest Determination Date" for a
LIBOR Note shall mean the Second London Banking Day preceding its
Interest Reset Date.
LIBOR Notes:
The term "LIBOR Notes" shall mean Floating Rate Notes
which are specified in the applicable Company Order as having
interest computed with reference to LIBOR.
London Banking Day:
The term "London Banking Day" shall mean any day on
which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
Maturity:
The term "Maturity", when used with respect to any
Note, shall mean the date on which the principal of such Note
becomes due and payable as therein or herein provided, whether at
the stated maturity thereof or by declaration of acceleration,
call for redemption or otherwise.
Maximum Interest Rate:
The term "Maximum Interest Rate" shall mean the maximum
rate of interest, if any, which may accrue to any Floating Rate
Note during any Interest Accrual Period as specified in the
applicable Company Order.
Minimum Interest Rate:
The term "Minimum Interest Rate" shall mean the minimum
rate of interest, if any, which may be applicable to any Floating
Rate Note during any Interest Accrual Period as specified in the
applicable Company Order.
Money Market Yield
The term "Money Market Yield" shall be the yield (ex-
pressed as a percentage) calculated in accordance with the
following formula:
Money Market Yield = D x 360
x 100
360-(D x M)
where "D" refers to the applicable per annum rate for commercial
paper quoted on a bank discount basis and expressed as a decimal,
and "M" refers to the actual number of days in the Interest
Accrual Period for which interest is being calculated.
Mortgage:
The term "Mortgage" shall mean the General Mortgage
Indenture and Deed of Trust dated as of December 1, 1986, from
the Company to United Missouri Bank of Kansas City, N.A., as
trustee, as from time to time supplemented and amended, including
but not limited to the Mortgage Supplemental Indenture.
Mortgage Bonds:
The term "Mortgage Bonds" shall mean the Company's
mortgage bonds issued under the Mortgage.
Mortgage Supplemental Indenture:
The term "Mortgage Supplemental Indenture" shall mean
the Tenth Supplemental Indenture dated as of November 1, 1994,
which supplements the Mortgage.
Mortgage Trustee:
The term "Mortgage Trustee" shall mean the trustee at
the time serving as such under the Mortgage.
Note or Notes; Outstanding:
The terms "Note or "Notes" shall mean any Fixed Rate or
Floating Rate Note or Notes, as the case may be, authenticated
and delivered under this Indenture, including any Global Note.
The term "outstanding," when used with reference to
Notes, shall, subject to Section 10.04, mean, as of any particu-
lar time, all Notes authenticated and delivered by the Trustee
under this Indenture, except
(a) Notes theretofore cancelled by the Company or
delivered to the Company for cancellation;
(b) Notes, or portions thereof, for the payment
or redemption of which moneys in the necessary amount
shall have been deposited in trust with the Trustee or
with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying
agent), provided that if such Notes are to be redeemed
prior to the maturity thereof, notice of such redemp-
tion shall have been given as provided in
Article Three, or provisions satisfactory to the Trust-
ee shall have been made for giving such notice;
(c) Notes, or portions thereof, which shall have
been Discharged; and
(d) Notes in lieu of or in substitution for which
other Notes shall have been authenticated and deliv-
ered, or which have been paid, pursuant to
Section 2.07.
Noteholder:
The terms "Noteholder" or "holder of Notes" shall mean
any Person in whose name at the time a particular Note is regis-
tered on the books of the Company kept for that purpose in accor-
dance with the terms hereof.
Officers' Certificate:
The term "Officers' Certificate" when used with respect
to the Company, shall mean a certificate signed by the Chairman
of the Board, the President or any Vice President and by the
Secretary or an Assistant Secretary of the Company. Each such
certificate shall include the statements provided for in Sec-
tion 15.05 if and to the extent required by such Section.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of the
Company, or such other counsel who is satisfactory to the
Trustee. Each such opinion shall include the statements provided
for in Section 15.05 if and to the extent required by such Sec-
tion. In the event that the Indenture requires the delivery of
an Opinion of Counsel to the Trustee, the text and substance of
which has been previously delivered to the Trustee, the Company
may satisfy such requirement by the delivery by the legal counsel
that delivered such previous Opinion of Counsel of a letter to
the Trustee to the effect that the Trustee may rely on such
previous Opinion of Counsel as if such Opinion of Counsel was
dated and delivered the date delivery of such Opinion of Counsel
is required.
Original Issue Date:
The term "Original Issue Date" shall mean for a
particular Note, or portions thereof, the date upon which it, or
such portion, was issued by the Company pursuant to this
Indenture and authenticated by the Trustee (other than in
connection with a transfer, exchange or substitution).
Person:
The term "Person" shall mean any individual, corpora-
tion, partnership, joint venture, association, joint-stock compa-
ny, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Pledged Bond:
The term "Pledged Bond" shall mean the Mortgage Bond,
Medium-Term Series E, in the form attached hereto as Exhibit A,
issued by the Company pursuant to the Mortgage Supplemental
Indenture.
Principal Executive Offices of the Company:
The term "principal executive offices of the Company"
shall mean the place where the main corporate offices of the
Company are located, currently 1201 Walnut, Kansas City,
Missouri 64106, or such other place where the main corporate
offices of the Company are located as designated in an Officer's
Certificate delivered to the Trustee.
Record Date:
The term "Record Date" shall mean for the Interest
Payment Date for the payment of interest for an Interest Payment
Period for a particular Note (a) the day which is fifteen
calendar days prior to such Interest Payment Date, whether or not
such day is a Business Day, (b) the date of Maturity of such
Note, unless such date of Maturity for a Fixed Rate Note is a May
1 or a November 1, in which event the Record Date will be as
provided in clause (a), and (c) a date which is not less than
five Business Days preceding the Interest Payment Date of
defaulted interest on such Note established by notice given by
first-class mail by or on behalf of the Company to the holder of
such Note not less than fifteen days prior to such Interest
Payment Date.
Redemption Date:
The term "Redemption Date" for a Note shall mean the
date on or after which such Note is redeemable at the option of
the Company.
Responsible Officer:
The term "responsible officer" or "responsible offi-
cers" when used with respect to the Trustee shall mean one or
more of the following: the chairman of the board of directors,
the vice chairman of the board of directors, the chairman of the
executive committee, the president, any vice president, the
cashier, the secretary, the treasurer, any trust officer, any
assistant trust officer, any second or assistant vice president,
any assistant cashier, any assistant secretary, any assistant
treasurer, or any other officer or assistant officer of the
Trustee customarily performing functions similar to those per-
formed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the
particular subject.
Spread:
The term "Spread" applicable to a particular Floating
Rate Note shall mean the number of Basis Points above or below
the Base Rate for such Floating Rate Note as specified in the
applicable Company Order.
Spread Multiplier:
The term "Spread Multiplier" applicable to a particular
Floating Rate Note shall mean the percentage of the Base Rate
applicable to the Interest Rate for such Floating Rate Note as
specified in the applicable Company Order.
Treasury:
The term "Treasury" shall mean the United States De-
partment of Treasury.
Treasury Bills:
The term "Treasury Bills" shall mean direct obligations
of the United States.
Treasury Rate:
The term "Treasury Rate" for a particular Floating Rate
Note, unless otherwise indicated in the Applicable Company Order,
shall mean with respect to any Treasury Rate Interest Determina-
tion Date, the rate applicable to the most recent auction of
Treasury Bills having the Index Maturity specified in the appli-
cable Company Order, as such rate is published in H.15(519) under
the heading "Treasury bills-auction average (investment)" or, if
not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Treasury Rate Interest Deter-
mination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applica-
ble, and applied on a daily basis) as otherwise announced by the
Treasury. In the event that the results of the auction of Trea-
sury Bills having the specified Index Maturity are not reported
as provided by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent
and shall be a yield to maturity (expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three
leading primary United States government securities dealers
selected by the Calculation Agent, for the issue of Treasury
Bills with a remaining maturity closest to the applicable Index
Maturity; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as set forth
above, the Treasury Rate will be the Treasury Rate in effect on
such Treasury Rate Interest Determination Date.
Treasury Rate Interest Determination Date:
The term "Treasury Rate Interest Determination Date"
for a Treasury Rate Note shall mean the day of the week in which
its Interest Reset Date falls on which Treasury Bills normally
would be auctioned, provided, however, that if as a result of a
legal holiday an auction is held on the Friday of the week
preceding such Interest Reset Date, the related Treasury Rate
Interest Determination Date shall be the preceding Friday.
Treasury Rate Notes:
The term "Treasury Rate Notes" shall mean Floating Rate
Notes which are specified in the applicable Company Order as
having interest computed with reference to the Treasury Rate.
Trustee:
The term "Trustee" shall mean The Bank of New York and,
subject to Article Nine, shall also include any successor Trust-
ee.
U.S. Government Obligations:
The term "U.S. Government Obligations" shall mean (a)
direct non-callable obligations of, or non-callable obligations
guaranteed as to timely payment of principal and interest by, the
United States of America or an agency thereof for the payment of
which obligations or guarantee the full faith and credit of the
United States is pledged or (b) certificates or receipts repre-
senting direct ownership interests in obligations or specified
portions (such as principal or interest) of obligations described
in (a) above, which obligations are held by a custodian in safe-
keeping on behalf of such certificates or receipts.
ARTICLE TWO.
Form, Issue, Execution, Registration And Exchange Of
Notes.
Section 2.01. Form Generally.
(a) The Notes shall be titled "Secured Medium-Term
Notes", and, if such Notes shall be in the form of (a) a Fixed
Rate Note which is a Global Note, shall be in substantially the
form set forth in Exhibit B, (b) a Fixed Rate Note which is not a
Global Note, shall be in substantially the form set forth in
Exhibit C, (c) a Floating Rate Note which is a Global Note, shall
be in substantially the form set forth in Exhibit D, and (d) a
Floating Rate Note which is not a Global Note, shall be in
substantially the form set forth in Exhibit E, to this Indenture,
or in any such case such other form as shall be established by a
Board Resolution, or an Officers' Certificate pursuant to a Board
Resolution, or in one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions, substitu-
tions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities ex-
change or with applicable law or as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced
by their execution of such Notes. If the form of Notes is estab-
lished by a Board Resolution, or an Officers' Certificate pursu-
ant to a Board Resolution, a copy of such Board Resolution or
Officer's Certificate shall be delivered to the Trustee at or
prior to the delivery to the Trustee of the Company Order contem-
plated by Section 2.05 for the authentication and delivery of
such Notes.
(b) The definitive Notes shall be printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers
executing such Notes, as evidenced by their execution of such
Notes.
Section 2.02. Form of Trustee's Certificate of Authen-
tication. The Trustee's certificate of authentication on all
Notes shall be in substantially the following form:
Trustee's Certificate of Authentication
This is one of the Notes designated therein referred to
in the within-mentioned Indenture.
The Bank of New York,
as Trustee
By __________________________
Authorized Signatory
Section 2.03. Amount Limited. The aggregate principal
amount of Notes which may be authenticated and delivered under
this Indenture is limited to $125,000,000, or such lesser amount
as may from time to time be established by an Officers' Certifi-
cate delivered to the Trustee.
Section 2.04. Denominations, Dates, Interest Payment
and Record Dates.
(a) The Notes shall be issuable in registered form
without coupons in denominations of $1,000 and integral multiples
of $1,000 in excess thereof.
(b) Each Note shall be dated and issued as of the date
of its authentication by the Trustee, and shall bear an Original
Issue Date or, as provided in Section 2.12(e), two or more Origi-
nal Issue Dates; each Note issued upon transfer, exchange or
substitution of a Note shall bear the Original Issue Date or
Dates of such transferred, exchanged or substituted Note, subject
to Section 2.12(e).
(c) Each Note shall bear interest, if any, at its
Interest Rate during each Interest Payment Period for such Note,
from the later of (1) its Original Issue Date (or, if pursuant to
Section 2.12, a Global Note has two or more Original Issue Dates,
interest shall, beginning on each such Original Issue Date, begin
to accrue for that part of the principal amount of such Global
Note to which that Original Issue Date is applicable), or (2) the
most recent date to which any interest has been paid or duly
provided for until the principal of such Note is paid or made
available for payment, and Accrued Interest on each Note shall be
payable for each Interest Payment Period on the Interest Payment
Date immediately subsequent to the Record Date for the payment of
interest for such Interest Payment Period.
(d) All percentages resulting from any calculation of
the Interest Rate for a Floating Rate Note shall be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655%
(or .0987655)), and all dollar amounts used in or resulting from
such calculation shall be rounded to the nearest cent (with one-
half cent being rounded upward).
(e) Each Note shall mature on a date specified in such
Note not less than nine months nor more than 30 years after its
Original Issue Date, and the principal amount of each outstanding
Note shall be payable on the maturity date specified therein.
(f) The Person in whose name any Note is registered at
the close of business on any Record Date with respect to an
Interest Payment Date for such Note shall be entitled to receive
the Accrued Interest payable on such Note on such Interest
Payment Date notwithstanding the cancellation of such Note upon
any registration of transfer, exchange or substitution of such
Note subsequent to such Record Date and prior to such Interest
Payment Date.
(g) The Company shall cause the Calculation Agent to
calculate each Interest Rate applicable to each Floating Rate
Note in accordance with this Indenture, and the Company shall, or
shall cause the Calculation Agent to, notify the Trustee of each
determination of such Interest Rate promptly after such
determination.
(h) On the fifth Business Day immediately preceding
each Interest Payment Date, the Trustee shall furnish to the
Company a notice setting forth the total amount of the Accrued
Interest payments to be made on such Interest Payment Date and to
the Depositary, a notice setting forth the total amount of
Accrued Interest payments to be made on Global Notes on such
Interest Payment Date. The Trustee will provide monthly to the
Company a list of the principal of and any premium and Accrued
Interest to be paid on Notes in the next succeeding month and to
the Depositary a list of the principal of and any premium and
Accrued Interest to be paid on Global Notes in the such
succeeding month. Promptly after the first Business Day of each
month, the Trustee shall furnish to the Company a written notice
setting forth the aggregate principal amount of the Global Notes.
The Company will provide to the Trustee not later than the
payment date sufficient moneys to pay in full all principal of
and any premium and Accrued Interest payments due on such payment
date. The Trustee shall assume responsibility for withholding
taxes on interest paid as required by law.
(i) Upon the request of any Noteholder of a Floating
Rate Note, the Trustee shall provide to such Noteholder the
Interest Rate then in effect and, if determined, the Interest
Rate that will become effective on the next Interest Reset Date,
with respect to such Floating Rate Note.
Section 2.05. Execution, Authentication, Delivery and
Dating.
(a) The Notes shall be executed on behalf of the
Company by the Chairman of the Board, the President or any Vice
President under its corporate seal (which may be in the form of a
facsimile thereof and may be printed, engraved or otherwise
reproduced thereon) attested by the Secretary or an Assistant
Secretary. The signature of any of such officers on any Notes
may be manual or facsimile.
(b) Notes bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) At any time and from time to time after the execu-
tion and delivery of this Indenture, the Company may deliver
Notes executed by the Company to the Trustee for authentication,
together with one or more Company Orders for the authentication
and delivery of such Notes, and the Trustee in accordance with
any such Company Order shall authenticate such Notes and make
them available for delivery. Prior to authenticating such Notes,
and in accepting the additional responsibilities under this
Indenture in relation to such Notes, the Trustee shall be
entitled to receive the following only at or before the first
issuance of Notes, and (subject to Section 9.01) shall be fully
protected in relying upon:
(1) a Board Resolution authorizing this Indenture
and the Notes, and if applicable, an appropriate record
of any action taken pursuant to such Board Resolution,
certified by the Secretary or an Assistant Secretary of
the Company;
(2) an Officers' Certificate designating one or
more Authorized Agents and officers of the Company who
are authorized to give Company Orders for the issuance
of, and specifying terms of, Notes and, if appropriate,
setting forth the form of Notes in accordance with
Section 2.01;
(3) an Opinion of Counsel stating,
(A) if the form of Notes has been
established by or pursuant to a Board
Resolution or, an Officers' Certificate
pursuant to a Board Resolution, or in a
supplemental indenture as permitted by
Section 2.01, that such form has been
established in conformity with this
Indenture;
(B) that the Indenture has been duly
authorized, executed and delivered by the
Company and constitutes a valid and legally
binding agreement of the Company, enforceable
in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and
other laws of general applicability relating
to or affecting the enforcement of creditors'
rights and to general equity principles;
(C) that the Indenture and the Mortgage
Indenture are qualified under the TIA;
(D) that the issuance of the Pledged
Bond has been duly authorized, the Pledged
Bond has been duly authorized, executed and
delivered and the Pledged Bond is a legal,
valid and a legally binding obligation of the
Company enforceable in accordance with its
terms and entitled to the benefits of the
Mortgage Indenture, subject to bankruptcy,
insolvency, reorganization and other laws of
general applicability relating to or
affecting the enforcement of creditors'
rights and to general equity principles;
(E) that any supplemental indenture
referred to in (A) above has been duly
authorized, executed and delivered by the
Company and constitutes a legal, valid and
legally binding agreement of the Company,
enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorgani-
zation and other laws of general
applicability relating to or affecting the
enforcement of creditors' rights and to
general equity principles;
(F) that the Notes, when authenticated
and delivered by the Trustee and issued by
the Company in the manner and subject to any
conditions specified in such Opinion of
Counsel, will constitute legal, valid and
legally binding obligations of the Company,
enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorgani-
zation and other laws of general applicabil-
ity relating to or affecting the enforcement
of creditors' rights and to general equity
principles;
(G) that all laws and requirements in
respect of the execution, delivery and sale
by the Company of the Notes have been
complied with;
(H) that the Company is not in default
in any of its obligations under this
Indenture or the Mortgage Indenture, and that
the issuance of the Notes will not result in
any such default; and
(I) such other matters as the Trustee
may reasonably request.
(4) the Pledged Bond; and
(5) the Opinion of Counsel required by Section
6.05(a).
(d) The Trustee shall have the right to decline to
authenticate and deliver any Note:
(1) if the issuance of such Note pursuant to this
Indenture will affect the Trustee's own rights, duties
or immunities under the Notes and this Indenture or
otherwise in a manner which is not reasonably
acceptable to the Trustee;
(2) if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken;
or
(3) if the Trustee in good faith by its Board of
Directors, executive committee or a trust committee of
directors and/or responsible officers in good faith
determines that such action would expose the Trustee to
personal liability to holders of any outstanding Notes.
(e) No Note shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless
there appears on such Note a certificate of authentication
substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture, provided, however,
that if any Note shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the
Company shall deliver such Note to the Trustee for cancellation
as provided in Section 2.09, for all purposes of this Indenture
such Note shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits
of this Indenture.
Section 2.06. Exchange and Registration of Transfer of
Notes.
(a) Subject to Section 2.12, Notes may be exchanged
for one or more new Notes, of any authorized denominations and of
a like aggregate principal amount and stated maturity and having
the same terms and Original Issue Date or Dates. Notes to be
exchanged shall be surrendered at any of the offices or agencies
to be maintained by the Company for such purpose as provided in
Section 6.02, and the Company shall execute and register and the
Trustee shall authenticate and deliver in exchange therefor the
Note or Notes which the Noteholder making the exchange shall be
entitled to receive.
(b) The Trustee on behalf of the Company shall keep, at
one of said offices or agencies, a register in which, subject to
such reasonable regulations as it or the Company may prescribe,
the Trustee shall register or cause to be registered Notes and
shall register or cause to be registered the transfer of Notes as
in this Article Two provided. Such register shall be in written
form or in any other form capable of being converted into written
form within a reasonable time. At all reasonable times such
register shall be open for inspection by the Trustee. Upon due
presentment for registration of transfer of any Note at any such
office or agency, the Company shall execute and register or cause
to be registered and the Trustee shall authenticate and make
available for delivery, in the name of the transferee or trans-
ferees, one or more new Notes, of any authorized denominations
and of a like aggregate principal amount and stated maturity and
having the same terms and Original Issue Date or Dates.
(c) All Notes presented for registration of transfer
or for exchange, redemption or payment shall (if so required by
the Company) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the
Company and the Trustee duly executed by, the holder or the
attorney of such holder duly authorized in writing.
(d) No service charge shall be made for any exchange
or registration of transfer of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
(e) The Company shall not be required to exchange or
register a transfer of any Notes selected, called or being called
for redemption except, in the case of any Note to be redeemed in
part, the portion thereof not to be so redeemed.
(f) If the principal amount and any applicable premium
or part, but not all of a Global Note is paid, then upon
surrender to the Trustee of such Global Note, the Company shall
execute, and the Trustee shall authenticate, and make available
for delivery, a Global Note in an authorized denomination in
aggregate principal amount equal to, and having the same terms
and Original Issue Date or Dates as, the unpaid portion of such
Global Note.
Section 2.07. Mutilated, Destroyed, Lost or Stolen
Notes.
(a) In case any temporary or definitive Note shall
become mutilated or be destroyed, lost or stolen, the Company in
its discretion may execute, and upon its request the Trustee
shall authenticate and deliver, a new Note of like form and
principal amount and having the same terms and Original Issue
Date or Dates and bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note,
or in lieu of and in substitution for the Note so destroyed, lost
or stolen. In every case the applicant for a substituted Note
shall furnish to the Company, the Trustee, any Authenticating
Agent or Note registrar such security or indemnity as may be
required by them to save each of them harmless, and, in every
case of destruction, loss or theft of a Note, the applicant shall
also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Note and
of the ownership thereof.
(b) The Trustee may authenticate any such substituted
Note and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance
of any substituted Note, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
connected therewith. In case any Note which has matured or is
about to mature shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substituted Note,
pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated Note) if the applicant
for such payment shall furnish to the Company, the Trustee, any
Authenticating Agent or Note registrar such security or indemnity
as may be required by them to save each of them harmless and, in
case of destruction, loss or theft, evidence satisfactory to the
Company and the Trustee of the destruction, loss or theft of such
Note and of the ownership thereof.
(c) Every substituted Note issued pursuant to this
Section 2.07 by virtue of the fact that any Note is destroyed,
lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not such destroyed, lost or
stolen Note shall be found at any time, and shall be entitled to
all the benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder. All Notes
shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all
other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other
securities without their surrender.
Section 2.08. Temporary Notes. Pending the
preparation of definitive Notes, the Company may execute and the
Trustee shall authenticate and make available for delivery,
temporary Notes (printed, lithographed or otherwise reproduced).
Temporary Notes shall be issuable in any authorized denomination
and substantially in the form of the definitive Notes but with
such omissions, insertions and variations as may be appropriate
for temporary Notes, all as may be determined by the Company.
Every such temporary Note shall be authenticated by the Trustee
upon the same conditions and in substantially the same manner,
and with the same effect, as the definitive Notes. Without
unreasonable delay the Company will execute and register and will
deliver to the Trustee definitive Notes and thereupon any or all
temporary Notes may be surrendered in exchange therefor, at the
Corporate Trust Office of the Trustee, and the Trustee shall
authenticate and deliver in exchange for such temporary Notes an
equal aggregate principal amount of definitive Notes. Such
exchange shall be made by the Company at its own expense and
without any charge therefor to the Noteholders. Until so
exchanged, the temporary Notes shall in all respects be entitled
to the same benefits under this Indenture as definitive Notes
authenticated and made available for delivery hereunder.
Section 2.09. Cancellation of Notes Paid, etc. All
Notes surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall be surrendered to the
Trustee for cancellation and promptly cancelled by it and no
Notes shall be issued in lieu thereof except as expressly
permitted by this Indenture. All Notes so cancelled shall be
retained by the Trustee. If the Company shall acquire any of the
Notes, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by
such Notes unless and until the same are cancelled by the
Trustee.
Section 2.10. Interest Rights Preserved. Each Note
delivered under this Indenture upon transfer of or in exchange
for or in lieu of any other Note shall carry all the rights to
unpaid Accrued Interest, and interest to accrue, which were
carried by such other Note, and each such Note shall be so dated
that neither gain nor loss of interest shall result from such
transfer, exchange or substitution.
Section 2.11. Payment of Notes. The principal of and
any premium and Accrued Interest on all Notes shall be payable as
follows:
(a) On or before 10:00 a.m., New York City time, of
the day on which payment of principal, Accrued Interest and
premium is due on any Global Note pursuant to the terms thereof,
the Company shall deliver to the Trustee immediately available
funds sufficient to make such payment. On or before 10:30 a.m.,
New York City time or such other time as shall be agreed upon
between the Trustee and the Depositary, of the day on which such
payment is due, the Trustee shall deposit with the Depositary
such funds by wire transfer into the account specified by the
Depositary. As a condition to the payment at the Maturity of any
part of the principal and applicable premium of any Global Note,
the Depositary shall surrender, or cause to be surrendered, such
Global Note to the Trustee, whereupon a new Global Note shall be
issued to the Depositary pursuant to Section 3.03(d).
(b) With respect to any Note that is not a Global
Note, principal, any premium and Accrued Interest due at the
Maturity of such Note shall be payable in immediately available
funds when due upon presentation and surrender of such Note at
the Corporate Trust Office of the Trustee. Accrued Interest on
any Note that is not a Global Note (other than Accrued Interest
payable at the maturity date) shall be paid in a clearinghouse
funds check mailed on the Interest Payment Date; provided,
however, that if any holder of Notes, the aggregate principal
amount of which equals or exceeds $10,000,000, provides a written
request to the Trustee on or before the applicable Record Date
for such Interest Payment Date, Accrued Interest on such
principal amount shall be paid by wire transfer of immediately
available funds to a bank within the continental United States or
by direct deposit into the account of such holder if such account
is maintained with the Trustee.
Section 2.12. Notes Issuable in the Form of a Global
Note.
(a) If the Company shall establish pursuant to Section
2.05 that the Notes of a particular series are to be issued in
whole or in part in the form of one or more Global Notes, then
the Company shall execute and the Trustee shall, in accordance
with Section 2.05 and the Company Order delivered to the Trustee
thereunder, authenticate and make available for delivery, such
Global Note or Notes, which (1) shall represent, shall be
denominated in an amount equal to the aggregate principal amount
of, and shall have the same terms as, the outstanding Notes to be
represented by such Global Note or Notes, (2) shall be registered
in the name of the Depositary or its nominee, (3) shall be
delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction and (4) shall bear a legend
substantially to the following effect: "Unless and until it is
exchanged in whole or in part for the individual Notes
represented hereby, this Global Note may not be transferred
except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such
successor Depositary."
(b) Notwithstanding any other provision of Section
2.06 or of this Section 2.12, unless the terms of a Global Note
expressly permit such Global Note to be exchanged in whole or in
part for individual Notes, a Global Note may be transferred, in
whole but not in part, only to a nominee of the Depositary, or by
a nominee of the Depositary to the Depositary, or to a successor
Depositary for such Global Note selected or approved by the
Company or to a nominee of such successor Depositary.
(c) (1) If at any time the Depositary for a Global
Note notifies the Company that such Depositary is unwilling or
unable to continue as Depositary for such Global Note or if at
any time the Depositary for a Global Note shall no longer be
eligible or in good standing under the Securities Exchange Act of
1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depositary with respect to such
Global Note. If a successor Depositary for such Global Note is
not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the
Company's election pursuant to Section 2.05(c)(6) shall no longer
be effective with respect to such Global Note and the Company
shall execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of individual Notes of such
series in exchange for such Global Note, shall authenticate and
make available for delivery, individual Notes of such series of
like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Note in
exchange for such Global Note. The Trustee shall not be charged
with knowledge of notice of the ineligibility of a Depositary
unless a responsible officer assigned to and working in its
corporate trustee administration department shall have actual
knowledge thereof.
(2) The Company may at any time and in its sole
discretion determine that all outstanding (but not less than all)
the Notes issued or issuable in the form of one or more Global
Notes shall no longer be represented by such Global Note or
Notes. In such event the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and
delivery of individual Notes in exchange for such Global Note,
shall authenticate and make available for delivery, individual
Notes of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global
Note or Notes in exchange for such Global Note or Notes.
(3) If agreed upon by the Company and the
Depositary with respect to Notes issued in the form of a Global
Note, the Depositary for such Global Note shall surrender such
Global Note in exchange in whole or in part for individual Notes
of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such Depositary. Thereupon the
Company shall execute, and the Trustee shall authenticate and
make available for delivery, without a service charge, (A) to
each Person specified by the Depositary, a new Note or Notes of
like tenor and terms, and of any authorized denomination as
requested by such Person, in aggregate principal amount equal to
and in exchange for the beneficial interest of such Person in
such Global Note; and (B) to such Depositary a new Global Note of
like tenor and terms and in a denomination equal to the
difference, if any, between the principal amount of the
surrendered Global Note and the aggregate principal amount of
Notes delivered to Holders thereof.
(4) In any exchange provided for in Section
2.12(c)(1),(2) or (3), the Company will execute and the Trustee
will authenticate and make available for delivery, individual
Notes in definitive registered form in authorized denominations.
Upon the exchange of a Global Note for individual Notes, such
Global Note shall be cancelled by the Trustee. Notes issued in
exchange for a Global Note pursuant to this Section 2.12 shall be
registered in such names and in such authorized denominations as
the Depositary for such Global Note, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Notes to
the Depositary for delivery to the Persons in whose names such
Notes are so registered, or if the Depositary shall refuse or be
unable to deliver such Notes, the Trustee shall deliver such
Notes to the Persons in whose names such Notes are registered,
unless otherwise agreed upon by the Trustee and the Company.
(d) Neither the Company, the Trustee or any
Authenticating Agent will have any responsibility or liability
for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in a Global Note or
for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
(e) Pursuant to the provisions of this subsection, at
the option of the Trustee and upon thirty days' written notice to
the Depositary, the Depositary shall be required to surrender any
two or more Global Notes which have identical terms, including,
without limitation, identical maturities, interest rates and
redemption provisions (but which may have differing Original
Issue Dates) to the Trustee, and the Company shall execute and
the Trustee shall authenticate and deliver to, or at the
direction of, the Depositary a Global Note in principal amount
equal to the aggregate principal amount of, and with all terms
identical to, the Global Notes so surrendered to the Trustee, and
such new Global Note shall indicate each applicable Original
Issue Date and the principal amount applicable to each such
Original Issue Date. The exchange contemplated in this
subsection shall be consummated at least 30 days prior to any
Interest Payment Date applicable to any of the Global Notes so
surrendered to the Trustee. Upon any exchange of any Global Note
with two or more original Issue Dates, whether pursuant to this
Section or pursuant to Section 2.06 or Section 3.03, the
aggregate principal amount of the Notes with a particular
Original Issue Date shall be the same before and after such
exchange, giving effect to any retirement of Notes and the
Original Issue Dates applicable to such Notes occurring in
connection with such exchange.
Section 2.13. CUSIP Numbers. The Company in issuing
Notes may use CUSIP numbers (if then generally in use), and, if
so, the Trustee shall use CUSIP numbers in notices of redemption
Notes as a convenience to Noteholders, provided, that any such
notice may state that no representation is made as to the
correctness of such CUSIP numbers either as printed on the Notes
or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any
defect in or omission of such numbers.
ARTICLE THREE.
Redemption of Notes
Section 3.01. Applicability of Article. The
provisions of this Article Three shall be applicable to any Notes
which are redeemable prior to their stated maturity date.
Section 3.02. Notice of Redemption; Selection of
Notes.
(a) The election of the Company to redeem any Notes
shall be evidenced by a Board Resolution which shall be given
with notice of redemption to the Trustee ten Business Days prior
to the giving of the notice of redemption to holders of such
Notes.
(b) Notice of redemption to each holder of Notes to be
redeemed as a whole or in part shall be given in the manner
provided in Section 15.10 no less than 30 nor more than 60 days
prior to the date fixed for redemption. Any notice which is
given in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Noteholder
receives the notice. In any case, failure duly to give such
notice, or any defect in such notice, to the holder of any Note
designated for redemption as a whole or in part shall not affect
the validity of the proceedings for the redemption of any other
Note.
(c) Each such notice shall specify the date fixed for
redemption, the places of redemption and the redemption price at
which such Notes are to be redeemed, and shall state that payment
of the redemption price of such Notes or portion thereof to be
redeemed will be made on surrender of such Notes at such places
of redemption, that Accrued Interest to the date fixed for
redemption will be paid as specified in such notice, and that
from and after such date interest thereon will cease to accrue.
If less than all the Notes having the same terms are to be
redeemed, the notice shall specify the Notes or portions thereof
to be redeemed. In case any Note is to be redeemed in part only,
the notice which relates to such Note shall state the portion of
the principal amount thereof to be redeemed (which shall be
$1,000 or any integral multiple thereof), and shall state that,
upon surrender of such Note, a new Note or Notes having the same
terms in aggregate principal amount equal to the unredeemed
portion thereof will be issued.
(d) If less than all of the Notes having the same
terms are to be redeemed, the Trustee shall select in such manner
as it shall deem appropriate and fair in its discretion the
particular Notes to be redeemed as a whole or in part and shall
thereafter promptly notify the Company in writing of the Notes so
to be redeemed. Notes shall be redeemed only in denominations of
$1,000, provided, that any remaining principal amount of a Note
redeemed in part shall be at least $1,000.
(e) If at the time of the mailing of any notice of
redemption the Company shall not have irrevocably directed the
Trustee to apply funds deposited with the Trustee or held by it
and available to be used for the redemption of Notes to redeem
all the Notes called for redemption, such notice may state that
it is subject to the receipt of the redemption moneys by the
Trustee before the date fixed for redemption and that such notice
shall be of no effect unless such moneys are so received before
such date.
Section 3.03. Payment of Notes on Redemption; Deposit
of Redemption Price.
(a) If notice of redemption shall have been given as
provided in Section 3.02, such Notes or portions of Notes called
for redemption shall become due and payable on the date and at
the places stated in such notice at the applicable redemption
price, together with Accrued Interest to the date fixed for
redemption of such Notes, and on and after such date fixed for
redemption, provided that the Company shall have deposited with
the Trustee on such date of redemption the amount sufficient to
pay the redemption price together with Accrued Interest to the
date fixed for redemption. Interest on the Notes or portions
thereof so called for redemption shall cease to accrue and such
Notes or portions thereof shall be deemed not to be entitled to
any benefit under this Indenture except to receive payment of the
redemption price together with Accrued Interest thereon to the
date fixed for redemption. On presentation and surrender of such
Notes at such a place of payment in such notice specified, such
Notes or the specified portions thereof shall be paid and
redeemed at the applicable redemption price, together with
Accrued Interest thereon to the date fixed for redemption.
(b) The Company shall not mail any notice of
redemption of Notes during the continuance of any Event of
Default, except (1) that where notice of redemption of any Notes
has been mailed, the Company shall redeem such Notes provided
that funds have theretofore been deposited for such purpose, and
(2) that notices of redemption of all outstanding Notes may be
given during the continuance of an Event of Default.
(c) If any Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal of and
any premium on such Note, shall until paid bear interest from
the date set for redemption at the rate borne by such Note.
(d) Upon surrender of any Note redeemed in part only,
the Company shall execute and register, and the Trustee shall
authenticate and make available for delivery, a new Note or Notes
of authorized denominations in aggregate principal amount equal
to, and having the same terms and Original Issue Date or Dates
as, the unredeemed portion of the Note so surrendered.
ARTICLE FOUR
Pledged Bond.
Section 4.01. Pledge. The Company hereby delivers to
and pledges with the Trustee, for the benefit of the holders from
time to time of the Notes, the Pledged Bond, fully registered in
the name of the Trustee, in trust for the holders of the Notes as
security for (a) the full and prompt payment of the principal of
each Note when and as the same shall become due in accordance
with the terms and provisions of this Indenture, either at the
stated maturity thereof, upon acceleration of the maturity
thereof or upon call for redemption, and (b) the full and prompt
payment of any premium and interest on each Note when and as the
same shall become due in accordance with the terms and provisions
of this Indenture.
Section 4.02. Receipt. The Trustee acknowledges
receipt of the Pledged Bond, for the benefit of the holders from
time to time of the Notes.
Section 4.03. Trustee to Exercise Rights of Mortgage
Bondholder. As the holder of the Pledged Bond, the Trustee shall
have and exercise all of the rights of a holder of Mortgage Bonds
possessed under the Mortgage.
Section 4.04. No Transfer of Pledged Bond; Exception.
Except as required to effect an assignment to a successor trustee
under this Indenture, the Trustee shall not sell, assign or
transfer the Pledged Bond and the Company shall issue stop
transfer instructions to the Mortgage Trustee and any transfer
agent under the Mortgage to effect compliance with this Section
4.04.
Section 4.05. Release of Pledged Bond. When (a) all
of the principal of and any premium and interest on all Notes
shall have been paid or provision therefor duly made in
accordance with this Indenture, or (b) all Notes shall have been
delivered to the Trustee for cancellation by or on behalf of the
Company, or (c) no Note is any longer outstanding under this
Indenture and all conditions in Article Five have been satisfied,
the Trustee shall upon request of the Company, within five
Business Days thereafter, deliver to the Company without charge
the Pledged Bond, together with such appropriate instruments of
release as may be required; the Pledged Bond so acquired by the
Company shall be delivered to the Mortgage Trustee for
cancellation.
Section 4.06. Voting of Pledged Bond.
(a) The Trustee, as holder of the Pledged Bond, shall
attend meetings of Bondholders under the Mortgage and either at
such meeting, or otherwise when the consent of holders of
Mortgage Bonds is sought without a meeting, the Trustee shall
vote the outstanding principal amount of the Pledged Bond, or
shall consent with respect thereto, proportionally with respect
to all other Mortgage Bonds then outstanding and eligible to vote
or consent.
(b) Notwithstanding Section 4.06(a), the Trustee shall
not vote any portion of the outstanding principal amount of the
Pledged Bond in favor of, or give its consent to, any action
which, in the opinion of the Trustee, would materially adversely
affect the interests of the Noteholders, except with the
appropriate consent of the Noteholders.
Section 4.07. Note Issuances Recorded on Pledged Bond.
The Trustee shall record on the schedule to the Pledged Bond (a)
the Original Issue Date or Dates for each Note issued under this
Indenture, (b) the principal amount of each Note, (c) the
Interest Rate, if any, payable on each Fixed Rate Note and the
Base Rate of each Floating Rate Note, (d) the date or dates upon
which the principal of and any premium or interest on each Note
are payable, (e) the Redemption Date, if any, of such Note, and
(f) the date on which each Note ceases to be outstanding under
this Indenture; the Trustee shall furnish to the Mortgage Trustee
within five Business Days after the end of each calendar month
during which Notes were issued, a photocopy of the Pledged Bond,
including the schedule to the Pledged Bond which shall show
clearly the Notes outstanding as of the end of such calendar
month.
Section 4.08. Further Assurances. The Company, at its
own expense, shall do such further lawful acts and things, and
execute and deliver such additional conveyances, assignments,
assurances, agreements, financing statements and instruments, as
the Trustee may at any time reasonably request in order to better
assign, assure, perfect and confirm to the Trustee its security
interest in the Pledged Bond and for maintaining, protecting and
preserving such security interest.
ARTICLE FIVE.
Satisfaction and Discharge; Unclaimed Moneys.
Section 5.01. Satisfaction and Discharge.
(a) If at any time
(1) the Company shall have paid or caused to be
paid the principal of and premium, if any, and interest
on all the outstanding Notes, as and when the same
shall have become due and payable, or
(2) the Company shall have delivered to the
Trustee for cancellation all Notes theretofore
authenticated (other than any Notes which shall have
been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.07
hereof), or
(3) (A) all such Notes not theretofore delivered
to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and
payable within the year or are to be called for redemp-
tion within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and
(B) the Company shall have irrevocably deposited or
caused to be irrevocably deposited with the Trustee as
trust funds the entire amount in cash (other than
moneys repaid by the Trustee or any paying agent to the
Company in accordance with Section 5.03 or moneys paid
to any State or to the District of Columbia pursuant to
its unclaimed property or similar laws), U.S.
Government Obligations maturing as to principal and
interest in such amounts and at such times as will
insure the availability of cash, or a combination of
cash and U.S. Government Obligations, sufficient to pay
at maturity all outstanding Notes not theretofore
delivered to the Trustee for cancellation, including
principal and any premium and interest due or to become
due to such date of maturity, as the case may be, and
if, in any such case, the Company shall also pay or
cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of
further effect (except as to (i) rights of registration
of transfer and exchange of Notes, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or
stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and any premium and
interest thereon, upon the original stated due dates
therefor (but not upon acceleration of maturity), (iv)
the rights, obligations and immunities of the Trustee
hereunder and (v) the rights of the holders of Notes as
beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of
them), and the Trustee, on demand of the Company accom-
panied by an Officers' Certificate and an Opinion of
Counsel and at the cost and expense of the Company,
shall execute proper instruments acknowledging such
satisfaction of and discharging this Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the
Trustee under Section 9.06 shall survive.
(b) The Company shall be deemed to have been
Discharged from its obligations with respect to the Notes on the
91st day after the applicable conditions set forth below have
been satisfied:
(1) the Company shall have deposited or caused
to be deposited irrevocably with the Trustee as trust
funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of
the Notes
(A) money in an amount, or
(B) U.S. Government Obligations, or a
combination of money and U.S. Government
Obligations, which through the payment of interest
and principal in respect thereof in accordance
with their terms will provide, in the opinion of
an accountant, who is also an employee of the
Company, expressed in a written certification
thereof delivered to the Trustee, not later than
one day before the due date of any payment, money
in an amount
sufficient to pay and discharge each installment of
principal of and any premium and interest on the
outstanding Notes on the dates such installments of
interest or principal are due, provided that the
Trustee shall have been irrevocably instructed to apply
such money or the proceeds of such U.S. Government
Obligations to the payment of such installments of
principal of and any premium and interest with respect
to the outstanding Notes; and
(2) no Event of Default or event (including such
deposit) which with notice or lapse of time would
become an Event of Default with respect to the Notes
shall have occurred and be continuing on the date of
such deposit.
(c) "Discharged" means that the Company shall be
deemed to have paid and discharged the entire indebtedness
represented by, and obligations under, the Notes and to have
satisfied all the obligations under this Indenture relating to
the Notes (and the Trustee, on demand of the Company accompanied
by an Officers' Certificate and an Opinion of Counsel and at the
expense of the Company, shall execute proper instruments
acknowledging the same), except
(1) the rights of holders of the Notes to
receive, from the trust fund described in Section
5.01(b)(1), payments of the principal of and interest
on the Notes when such payments become due;
(2) the Company's obligations with respect to the
Notes under Sections 2.06, 2.07, 5.02, 5.03 and 6.02;
and
(3) the rights, powers, trusts, duties and immuni-
ties of the Trustee with respect to the Notes as speci-
fied in this Indenture, including the rights of the
Trustee to receive payment or reimbursement of
compensation and expenses pursuant to Section 9.06.
Section 5.02. Deposited Moneys to Be Held in Trust by
Trustee. All moneys and U.S. Government Obligations deposited
with the Trustee pursuant to Section 5.01 shall be held in trust
and applied by it to the payment, either directly or through any
paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Notes for the payment or
redemption of which such moneys and U.S. Government Obligations
have been deposited with the Trustee, of all sums due and to
become due thereon for principal and premium, if any, and
interest.
Section 5.03. Return of Unclaimed Moneys. Any moneys
deposited with or paid to the Trustee for payment of the
principal of or any premium or interest on any Notes and not
applied but remaining unclaimed by the holders of such Notes for
two years after the date upon which the principal of or any
premium or interest on such Notes, as the case may be, shall have
become due and payable, shall be repaid to the Company by the
Trustee on written demand and all liability of the Trustee shall
thereupon cease; and any holder of any of such Notes shall
thereafter look only to the Company for any payment which such
holder may be entitled to collect; provided, however, that the
Trustee before being required to make any such repayment, may at
the expense of the Company cause to be mailed to such holder
notice that such money remains unclaimed and that, after a date
specified therein which shall not be less than 30 days from the
date of such mailing, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 5.04. Reinstatement. If the Trustee is unable
to apply any money or U.S. Government Obligations in accordance
with Section 5.01 by reason of any legal proceeding or any order
or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture with respect to the
Notes to which such money or U.S. Government Obligations were to
have been applied shall be revived and reinstated as though no
deposit had occurred pursuant to Section 5.01 until such time as
the Trustee is permitted to apply such money or U.S. Government
Obligations in accordance with Section 5.01; provided, however,
that if the Company has made any payment of principal of or any
premium or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of
the holders of such Notes to receive such payment from the money
or U.S. Government Obligations held by the Trustee.
ARTICLE SIX.
Particular Covenants of the Company.
Section 6.01. Payment of Principal, Premium and Inte-
rest. The Company covenants and agrees for the benefit of the
holders of the Notes that it will duly and punctually pay or
cause to be paid the principal of and any premium and interest on
each of the Notes at the places, at the respective times and in
the manner provided in such Notes.
Section 6.02. Office for Notices and Payments, etc.
So long as any of the Notes remain outstanding, the Company will
maintain in the Borough of Manhattan, The City and State of New
York, an office or agency where the Notes may be presented for
registration of transfer and for exchange as in this Indenture
provided, and where, at any time when the Company is obligated to
make a payment upon Notes (other than an interest payment as to
which it has exercised its option to make such payment by check),
the Notes may be presented for payment, and shall maintain at any
such office or agency and at its principal office an office or
agency where notices and demands to or upon the Company in
respect of the Notes or of this Indenture may be served, provided
that the Company may maintain at its principal executive offices,
one or more other offices or agencies for any or all of the
foregoing purposes; the Company hereby appoints the Trustee as
agent of the Company for the foregoing purposes. The Company
will give to the Trustee written notice of the location of each
such office or agency and of any change of location thereof. In
case the Company shall fail to maintain any such office or agency
or shall fail to give such notice of the location or of any
change in the location thereof, presentations may be made and
notices and demands may be served at the corporate trust office
of the Trustee.
Section 6.03. Appointments to Fill Vacancies in Trus-
tee's Office. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner
provided in Section 9.11, a Trustee, so that there shall at all
times be a Trustee hereunder.
Section 6.04. Annual Statement and Notice. (a) The
Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company, beginning with the fiscal
year ending December 31, 1994, an Officers' Certificate which
complies with TIA Section 314(a)(4) stating that in the course of
the performance by the signers of their duties as officers of the
Company they would obtain knowledge of any default by the Company
in the performance of any covenant contained in this Indenture or
an Event of Default (as defined in the Mortgage) stating whether
they have obtained knowledge of any such default or such Event of
Default, and, if so, specifying each such default or such Event
of Default of which the signers have knowledge, and the nature
and status thereof.
(b) The Company shall give to the Trustee written
notice of the occurrence of an Event of Default within five days
after the Company becomes aware of such occurrence.
Section 6.05. Opinions of Counsel. The Company will
cause this Indenture and any indentures supplemental to this
Indenture to be promptly recorded and filed and rerecorded and
refiled in such a manner and in such places, as may be required
by law in order fully to preserve and protect the security of the
Noteholders and all rights of the Trustee, and will deliver to
the Trustee:
(a) promptly after the execution and delivery of this
Indenture and of any indenture supplemental to this Indenture, an
Opinion of Counsel either stating that in the opinion of such
counsel this Indenture or such supplemental indenture has been
properly recorded and filed so as to make effective the security
interest of the Trustee, for the benefit of the holders from time
to time of the Notes, in the Pledged Bond, intended to be created
by this Indenture, and reciting the details of such action, or
stating that in the opinion of such counsel no such action is
necessary to make such security interest effective; and
(b) on or before February 15, of each year, beginning
in 1995, an Opinion of Counsel either stating that in the opinion
of such counsel such action has been taken, since the date of the
most recent Opinion of Counsel furnished pursuant to this Section
6.05(b) or the first Opinion of Counsel furnished pursuant to
Section 6.05(a), with respect to the recording, filing, rerecord-
ing, or refiling of this Indenture and each supplemental
indenture, as is necessary to maintain the security interest of
the Trustee, for the benefit of the holders from time to time of
the Notes, in the Pledged Bond intended to be created by this
Indenture, and reciting the details of such action, or stating
that in the opinion of such counsel no such action is necessary
to maintain such security interest.
ARTICLE SEVEN.
Noteholder Lists and Reports by the Company
and the Trustee.
Section 7.01. Noteholder Lists. If it is not the
registrar for the Notes, the Company will, so long as any Notes
are outstanding under this Indenture, furnish or cause to be
furnished to the Trustee within 15 days prior to each Interest
Payment Date on Notes from time to time outstanding, and at such
other times as the Trustee, may request in writing, the
information required by TIA Section 312(a), which the Trustee
shall preserve as required by TIA Section 312(a). The Trustee
shall also comply with TIA Section 312(b), but the Trustee, the
Company and each Person acting on behalf of the Trustee or the
Company shall have the protection of TIA Section 312(c).
Section 7.02. Securities and Exchange Commission
Reports. The Company shall (a) file with the Trustee, within 15
days after the Company is required to file the same with the
Securities and Exchange Commission, copies of the reports,
information and documents (or portions thereof) required to be so
filed pursuant to TIA Section 314(a), and (b) comply with the
other provisions of TIA Section 314(a).
Section 7.03. Reports by the Trustee. The Trustee
shall (a) transmit within 60 days after August 15 in each year,
beginning with the year 1995, to the Noteholders specified in TIA
Section 3.13(c) and to the Securities and Exchange Commission, a
brief report dated as of such August 15 and complying with the
requirements of TIA Section 313(a), but no report shall be
required if no event described in TIA Section 313(a) shall have
occurred within the previous twelve months ending on such date.
The Trustee shall also comply with the other provisions of TIA
Section 313(b)(2).
ARTICLE EIGHT.
Remedies of the Trustee and Noteholders
on Event of Default.
Section 8.01. Events of Default.
(a) In case one or more of the following Events of
Default shall have occurred and be continuing with respect to the
Notes:
(1) default in the payment of any installment of
interest upon any of the Notes as and when the same
shall become due and payable, and continuance of such
default for a period of 30 days;
(2) default in the payment of the principal of or
any premium on any of the Notes as and when the same
shall become due and payable, and continuance of such
default for a period of one day (whether at the stated
maturity thereof or upon declaration of acceleration or
call for redemption or otherwise);
(3) failure on the part of the Company duly to
observe or perform any other of the covenants or agree-
ments on the part of the Company contained in the Notes
or in this Indenture for a period of 60 days after the
date on which written notice of such failure, requiring
the same to be remedied and stating that such notice is
a "Notice of Default" hereunder, shall have been given
to the Company by the Trustee by registered mail, or to
the Company and the Trustee by the holders of at least
25% in aggregate principal amount of the Notes at the
time outstanding provided, however, that, subject to
Sections 9.01 and 6.04, the Trustee shall not be deemed
to have knowledge of such failure unless either (A) a
responsible officer of the Trustee shall have actual
knowledge of such failure, or (B) the Trustee shall
have received written notice thereof from the Company
or any Noteholder;
(4) an event of Default (as defined in the Mort-
gage) has occurred and the principal of the Mortgage
Bonds has been declared and become due and payable in
the manner and with the effect provided in the
Mortgage;
(5) the entry of a decree or order by a court
having jurisdiction in the premises for relief in
respect of the Company under Title 11 of the United
States Code, as now constituted or hereafter amended,
or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of the Company or of
any substantial part of its property, or ordering the
winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(6) the filing by the Company of a petition or
answer or consent seeking relief under Title 11 of the
United States Code, as now constituted or hereafter
amended, or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or the
consent by it to the institution of proceedings there-
under or to the filing of any such petition or to the
appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Company or of any
substantial part of its property, or the failure of the
Company generally to pay its debts as such debts become
due, or the taking of corporate action by the Company
in furtherance of any such action;
then and in each and every such case, unless the principal of all
of the Notes shall have already become due and payable, either
the Trustee or the holders of a majority in aggregate principal
amount of the Notes then outstanding, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare
the principal of all the Notes to be due and payable immediately
and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. This provision,
however, is subject to the condition that if, at any time after
the principal of the Notes shall have been so declared due and
payable, and before any judgment or decree for the payment of the
moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee
a sum sufficient to pay all matured installments of interest upon
all of the Notes and the principal of and any premium on any and
all Notes which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest,
to the extent that payment of such interest is enforceable under
applicable law, and on such principal and any premium at the rate
borne by the Notes to the date of such payment or deposit) and
all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any and all defaults
under this Indenture, other than the non-payment of principal of
and accrued interest on Notes which shall have become due by
acceleration of maturity, shall have been cured or waived -- then
and in every such case the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all such defaults
and rescind and annul such declaration and its consequences; but
no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right
consequent thereon.
(b) In case the Trustee shall have proceeded to
enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company
and the Trustee shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee shall continue as though no
such proceeding had been taken.
Section 8.02. Payment of Notes on Default; Suit There-
for.
(a) The Company covenants that in case of
(1) default in the payment of any installment of
interest upon any of the Notes as and when the same
shall become due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of or any
premium on any of the Notes as and when the same shall have
become due and payable, and continuance of such default for
a period of one day (whether at the stated maturity thereof
or upon declaration of acceleration or call for redemption
or otherwise)
then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Notes, the whole
amount that then shall have so become due and payable on all such
Notes for principal and any premium or interest, or both, as the
case may be, with interest upon the overdue principal and any
premium and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments
of interest at the rate borne by the Notes; and, in addition
thereto, such further amounts as shall be sufficient to cover the
costs and expenses of collection, including reasonable
compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith.
(b) In case the Company shall fail forthwith to pay
such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered
to institute any actions or proceedings at law or in equity for
the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and
may enforce any such judgment or final decree against the Company
or any other obligor on the Notes and collect in the manner
provided by law out of the property of the Company or any other
obligor on such series of Notes wherever situated, the moneys
adjudged or decreed to be payable.
(c) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor on the Notes under the Federal Bankruptcy Code or any
other applicable law, or in case a receiver or trustee shall have
been appointed for the property of the Company or such other
obligor, or in the case of any similar judicial proceedings
relative to the Company or other obligor upon the Notes, or to
the creditors or property of the Company or such other obligor,
the Trustee, irrespective of whether the principal of the Notes
shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to this Section 8.02, shall
be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole
amount of principal and any premium and interest owing and unpaid
in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including any amounts due to the Trustee
under Section 9.06 hereof) and of the holders of Notes allowed in
such judicial proceedings relative to the Company or any other
obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any
receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the Noteholders to make such
payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the holders of
any Notes, to pay to the Trustee any amount due to it for
compensation and expenses, including counsel fees and expenses
incurred by it up to the date of such distribution.
(d) All rights of action and of asserting claims under
this Indenture, or under any of the Notes, may be enforced by the
Trustee without the possession of any of the Notes, or the
production thereof in any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable
benefit of the holders of the Notes in respect of which such
action was taken.
(e) Nothing herein contained shall be deemed to autho-
rize the Trustee to authorize or consent or to accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of
any holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
Section 8.03. Application of Moneys Collected by
Trustee. Any moneys collected by the Trustee with respect to any
of the Notes shall be applied in the order following, at the date
or dates fixed by the Trustee for the distribution of such
moneys, upon presentation of the several Notes, and stamping
thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due to the
Trustee pursuant to Section 9.06;
SECOND: In case the principal of the outstanding
Notes in respect of which such moneys have been
collected shall not have become due and be unpaid, to
the payment of interest on the Notes, in the order of
the maturity of the installments of such interest, with
interest (to the extent allowed by law and to the
extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at
the rate borne by the Notes, such payments to be made
ratably to the persons entitled thereto;
THIRD: In case the principal of the outstanding
Notes in respect of which such moneys have been
collected shall have become due, by declaration or
otherwise, to the payment of the whole amount then
owing and unpaid upon the Notes for principal and any
premium and interest thereon, with interest on the
overdue principal and any premium and (to the extent
allowed by law and to the extent that such interest has
been collected by the Trustee) upon overdue
installments of interest at the rate borne by the
Notes; and in case such moneys shall be insufficient to
pay in full the whole amount so due and unpaid upon the
Notes, then to the payment of such principal and any
premium and interest without preference or priority of
principal and any premium over interest, or of interest
over principal and any premium or of any installment of
interest over any other installment of interest, or of
any Note over any other Note, ratably to the aggregate
of such principal and any premium and accrued and
unpaid interest; and
FOURTH: To the payment of the remainder, if any,
to the Company its successors or assigns, or to
whomsoever may lawfully be entitled to the same, or as
a court of competent jurisdiction may determine.
Section 8.04. Proceedings by Noteholders.
(a) No holder of any Note shall have any right by
virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Indenture or for the appointment
of a receiver or trustee, or for any other remedy hereunder,
unless such holder previously shall have given to the Trustee
written notice of default with respect to such Note and of the
continuance thereof, as hereinabove provided, and unless also the
holders of not less than a majority in aggregate principal amount
of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding, it
being understood and intended, and being expressly covenanted by
the taker and the holder of every Note with every other taker and
holder and the Trustee that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by availing
of any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Notes, or to obtain
or seek to obtain priority over or preference to any other such
holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common
benefit of all holders of Notes.
(b) Notwithstanding any other provision in this Inden-
ture, however, the rights of any holder of any Note to receive
payment of the principal of and any premium and interest on such
Note, on or after the respective due dates expressed in such
Note, or to institute suit for the enforcement of any such
payment on or after such respective dates shall not be impaired
or affected without the consent of such holder.
Section 8.05. Proceedings by Trustee. In case of an
Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this
Indenture, including its rights as holder of the Pledged Bond, by
such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either
by suit in equity or by action at law or by proceeding in bank-
ruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of
the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee
by this Indenture or by law.
Section 8.06. Remedies Cumulative and Continuing. All
powers and remedies given by this Article Eight to the Trustee or
to the Noteholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any powers and remedies
hereof or of any other powers and remedies available to the
Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or of any holder of any of the
Notes in exercising any right or power accruing upon any default
occurring and continuing as aforesaid shall impair any such right
or power, or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to Section 8.04,
every power and remedy given by this Article Eight or by law to
the Trustee or to the Noteholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee
or by the Noteholders.
Section 8.07. Restoration of Rights and Remedies. If
the Trustee or any Noteholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or
has been determined adversely to the Trustee or to such
Noteholder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and
the Noteholders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Noteholders shall continue as
though no such proceeding had been instituted.
Section 8.08. Direction of Proceedings and Waiver of
Defaults by Majority Noteholders. The holders of a majority in
aggregate principal amount of the Notes at the time outstanding
shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that (subject to Section 9.01) the
Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that
the action or proceeding so directed may not lawfully be taken or
if the Trustee in good faith by its board of directors or
trustees, executive committee, or a trust committee of directors
or trustees or responsible officers shall determine that the
action or proceeding so directed would involve the Trustee in
personal liability or would be unduly prejudicial to the rights
of Noteholders not joining in such directions. Prior to any
declaration accelerating the maturity of the Notes, the holders
of a majority in aggregate principal amount of the Notes at the
time outstanding may on behalf of all of the holders of the Notes
waive any past default or Event of Default hereunder and its
consequences except a default in the payment of principal of or
any premium or interest on the Notes. Upon any such waiver the
Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder,
respectively, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section
8.07, said default or Event of Default shall for all purposes of
the Notes and this Indenture be deemed to have been cured and to
be not continuing.
Section 8.09. Notice of Default. The Trustee shall,
within 90 days after the occurrence of a default with respect to
the Notes, give to all holders of the Notes specified in TIA
Section 3.13(c), in the manner provided in Section 15.10, notice
of such default, unless such default shall have been cured before
the giving of such notice, the term "default" for the purpose of
this Section 8.08 being hereby defined to be any event which is
or after notice or lapse of time or both would become an Event of
Default; provided that, except in the case of default in the
payment of the principal of or any premium or interest on any of
the Notes, the Trustee shall be protected in withholding such
notice if and so long as its board of directors or trustees,
executive committee, or a trust committee of directors or
trustees or responsible officers in good faith determines that
the withholding of such notice is in the interests of the holders
of the Notes. The Trustee shall not be charged with knowledge of
any Event of Default unless a responsible officer of the Trustee
assigned to the corporate trust division of the Trustee shall
have actual knowledge of such Event of Default.
Section 8.10. Undertaking to Pay Costs. All parties
to this Indenture agree, and each holder of any Note by
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses
made by such party litigant; but this Section 8.09 shall not
apply to any suit instituted by the Trustee, or to any suit
instituted by any Noteholder, or group of Noteholders, holding in
the aggregate more than 10% in principal amount of the Notes
outstanding, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or any premium or
interest on any Note on or after the due date expressed in such
Note.
ARTICLE NINE.
Concerning the Trustee.
Section 9.01. Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event
of Default and after the curing of all Events of Default which
may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture. In
case an Event of Default has occurred (which has not been cured
or waived) 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
or use under the circumstances in the conduct of his own affairs.
(b) No provisions of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful
misconduct, except that:
(1) prior to the occurrence of any Event of
Default and after the curing or waiving of all Events
of Default which may have occurred,
(A) the duties and obligations of the Trustee
shall be determined solely by the express
provisions of this Indenture, and the Trustee
shall not be liable except for the performance of
such duties and obligations as are specifically
set forth in this Indenture, and no implied
covenants or obligations shall be read into this
Indenture against the Trustee; and
(B) in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely,
as to the truth of the statements and the
correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but, in the case of any such
certificates or opinions which by any provision
hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not
they conform to the requirements of this
Indenture;
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a responsible officer
or officers of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the
holders of at least a majority in principal amount of
the Notes at the time outstanding determined as
provided in Section 10.04 relating to the time, method
and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Indenture.
(c) 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 this Section 9.01.
Section 9.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 9.01,
(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, consent, order, note
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, direction, order or demand of
the Company mentioned herein shall be sufficiently
evidenced by an Officers' Certificate (unless other
evidence in respect thereof is herein specifically
prescribed); and any Board Resolution may be evidenced
to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel selected
by the Trustee, if such counsel is reasonably
satisfactory to the Company, and any advice or Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of
any of the Noteholders, pursuant to this Indenture,
unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred
by such exercise;
(e) the Trustee shall not be liable for any
action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by
this Indenture;
(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, approval, bond, note, other evidence of
indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to
make such futher inquiry or investigation, it shall be
entitled to examine the books, records and premises of
the Company, personally or by agent or attorney;
(g) no provision of this Indenture shall require
the Trustee to extend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; and
(h) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys;
provided, however, that the Trustee shall not be liable
for the conduct or acts of any such agent or attorney
that shall have been appointed in accordance herewith
with due care.
Section 9.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Notes (except in the
certificate of authentication) shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Notes.
The Trustee shall not be accountable for the use or application
by the Company of any Notes or the proceeds of any Notes
authenticated and delivered by the Trustee in conformity with
this Indenture.
Section 9.04. Trustee, Authenticating Agent or
Registrar May Own Notes. The Trustee and any Authenticating
Agent or Note registrar, in its individual or any other capacity,
may become the owner or pledgee of Notes with the same rights it
would have if it were not Trustee, Authenticating Agent or Note
registrar.
Section 9.05. Moneys to Be Held in Trust. Subject to
Section 5.03, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated
from other funds except to the extent required by law.
Section 9.06. Compensation and Expenses of Trustee.
(a) The Company agrees:
(1) to pay to the Trustee from time to time such
compensation for all services rendered by it hereunder as
has been agreed upon in writing (which compensation shall
not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee
upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the
reasonable compensation and the reasonable expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify each of the Trustee and any
predecessor Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence
or bad faith on its own part, arising out of or in
connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses
of defending itself against any claim or liability in
connection with the exercise or performance of any of its
powers or duties hereunder.
(b) As security for the performance of the obligations
of the Company under this Section 9.06, the Trustee shall have a
lien prior to the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for
the payment of principal of and any premium and interest on
particular Notes.
(c) When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in
Section 8.01(5) or (6), the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration
under any applicable Federal or state bankruptcy, insolvency or
other similar law.
(d) The provisions of this Section 9.06 shall survive
the termination of this Indenture.
Section 9.07. Officers' Certificate as Evidence.
Except as otherwise provided in Section 9.01, whenever in the
administration of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof is herein
specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to
the Trustee, and such Officers' Certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted
by it under this Indenture in reliance thereon.
Section 9.08. Conflicting Interest of Trustee. The
Trustee will comply with TIA Section 310(b); provided, however,
that (a) there shall be excluded from the requirements of TIA
Section 310(b)(1) all indentures which may be excluded pursuant
to the proviso to TIA Section 310(b)(1); and(b) the provisions of
the first sentence of TIA Section 310(b)(9) shall not apply to
any securities described in the second sentence of TIA Section
310(b)(9).
Section 9.09. Eligibility of Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing
business under the laws of the United States or any State thereof
or of the District of Columbia authorized under such laws to
exercise corporate trust powers, having a combined capital and
surplus of at least $20,000,000 and subject to supervision or
examination by Federal, State or District of Columbia authority
and shall not otherwise be disqualified under TIA Section
310(a)(5). 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
purposes of this Section 9.09, 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. In case at any time the Trustee shall cease to be
eligible in accordance with this Section 9.09, the Trustee shall
resign immediately in the manner and with the effect specified in
Section 9.10.
Section 9.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be
discharged of the trusts created by this Indenture by giving
written notice to the Company specifying the day upon which such
resignation shall take effect, and such resignation shall take
effect upon the day specified in such notice unless previously a
successor trustee shall have been appointed by the Noteholders or
the Company in the manner provided in Section 9.11, and in such
event such resignation shall take effect immediately on the
appointment of such successor trustee.
(b) The Trustee may be removed at any time by an
instrument or concurrent instruments in writing filed with such
Trustee and signed and acknowledged by the holders of a majority
in principal amount of the then outstanding Notes or by their
attorneys in fact duly authorized.
(c) In case at any time the Trustee shall cease to be
eligible in accordance with Section 9.09, then the Trustee so
ceasing to be eligible shall resign immediately in the manner and
with the effect provided in this Section 9.10, and in the event
that it does not resign immediately in such case, then it may be
removed forthwith by an instrument or concurrent instruments in
writing filed with the Trustee so ceasing to be eligible and
either:
(1) signed by the President or any Vice-President
of the Company attested by the Secretary or an
Assistant Secretary of the Company; or
(2) signed and acknowledged by the holders of a
majority in principal amount of outstanding Notes or by
their attorneys in fact duly authorized.
(d) Any resignation or removal of the Trustee and any
appointment of a successor Trustee pursuant to this Section 9.10
shall become effective upon acceptance of appointment by the
successor Trustee as provided in Section 9.12.
Section 9.11. Appointment of Successor Trustee.
(a) In case at any time the Trustee shall resign or
shall be removed (unless such Trustee shall be removed as
provided in Section 9.10(c) in which event the vacancy shall be
filled as provided therein), or shall become adjudged a bankrupt
or insolvent, or if a receiver of the Trustee or of its property
shall be appointed, or if 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, or a
vacancy shall be deemed to exist in the office of the Trustee for
any other reason, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. Within one year after such
resignation, removal or incapability or the occurrence of such
vacancy, a successor Trustee may be appointed by act of the
holders of a majority in principal amount of the outstanding
Notes, delivered to the Company and retiring Trustee, and 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 Company or by
such receiver or Trustee.
(b) The Company shall publish notice of any
resignation and subsequent appointment of a successor Trustee
made by it or by act of Noteholders in one Authorized Newspaper
in the Borough of Manhattan, The City of New York, and in one
Authorized Newspaper in the city in which the principal office of
the Trustee is located, once each.
(c) If in a proper case no appointment of a successor
Trustee shall be made pursuant to Section 9.11(a) within six
months after a vacancy shall have occurred in the office of
Trustee, any Noteholder or any resigning Trustee may apply to any
court of competent jurisdiction to appoint a successor Trustee.
Said court may thereupon after such notice, if any, as such court
may deem proper and prescribe, appoint a successor Trustee.
(d) If any Trustee resigns because of conflict of
interest as provided in Section 9.08 and a successor Trustee has
not been appointed by the Company or the Noteholders or, if
appointed, has not accepted the appointment, within 30 days after
the date of such resignation, the resigning Trustee may apply to
any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) Any Trustee appointed under this Section 9.11 as a
successor Trustee shall be a bank or trust company eligible under
Section 9.09 and qualified under Section 9.08.
Section 9.12. Acceptance by Successor Trustee.
(a) Any successor Trustee appointed as provided in
Section 9.11 shall execute, acknowledge and deliver to the
Company and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee herein; but
nevertheless, on the written request of the Company or of the
successor Trustee, the Trustee ceasing to act shall, upon payment
of any amounts then due it pursuant to Section 9.06, execute and
deliver an instrument transferring to such successor Trustee all
the rights and powers of the Trustee so ceasing to act, including
the right, title, and interest of the Trustee ceasing to act, in
and to the Pledged Bond. Upon request of any such successor
Trustee, the Company shall execute any and all instruments in
writing in order more fully and certainly to vest in and confirm
to such successor Trustee all such rights and powers. Any
Trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such Trustee to secure
any amounts then due it pursuant to Section 9.06.
(b) No successor Trustee shall accept appointment as
provided in this Section 9.12 unless at the time of such
acceptance such successor Trustee shall be qualified under
Section 9.08 and eligible under Section 9.09.
(c) Upon acceptance of appointment by a successor
Trustee as provided in this Section 9.12, the Company shall mail
notice of the succession of such Trustee hereunder to all holders
of Notes as the names and addresses of such holders appear on the
registry books. If the Company fails to mail such notice in the
prescribed manner within 10 days after the acceptance of appoint-
ment by the successor Trustee, the successor Trustee shall cause
such notice to be mailed at the expense of the Company.
Section 9.13. Succession by Merger, etc.
(a) 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 without the execution or filing of any
paper or any further act on the part of any of the parties
hereto.
(b) In case at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture any of the
Notes shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentica-
tion of any predecessor Trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall
not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all
such cases such certificates shall have the full force which it
is anywhere in the Notes or in this Indenture provided that the
certificates of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Notes in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 9.14. Limitations on Rights of Trustee as a
Creditor. The Trustee shall comply with TIA Section 311(a). A
Trustee which has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated therein.
Section 9.15. Authenticating Agent. (a) There may be
one or more Authenticating Agents appointed by the Trustee with
power to act on its behalf and subject to its direction in the
authentication and delivery of Notes in connection with transfers
and exchanges under Sections 2.05, 2.06, 2.07, 2.08, 3.02, 3.03,
and 13.04, as fully to all intents and purposes as though such
Authenticating Agents had been expressly authorized by those
Sections to authenticate and deliver Notes. For all purposes of
this Indenture, the authentication and delivery of Notes by any
Authenticating Agent pursuant to this Section 9.15 shall be
deemed to be the authentication and delivery of such Notes "by
the Trustee." Any such Authenticating Agent shall be a bank or
trust company of the character and qualifications set forth in
Section 9.09.
(b) Any corporation into which any Authenticating
Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate
trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, if such
successor corporation is otherwise eligible under this
Section 9.15, without the execution or filing of any paper or any
further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
(c) Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the
Company. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in
case at any time any Authenticating Agent shall cease to be
eligible under this Section 9.15, the Trustee shall promptly
appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Company and shall mail, in the
manner provided in Section 15.10, notice of such appointment to
the holders of Notes.
(d) The Trustee agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services,
and the Trustee shall be entitled to be reimbursed for such
payments, in accordance with Section 9.06.
(e) Sections 9.02, 9.03, 9.04, 9.06, 9.09 and 10.03
shall be applicable to any Authenticating Agent.
Section 9.16. Trustee's Application for Instructions
from the Company. Any application by the Trustee for written
instructions from the Company may, at the option of the Trustee,
set forth in writing any action proposed to be taken or omitted
by the Trustee under this Indenture and the date on and/or after
which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken
by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in
such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to
such application specifying the action to be taken or omitted.
ARTICLE TEN.
Concerning the Noteholders.
Section 10.01. Action by Noteholders. (a) Whenever
in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Notes may take
any action (the making of any demand or request, or the giving of
any notice, consents or waivers in lieu of a Noteholders' meeting
or the taking of any other action) the fact that at the time of
taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by such
Noteholders in person or by agent or proxy appointed in writing,
or (b) by the record of such Noteholders voting in favor thereof
at any meeting of Noteholders duly called and held in accordance
with Article Eleven, or (c) by a combination of such instrument
or instruments and any such record of such a meeting of
Noteholders.
(b) Whenever in this Indenture it is provided that the
holders of a specified percentage in aggregate principal amount
of the Notes may take any action, any party designated in writing
by the Depositary, or by any party so designated by the
Depositary, as the owner of a beneficial interest of a specified
principal amount of any Global Note held by such Depositary shall
be deemed to be a holder of Notes in such principal amount for
such purpose.
Section 10.02. Proof of Execution by Noteholders. (a)
Subject to Sections 9.01, 9.02 and 11.05, proof of the execution
of any instruments by a Noteholder or the agent or proxy for such
Noteholder shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the
Trustee or in such manner as shall be satisfactory to the
Trustee. The ownership of Notes shall be proved by the Note
register of the Company or by a certificate of the Note
registrar.
(b) The record of any Noteholders' meeting shall be
proven in the manner provided in Section 11.06.
Section 10.03. Who Deemed Absolute Owners. Subject to
Sections 2.04(f) and 10.01, the Company, the Trustee, any
Authenticating Agent and Note registrar may deem the person in
whose name any Note shall be registered upon the Note register of
the Company to be, and may treat such person as, the absolute
owner of such Note (whether or not such Note shall be overdue)
for the purpose of receiving payment of or on account of the
principal of and any premium and interest on such Note, and for
all other purposes; and neither the Company nor the Trustee nor
any Authenticating Agent nor any Note registrar shall be affected
by any notice to the contrary. All such payments shall be valid
and effectual to satisfy and discharge the liability upon any
such Note to the extent of the sum or sums so paid.
Section 10.04. Company-Owned Notes Disregarded. In
determining whether the holders of the requisite aggregate
principal amount of outstanding Notes have concurred in any
direction, consent or waiver under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or by
any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any
other obligor on the Notes shall be disregarded and deemed not to
be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent or
waiver only Notes which the Trustee knows are so owned shall be
so disregarded. Notes so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this
Section 10.04 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Notes and that
the pledgee is not a person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.
Section 10.05. Revocation of Consents; Future Holders
Bound. At any time prior to the taking of any action by the
holders of the percentage in aggregate principal amount of the
Notes specified in this Indenture in connection with such action,
any holder of a Note, which is shown by the evidence to be
included in the Notes the holders of which have consented to such
action may, by filing written notice with the Trustee at the
Corporate Trust Office of the Trustee and upon proof of ownership
as provided in Section 10.02(a), revoke such action so far as it
concerns such Note. Except as aforesaid any such action taken by
the holder of any Note shall be conclusive and binding upon such
holder and upon all future holders and owners of such Note and of
any Notes issued in exchange or substitution therefor,
irrespective of whether or not any notation thereof is made upon
such Note or such other Notes.
Section 10.06. Record Date for Noteholder Acts. If
the Company shall solicit from the Noteholders any request,
demand, authorization, direction, notice, consent, waiver or
other act, the Company may, at its option, by Board Resolution,
fix in advance a record date in compliance with TIA Section
3.16(c) for the determination of Noteholders entitled to give
such request, demand, authorization, direction, notice, consent,
waiver or other act, but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other act
may be given before or after the record date, but only the
Noteholders of record at the close of business on the record date
shall be deemed to be Noteholders for the purpose of determining
whether holders of the requisite aggregate principal amount of
outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent,
waiver or other act, and for that purpose the outstanding Notes
shall be computed as of the record date; provided, however, that
no such authorization, agreement or consent by the Noteholders on
the record date shall be deemed effective unless it shall become
effective pursuant to this Indenture not later than six months
after the record date.
ARTICLE ELEVEN
Noteholders' Meeting.
Section 11.01. Purposes of Meetings. A meeting of
Noteholders may be called at any time and from time to time
pursuant to this Article Eleven for any of the following
purposes:
(a) to give any notice to the Company or to the
Trustee, or to give any directions to the Trustee, or
to consent to the waiving of any default hereunder and
its consequences, or to take any other action
authorized to be taken by Noteholders pursuant to
Article Eight;
(b) to remove the Trustee and nominate a
successor Trustee pursuant to Article Nine;
(c) to consent to the execution of an indenture
or indentures supplemental hereto pursuant to Section
13.02; or
(d) to take any other action authorized to be
taken by or on behalf of the holders of any specified
aggregate principal amount of the Notes, as the case
may be, under any other provision of this Indenture or
under applicable law.
Section 11.02. Call of Meetings by Trustee. The
Trustee may at any time call a meeting of holders of Notes to
take any action specified in Section 11.01, to be held at such
time and at such place as the Trustee shall determine. Notice of
every such meeting of Noteholders, setting forth the time and the
place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given to holders of the Notes
that may be affected by the action proposed to be taken at such
meeting in the manner provided in Section 15.10. Such notice
shall be given not less than 20 nor more than 90 days prior to
the date fixed for such meeting.
Section 11.03. Call of Meetings by Company or Note-
holders. In case at any time the Company, pursuant to a Board
Resolution, or the holders of at least 10% in aggregate principal
amount of the Notes then outstanding, shall have requested the
Trustee to call a meeting of Noteholders, by written request
setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within 20 days after receipt of such
request, then the Company or such Noteholders may determine the
time and the place for such meeting and may call such meeting to
take any action authorized in Section 11.01, by giving notice
thereof as provided in Section 11.02.
Section 11.04. Qualifications for Voting. To be
entitled to vote at any meetings of Noteholders a Person shall
(a) be a holder of one or more Notes affected by the action pro-
posed to be taken or (b) be a Person appointed by an instrument
in writing as proxy by a holder of one or more such Notes. The
only Persons who shall be entitled to be present or to speak at
any meeting of Noteholders shall be the Persons entitled to vote
at such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company
and its counsel.
Section 11.05. Regulations. (a) Notwithstanding any
other provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting
of Noteholders, in regard to proof of the holding of Notes and of
the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as
it shall think fit.
(b) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting
shall have been called by the Company or by the Noteholders as
provided in Section 11.03, in which case the Company or
Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by the
holders of a majority in aggregate principal amount of the Notes
present in person or by proxy at the meeting.
(c) Subject to Section 10.04, at any meeting each
Noteholder or proxy shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by such Noteholder;
provided, however, that no vote shall be cast or counted at any
meeting in respect of any Note challenged as not outstanding and
ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote other than by
virtue of Notes held by such chairman or instruments in writing
as aforesaid duly designating such chairman as the person to vote
on behalf of other Noteholders. At any meeting of Noteholders
duly called pursuant to Section 11.02 or 11.03, the presence of
persons holding or representing Notes in an aggregate principal
amount sufficient to take action on any business for the
transaction for which such meeting was called shall constitute a
quorum. Any meeting of Noteholders duly called pursuant to
Section 11.02 or 11.03 may be adjourned from time to time by the
holders of a majority in aggregate principal amount of the Notes
present in person or by proxy at the meeting, whether or not
constituting a quorum, and the meeting may be held as so
adjourned without further notice.
Section 11.06. Voting. The vote upon any resolution
submitted to any meeting of Noteholders shall be by written
ballots on which shall be subscribed the signatures of the
holders of Notes or of their representatives by proxy and the
principal amount of Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Noteholders shall
be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice
was given as provided in Section 11.02. The record shall show
the principal amount of the Notes voting in favor of or against
any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting
and one of the duplicates shall be delivered to the Company and
the other to the Trustee to be preserved by the Trustee. Any
record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 11.07. Right of Trustee or Noteholders not
Delayed. Nothing in this Article Eleven contained shall be
deemed or construed to authorize or permit, by reason of any call
of a meeting of Noteholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to
the Trustee or to the holders of Notes under any of the
provisions of this Indenture or of the Notes.
ARTICLE TWELVE
Consolidation, Merger, Conveyance, Transfer or Lease
Section 12.01. Company May Consolidate, etc., only on
Certain Terms. The Company shall not consolidate with or merge
into any other corporation or convey or transfer its properties
and assets substantially as an entirety to any Person unless:
(1) the corporation formed by such consolidation
or into which the Company is merged or the Person which
acquires by conveyance or transfer the properties and
assets of the Company substantially as an entirety
shall be a corporation organized and existing under the
laws of the United States of America or any State or
the District of Columbia, and shall expressly assume,
by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal
of and any premium and interest on all of the Notes and
the performance of every covenant of this Indenture on
the part of the Company to be performed or observed;
(2) immediately after giving effect to such
consolidation, merger, conveyance or transfer, no Event
of Default, and no event which, after notice or lapse
of time, or both, would become an Event of Default,
shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance or
transfer and such supplemental indenture comply with
this Article Twelve and that all conditions precedent
herein provided for relating to such consolidation,
merger, conveyance or transfer have been complied with.
Section 12.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any conveyance or transfer
of the properties and assets of the Company substantially as an
entirety in accordance with Section 12.01, the successor
corporation formed by such consolidation or into which the
Company is merged or to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named as
the Company herein; provided, however, that no such conveyance or
transfer shall have the effect of releasing the Person named as
the "Company" in the first paragraph of this Indenture or any
successor corporation which shall theretofore have become such in
the manner prescribed in this Article Twelve from its liability
as obligor and maker on any of the Notes.
ARTICLE THIRTEEN
Supplemental Indentures.
Section 13.01. Supplemental Indentures without Consent
of Noteholders.
(a) The Company, when authorized by Board Resolution,
and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto for one or more of
the following purposes:
(1) to make such provision in regard to matters
or questions arising under this Indenture as may be
necessary or desirable and not inconsistent with this
Indenture or for the purpose of supplying any omission,
curing any ambiguity, or curing, correcting or supple-
menting any defective or inconsistent provision or to
make a change which does not affect the rights of any
Noteholder;
(2) to change or eliminate any of the provisions
of this indenture, provided that any such change or
elimination shall become effective only when there is
no Note outstanding created prior to the execution of
such supplemental indenture which is entitled to the
benefit of such provision;
(3) to establish the form of Notes as permitted
by Section 2.01 or to establish or reflect any terms of
any Note determined pursuant to Section 2.05;
(4) to evidence the succession of another
corporation to the Company, and the assumption by any
such successor of the covenants of the Company herein
and in the Notes;
(5) to grant to or confer upon the Trustee for the
benefit of the Holders any additional rights, remedies,
powers or authority;
(6) to permit the Trustee to comply with any duties
imposed upon it by law;
(7) to specify further the duties and responsibilities
of, and to define further the relationships among, the
Trustee, any Authenticating Agent and any paying agent; and
(8) to add to the covenants of the Company for the
benefit of the holders or to surrender a right or power
conferred on the Company herein.
(b) The Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, to
make any further appropriate agreements and stipulations which
may be therein contained and to accept the conveyance, transfer
and assignment of any property thereunder, but the Trustee shall
not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
(c) Any supplemental indenture authorized by this
Section 15.01 may be executed by the Company and the Trustee
without the consent of the holders of any of the Notes at the
time outstanding, notwithstanding any of the provisions of
Section 13.02.
Section 13.02. Supplemental Indentures with Consent of
Noteholders.
(a) With the consent (evidenced as provided in Sec-
tion 10.01) of the holders of at least 50% in aggregate principal
amount of the Notes at the time outstanding that would be
affected by such supplemental indenture, the Company, when
authorized by Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the Noteholders; provided, however,
that no such supplemental indenture shall:
(1) change the maturity of any Note; or reduce
the rate or extend the time of payment of interest on
any Note; or change the method of calculating interest,
or any term used in the calculation of interest, or the
period for which interest is payable, on any Floating
Rate Note; or reduce the principal amount of any Note
or any premium thereon; or change the coin or currency
in which the principal of any Note or any premium or
interest thereon is payable; or change the date on
which any Note may be redeemed; or adversely affect the
rights of any Noteholder to institute suit for the
enforcement of any payment of principal of or any
premium or interest on any Note; in each case without
the consent of the holder of each Note so affected (for
purposes of this Section 13.02 (a)(1) only, the term
"Note" shall include Notes for which an offer has been
accepted by the Company); or
(2) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such
supplemental indenture, without the consent of the
holders of all of the Notes then outstanding.
(b) Upon the request of the Company, accompanied by a
copy of the Board Resolution authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee
of evidence of the consent of Noteholders as aforesaid, the
Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects
the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
(c) It shall not be necessary for the consent of the
holders of Notes under this Section 13.02 to approve the
particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance
thereof.
(d) Promptly after the execution by the Company and
the Trustee of any supplemental indenture pursuant to this
Section 13.02, the Company shall give notice in the manner
provided in Section 15.10, setting forth in general terms the
substance of such supplemental indenture, to all Noteholders.
Any failure of the Company to give such notice, or any defect
therein shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
Section 13.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures. Any supplemental indenture
executed pursuant to this Article Thirteen shall comply with the
TIA. Upon the execution of any supplemental indenture pursuant
to this Article Thirteen, this Indenture shall be and be deemed
to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and
the Noteholders shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 13.04. Notation on Notes. Notes authenticated
and delivered after the execution of any supplemental indenture
pursuant to this Article Thirteen may bear a notation in form
approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so
determine, new Notes so modified as to conform in the opinion of
the Trustee and the Board of Directors to any modification of
this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the
Trustee and delivered in exchange for the Notes then outstanding.
Section 13.05. Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee. The Trustee, subject to
Sections 9.01 and 9.02, may receive an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the
requirements of this Article Thirteen.
ARTICLE FOURTEEN.
Immunity of Incorporators, Stockholders,
Officers and Directors.
Section 14.01. Indenture and Notes Solely Corporate
Obligations. No recourse for the payment of the principal of or
any premium or interest on any Note, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company,
contained in this Indenture or in any supplemental indenture, or
in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or
future, of the Company or any successor corporation, either
directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue
of the Notes.
ARTICLE FIFTEEN.
Miscellaneous Provisions.
Section 15.01. Provisions Binding on Company's Succes-
sors. All the covenants, stipulations, promises and agreements
made by the Company in this Indenture shall bind its successors
and assigns whether so expressed or not.
Section 15.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee
or officer of any corporation that shall at the time be the
lawful successor of the Company.
Section 15.03. Addresses for Notices, etc. Any notice
or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the
Noteholders on the Company may be given or served by being depos-
ited postage prepaid in a post office letter box addressed (until
another address is filed by the Company with the Trustee) to
Kansas City Power & Light Company, 1201 Walnut, Kansas City,
Missouri 64106, to the attention of the Corporate Secretary.
Any notice, direction, request or demand by any Noteholder to or
upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee.
Section 15.04. Governing Law. This Indenture and each
Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in
accordance with the laws of said State.
Section 15.05. Evidence of Compliance with Conditions
Precedent.
(a) Upon any application or demand by the Company to
the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
(b) Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant provided for in this Indenture shall
include (1) a statement that each Person making such certificate
or opinion has read such covenant or condition and the
definitions relating thereto; (2) a brief statement as to the
nature and scope of the examination or investigation upon which
the statements or opinion contained in such certificate or
opinion are based; (3) a statement that, in the opinion of each
such Person, such Person has made such examination or
investigation as is necessary to enable such Person to express an
informed opinion as to whether or not such covenant or condition
has been complied with; and (4) a statement as to whether or not,
in the opinion of each such Person, such condition or covenant
has been complied with.
(c) In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person,or that
they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such
matters in one or several documents.
(d) Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or
opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such person knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are
erroneous.
(e) Any certificate, statement or opinion of any
officer of the Company, or of counsel, may be based, insofar as
it relates to accounting matters, upon a certificate or opinion
of or representations by an accountant or firm of accountants,
unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the
accounting matters upon which the certificate, statement or
opinion of such officer or counsel may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate or opinion of any firm
of independent public accountants filed with the Trustee shall
contain a statement that such firm is independent.
(f) Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under
this Indenture, they may, but need not, be consolidated and form
one instrument.
Section 15.06. Business Days. Unless otherwise
provided herein, in any case where the date of maturity of the
principal of or any premium or interest on any Note or the date
fixed for redemption of any Note is not a Business Day, then
payment of such principal or any premium or interest need not be
made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and, in the case of
payment, no interest shall accrue for the period from and after
such date.
Section 15.07. Trust Indenture Act to Control. If and
to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this
Indenture which is required to be included in this Indenture by
any of Sections 310 to 317, inclusive, of the TIA, such required
provision shall control.
Section 15.08. Table of Contents, Headings, etc. The
table of contents and the titles and headings of the articles
and sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions
hereof.
Section 15.09. Execution in Counterparts. This Inden-
ture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together
constitute but one and the same instrument.
Section 15.10. Manner of Mailing Notice to
Noteholders. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the
Trustee or the Company to or on the holders of Notes, as the case
may be, shall be given or served by first-class mail, postage
prepaid, addressed to the holders of such Notes at their last
addresses as the same appear on the Note register referred to in
Section 2.06, and any such notice shall be deemed to be given or
served by being deposited in a post office letter box in the form
and manner provided in this Section 15.10.
<PAGE>
In Witness Whereof, Kansas City Power & Light Company
has caused this Indenture to be signed and acknowledged by its
Senior Vice President-Finance and Business Development, and its
corporate seal to be affixed hereunto, and the same to be
attested by its Secretary or an Assistant Secretary, and The Bank
of New York has caused this Indenture to be signed and acknowl-
edged by one of its Assistant Vice Presidents and its corporate
seal to be affixed hereunto, and the same to be attested by one
of its Assistant Treasurers, as of the day and year first written
above.
KANSAS CITY POWER & LIGHT COMPANY
By /s/Bernard J. Beaudoin
Bernard J. Beaudoin
Senior Vice President-Finance
and Business Development
Attest:
/s/Jeanie Sell Latz
Jeanie Sell Latz
Secretary
[Seal)
THE BANK OF NEW YORK, as Trustee
By /s/Lucille Firrincieli
Assistant Vice President
Attest:
/s/Alfia Monastra
Assistant Treasurer
[Seal]
<PAGE>
STATE OF MISSOURI )
) ss:
COUNTY OF JACKSON )
I, Jacquetta L. Hartman, a Notary Public in and for
said County and State aforesaid, do hereby certify that Bernard
J. Beaudoin of Kansas City Power & Light Company, a Missouri
corporation and Jeanie Sell Latz of said corporation, who are
personally known to me to be the same persons whose names are
subscribed to the foregoing instrument and who are both
personally known to me to be Senior Vice President-Finance and
Business Development and Secretary of said corporation, appeared
before me this day in person and severally acknowledged that they
this day signed, sealed and delivered the said instrument as
their free and voluntary act as such Senior Vice President-
Finance and Business Development and Secretary, respectively, of
said corporation and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth, and
that the seal affixed to said instrument is the corporate seal of
said corporation and that the said instrument was executed,
signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and acknowledged said
instrument to be the free and voluntary act and deed of said
corporation.
GIVEN under my hand and notarial seal this 17th day of
November, 1994.
/s/Jacquetta Hartman
My commission expires:
April 8, 1996
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
I, Timothy J. Shea, a Notary Public in and for said
County and State aforesaid, do hereby certify that Lucille
Firrincieli of The Bank of New York, a corporation organized and
existing under the laws of the State of New York, and Alfia
Monastra, of said corporation, who are personally known to me to
be the same persons whose names are subscribed to the foregoing
instrument and who are both personally known to me to be an
Assistant Vice President and Assistant Treasurer of said corpora-
tion, appeared before me this day in person and severally
acknowledged that they this day signed, sealed and delivered the
said instrument as their free and voluntary act as such an
Assistant Vice President and Assistant Treasurer, respectively,
of said corporation, and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth, and
that the seal affixed to said instrument is the corporate seal of
said corporation and that the said instrument was executed,
signed, sealed and delivered on behalf of said corporation by
authority of its By-laws, and acknowledged said instrument to be
the free and voluntary act and deed of said corporation.
GIVEN under my hand and notarial seal this 14th day of
November, 1994.
/s/Timothy J. Shea
Notary Public
My commission expires:
May 5, 1996
<PAGE>
EXHIBIT A
Bond of Tenth Series
See attached.
<PAGE>
EXHIBIT B
Global Fixed Rate Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT COMPANY
Fixed Rate
Secured Medium-Term Note
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE
DEPOSITARY (REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
CUSIP: PRINCIPAL AMOUNT:
$
ORIGINAL ISSUE DATES: MATURITY DATE:
INTEREST RATE: REDEMPTION DATE:
INTEREST PAYMENT DATES:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company", which term includes any
successor Person under the Indenture referred to on the reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above and to pay interest thereon
from the Original Issue Date (or if this Global Note has two or
more Original Issue Dates, interest shall, beginning on each such
Original Issue Date, begin to accrue for that part of the
principal amount to which such Original Issue Date is applicable)
set forth above, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually
in arrears on the Interest Payment Dates set forth above in each
year commencing on (a) the first such Interest Payment Date next
succeeding the earliest Original Issue Date or Dates set forth
above, or (b) if such Original Issue Date is after a Record Date
and prior to the first Interest Payment Date, on the second
Interest Payment Date, at the per annum Interest Rate set forth
above until the principal hereof is paid or made available for
payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Note is
registered at the close of business on the Record Date for such
Interest Payment Date, which shall be the date fifteen calendar
days (whether or not a Business Day) preceding such Interest
Payment Date, provided, however, that if an Original Issue Date
falls between a Record Date and an Interest Payment Date, the
first payment of interest with respect to such Original Issue
Date will be paid on the second Interest Payment Date subsequent
to such Original Issue Date to the Person in whose name this Note
is registered at the close of business on the Record Date for
such second Interest Payment Date, and provided further, that
interest payable on the Maturity date or, if applicable, upon
redemption, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture,
any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the holder on such Record
Date and shall be paid to the Person in whose name this Note is
registered at the close of business on a Record Date for the
payment of such defaulted interest to be fixed by the Company,
notice whereof shall be given to Noteholders not less than
fifteen days prior to such Record Date. Payment of the principal
of and any premium and interest on this Note will be made at the
Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York, or such other office or agency
of the Company as may be designated by it for such purpose, in
such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private
debts, provided, however, that at the option of the Company,
payment of interest may be made by United States dollar check
mailed to the address of the Person entitled thereto as such
address shall appear in the Note Register.
Under certain circumstances, this Global Note is
exchangeable in whole or from time to time in part for a
definitive Note or Notes, with the same Original Issue Date or
Dates, Maturity Date, Interest Rate and redemption provisions as
provided herein or in the Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS GLOBAL NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has
executed by the Trustee referred to on the reverse hereof,
directly or through an Authenticating Agent, by manual signature
of an authorized signatory, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas City Power & Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned Indenture President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized Signatory Secretary
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
SECURED MEDIUM-TERM NOTE
This Global Note is one of, and a global security which
represents Notes which are part of, a duly authorized issue of
Notes of the Company (herein called the "Notes"), issued and to
be issued under an Indenture dated as of November 1, 1994 (herein
called the "Indenture") between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term
includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the
Trustee and the Noteholders, and of the terms upon which the
Notes are, and are to be, authenticated and delivered. The Notes
are limited to $125,000,000 aggregate principal amount.
This Global Note is secured by a Mortgage Bond pledged
by the Company to the Trustee for the benefit of the holders of
the Notes. The Mortgage Bond is issued by the Company under, and
the Mortgage Bond is secured by, a General Mortgage Indenture and
Deed of Trust dated as of December 1, 1986, duly executed by the
Company to United Missouri Bank of Kansas City, N.A., Trustee, to
which General Mortgage Indenture and Deed of Trust and all
indentures supplemental thereto reference is hereby made for a
description of the property mortgaged and pledged, the nature and
extent of the security, the terms and conditions upon which the
Mortgage Bond is issued and secured and the prior liens to which
the security for the Mortgage Bond is junior.
Each Note shall be dated the date of its authentication
by the Trustee. Each Note shall also bear an Original Issue Date
or Dates which with respect to this Global Note (or any portion
thereof), shall mean the date or dates of the original issue of
the Notes represented hereby as specified on the face hereof, and
such Original Issue Date or Dates shall remain the same for all
Notes subsequently issued upon transfer, exchange, or
substitution of such original Note (or such subsequently issued
Notes) regardless of their dates of authentication.
This Global Note may not be redeemed prior to the
Redemption Date set forth on the face hereof. If no Redemption
Date is so set forth, this Global Note is not redeemable prior to
its maturity. On or after the Redemption Date set forth on the
face hereof this Note is redeemable in whole or in part in
increments of $1,000 (provided that any remaining principal
amount of this note shall be at least $1,000) at the option of
the Company at the following redemption prices (expressed as
percentages of the principal amount to be redeemed) together with
interest thereon payable to the date of redemption:
<PAGE>
Redemption Periods Redemption Prices
Notice of redemption will be given by mail to Holders of Notes
not less than 30 nor more than 60 days prior to the date fixed
for redemption all as provided in the Indenture. In the event of
redemption of this Global Note in part only, a new Global Note or
Notes and of like tenor for the unredeemed portion hereof will be
issued in the name of the Noteholder hereof upon the surrender
hereof.
This Global Note will not be entitled to the benefit of
a sinking fund.
Interest payments on this Global Note will include
Accrued Interest to but excluding the Interest Payment Date.
Interest payments on this Note shall be computed and paid on the
basis of a 360-day year of twelve 30-day months.
The Company at its option, subject to the terms and
conditions provided in the Indenture, will be discharged from any
and all obligations in respect of the Notes (except for certain
obligations including obligations to register the transfer or
exchange of Notes, replace stolen, lost or mutilated Notes,
maintain paying agencies and hold monies for payment in trust),
91 days after the Company deposits with the Trustee money or U.S.
Government Obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will
provide money, or a combination of money and U.S. Government
Obligations, in an amount sufficient to pay all the principal of
and any premium and interest on the Notes on the dates such
payments are due in accordance with the terms of the Notes.
If an Event of Default with respect to Notes shall
occur and be continuing, the principal of the Notes may be
declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Noteholders to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the holders of not
less than a majority in principal amount of the outstanding Notes
affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority in principal
amount of the outstanding Notes affected thereby, on behalf of
the holders of all Notes, to waive compliance by the Company with
certain provisions of the Indenture. The Indenture also provides
that the holders of not less than a majority in principal amount
of the outstanding Notes may waive certain past defaults and
their consequences on behalf of the holders of all Notes. Any
such consent or waiver by the holder of this Global Note shall be
conclusive and binding upon such holder and upon all future
holders of this Global Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Global Note or such Note.
As set forth in, and subject to, the provisions of the
Indenture, no holder of any Notes will have any right to
institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given
to the Trustee written notice of a continuing Event of Default
with respect to the Notes, the holders of not less than a
majority in principal amount of the outstanding Notes shall have
made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee, and the Trustee
shall have failed to institute such proceeding within 60 days,
provided, however, that such limitations do not apply to a suit
instituted by the holder hereof for the enforcement of payment of
the principal of and any premium or interest on this Global Note
on or after the respective due dates expressed herein.
As provided in the Indenture and subject to certain
limitations therein set forth, this Global Note may be
transferred, in whole but not in part, only by the Depositary to
a nominee of the Depositary, or by a nominee of the Depositary to
another nominee or the Depositary or by the Depositary or any
such nominee to a successor Depositary for this Global Note
selected or approved by the Company or to a nominee of such
successor Depositary.
If at any time the Depositary for this Global Note
notifies the Company that it is unwilling or unable to continue
as Depositary for this Global Note or if at any time the
Depositary for this Global Note shall no longer be eligible or in
good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to this Global
Note. If a successor Depositary for this Global Note is not
appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the
Company's election to issue this Note in global form shall no
longer be effective with respect to this Global Note and the
Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of individual Notes in
exchange for this Global Note, will authenticate and deliver
individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such
Global Note or Notes in exchange for such Global Note or Notes.
If specified by the Company and agreed by the
Depositary with respect to Notes issued in the form of a Global
Note, the Depositary for such Global Note shall surrender such
Global Note in exchange in whole or in part for individual Notes
of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such Depositary. Thereupon the
Company shall execute, and the Trustee shall authenticate and
deliver, without service charge, (1) to each Person specified by
such Depositary, a new Note or Notes of like tenor and terms and
of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for
beneficial interest of such Person in such Global Note; and (2)
to such Depositary a new Global Note of like tenor and terms and
in a denomination equal to the difference, if any, between the
principal amount of the surrendered Global Note and the aggregate
principal amount of Notes delivered to Holders thereof.
Under certain circumstances specified in the Indenture,
the Depositary may be required to surrender any two or more
Global Notes which have identical terms (but which may have
differing Original Issue Dates) to the Trustee, and the Company
shall execute and the Trustee shall authenticate and deliver to,
or at the direction of, the Depositary a Global Note in principal
amount equal to the aggregate principal amount of, and with all
terms identical to, the Global Notes surrendered thereto and
which shall indicate all Original Dates and the principal amount
applicable to each such Original Issue Date.
No reference herein to the Indenture and no provision
of this Global Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Note
at the times, places and rates, and in the coin or currency,
herein prescribed.
Prior to due presentment of this Global Note for
registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name
this Global Note is registered as the owner hereof for all
purposes, whether or not this Global Note is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the
face of this instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
_________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
_________________________________________________________________
the within note and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________
_______________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of
the within instrument in every
particular, without alteration or
enlargement or any change whatever.
<PAGE>
EXHIBIT C Fixed Rate Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT COMPANY
Fixed Rate
Secured Medium-Term Note
CUSIP: PRINCIPAL AMOUNT:
$
ORIGINAL ISSUE DATE: MATURITY DATE:
INTEREST RATE: REDEMPTION DATE:
INTEREST PAYMENT DATES:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company", which term includes any
successor Person under the Indenture referred to on the reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above, and to pay interest thereon
from the Original Issue Date set forth above, or from the most
recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on the Interest
Payment Dates set forth above in each year, commencing on (a) the
first such Interest Payment Date next succeeding the Original
Issue Date set forth above, or (b) if such Original Issue Date is
after a Record Date and prior to the first Interest Payment Date,
on the second Interest Payment Date, at the per annum Interest
Rate set forth above until the principal hereof is paid or made
available for payment. The interest so payable and punctually
paid or duly provided for on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name
this Note is registered at the close of business on the Record
Date for such Interest Payment Date, which shall be the date
fifteen calendar days (whether or not a Business Day) preceding
such Interest Payment Date, provided, however that if the
Original issue Date falls between a Record Date and an Interest
Payment Date, the first payment of interest will be paid on the
second Interest Payment Date subsequent to such Original Issue
Date to the Person in whose name this Note is registered at the
close of business on the Record Date for such second Interest
Payment Date, and provided further, that interest payable on the
Maturity Date, or if applicable, upon redemption, shall be
payable to the Person to whom principal shall be payable. Except
as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be
payable to the holder on such Record Date and shall be paid to
the Person in whose name this Note is registered at the close of
business on a Record Date for the payment of such defaulted
interest to be fixed by the Company, notice whereof shall be
given to Noteholders not less than fifteen days prior to such
Record Date. Payment of the principal of and any premium and
interest on this Note will be made at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York,
or such other office or agency of the Company as may be
designated by it for such purpose, in such coin or currency of
the United States of America as at the time of payment is legal
lender for payment of public and private debts, provided,
however, that at the option of the Company, payment of interest
may be made by United States dollar check mailed to the address
of the Person entitled thereto as such address shall appear in
the Security Register.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET
FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has
executed by the Trustee referred to on the reverse hereof,
directly or through an Authenticating Agent, by manual signature
of an authorized signatory, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas City Power & Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned Indenture President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized Signatory Secretary
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
SECURED MEDIUM-TERM NOTE
This Note is one of a duly authorized issue of Notes of
the Company (herein called the "Notes"), issued and to be issued
under an Indenture dated as of November 1, 1994 (herein called
the "Indenture") between the Company and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and
the Noteholders, and of the terms upon which the Notes are, and
are to be, authenticated and delivered. The Notes are limited to
$125,000,000 aggregate principal amount.
This Note is secured by a Mortgage Bond pledged by the
Company to the Trustee for the benefit of the holders of the
Notes. The Mortgage Bond is issued by the Company under, and the
Mortgage Bond is secured by, a General Mortgage Indenture and
Deed of Trust dated as of December 1, 1986, duly executed by the
Company to United Missouri Bank of Kansas City, N.A., Trustee, to
which General Mortgage Indenture and Deed of Trust and all
indentures supplemental thereto reference is hereby made for a
description of the property mortgaged and pledged, the nature and
extent of the security, the terms and conditions upon which the
Mortgage Bond is issued and secured and the prior liens to which
the security for the Mortgage Bond is junior.
Each Note shall be dated the date of its authentication
by the Trustee. Each Note shall also bear an Original Issue Date
which with respect to this Note (or any portion thereof), shall
mean the date of its original issue as specified on the face
hereof, and such Original Issue Date shall remain the same for
all Notes subsequently issued upon transfer, exchange or
substitution of such original Note (or such subsequently issued
Notes) regardless of their dates of authentication.
This Note may not be redeemed prior to the Redemption
Date set forth on the face hereof. If no Redemption Date is so
set forth, this Note is not redeemable prior to its maturity. On
or after the Redemption Date set forth on the face hereof this
Note is redeemable in whole or in part in increments of $1,000
(provided that any remaining principal amount of this note shall
be at least $1,000) at the option of the Company at the following
redemption prices (expressed as percentages of the principal
amount to be redeemed) together with interest thereon payable to
the date of redemption:
<PAGE>
Redemption Periods Redemption Prices
Notice of redemption will be given by mail to Holders of Notes
not less than 30 nor more than 60 days prior to the date fixed
for redemption, all as provided in the Indenture. In the event
of redemption of this Note in part only, a new Note or Notes and
of like tenor for the unredeemed portion hereof will be issued in
the name of the Noteholder hereof upon the surrender hereof.
This Note will not be entitled to the benefit of a
sinking fund.
Interest payments on this Note will include Accrued
Interest to but excluding the Interest Payment Date. Interest
payments on this Note shall be computed and paid on the basis of
a 360-day year of twelve 30-day months.
The Company at its option, subject to the terms and
conditions provided in the Indenture, will be discharged from any
and all obligations in respect of the Notes (except for certain
obligations including obligations to register the transfer or
exchange of Notes, replace stolen, lost or mutilated Notes,
maintain paying agencies and hold monies for payment in trust),
91 days after the Company deposits with the Trustee money or U.S.
Government Obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will
provide money, or a combination of money and U.S. Government
Obligations, in an amount sufficient to pay all the principal of
and any premium and interest on the Notes on the dates such
payments are due in accordance with the terms of the Notes.
If an Event of Default with respect to Notes shall
occur and be continuing, the principal of the Notes may be
declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Noteholders to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the holders of not
less than a majority in principal amount of the outstanding Notes
affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority in principal
amount of the outstanding Notes affected thereby, on behalf of
the holders of all Notes, to waive compliance by the Company with
certain provisions of the Indenture. The Indenture also provides
that the holders of not less than a majority in principal amount
of the outstanding Notes may waive certain past defaults and
their consequences on behalf of the holders of all Notes. Any
such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future
holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon
this Note or such Note.
As set forth in, and subject to, the provisions of the
Indenture, no holder of any Notes will have any right to
institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given
to the Trustee written notice of a continuing Event of Default
with respect to the Notes, the holders of not less than a
majority in principal amount of the outstanding Notes shall have
made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee, and the Trustee
shall have failed to institute such proceeding within 60 days,
provided, however, that such limitations do not apply to a suit
instituted by the holder hereof for the enforcement of payment of
the principal of and any premium or interest on this Note on or
after the respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Note
at the times, places and rates, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Note Register. Upon surrender of this Note
for registration of transfer at the Corporate Trust Office of the
Trustee or such other office or agency as may be designated by it
in the Borough of Manhattan, The City of New York, duly endorsed
by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note registrar duly executed
by the holder hereof or the attorney of such holder duly
authorized in writing, and thereupon one or more new Notes of
like tenor,of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple of
$1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of
like tenor of a different authorized donomination, as requested
by the holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether
or not this Note is overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the
face of this instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
_________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
_________________________________________________________________
the within note and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________
_______________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of
the within instrument in every
particular, without alteration or
enlargement or any change whatever.<PAGE>
EXHIBIT D
Global Floating Rate Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT COMPANY
Floating Rate
Secured Medium-Term Note
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE
DEPOSITARY (REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
CUSIP: Principal Amount: $
Original Issue Dates: Maturity Date:
Base Rate: Maximum Interest Rate:
Index Maturity: Minimum Interest Rate:
Interest Payment Dates: Redemption Date:
Initial Interest Rate: Spread:
Initial Interest Reset Date: Spread Multiplier: + or -
Interest Reset Dates:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company", which term includes any
successor Person under the Indenture referred to on the reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above and to pay interest thereon
from the Original Issue Date (or if this Global Note has two or
more Original Issue Dates, interest shall, beginning on each such
Original Issue Date, begin to accrue for that part of the
principal amount to which such Original Issue Date is applicable)
set forth above, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, monthly,
quarterly, semiannually or annually as specified above under
Interest Payment Period, on the Interest Payment Dates specified
above, commencing on (a) the first such Interest Payment Date
next succeeding the earliest Original Issue Date or Dates set
forth above, or (b) if such Original Issue Date is after a Record
Date and prior to the first Interest Payment Date, on the second
Interest Payment Date, and at Maturity, at a rate per annum equal
to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above, and thereafter at a rate per
annum determined in accordance with the provisions in the
Indenture for calculating the Interest Rate for Notes having the
Base Rate specified above, until the principal hereof is paid or
made available for payment. The interest so payable and
punctually paid or duly provided for on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in
whose name this Note is registered at the close of business on
the Record Date for such Interest Payment Date, which shall be
the fifteenth day (whether or not a Business Day) next preceding
such Interest Payment Date provided, however, that if an Original
Issue Date falls between a Record Date and an Interest Payment
Date, the first payment of interest with respect to such Original
Issue Date will be paid on the second Interest Payment Date
subsequent to such Original Issue Date to the Person in whose
name this Note is registered at the close of business on the
Record Date for such second Interest Payment Date, and provided
further, that interest payable on the Maturity Date or, if
applicable, upon redemption, shall be payable to the Person to
whom principal shall be payable. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or dully
provided for will forthwith cease to be payable to the holder on
such Record Date and shall be paid to the Person in whose name
this Note is registered at the close of business on a Record Date
for the payment of such defaulted interest to be fixed by the
Company, notice whereof shall be given to Noteholders not less
than fifteen days prior to such Record Date. Payment of the
principal of and any premium and interest on this Note will be
made at the Corporate Trust Office of the Trustee in the Borough
of Manhattan, The City of New York, or such other office or
agency of the Company as may be designated by it for such
purpose, in such coin or currency of the United States of America
as at the time of payment is legal lender for payment of public
and private debts, provided, however, that at the option of the
Company, payment of interest may be made by United States dollar
check mailed to the address of the Person entitled thereto as
such address shall appear in the Note Register.
Under certain circumstances, this Global Note is
exchangeable in whole or from time to time in part for a
definitive Note or Notes, with the same Original Issue Date or
Dates, Maturity Date, Interest Rate and redemption provisions as
provided herein or in the Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS GLOBAL NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has
executed by the Trustee referred to on the reverse hereof,
directly or through an Authenticating Agent, by manual signature
of an authorized signatory, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas City Power & Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned Indenture President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized Signatory Secretary
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
SECURED MEDIUM-TERM NOTE
This Global Note is one of, and a global security which
represents Notes which are part of, a duly authorized issue of
Notes of the Company (herein called the "Notes"), issued and to
be issued under an Indenture dated as of November 1, 1994 (herein
called the "Indenture") between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term
includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the
Trustee and the Noteholders, and of the terms upon which the
Notes are, and are to be, authenticated and delivered. The Notes
are limited to $125,000,000 aggregate principal amount.
This Global Note is secured by a Mortgage Bond pledged
by the Company to the Trustee for the benefit of the holders of
the Notes. The Mortgage Bond is issued by the Company under, and
the Mortgage Bond is secured by, a General Mortgage Indenture and
Deed of Trust dated as of December 1, 1986, duly executed by the
Company to United Missouri Bank of Kansas City, N.A., Trustee, to
which General Mortgage Indenture and Deed of Trust and all
indentures supplemental thereto reference is hereby made for a
description of the property mortgaged and pledged, the nature and
extent of the security, the terms and conditions upon which the
Mortgage Bond is issued and secured and the prior liens to which
the security for the Mortgage Bond is junior.
Each Note shall be dated the date of its authentication
by the Trustee. Each Note shall also bear an Original Issue Date
or Dates which with respect to this Global Note (or any portion
thereof), shall mean the date or dates of the original issue of
the Notes represented hereby as specified on the face hereof, and
such Original Issue Date or Dates shall remain the same for all
Notes subsequently issued upon transfer, exchange, or
substitution of such original Note (or such subsequently issued
Notes) regardless of their dates of authentication.
This Global Note may not be redeemed prior to the
Redemption Date set forth on the face hereof. If no Redemption
Date is so set forth, this Global Note is not redeemable prior to
its maturity. On or after the Redemption Date set forth on the
face hereof this Note is redeemable in whole or in part in
increments of $1,000 (provided that any remaining principal
amount of this note shall be at least $1,000) at the option of
the Company at the following redemption prices (expressed as
percentages of the principal amount to be redeemed) together with
interest thereon payable to the date of redemption:
<PAGE>
Redemption Periods Redemption Prices
Notice of redemption will be given by mail to Holders of Notes
not less than 30 nor more than 60 days prior to the date fixed
for redemption all as provided in the Indenture. In the event of
redemption of this Global Note in part only, a new Global Note or
Notes and of like tenor for the unredeemed portion hereof will be
issued in the name of the Noteholder hereof upon the surrender
hereof.
This Global Note will not be entitled to the benefit of
a sinking fund.
The Company at its option, subject to the terms and
conditions provided in the Indenture, will be discharged from any
and all obligations in respect of the Notes (except for certain
obligations including obligations to register the transfer or
exchange of Notes, replace stolen, lost or mutilated Notes,
maintain paying agencies and hold monies for payment in trust),
91 days after the Company deposits with the Trustee money or U.S.
Government Obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will
provide money, or a combination of money and U.S. Government
Obligations, in an amount sufficient to pay all the principal of
and any premium and interest on the Notes on the dates such
payments are due in accordance with the terms of the Notes.
If an Event of Default with respect to Notes shall
occur and be continuing, the principal of the Notes may be
declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Noteholders to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the holders of not
less than a majority in principal amount of the outstanding Notes
affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority in principal
amount of the outstanding Notes affected thereby, on behalf of
the holders of all Notes, to waive compliance by the Company with
certain provisions of the Indenture. The Indenture also provides
that the holders of not less than a majority in principal amount
of the outstanding Notes may waive certain past defaults and
their consequences on behalf of the holders of all Notes. Any
such consent or waiver by the holder of this Global Note shall be
conclusive and binding upon such holder and upon all future
holders of this Global Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Global Note or such Note.
As set forth in, and subject to, the provisions of the
Indenture, no holder of any Notes will have any right to
institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given
to the Trustee written notice of a continuing Event of Default
with respect to the Notes, the holders of not less than a
majority in principal amount of the outstanding Notes shall have
made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee, and the Trustee
shall have failed to institute such proceeding within 60 days,
provided, however, that such limitations do not apply to a suit
instituted by the holder hereof for the enforcement of payment of
the principal of and any premium or interest on this Global Note
on or after the respective due dates expressed herein.
As provided in the Indenture and subject to certain
limitations therein set forth, this Global Note may be
transferred, in whole but not in part, only by the Depositary to
a nominee of the Depositary, or by a nominee of the Depositary to
another nominee or the Depositary or by the Depositary or any
such nominee to a successor Depositary for this Global Note
selected or approved by the Company or to a nominee of such
successor Depositary.
If at any time the Depositary for this Global Note
notifies the Company that it is unwilling or unable to continue
as Depositary for this Global Note or if at any time the
Depositary for this Global Note shall no longer be eligible or in
good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to this Global
Note. If a successor Depositary for this Global Note is not
appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the
Company's election to issue this Note in global form shall no
longer be effective with respect to this Global Note and the
Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of individual Notes in
exchange for this Global Note, will authenticate and deliver
individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such
Global Note or Notes in exchange for such Global Note or Notes.
If specified by the Company and agreed by the
Depositary with respect to Notes issued in the form of a Global
Note, the Depositary for such Global Note shall surrender such
Global Note in exchange in whole or in part for individual Notes
of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such Depositary. Thereupon the
Company shall execute, and the Trustee shall authenticate and
deliver, without service charge, (1) to each Person specified by
such Depositary, a new Note or Notes of like tenor and terms and
of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for
beneficial interest of such Person in such Global Note; and (2)
to such Depositary a new Global Note of like tenor and terms and
in a denomination equal to the difference, if any, between the
principal amount of the surrendered Global Note and the aggregate
principal amount of Notes delivered to Holders thereof.
Under certain circumstances specified in the Indenture,
the Depositary may be required to surrender any two or more
Global Notes which have identical terms (but which may have
differing Original Issue Dates) to the Trustee, and the Company
shall execute and the Trustee shall authenticate and deliver to,
or at the direction of, the Depositary a Global Note in principal
amount equal to the aggregate principal amount of, and with all
terms identical to, the Global Notes surrendered thereto and
which shall indicate all Original Dates and the principal amount
applicable to each such Original Issue Date.
No reference herein to the Indenture and no provision
of this Global Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Note
at the times, places and rates, and in the coin or currency,
herein prescribed.
Prior to due presentment of this Global Note for
registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name
this Global Note is registered as the owner hereof for all
purposes, whether or not this Global Note is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the
face of this instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
_________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
_________________________________________________________________
the within note and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________
_______________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature to this
assignment must correspond with the name
as written upon the face of the within
instrument in every particular, without
alteration or enlargement or any change
whatever.
<PAGE>
EXHIBIT E
Floating Rate Note
Registered REGISTERED
NO.
KANSAS CITY POWER & LIGHT COMPANY
Floating Rate
Secured Medium-Term Note
CUSIP: Principal Amount: $
Original Issue Dates: Maturity Date:
Base Rate: Maximum Interest Rate:
Index Maturity: Minimum Interest Rate:
Interest Payment Dates: Redemption Date:
Initial Interest Rate: Spread:
Initial Interest Reset Date: Spread Multiplier: + or -
Interest Reset Dates:
Kansas City Power & Light Company, a Missouri
corporation (herein called the "Company", which term includes any
successor Person under the Indenture referred to on the reverse
hereof) for value received hereby promises to pay to
or registered assigns the principal sum of
DOLLARS
on the Maturity Date set forth above, and to pay interest thereon
from the Original Issue Date set forth above, or from the most
recent Interest Payment Date to which interest has been paid or
duly provided for, monthly, quarterly, semiannually or annually
as specified above under Interest Payment Period, on the Interest
Payment Dates specified above, commencing on (a) the first such
Interest Payment Date next succeeding the Original Issue Date or
Dates set forth above or (b) if such Original Issue Date is after
a Record Date and prior to the first Interest Payment Date, on
the second Interest Payment Date, and at maturity, at a rate per
annum equal to the Initial Interest Rate specified above until
the Initial Interest Rate Reset Date specified above, and
thereafter at a rate per annum determined in accordance with the
provisions in the Indenture for calculating the Interest Rate for
Notes having the Base Rate specified above, until the principal
hereof is paid or made available for payment. The interest so
payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note is registered at the close of
business on the Record Date for such interest which shall be the
fifteenth day (whether or not a Business Day), next preceding
such Interest Payment Date provided, however that if the Original
<PAGE>
Issue Date falls between a Record Date and an Interest Payment
Date, the first payment of interest will be paid on the second
Interest Payment Date subsequent to such Original Issue Date to
the Person in whose name this Note is registered at the close of
business on the Record Date for such second Interest Payment
Date, and provided further, that interest payable on the Maturity
Date, or, if applicable, upon redemption, shall be payable to the
Person to whom principal shall be payable. Except as otherwise
provided in the Indenture, any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to
the holder on such Record Date and shall be paid to the Person in
whose name this Note is registered at the close of business on a
Record Date for the payment of such defaulted interest to be
fixed by the Company, notice whereof shall be given to
Noteholders not less than fifteen days prior to such Record Date.
Payment of the principal of and any premium and interest on this
Note will be made at the Corporate Trust Office of the Trustee in
the Borough of Manhattan, The City of New York, or such other
office or agency of the Company as may be designated by it for
such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of
public and private debts, provided, however, that at the option
of the Company, payment of interest may be made by United States
dollar check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET
FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has
executed by the Trustee referred to on the reverse hereof,
directly or through an Authenticating Agent, by manual signature
of an authorized signatory, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal
Dated
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
Kansas City Power & Light
Company
This is one of the notes designated
therein referred to in the within- By
mentioned Indenture President
THE BANK OF NEW YORK, as Trustee
By Attest
Authorized Signatory Secretary
<PAGE>
KANSAS CITY POWER & LIGHT COMPANY
SECURED MEDIUM-TERM NOTE
This Note is one of a duly authorized issue of Notes of
the Company (herein called the "Notes"), issued and to be issued
under an Indenture dated as of November 1, 1994 (herein called
the "Indenture") between the Company and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any
successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and
the Noteholders, and of the terms upon which the Notes are, and
are to be, authenticated and delivered. The Notes are limited to
$125,000,000 aggregate principal amount.
This Note is secured by a Mortgage Bond pledged by the
Company to the Trustee for the benefit of the holders of the
Notes. The Mortgage Bond is issued by the Company under, and the
Mortgage Bond is secured by, a General Mortgage Indenture and
Deed of Trust dated as of December 1, 1986, duly executed by the
Company to United Missouri Bank of Kansas City, N.A., Trustee, to
which General Mortgage Indenture and Deed of Trust and all
indentures supplemental thereto reference is hereby made for a
description of the property mortgaged and pledged, the nature and
extent of the security, the terms and conditions upon which the
Mortgage Bond is issued and secured and the prior liens to which
the security for the Mortgage Bond is junior.
Each Note shall be dated the date of its authentication
by the Trustee. Each Note shall also bear an Original Issue Date
which with respect to this Note (or any portion thereof), shall
mean the date of its original issue as specified on the face
hereof, and such Original Issue Date shall remain the same for
all Notes subsequently issued upon transfer, exchange or
substitution of such original Note (or such subsequently issued
Notes) regardless of their dates of authentication.
This Note may not be redeemed prior to the Redemption
Date set forth on the face hereof. If no Redemption Date is so
set forth, this Note is not redeemable prior to its maturity. On
or after the Redemption Date set forth on the face hereof this
Note is redeemable in whole or in part in increments of $1,000
(provided that any remaining principal amount of this note shall
be at least $1,000) at the option of the Company at the following
redemption prices (expressed as percentages of the principal
amount to be redeemed) together with interest thereon payable to
the date of redemption:
<PAGE>
Redemption Periods Redemption Prices
Notice of redemption will be given by mail to Holders of Notes
not less than 30 nor more than 60 days prior to the date fixed
for redemption, all as provided in the Indenture. In the event
of redemption of this Note in part only, a new Note or Notes and
of like tenor for the unredeemed portion hereof will be issued in
the name of the Noteholder hereof upon the surrender hereof.
This Note will not be entitled to the benefit of a
sinking fund.
The Company at its option, subject to the terms and
conditions provided in the Indenture, will be discharged from any
and all obligations in respect of the Notes (except for certain
obligations including obligations to register the transfer or
exchange of Notes, replace stolen, lost or mutilated Notes,
maintain paying agencies and hold monies for payment in trust),
91 days after the Company deposits with the Trustee money or U.S.
Government Obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will
provide money, or a combination of money and U.S. Government
Obligations, in an amount sufficient to pay all the principal of
and any premium and interest on the Notes on the dates such
payments are due in accordance with the terms of the Notes.
If an Event of Default with respect to Notes shall
occur and be continuing, the principal of the Notes may be
declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Noteholders to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the holders of not
less than a majority in principal amount of the outstanding Notes
affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority in principal
amount of the outstanding Notes affected thereby, on behalf of
the holders of all Notes, to waive compliance by the Company with
certain provisions of the Indenture. The Indenture also provides
that the holders of not less than a majority in principal amount
of the outstanding Notes may waive certain past defaults and
their consequences on behalf of the holders of all Notes. Any
such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future
holders of this Note and of any Note issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon
this Note or such Note.
As set forth in, and subject to, the provisions of the
Indenture, no holder of any Notes will have any right to
institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given
to the Trustee written notice of a continuing Event of Default
with respect to the Notes, the holders of not less than a
majority in principal amount of the outstanding Notes shall have
made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee, and the Trustee
shall have failed to institute such proceeding within 60 days,
provided, however, that such limitations do not apply to a suit
instituted by the holder hereof for the enforcement of payment of
the principal of and any premium or interest on this Note on or
after the respective due dates expressed herein.
No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Note
at the times, places and rates, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Note Register. Upon surrender of this Note
for registration of transfer at the Corporate Trust Office of the
Trustee or such other office or agency as may be designated by it
in the Borough of Manhattan, The City of New York, duly endorsed
by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note registrar duly executed
by the holder hereof or the attorney of such holder duly
authorized in writing, and thereupon one or more new Notes of
like tenor,of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form, without
coupons, in denominations of $1,000 and any integral multiple of
$1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of
like tenor of a different authorized donomination, as requested
by the holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all purposes, whether
or not this Note is overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the
face of this instrument, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in
the above list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
_________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
_________________________________________________________________
the within note and all rights thereunder, hereby irrevocably
constituting and appointing _____________________________________
_______________________ attorney to transfer said note on the
books of the Company, with full power of substitution in the
premises.
Dated:____________________
___________________________________
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of
the within instrument in every
particular, without alteration or
enlargement or any change whatever.
RAILCAR LEASE
Dated as of January 31, 1995
Between
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
dated as of January 31, 1995 with
Shawmut Bank, National Association,
as Lessor
And
KANSAS CITY POWER & LIGHT COMPANY,
as Lessee
This Lease has been executed in several counterparts.
To the extent, if any, that this Lease constitutes chattel paper
(as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction), no security interest in
this Lease may be created through the transfer or possession of
any counterpart hereof other than the "Counterpart No. 1". This
Counterpart is Counterpart No. _______ of 11. Certain rights of
Lessor under this Railcar Lease have been assigned as security
to, and are subject to a security interest in favor of Wilmington
Trust Company, as Security Trustee under the Security Agreement-
Trust Deed dated as of the date hereof between Lessor and the
Security Trustee, for the benefit of the holders of the Notes
referred to therein.
TABLE OF CONTENTS
Section Heading Page
Section 1. Definitions 1
Section 2. Agreement for Lease of Equipment 1
Section 3. Delivery and Acceptance of Equipment 1
Section 4. Lease Term 2
Section 5. Return of Equipment 2
Section 6. Rent 4
Section 7. Net Lease 7
Section 8. Lessor's Title; Equipment to Be and Remain Personal Property 8
Section 9. Use of Equipment; Compliance with Laws 8
Section 10. Maintenance and Repair of Equipment 10
Section 11. Replacements; Alterations; Modifications 10
Section 12. Identification Marks; Inspection 11
Section 13. Assignments and Subleases 11
Section 14. Liens 13
Section 15. Loss, Damage or Destruction 13
Section 16. Insurance 17
Section 17. No Warranties 19
Section 18. Events of Default 21
Section 19. Remedies upon Default 22
Section 20. Lessor's Right to Perform for Lessee 24
Section 21. Late Charges 24
Section 22. Covenant of Quiet Enjoyment 24
Section 23. Other Documents 25
Section 24. Notices and Requests 25
Section 25. Lessee's Renewal and Purchase Options 25
Section 26. Financial Information; Reports 29
Section 27. Voluntary Termination for Obsolescence 29
Section 28. Consolidation, Merger and Sale of All Assets 31
Section 29. Special Termination 32
Section 30. Miscellaneous 34
Section 31. Third-Party Beneficiaries 34
Section 32. Liability of Lessor Limited 34
Section 33. Execution 35
Signature 36
Attachments to Railcar Lease:
Annex 1 _ Definitions
Annex 2 _ Pricing Assumptions
Exhibits
A _ Equipment Description
B _ Lease Supplement
C _ Fixed Rent
D _ Stipulated Loss Value and Termination Value
RAILCAR LEASE
THIS RAILCAR LEASE dated as of January 31, 1995 (the
"Lease"), by and between FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION, a national banking association, not in its
individual capacity but solely as Owner Trustee under the Trust
Agreement dated as of January 31, 1995 with SHAWMUT BANK,
NATIONAL ASSOCIATION, a national banking association (the
"Lessor"), AND KANSAS CITY POWER & LIGHT COMPANY, a Missouri
corporation (the "Lessee").
WHEREAS, Lessee has selected 625 new 120-ton high side
rotary dump aluminum gondola railcars as more specifically
described in the Lease Supplements to be delivered on each
Closing Date for purchase from Seller and intends to assign to
Lessor, pursuant to the Acquisition Agreement, its right to
purchase such railcars; and
WHEREAS, Lessor will purchase such railcars on each Closing
Date; In consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
For purposes of this Lease, capitalized terms used
herein shall have the meanings assigned to them in Annex 1
hereto, as the same may be amended from time to time (such
definitions to be equally applicable to both the singular and
plural forms of the terms defined). Any term defined by
reference to an agreement, instrument or other document shall
have the meaning so assigned to it whether or not such document
is in effect. Unless otherwise indicated, references without
qualification in this Lease to sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in
or attached to this Lease.
SECTION 2. AGREEMENT FOR LEASE OF EQUIPMENT.
Subject to, and upon all of the terms and conditions of
this Lease, Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor each Item of Equipment for the
Lease Term.
SECTION 3. DELIVERY AND ACCEPTANCE OF EQUIPMENT.
Lessor shall not be liable to Lessee for any failure or
delay in obtaining any Item of Equipment or making delivery
thereof. Upon execution and delivery of a Lease Supplement
substantially in the form attached hereto as Exhibit B by Lessor
and Lessee, the Items described therein shall be deemed to have
been delivered to and accepted by Lessee as agent for Lessor
under the Acquisition Agreements and for all purposes of this
Lease, and thereupon shall be subject to all of the terms,
provisions and conditions of this Lease.
Lessee's execution and delivery of a Lease Supplement shall
be evidence that the Items of Equipment listed therein have been
subjected to this Lease on the terms hereof. Lessee's execution
and delivery of a Lease Supplement with respect to an Item of
Equipment pursuant to this Section 3 shall conclusively establish
that, as between Lessor and Lessee, but without limiting or
otherwise affecting Lessor's or Lessee's rights, if any, against
any other Person, such Item of Equipment is acceptable to and
irrevocably accepted by Lessee under the Lease, notwithstanding
any defect with respect to design, manufacture, condition or any
other matter or the failure of any such Item of Equipment to
comply to the specifications applicable thereto or to all
applicable federal or state governmental standards including,
without limitation, any imposed by the United States Department
of Transportation and ICC requirements and specifications, if
any, or to all standards recommended by the AAR applicable to
railroad equipment of the character of the Equipment as of the
date hereof, and that, as between Lessor and Lessee, such Item of
Equipment is in good order and condition.
SECTION 4. LEASE TERM.
The interim term (the "Interim Term") for each Item of
Equipment shall commence on the Acceptance Date for such Item of
Equipment and shall terminate on August 12, 1995 unless this
Lease is sooner terminated with respect to such Item pursuant to
the provisions hereof. The basic term (the "Basic Term") for
each Item of Equipment shall commence on August 13, 1995 (the
"Basic Term Commencement Date") for such Item and, unless this
Lease is sooner terminated with respect to such Item (or all
Equipment) pursuant to the provisions hereof, shall terminate on
August 13, 2015. If not sooner terminated pursuant to the
provisions hereof, the Lease Term for each Item of Equipment
shall end on the last day of the Basic Term thereof, or if this
Lease is renewed pursuant to Section 25(a) hereof, on the last
day of the last Renewal Term thereof.
SECTION 5. RETURN OF EQUIPMENT.
(a) Return of Equipment upon Expiration of Term. Upon the
expiration or earlier termination of the Lease Term with respect
to each Item of Equipment and provided the Lessor shall not have
terminated this Lease pursuant to Section 19 hereof (and
provided, further, in the case of the expiration of the Lease
Term, that Lessee has not exercised its purchase option under
Section 25(b) hereof), Lessee will deliver possession of each
Item of Equipment to Lessor, at up to two (2) locations specified
by Lessor within fifty (50) miles of Kansas City, Missouri or at
such other mutually agreed to locations, in the condition
described in Section 10 hereof. Delivery shall be in groups of
at least 100 Items of Equipment. Each such group of Items of
Equipment shall be returned to the Lessor on the expiration or
earlier termination of the Lease Term with respect to such Items
of Equipment. The location where each such Item shall be
returned shall be specified in a written notice given by Lessor
to Lessee at least sixty (60) days prior to such redelivery
(each, a "Redelivery Location"). Any Item of Equipment delivered
to a Redelivery Location shall be deemed to be redelivered
hereunder on the date on which all of the Equipment shall have
been delivered to such Redelivery Location in the condition
described in Section 10 hereof, provided that Lessor has given
the notice set forth above. During the period of 240 days prior
to the end of the Lease Term or any Renewal Term, Lessee will
permit Lessor or any person designated by it, including the
authorized representative or representatives of any prospective
purchaser or user of such Items of Equipment to inspect any or
all of such Items of Equipment. Subject to the following
paragraph, Fixed Rent or Renewal Rent, as the case may be, with
respect to any Item of Equipment so deemed to have been
redelivered shall cease to accrue.
(b) Return of Equipment upon Default. If the Lessor shall
terminate this Lease pursuant to Section 19 hereof, the Lessee
shall forthwith deliver possession of the Equipment to the
Lessor. For the purpose of delivering possession of any Item to
the Lessor as above required, the Lessee shall at its own cost,
expense and risk: (i) forthwith deliver such Items to not more
than two (2) locations as the Lessor shall designate, and (ii)
permit the Lessor to store such Items for a period of 360 days at
such locations without charge for insurance, rent or storage, and
during such period of storage the Lessee shall continue to
maintain all insurance required by Section 16 hereof.
Each such Item will, when placed in storage and at all
times while in storage, be in the condition required by Section
10 hereof and the Lessee shall take such actions as may be
required by the Lessor to enable the Items to be sold or leased
to a third party for use in interchange service under the
Interchange Rules. Lessee agrees that no Item shall be considered
to have been returned under this Section 5(b) until the Lessee
has returned such Item in such condition.
Without in any way limiting the obligation of the Lessee
under the foregoing provisions of this Section 5(b), the Lessee
hereby irrevocably appoints the Lessor as the agent and attorney
of the Lessee, with full power and authority (which power is
coupled with an interest), at any time while the Lessee is
obligated to deliver possession of any Items of Equipment to the
Lessor after the occurrence of an Event of Default, to demand and
take possession of such Item in the name and on behalf of the
Lessee from whomsoever shall be at the time in possession of such
Item.
(c) Holdover Rent; Storage Charges. In the event any Item
of Equipment is not returned as hereinabove provided as a result
of any action or inaction on the part of Lessee as of the date of
the expiration of the Lease Term or the Renewal Term with respect
to such Item of Equipment, Lessee shall pay to Lessor, for each
day thereafter as liquidated damages, and not as a penalty, for
the failure of Lessee to return such Item of Equipment to Lessor
at the expiration of the Lease Term as required by the provisions
of Section 5(a), an amount equal to the daily equivalent of the
arithmetic average of the Fixed Rent during the Basic Term for
such Item of Equipment or, if the failure to return occurs after
a Renewal Term, the arithmetic average of the rent paid during
the Renewal Term for such Item of Equipment. Lessee shall also
reimburse Lessor, upon demand, for all storage charges incurred
by Lessor if any Item of Equipment is redelivered after the end
of the Lease Term, until such time as all Items of Equipment
shall have been returned to Lessor as required hereby. The
provision for such payment of such Rent and storage charges shall
not be in abrogation of Lessor's right under Section 5(a) to have
such Item of Equipment returned to it hereunder.
(d) Essence of Lease. The assembling and delivery of the
Equipment as hereinbefore provided are of the essence of this
Lease, and upon application to any court of equity having
jurisdiction in the premises, the Lessor shall be entitled to a
decree against the Lessee requiring specific performance of the
covenants of the Lessee so to assemble and deliver the Equipment.
SECTION 6. RENT.
(a) Interim Rent. Lessee hereby agrees to pay Lessor
Interim Rent for the use by Lessee of each Item of Equipment
during the Interim Term in one installment payable on August 13,
1995 in an amount equal to the difference between (i) the amount
that the Owner Participant shall be obligated to pay under and
pursuant to Section 2.1(b) of the Participation Agreement, and
(ii) the amount actually paid to the Security Trustee by the
Owner Participant under and pursuant to Section 2.1(b) of the
Participation Agreement. Subject to the provisions of Section
6(e), in the event that Lessee shall make a payment of Interim
Rent hereunder due to Owner Participant's failure to pay the full
amount required to be paid by the Owner Participant under Section
2.1(b) of the Participation Agreement, Lessee shall be entitled
to offset such amount plus interest thereon at a rate per annum
equal to the Late Rate against payments of Fixed Rent until such
time as Lessee has been paid or shall have so offset the amount
of such Interim Rent payment; provided that Lessee shall not have
such right of offset if a Default or Event of Default hereunder
shall have occurred and be continuing.
(b) Fixed Rent. Lessee hereby agrees to pay Lessor Fixed
Rent for the use by Lessee of each Item of Equipment during the
Basic Term, in consecutive semiannual installments, due and
payable on each Rent Payment Date and continuing until the
expiration or earlier termination of the Basic Term, with each
such installment to be in an amount equal to the product obtained
by multiplying (i) the Purchase Price of such Item of Equipment
by (ii) the applicable percentages set forth in Exhibit C
attached hereto. Lessee hereby agrees to pay Lessor Fixed Rent
for each Item of Equipment during each Renewal Term thereof as
specified in Section 25(a) hereof.
(c) Supplemental Rent. Lessee also agrees to pay to
Lessor, or to whomever shall be entitled thereto, all
Supplemental Rent, as the same shall become due and owing.
Lessee shall also pay to Lessor (and, in the case of payments of
Supplemental Rent payable to other Persons hereunder, such other
Persons) on demand, as Supplemental Rent, to the extent permitted
by applicable law, interest at the Late Rate on any part of any
installment of Interim Rent or Fixed Rent or any amount due under
Section 19 hereof not paid when due at or prior to the time
specified for such payment for any period for which the same
shall be overdue and on any payment of Supplemental Rent payable
to the Note Purchasers or the Security Trustee and not paid when
due for the period from the due date thereof until the same shall
be paid and at a rate per annum equal to 1% plus the Prime Rate
on any payment of Supplemental Rent payable to the Owner
Participant or the Owner Trustee and not paid when due for the
period from the due date thereof until the same shall be paid.
The payment or satisfaction of Lessee's obligation with respect
to Fixed Rent or any installment thereof shall not limit any
obligation of Lessee which may have accrued during the Lease Term
with respect to Supplemental Rent. In the event of any failure
on the part of Lessee to pay any such Supplemental Rent hereunder
Lessor shall have all rights, powers and remedies provided for
herein or by law or equity or otherwise in the case of nonpayment
of Rent.
(d) Method of Payment. All payments of Interim Rent, Fixed
Rent and Supplemental Rent required to be made by Lessee to
Lessor shall be made by 11:00 A.M. Wilmington, Delaware time on
the date payment is due in United States dollars and in
immediately available funds. If any such date is not a Business
Day, then payment shall be due on the next succeeding Business
Day and if paid on such Business Day by 11:00 A.M. Wilmington,
Delaware time, such payment shall be without interest or penalty.
In the event of any assignment pursuant to Section 13(b) hereof,
all payments or right to payments which are properly assigned
thereunder, whether Interim Rent, Fixed Rent, Supplemental Rent
or otherwise, shall be paid to such address as shall be
designated by Lessor and any such assignee. All payments of Rent
(other than payments with respect to Excepted Rights in
Collateral, which shall be paid to the Person entitled thereto)
shall be paid by Lessee to Lessor at its office at First Security
Bank of Utah, National Association, Salt Lake City, Utah, ABA.
No. 124000012, Attention: Corporate Trust Administration, or as
Lessor may otherwise direct from time to time in writing;
provided, that so long as the Security Agreement shall not have
been discharged pursuant to Section 12.4 thereof, Lessor hereby
directs, and Lessee agrees, that all payments of Rent and all
other amounts payable to Lessor hereunder (other than payments
with respect to Excepted Rights in Collateral, which shall be
paid to the Person entitled thereto) shall be paid directly to
the Security Trustee at its office at Rodney Square North,
Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, or as the Security Trustee may otherwise direct,
at such time so as to be received by the Security Trustee prior
to 11:00 A.M. Wilmington, Delaware time on the date of payment.
(e) Minimum Payments. Notwithstanding anything to the
contrary contained herein or in any other Operative Agreement, in
all events and irrespective of any adjustment thereto, (i) the
installment of Interim Rent payable on August 13, 1995 shall be
at least equal to the amount of accrued interest due and payable
on such date in respect of all Notes then outstanding less the
amount paid in respect thereof by Owner Participant, (ii) each
installment of aggregate Fixed Rent payable with respect to all
Items of Equipment then subject to this Lease on each Rent
Payment Date shall be at least equal to the aggregate amount of
principal and accrued interest due and payable on such date in
respect of all Notes then outstanding and (iii) each payment of
Stipulated Loss Value and Termination Value (when added to all
other amounts required to be paid by the Lessee under this Lease
in respect of any Event of Loss or termination of this Lease)
shall be at least equal to an amount sufficient, as of the date
of payment, to pay in full the principal of and premium, if any,
and interest on all Notes due under the Security Agreement on
account of such Event of Loss or termination. Nothing in this
Section 6(e) shall be deemed to constitute a guarantee by Lessee
of the indebtedness evidenced by the Notes or a guarantee of the
residual value of any Item of Equipment.
(f) Adjustments to Rent. The FPPO and the percentages for
Fixed Rent, Stipulated Loss Value and Termination Value set forth
in Exhibits C and D, have been calculated in part on the basis of
the Pricing Assumptions. If any such Pricing Assumption proves
to have been incorrect, then such FPPO and such percentages for
Fixed Rent, Stipulated Loss Value and Termination Value shall be
adjusted (the FPPO upward only and such percentages upward or
downward) so as to preserve Owner Participant's Net Economic
Return. Any adjustments pursuant to this Section 6(f) shall (A)
satisfy the provisions of Revenue Procedure 75-28 and any other
applicable statutes, regulations, revenue procedures, revenue
rulings or technical information releases relating to the subject
matter of such Revenue Procedure, (B) be made in a manner
designed to avoid application of Section 467(b)(2) of the Code
and any regulations thereunder or any other similar provision of
Federal income tax law and not otherwise cause any adverse effect
under any Federal income tax law in effect at the time of such
adjustment, (C) not adjust the Fixed Rent or the Stipulated Loss
Values and Termination Values to an amount less than the Fixed
Rent and Stipulated Loss Values and Termination Values required
to enable Lessor to satisfy in full its obligations in respect of
the Notes, (D) to the extent possible and not inconsistent with
the foregoing, minimize the net present value of the remaining
Fixed Rent (using a discount rate equal to the interest rate on
the Notes) to the extent the foregoing criteria are met (subject
to the requirements of Section 6(e) hereof) and (E) be made on or
prior to the Basic Term Commencement Date. Lessor shall furnish
to each holder of a Note and to the Security Trustee, at least
ten (10) days prior to any adjustment of the FPPO, Fixed Rent,
Stipulated Loss Values and Termination Value pursuant to this
Section 6(f), revised schedules of such FPPO, Fixed Rent,
Stipulated Loss Values and Termination Value, as so adjusted in
such form as is provided to the Lessor by the Owner Participant.
(g) Computation of Adjustments. (i) Upon the occurrence of
an event requiring adjustments to the FPPO and the percentages
for Fixed Rent, Stipulated Loss Value and Termination Value
pursuant to Section 6(f), Owner Participant shall make the
necessary computations on a basis consistent with that used by
Owner Participant in the computation of the FPPO and the
percentages for Fixed Rent, Stipulated Loss Value and Termination
Value in connection with the execution and delivery of the
Participation Agreement and this Lease, taking into account only
the event giving rise to the adjustments. Subject to paragraph
(ii) of this Section 6(g), such adjustments shall be effective on
the date Owner Participant shall have furnished to Lessee a
certificate signed on behalf of Owner Participant by a
responsible officer confirming that such adjustments have been
properly computed in accordance with the provisions of this
Lease, and shall remain effective until changed in consequence of
any inaccuracy discovered in the course of any verification
procedure conducted pursuant to paragraph (ii) of this Section
6(g); provided that any such notice of adjustment shall be given
to Lessee at least 30 days prior to the Rent Payment Date next
following such notice.
(ii) Within 30 days after Owner Participant shall have
provided Lessee with a certificate pursuant to paragraph (i) of
this Section 6(g), Lessee either shall confirm the accuracy of
such computation or shall notify Owner Participant that such
computation, and the resulting adjustments proposed by Owner
Participant, are inaccurate. In the latter event, Owner
Participant and Lessee agree to submit the matter to a nationally
recognized independent accounting firm selected by the Owner
Participant and reasonably acceptable to the Lessee, and the
conclusion of such firm as to the proper adjustments shall be
conclusive and binding on Lessee, Owner Participant and Lessor.
All expenses incurred by Owner Participant and Lessee in
connection with the verification procedures described in this
paragraph (ii) shall be paid by Lessee, unless the adjustments of
the percentages for Fixed Rent proposed by Owner Participant
shall exceed the actual adjustments of such percentages, properly
computed and confirmed, by more than 5%, in which case all such
expenses shall be paid by Owner Participant. Each adjustment of
the FPPO and the percentages for Fixed Rent, Stipulated Loss
Value and Termination Value shall be evidenced by the execution
and delivery of a supplement to this Lease in form and substance
satisfactory to Lessee, Lessor and Owner Participant, and shall
be effective as provided herein without regard to the date on
which such supplement to this Lease is so executed and delivered.
So long as the Lien of the Security Agreement shall remain
outstanding, copies of the certificates, proposed adjustments and
final adjustments shall be forwarded by the Owner Participant to
the Security Trustee.
SECTION 7. NET LEASE.
This Lease is a net lease and Lessee acknowledges and
agrees that Lessee's obligations hereunder shall be absolute and
unconditional under any and all circumstances and shall be paid
without notice or demand and without any abatement, reduction,
suspension, diminution, deferral, setoff, defense, counterclaim
or recoupment whatsoever, including, without limitation, any
abatement, reduction, suspension, diminution, deferral, setoff,
defense, counterclaim or recoupment due or alleged to be due to,
or by reason of, any past, present or future claims which Lessee
may have against Lessor, Owner Participant, any assignee,
Security Trustee, any vendor or manufacturer of the Equipment or
any part or Item thereof, the holders from time to time of the
Notes, or any other Person, either under this Lease or otherwise,
for any reason whatsoever; nor, except as otherwise expressly
provided herein, shall this Lease terminate, or the obligations
of Lessee be otherwise affected for any reason whatsoever,
including any defect in or damage to or loss of possession or
loss of use or destruction of the Equipment or any part or Item
thereof, the condition, design, operation or fitness for use
thereof, any Liens or rights of others with respect to the
Equipment or any part or Item thereof, any prohibition or
interruption of or other restriction against Lessee's use,
operation or possession of the Equipment or any part or Item
thereof, or any interference with such use, operation or
possession by any Person or entity (including confiscation,
requisition or other taking by any governmental authority, any
person acting under governmental authority or otherwise, or
action of any public or private person, whether by eviction by
paramount title or for any other reason whatsoever), the
invalidity or unenforceability or lack of due authorization of
this Lease, or any other Operative Agreement, any defect in the
title to, compliance with plans or specifications for condition,
design or fitness for use of all or any of the Items of
Equipment, any insolvency of or any bankruptcy, reorganization or
other proceeding against Lessee, Lessor or any other person, or
for any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary
notwithstanding, it being the intention and agreement of the
parties hereto, and the basis of the bargain, that (to the extent
permitted by applicable law) Interim Rent, Fixed Rent, Renewal
Rent, Supplemental Rent and other amounts payable by Lessee
hereunder shall continue to be payable in all events in the
manner and at the times herein provided unless and until the
obligation to pay the same shall be terminated pursuant to the
express provisions of this Lease (in the case of any return of
the Equipment to the Lessor, any item of Equipment shall not be
deemed to have been returned to the Lessor's possession until all
of the Lessee's obligations with respect to the return thereof
have been performed). To the extent permitted by applicable law,
Lessee hereby waives any and all rights which it may now have or
which at any time hereafter may be conferred upon it, by statute
or otherwise, to terminate, cancel, quit or surrender this Lease
of any of the Items of Equipment except in accordance with the
express terms hereof. Each Interim Rent, Fixed Rent, Renewal
Rent, Supplemental Rent or other payment made by Lessee hereunder
shall be final and Lessee shall not seek to recover all or any
part of such payment (except for any excess payment made in
error) from Lessor, Owner Participant, Security Trustee, or any
holder or former holder of a Note for any reason whatsoever.
Without limiting the generality of the foregoing, Lessee
covenants that it will remain obligated under this Lease in
accordance with its terms, and will not take any action to
terminate (except in accordance with the express provisions
hereof), rescind or avoid this Lease for any reason,
notwithstanding any insolvency, bankruptcy, reorganization or
other proceeding affecting Lessor or Owner Participant, or any
property of Lessor or Owner Participant, or any action which may
be taken by any receiver, trustee or liquidator (or other similar
official) or by any court.
Nothing in this Section or in any other provision of this
Lease shall preclude any separate, independent claim (not by way
of abatement or reduction of any amount at any time payable by
Lessee hereunder) by Lessee for the breach of any representation,
covenant, undertaking or agreement made herein and in any other
Operative Agreement for the benefit of Lessee by Lessor or Owner
Participant.
SECTION 8. LESSOR'S TITLE; EQUIPMENT TO BE AND REMAIN
PERSONAL PROPERTY.
Title to the Equipment shall at all times remain in
Lessor and at no time during the Lease Term shall title become
vested in Lessee. This Lease is and is intended to be a true
lease and not a lease intended as security or a lease in the
nature of a security interest. Lessee shall acquire no right,
title or interest in or to the Equipment, except the right to use
the same pursuant to the terms of this Lease. It is the
intention and understanding of both Lessor and Lessee that the
Equipment shall be and at all times remain personal property and
be treated as a lease for federal income tax purposes.
SECTION 9. USE OF EQUIPMENT; COMPLIANCE WITH LAWS.
Lessee shall pay all costs, expenses, fees and charges
incurred in connection with the use and operation of the
Equipment during the lease thereof. Lessee agrees that the
Equipment will be used and operated solely in the regular course
of its or any affiliate's business and in compliance with all
statutes, laws, ordinances, rules and regulations of any Federal,
state or local governmental body, agency or authority applicable
to the use and operation of the Equipment. If such laws or rules
require any alteration, replacement or addition of or to any part
on any Item of Equipment, Lessee will conform therewith at its
own expense. Lessee agrees not to operate or locate any Item of
Equipment, or to suffer any Item of Equipment to be operated or
located, in any area excluded from coverage by any insurance
policy required by the terms of Section 16 hereof or to operate
or locate any Item of Equipment in such a manner as to violate
the terms of any insurance policy required by the terms of said
Section 16, except in the case of a requisition for use by the
United States Government where Lessee (or any sublessee) has
obtained, prior to the operation or location of the Item of
Equipment in such area, indemnification or insurance in lieu of
such indemnification from the United States Government against
the risks and in the amounts required by, and in compliance with,
Section 16 hereof covering such area.
Lessee shall procure and maintain in effect all licenses,
registrations, certificates, permits, approvals and consents
required by Federal, state or local laws or by any governmental
body, agency or authority in connection with the use and
operation of each Item of Equipment, including any instruments
required by the AAR. Notwithstanding the foregoing sentence,
however, Lessee will cause this Lease and the Security Agreement
to be filed and recorded with the ICC in accordance with Section
20c of the Interstate Commerce Act, and will do and perform any
other act and will execute, acknowledge, deliver, file, register,
record (and will refile, reregister, deposit and redeposit or
rerecord whenever required) this Lease and any and all amendments
or supplements to this Lease, or otherwise with respect to or
including any other Operative Agreement, in connection with any
assignment or sublease pursuant to Section 13(a) or otherwise,
any financing statements or similar instruments, and any and all
further instruments required by law or reasonably requested by
Lessor, for the purpose of protecting Lessor's title to any Item
of Equipment to the satisfaction of Lessor and Lessor's counsel
or for the purpose of carrying out the intention of this Lease,
including, without limitation, any such filings and recordings as
shall be necessary to evidence any change in name of Lessee or
Lessor, or any merger or consolidation thereof. Lessee will pay
all costs, charges and expenses incident to any such filing,
refiling, recording and re-recording or depositing and
redepositing of any such instruments or incident to the taking of
such action, other than the fees and expenses of the Owner
Participant and the Owner Trustee in connection with any such
instruments requested by the Owner Participant solely for the
benefit of the Owner Participant and not otherwise required under
or anticipated by the Operative Agreements. This Lease shall be
filed and recorded with the ICC prior to the delivery and
acceptance hereunder of any Item.
The Equipment will at all times during the Lease Term be and
remain in the possession and control of Lessee, subject to the
terms of Section 13(a) hereof. Lessee shall operate the
Equipment and permit the Equipment to be located only in the
contiguous forty-eight states of the United States. Lessee shall
not use and will not permit any other person to use any Equipment
or allow the same to be used for any unlawful purpose. Lessee
shall use and operate the Equipment or cause it to be used and
operated only by personnel authorized by Lessee, and Lessee shall
use every reasonable precaution to prevent loss or damage to each
Item of Equipment from fire and other hazards. Lessee shall use
the Equipment only in the manner for which it was designed and
intended and so as to subject it only to ordinary wear and tear;
provided, that the Lessee shall not use the Equipment and shall
not permit the Equipment to be used to transport or store
hazardous or toxic substances or materials or other substances or
materials containing or contaminated by hazardous or toxic
substances or materials.
SECTION 10. MAINTENANCE AND REPAIR OF EQUIPMENT.
Lessee shall, at its own expense, (i) maintain and keep
the Equipment in good physical condition and working order
consistent with standard industry maintenance practice, and as
otherwise may be required by any insurance policies maintained
pursuant to Section 16 or to enforce warranty claims against each
vendor and manufacturer of each Item of Equipment, ordinary wear
and tear excepted; (ii) maintain the Equipment in accordance with
the standards then in effect under (A) the Interchange Rules or
similar successor guidelines of the AAR (the "Interchange Rules")
and (B) regulations of the Federal Railway Administration, and at
least equal to the standards of maintenance which Lessee performs
on similar equipment owned or leased by Lessee, without
discriminating in any way between equipment of similar type that
is owned or leased; (iii) comply with all requirements of law
applicable to the maintenance and condition of the Equipment; and
(iv) maintain the Equipment in good operating condition
commercially suitable for carrying the commodities for which such
Equipment was designed.
SECTION 11. REPLACEMENTS; ALTERATIONS; MODIFICATIONS.
Lessee shall, at its sole expense, make all
alterations, modifications, additions or attachments required by
applicable law or deemed necessary by any Federal, state or local
governmental agency for the continued usefulness of the
Equipment. Lessee may, at its sole expense, make other
alterations, modifications, additions or attachments to the
Equipment as it may deem desirable in the conduct of its business
so long as (x) the value, utility or condition of the Equipment
is not diminished materially below the value, utility, or
condition thereof immediately prior to such alteration,
modification, addition or attachment, assuming the Equipment was
then in at least the condition and repair required to be
maintained by the terms of this Lease, and (y) such alterations,
modifications, additions or attachments do not cause any such
Item to become a limited use property within the meaning of
Revenue Procedure 76-30, 1976-2 C.B. 647 (or such other successor
tax provision). So long as no Event of Default has occurred and
is continuing, and so long as the value, utility and condition of
the Equipment (exclusive of any such alterations, modifications,
additions or attachments) is not reduced thereby, any such
alteration, modification, addition or attachment, which was paid
for by Lessee and not reimbursed or otherwise compensated for by
Lessor, shall (subject to the last two sentences of this Section
11) remain the property of Lessee and may be removed by Lessee
prior to return of the Equipment pursuant to Section 5 hereof.
If any alteration, modification, addition or attachment to an
Item of Equipment (i) is a replacement of existing parts
constituting part of the Items of Equipment, (ii) was made in the
course of ordinary and proper maintenance of the Items of
Equipment, (iii) is required by Federal, state or local law in
order to permit the continued usefulness of the Equipment; or
(iv) cannot physically be removed without damage to the
Equipment, it shall become the property of Lessor, and shall be
subject to all the terms of this Lease. Upon termination of this
Lease, Lessor shall have the option to purchase from Lessee any
alterations, modifications, additions or attachments to any Item
of Equipment not described in the preceding sentence at the Fair
Market Sales Value of such alterations, modifications, additions
or attachments, as the case may be.
SECTION 12. IDENTIFICATION MARKS; INSPECTION.
Lessee agrees, at Lessee's cost and expense and on or
before the Acceptance Date for each Item of Equipment, to place
markings on the Equipment by stencil or by a metal tag or plate
affixed thereto in letters not less than one inch in height, a
legend substantially as follows:
"Ownership Subject to a Security Agreement and Lease filed with
the Interstate Commerce Commission"
with appropriate changes thereof and additions thereto as from
time to time may be required by law in order to protect Lessor's
title thereto and ownership thereof and the Security Trustee's
interest therein; provided, however, that such identification
markings are to be placed so as not to interfere with the
usefulness and utility of such Item of Equipment. If during the
Lease Term any such identification marking shall be defaced or
destroyed, Lessee shall cause such defaced or destroyed
identification marking to be restored or replaced. Lessee will
cause each Item of Equipment to be kept numbered with the road
number and serial number as shall be set forth in any Lease
Supplement hereto extending this Lease to cover such Item of
Equipment. Lessee shall not allow the name of any other Person
to be placed on any Item of Equipment as a designation that might
be identified as a claim of ownership or any other interest
therein; provided that nothing herein contained shall prohibit
Lessee or its permitted sublessees from placing its customary
colors and insignia on any Item of Equipment or from naming each
Item of Equipment. Lessee will not change the identification
number of any Item of Equipment unless and until (i) a statement
of a new number or numbers to be substituted therefor shall have
been delivered to Security Trustee and Lessor and filed, recorded
and deposited by Lessee in all appropriate public offices,
including the public offices where this Lease and the Security
Agreement shall have been filed, recorded and deposited, and (ii)
Lessee shall have furnished Lessor and Security Trustee an
opinion of counsel in form and substance reasonably satisfactory
to them to the effect that such statement has been so filed,
recorded and deposited and that such filing, recordation and
deposit will protect Lessor's interest in such Items of Equipment
and the security interest of the Security Trustee under the
Security Agreement. Upon the reasonable request of Lessor,
Lessee shall make the Equipment available to Lessor for
inspection and shall also make Lessee's records pertaining to the
Equipment reasonably available to Lessor for inspection, it being
understood and agreed that Lessor shall have no obligation to
make such inspection and shall incur no liability for failure to
do so. During the continuance of a Default or an Event of
Default, such inspection shall be at Lessee's expense.
SECTION 13. ASSIGNMENTS AND SUBLEASES.
(a) By Lessee. Lessee will not, without the prior written
consent of Lessor and the Security Trustee, assign its lease of
any Item of Equipment, or transfer or encumber its rights or
obligations hereunder, and any attempted assignment, transfer or
encumbering by Lessee shall be null and void; provided, however,
subject to the receipt of any necessary regulatory approvals,
Lessee may, so long as no Default or Event of Default shall have
occurred and be continuing, assign its lease of any Item of
Equipment to an Affiliate with the prior written consent of
Lessor and the Security Trustee, which consent will not be
unreasonably withheld; provided, further, subject to the receipt
of any necessary regulatory approvals, Lessee may so long as no
Default or Event of Default shall have occurred and be continuing
without the prior consent of Lessor or the Security Trustee,
sublease any Item of Equipment to any Affiliate, railroad company
or other Person for a period not to exceed twelve months in
accordance with customary industry practice so long as such
assignment or sublease does not cause the Items of Equipment to
be "tax-exempt use property" within the meaning of Section 168(h)
of the Code and so long as such assignment or sublease does not
extend beyond the end of the Lease Term. Any such sublease or
assignment shall not be in conflict with any of the terms and
conditions of this Lease and Lessee's obligations hereunder shall
continue in full force and effect as the obligations of a
principal and not of a surety irrespective of such sublease or
assignment. Each sublease or assignment permitted by this
paragraph shall be expressly subject and subordinate to all of
the provisions of this Lease and to the rights and remedies of
the Security Trustee under the Security Agreement and Lessor
under this Lease in respect of the Items of Equipment covered by
such sublease or assignment.
(b) Transfers by Lessor or Owner Participant. Lessor and
Owner Participant shall not be entitled to transfer their
respective interests in this Lease and the Trust Estate other
than the assignment of this Lease by the Lessor to the Security
Trustee pursuant to the Security Agreement except in compliance
with Section 3.11 of the Trust Agreement, with respect to Lessor,
and Section 3.6(d) of the Participation Agreement, with respect
to Owner Participant. No such transfer by Lessor or Owner
Participant shall interfere with Lessee's rights under this Lease
with respect to Lessee's use of the Items of Equipment. Lessee
shall provide such information concerning the location of the
Equipment as Lessor may reasonably request in connection with any
such transfer.
Upon written notice by Lessor to Lessee of any such
sale or assignment, Lessee shall thereafter make payments of all
Fixed Rent and other sums due hereunder to the party specified in
such notice and such payments shall discharge the obligation of
Lessee to Lessor hereunder to the extent of such payments.
Lessee shall be under no obligation to any assignee of Lessor,
except upon written notice of such assignment to Lessee. Lessee
hereby acknowledges and consents to the security interest and
other rights and interests granted to the Security Trustee
pursuant to the Security Agreement. Such notice is hereby given
of the assignment of this Lease and all Rent and other payments
to be made to the Lessor hereunder (other than Excepted Rights in
Collateral) to the Security Trustee under and pursuant to the
Security Agreement, and the Lessee agrees to make all payments of
Rent in accordance with the provisions of Section 6(d). Upon any
such sale or assignment under this Section 13(b), Lessee shall
not be required to execute any documents in connection therewith
other than a form of acknowledgment, any required Uniform
Commercial Code Financing Statements or any filings required by
the ICC or AAR. Any expenses incurred in connection with any
such sale or assignment shall be borne solely by Lessee if an
Event of Default has occurred and is continuing, otherwise solely
by Lessor. Lessee shall not be required to prepare any documents
in connection with any such sale or assignment.
SECTION 14. LIENS.
Assuming that the Lease has been filed with the ICC,
Lessee represents and warrants to Lessor that at the time an Item
of Equipment is accepted by it under the Lease, such Item will be
free and clear of all Liens except Permitted Encumbrances
described in clauses (i) and (iv) of the definition thereof, it
being understood that a claim by the Seller against the
Equipment, even if not 30 days past due, is not a Permitted
Encumbrance. Lessee will not create, incur, assume or suffer to
exist any Lien on or with respect to the Equipment or any part or
Item thereof, Lessor's title thereto, or any interest therein,
except Permitted Encumbrances. Lessee, at its own expense, will
pay, satisfy and otherwise take such actions as may be necessary
to keep the Equipment free and clear of, and to duly discharge or
eliminate or bond in a manner satisfactory to Lessor, any such
Lien other than Permitted Encumbrances if the same shall arise at
any time during the Lease Term. Lessee will notify Lessor upon
becoming aware of any tax or other Lien (other than any Lien
excepted above) that shall attach to the Equipment or any Item of
Equipment.
SECTION 15. LOSS, DAMAGE OR DESTRUCTION.
(a) Risk of Loss, Damage or Destruction. Lessee hereby
assumes all risk of loss, damage, theft, taking, destruction,
confiscation or requisition, partial or complete, of or to each
Item of Equipment, however caused or occasioned, such risk to be
borne by Lessee with respect to each Item of Equipment from the
Acceptance Date, and continuing until the expiration or early
termination of the Lease Term and until the Item or Items of
Equipment shall have been returned in accordance with Section 5
hereof. Lessee shall promptly notify Lessor of any loss or
casualty damage (other than any such loss or damage which
constitutes an Event of Loss) to any Item or Items of Equipment
where such loss or damage is estimated to exceed the amount of
self-insurance or deductible amount maintained by the Lessee
pursuant to and in accordance with Section 16 hereof. Lessee
shall, within 90 days of notifying Lessor of such loss or
casualty damage, notify Lessor that Lessee intends to repair such
Item or Items of Equipment and provide Lessor with an estimated
cost and time frame with respect to such repairs.
(b) Replacement or Payment of Stipulated Loss Value upon an
Event of Loss. If an Event of Loss occurs with respect to an
Item or Items of Equipment during the Lease Term, Lessee shall,
promptly and in any event within ninety (90) days after the
occurrence of such Event of Loss, inform Lessor and Owner
Participant in regard thereto and of its election to perform one
of the following options (it being agreed that if Lessee shall
not have given notice of such election within ninety (90) days
after such occurrence or if a Default or an Event of Default then
exists, Lessee shall be obligated to perform the option set forth
in the following paragraph (ii)):
(i) as promptly as practicable, and in any event on or
before the Business Day next preceding the 136th day following
the date of such notice, in replacement for such Item of
Equipment, Lessee shall comply with Section 15(d) hereof and
shall convey or cause to be conveyed to Lessor a Replacement Item
to be leased to Lessee hereunder, such Replacement Item to be
free and clear of all Liens (other than Permitted Encumbrances
referred to in clauses (i) and (iv) of the definition of such
term), to be of a similar make and model and made of aluminum and
to have a similar capacity to the Item so replaced and to have a
fair market value, utility and remaining useful life at least
equal to the Item so replaced (assuming such Item was in the
condition required to be maintained by the terms of this Lease);
provided that, as a condition to Lessee's election to replace any
Item of Equipment pursuant to this paragraph (i), on the Rent
Payment Date next following such notice of such Event of Loss,
Lessee shall pay the Stipulated Loss Value for such Item
(computed as of such Rent Payment Date) to Lessor or, so long as
the Lien of the Security Agreement shall not have been satisfied
and discharged, to the Security Trustee to be held in escrow (but
as part of the Collateral) pending the replacement of such Item
in compliance with this paragraph (i) and Section 15(d) hereof
(it being agreed that, upon the replacement of such Item in
compliance with this paragraph (i) and Section 15(d) hereof, such
Stipulated Loss Value shall be returned to Lessee); and provided
further that if Lessee shall not perform its obligation to effect
such replacement under this paragraph (i) during the period of
time provided herein, then such Stipulated Loss Value shall be
retained by Lessor or, so long as the Lien of the Security
Agreement shall not have been satisfied and discharged, the
Security Trustee for application in accordance with Section
5.1(d) of the Security Agreement and Lessee shall pay, on the
next succeeding Rental Payment Date after the end of such period,
to Lessor or, in the case of Supplemental Rent, to the person
entitled thereto, the amounts specified in clauses (B) and (C) of
paragraph (ii) below; or
(ii) on the Rent Payment Date next following such notice of
such Event of Loss, Lessee shall pay (A) the Stipulated Loss
Value for such Item (computed as of such Rent Payment Date), plus
(B) the Fixed Rent and any Supplemental Rent due for such Item of
Equipment on such Rent Payment Date, plus (C) all accrued and
unpaid Fixed Rent and any Supplemental Rent owing for such Item
of Equipment through any prior Rent Payment Date.
Lessee agrees (i) to indemnify the Owner Participant on an after-
tax-basis for any adverse tax consequences resulting from the
replacement of any Item pursuant to this Section 15 and (ii) to
pay all legal and other expenses in connection with the
replacement of any Item pursuant to this Section 15.
(c) Rent Termination. Upon the sale, retention or
replacement of any Item or Items of Equipment in compliance with
this Section 15 or upon the payment of all sums required to be
paid pursuant to Section 15(b)(ii) hereof in respect of any Item
or Items for which the Lessee has elected to pay or has been
deemed to have elected to pay pursuant to the proviso to Section
15(b)(i) the amounts specified in Section 15(b)(ii), the Lease
Term with respect to such Item or Items and the obligation to pay
Rent for such Item or Items accruing subsequent to the date of
payment of the Stipulated Loss Value for such Item or Items
pursuant to Section 15(b)(ii) shall terminate; provided that
Lessee shall be obligated to pay all Rent in respect of such Item
or Items which has accrued up to and including the date of
payment of such Stipulated Loss Value pursuant to Section
15(b)(ii); and provided further, if the replacement of any Item
or Items of Equipment in accordance with this Section 15 occurs,
or if the payment of all sums required to be paid pursuant to
Section 15(b)(ii) hereof is due and payable, after the expiration
of the Lease Term, then, in either case, Lessee shall pay to
Lessor, for each day after the expiration of the Lease Term until
such time that such replacement or payment, as the case may be,
has been made, an amount equal to the daily equivalent of the
arithmetic average of the Fixed Rent during the Basic Term for
such Item or Items or, if the Lease expired after a Renewal Term,
the arithmetic average of rent paid during such Renewal Term for
such Item or Items; provided further, however, that where
payments in respect of the daily equivalent of Rent are made
under this Section 15(c) with respect to any Item or Items of
Equipment, no payments shall be due from Lessee under the first
sentence of Section 5(c) hereof with respect to such Item or
Items of Equipment.
(d) Disposition of Equipment; Replacement of Item. (i)
Upon the payment of all sums required to be paid pursuant to this
Section 15 in respect of any Item or Items of Equipment, Lessor
will convey to Lessee or its designee all right, title and
interest of Lessor in and to such Item or Items, "as is", "where
is", without recourse or warranty, except for a warranty against
Lessor's Liens, and shall execute and deliver to Lessee or its
designee such bills of sale and other documents and instruments
as Lessee or its designee may reasonably request to evidence such
conveyance. As to each separate Item so disposed of, so long as
no Default or Event of Default shall have occurred and be
continuing, any payments received by Lessor or by Lessee from any
insurer or other party (except Lessee) as a result of the
occurrence of such Event of Loss will be applied in reduction of
Lessee's obligation to pay the amounts described in Section
15(b)(ii)(A), if not already paid by Lessee, or, if already paid
by Lessee, will be applied to reimburse Lessee for its payment of
such amount, and any such payments in excess of the amounts
described in Section 15(b)(ii)(A) shall be paid to or retained by
Lessor, and after the occurrence and continuance of a Default or
an Event of Default such payments shall be paid to the Security
Trustee so long as the Lien of the Security Agreement shall not
have been discharged and thereafter shall be paid to the Lessor;
provided however, that Lessee shall be entitled to share in any
excess such that Lessee's share will be calculated as the product
of (x) any excess of the amounts described above and (y) one
minus a fraction having as its numerator the number of years of
the Basic Term, together with any fractions thereof, which have
elapsed to the date of availability of any such excess funds and
a denominator equal to the total number of years of the Basic
Term.
(ii) At the time of or prior to any replacement of any Item,
Lessee, at its own expense, will (A) furnish Lessor with a bill
of sale and an assignment of warranties with respect to the
Replacement Item, (B) cause a Lease Supplement substantially in
the form of Exhibit B hereto, subjecting such Replacement Item to
this Lease, duly executed by Lessee, to be delivered to Lessor
for execution and, upon such execution, to be filed for
recordation in the same manner as the original Lease Supplement,
(C) so long as the Lien of the Security Agreement shall not have
been satisfied and discharged, cause a Security Agreement
Supplement substantially in the form of Exhibit B to the Security
Agreement for such Replacement Item, to be delivered to Lessor
and to the Security Trustee for execution and, upon such
execution, to be filed for recordation in the same manner as the
original Security Agreement Supplement, (D) so long as the Lien
of the Security Agreement shall not have been satisfied and
discharged, cause a financing statement or statements with
respect to the Replacement Item to be filed in such place or
places as necessary in order to perfect the security interest
therein created by or pursuant to the Security Agreement and
precautionary Uniform Commercial Code financing statements naming
Lessee as debtor, the Owner Trustee as secured party and the
Security Trustee as assignee of the secured party to be filed in
such public offices as are deemed necessary or appropriate by the
Security Trustee, the Owner Trustee and the Owner Participant to
perfect the right, title and interest of the Security Trustee as
assignee of the Owner Trustee in the Equipment, (E) furnish
Lessor with an opinion of Lessee's counsel, to the effect that
(x) the bill of sale referred to in clause (A) above constitutes
an effective instrument for the conveyance of title to the
Replacement Item to Lessor, (y) good and marketable title to the
Replacement Item has been delivered to Lessor, free and clear of
all Liens (other than Permitted Encumbrances referred to in
clauses (i) and (iv) of the definition of such term), and (z) all
filings, recordings and other action necessary or appropriate to
perfect and protect the Lessor's and the Security Trustee's
respective interests in the Replacement Item have been
accomplished and (F) furnish Lessor with a certificate of a
qualified independent appraiser reasonably acceptable to Lessor
(or such other Person as shall be mutually agreed to by Lessee
and Lessor and, if so mutually agreed to, may be the system chief
mechanical officer of Lessee) certifying that the Replacement
Item has a fair market value, utility and remaining useful life
at least equal to the Item so replaced (assuming such Item was in
the condition required to be maintained by the terms of this
Lease) and setting forth a reasonable basis for such conclusion
in reasonable detail. For all purposes hereof, upon passage of
title thereto to Lessor, the Replacement Item shall be deemed
part of the property leased hereunder and the Replacement Item
shall be deemed an "Item" of Equipment as defined herein. Upon
passage of title to any Item of Equipment, whether in connection
with the replacement of such Item of Equipment or in connection
with the payment of all sums required to be paid pursuant to
Section 15(b)(ii) hereof with respect to such Item of Equipment,
Lessor will transfer to Lessee, without recourse or warranty
(except as to Lessor's Liens), all Lessor's right, title and
interest in and to such Item, and upon such transfer, Lessor will
request in writing that the Security Trustee execute and deliver
to Lessee an appropriate instrument releasing such Item from the
lien of the Security Agreement and releasing the Assignment of
Warranties with respect to such Item from the assignment and
pledge under the Security Agreement. As to each separate
replaced Item, so long as no Default or Event of Default shall
have occurred and be continuing, Lessee or its designee shall be
entitled to any awards, insurance or other proceeds and damages
received by Lessee, Lessor or the Security Trustee with respect
to such replaced Item after having replaced such Item.
(e) Application of Payments Not Relating to an Event of
Loss. So long as no Default or Event of Default shall have
occurred and be continuing, any payments (including, without
limitation, insurance proceeds) received at any time by Lessor or
Lessee from any governmental authority or other party with
respect to any loss or damage to any Item or Items of Equipment
not constituting an Event of Loss will be applied directly in
payment of repairs or for replacement of property in accordance
with the provisions of Sections 10, 11 and 16 hereof, if not
already paid by Lessee, or if already paid by Lessee, shall be
applied to reimburse Lessee for such payment, and any balance
remaining after compliance with said Sections with respect to
such loss or damage shall be retained by Lessor, and after the
occurrence and continuance of a Default or an Event of Default
such payments shall be paid to the Security Trustee so long as
the Lien of the Security Agreement shall not have been discharged
and thereafter shall be paid to the Lessor; provided, however,
that Lessee shall be entitled to share in any excess such that
Lessee's share will be calculated as the product of (x) any
excess of the amounts described above and (y) one minus a
fraction having as its numerator the number of years of the Basic
Term, together with any fractions thereof, which have elapsed to
the date of availability of any such excess funds and a
denominator equal to the total number of years of the Basic Term.
Lessee's obligation to pay all installments of Rent and other
sums shall continue for the duration of such requisitioning or
taking unless and until the same shall become an Event of Loss.
SECTION 16. INSURANCE.
As part of an insurance program including risk
retention and self-insurance, Lessee will, at all times prior to
the return of the Equipment to Lessor, at its own expense, cause
to be carried and maintained (i) property damage insurance in
respect of the Equipment at the time subject hereto and (ii)
public liability insurance with respect to third-party personal
and property damage, and Lessee will continue to carry such
insurance in such amounts and for such risks and with such
insurance companies and subject to such self-insurance consistent
with prudent industry practice by Lessee, but in any event not
less comprehensive in amounts and against risks customarily
insured against by Lessee in respect of equipment owned or leased
by it similar in make and model to the Equipment.
Lessee may from time to time self-insure in accordance with
its then-current fleet wide practice by way of deductible,
premium adjustment or franchise provisions or otherwise in
respect of the insurance policies covering the risks required to
be insured against pursuant to this Section 16; provided,
however, that during any period when (a) any debt security issued
by Lessee is rated lower than Baa3 by Moody's Investors Service,
Inc., lower than BBB- by Standard & Poor's Corporation, or lower
than the equivalent of either thereof by any other nationally
recognized rating agency, or (b) no such debt security is
outstanding or rated, the public liability insurance required
hereunder shall provide a minimum coverage of $50,000,000 and
Lessee may not so self-insure in aggregate policy year amounts in
excess of $10,000,000. If Lessee shall lose the right to self-
insure without restriction under this Section 16 and shall
subsequently be able to self-insure without restriction under
this Section 16, Lessee shall give Lessor not less than ninety
(90) days' prior written notice of the commencement of any self-
insurance program permitted by this Section 16, which notice
shall include such details about such self-insurance as Lessor
may reasonably request. In addition, Lessee shall cooperate with
all reasonable requests of Lessor for such information and
documentation about such self-insurance program. All such self-
insurance assumed by Lessee pursuant to this Section 16 in
respect of property damage and public liability shall not be in
amounts greater than that under any other insurance coverage in
respect of any railcar owned, operated or leased by Lessee or any
Affiliate of Lessee. Upon request by Lessor, Lessee shall, at
Lessor's sole cost and expense for premiums, arrange for and
place insurance coverage on the Equipment, assuming such
insurance can be obtained, for the benefit of Lessor, under then-
existing policies and with Lessee's then-existing insurance
brokers with deductibles, coverages and other terms as Lessor
shall request.
Any such insurance policies shall: (i) name and insure the
Lessor, in its individual and trust capacities, Owner
Participant, Security Trustee and each holder of a Note as
additional insureds under the comprehensive public liability
insurance and under the property insurance, (ii) insure the
Security Trustee or, in the event the Lien of the Security
Agreement has been discharged, the Lessor, as sole loss payee
under a standard loss payee clause satisfactory to the Security
Trustee or the Lessor, as the case may be, under the property
insurance, (iii) with respect to property insurance, provide
insurer's waiver of its right of subrogation, set-off or
counterclaim or any other deduction, whether by attachment or
otherwise, in respect of any liability against any additional
insured except for claims as shall arise from the willful
misconduct or gross negligence of such additional insured, (iv)
provide that such insurance as to the interest of the Lessor,
Owner Participant, Security Trustee and each holder of a Note
shall not be invalidated by any action or inaction of Lessee or
any other Person (other than such claimant), regardless of any
breach or violation of any warranty, declaration or condition
contained in such policies by the Lessee or any other Person
(other than such claimant), (v) provide that all such insurance
is primary without right of contribution from any other insurance
which might otherwise be maintained by the Lessor or any assignee
under Section 13(b) and shall expressly provide that all
provisions except the limits of liability, shall operate in the
same manner as if there were a separate policy covering each such
additional insured, (vi) provide therein or by endorsement that
thirty (30) days prior written notice of expiration, cancellation
or modification shall be given to the Lessor, Owner Participant,
Security Trustee and each holder of a Note and shall provide that
such cancellation, change or modification shall not be effective
during such 30 day period as to any of the Lessor, Owner
Participant, Security Trustee and each holder of a Note, and
(vii) provide that no additional insured shall have any
obligation or liability for premiums in connection with such
insurance.
Upon the execution and delivery of this Lease and thereafter
within 30 days after the close of each fiscal year of Lessee (so
long as Lessee shall have the right to self-insure without
restriction under this Section 16), Lessee shall furnish the
Lessor, Owner Participant, Security Trustee and each holder of a
Note with an Officer's Certificate, in form and substance
reasonably satisfactory to each such party, evidencing compliance
by Lessee with the self-insurance criteria set forth in this
Section 16. In the event that Lessee shall lose the right to
self-insure without restriction under this Section 16, Lessee
shall furnish the Lessor, Owner Participant, Security Trustee and
each holder of a Note with certificates or other satisfactory
evidence of maintenance of the insurance required under this
Section 16 and shall furnish binders or other formal confirmation
reasonably acceptable to the Lessor evidencing renewals thereof
as soon as practicable and certificates of insurance within
twenty (20) days after such renewal is effected or the expiration
date of the original policy or policies, as the case may be. All
other terms of insurance shall be in accordance with such
insurance carried by Lessee or its Affiliates with respect to
other railcars in its fleet. Lessee shall furnish written notice
to the Lessor, Owner Participant, Security Trustee and each
holder of a Note of any notice of cancellation, material
modification, termination or lapse for non-payment of premiums
with respect to any of the liability insurance provided pursuant
to this Section 16 within 5 Business Days after the earlier of
(i) the date on which Lessee receives such notice from the
insurance company providing such insurance, and (ii) the date on
which Lessee has actual knowledge of any such cancellation,
material modification, termination or lapse for non-payment of
premiums.
If the loss (or losses from a single incident or cause)
covered by said physical damage insurance is less than
$1,000,000, the proceeds of such insurance shall be payable to
Lessee provided that no Default or Event of Default shall have
occurred and be continuing and after the occurrence and
continuance of a Default or an Event of Default such proceeds
shall be paid to the Security Trustee so long as the Lien of the
Security Agreement shall not have been discharged and thereafter
shall be paid to the Lessor. If such loss equals or exceeds
$1,000,000, the proceeds of such insurance shall be payable to
the Security Trustee or, in the event that the Lien of the
Security Agreement has been discharged, the Lessor provided that
the Security Trustee or the Lessor, as the case may be, shall, so
long as no Default or Event of Default has occurred or is
continuing, remit all such insurance proceeds to Lessee at such
time as Lessee either (i) provides Lessor evidence that the
damage has been repaired and the Equipment has been restored to
good working order and condition or (ii) has paid to Lessor or
Security Trustee, as the case may be, the amounts otherwise due
to Lessor on loss of such Equipment pursuant to Section 15(b)
hereof. Lessee's obligation to maintain insurance with respect
to any Item of Equipment shall commence on the Acceptance Date of
such Item of Equipment and shall run until the earliest to occur
of (x) the date on which such Item of Equipment is sold, pursuant
to Section 19 hereof, (y) the termination of this Lease with
respect to such Items of Equipment pursuant to and in accordance
with Section 27 hereof, or (z) the return of the Equipment to the
Lessor in accordance with Section 5 hereof. Lessee covenants
that it will not use or operate or permit the use or operation of
any Item of Equipment at any time when the insurance required by
this Section 16 is not in force with respect to such Item of
Equipment and will not use the Equipment in a manner which would
violate the terms and provisions of such insurance policies. If
Lessee shall fail to cause the insurance required under this
Section 16 to be carried and maintained, Lessor may provide such
insurance and Lessee shall reimburse Lessor upon demand for the
cost thereof as Supplemental Rent hereunder.
Nothing in this Section 16 shall prohibit Lessor, Owner
Participant, Security Trustee or a holder of a Note from
obtaining insurance for its own account and any proceeds payable
thereunder shall be as provided in the insurance policy relating
thereto; provided that no such insurance may be obtained that
would limit or otherwise adversely affect the coverage of any
insurance to be obtained or maintained by Lessee pursuant to this
Section 16.
SECTION 17. NO WARRANTIES.
LESSEE LEASES THE EQUIPMENT AS-IS, WHERE-IS WITH ALL
FAULTS, AND IN WHATEVER CONDITION IT MAY BE. NEITHER LESSOR, NOT
BEING THE MANUFACTURER OR VENDOR OF THE EQUIPMENT, NOR OWNER
PARTICIPANT NOR SECURITY TRUSTEE MAKES OR HAS MADE OR SHALL BE
DEEMED TO MAKE OR HAVE MADE, ANY REPRESENTATIONS OR WARRANTY,
EITHER EXPRESSED OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION
OF THE EQUIPMENT, ITS MERCHANTABILITY, VALUE, DURABILITY,
SUITABILITY OR ITS FITNESS FOR ANY PARTICULAR USE OR PURPOSE,
LESSOR'S TITLE THERETO, LESSEE'S RIGHT TO THE QUIET ENJOYMENT
THEREOF, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE
EQUIPMENT, OR THE CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS
AND SPECIFICATIONS OF ANY PURCHASE ORDER OR ORDERS RELATING
THERETO, AND EACH OF LESSOR, OWNER PARTICIPANT AND SECURITY
TRUSTEE HEREBY DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY
(WHICH DISCLAIMER LESSEE HEREBY ACKNOWLEDGES). WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, NEITHER LESSOR NOR OWNER
PARTICIPANT NOR SECURITY TRUSTEE SHALL BE LIABLE OR RESPONSIBLE
FOR ANY DEFECTS, EITHER PATENT OR LATENT (WHETHER OR NOT
DISCOVERABLE BY LESSEE), IN THE EQUIPMENT, OR FOR ANY
INTERRUPTION IN LESSEE'S BUSINESS CAUSED BY LESSEE'S INABILITY TO
USE THE EQUIPMENT FOR ANY REASON WHATSOEVER, ALL OF WHICH ITEMS
OF EQUIPMENT WERE SELECTED BY LESSEE ON THE BASIS OF ITS OWN
JUDGMENT WITHOUT RELIANCE UPON ANY STATEMENTS, REPRESENTATIONS OR
WARRANTIES MADE BY OWNER TRUSTEE, OWNER PARTICIPANT OR SECURITY
TRUSTEE, IT BEING AGREED THAT ALL SUCH RISKS, AS BETWEEN LESSOR,
WHETHER IN ITS INDIVIDUAL CAPACITY OR AS TRUSTEE, OWNER
PARTICIPANT, SECURITY TRUSTEE AND THE HOLDER OF ANY NOTE ON THE
ONE HAND AND LESSEE ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
Neither Lessor, Owner Participant nor Security Trustee shall
have any responsibility or liability to Lessee or any other
person with respect to any of the following: (i) any liability,
loss or damage caused or alleged to be caused directly or
indirectly by any Item of Equipment or by any inadequacy thereof
or deficiency or defect therein or by any other circumstances in
connection therewith; (ii) the use, operation or performance of
any Item of Equipment or any risks relating thereto; (iii) any
interruption of service, loss of business or anticipated profits
or consequential damages; or (iv) the delivery, operation,
servicing, maintenance, repair, improvement or replacement of any
Item of Equipment. Lessee's delivery of a Lease Supplement
relating to an Item of Equipment shall be conclusive evidence as
between Lessee and Lessor that such Item of Equipment is in all
respects satisfactory to Lessee, and Lessee will not assert any
claim of any nature whatsoever against Lessor, Owner Participant
or Security Trustee based on any of the foregoing matters.
So long as an Event of Default shall not have occurred and
be continuing, and so long as the Equipment shall be subject to
this Lease and Lessee shall be entitled to possession of the
Equipment hereunder, Lessor authorizes Lessee, at Lessee's
expense, to assert for Lessor's account, all rights and powers of
Lessor under any manufacturer's, vendor's or dealer's warranty on
the Equipment or any part thereof; provided, however, that Lessee
shall indemnify, protect, save, defend and hold harmless Lessor
from and against any and all claims, and all costs, expenses,
damages, losses and liabilities incurred or suffered by Lessor in
connection therewith, as a result of, or incident to, any action
by Lessee pursuant to the foregoing authorization, and that
Lessee shall provide Lessor with prior written notice of any
action Lessee proposes to take on Lessor's behalf pursuant to the
foregoing authorization. Any payments made by any such vendor or
manufacturer pursuant to such warranty for any Item of Equipment
shall be payable to Lessee so long as no Default or Event of
Default shall have occurred and be continuing and after the
occurrence and continuance of a Default or an Event of Default
shall be paid to the Security Trustee so long as the Lien of the
Security Agreement shall not have been discharged and thereafter
shall be paid to the Lessor. Such payment is to be used to
repair or replace damaged components in accordance with Section
11 hereof, if feasible, and if not used, such amount shall be
paid promptly to Lessor.
SECTION 18. EVENTS OF DEFAULT.
Any of the following events shall constitute an Event
of Default:
(a) Lessee shall fail to make any payment of Interim Rent,
Fixed Rent, Stipulated Loss Value, Termination Value or Make-
Whole Premium within ten (10) Business Days after the same is due
and payable or any Supplemental Rent (other than Stipulated Loss
Value or Termination Value or Make-Whole Premium) within thirty
(30) days after receipt of written notice by Lessee; or
(b) Lessee shall fail to observe or perform any of the
covenants or agreements of Lessee set forth in the first and
second paragraphs of Section 16; or
(c) any representation or warranty made by Lessee herein,
or in any Lessee Agreement (other than the Tax Indemnification
Agreement) or any certificate furnished in connection herewith or
therewith shall prove to have been incorrect in any material
respect when such was made; or
(d) Lessee shall fail to perform or observe any covenant,
condition, or agreement to be performed or observed by it under
any Lessee Agreement, or in any agreement or certificate
furnished in connection herewith, and such failure shall continue
unremedied for thirty (30) days after receipt of written notice
by Lessee specifying such failure and demanding the same to be
remedied; provided that, no such default shall be deemed an Event
of Default if (i) such default is curable other than by the
payment of money but cannot be cured within such thirty (30) day
period, (ii) such default does not impair in any material respect
the Lessor's interest in the Equipment or the security interest
of the Security Trustee created pursuant to the Security
Agreement, and (iii) Lessee is diligently pursuing such cure and
effects such cure within 180 days of the date of such default or
before the last day of the Lease Term, whichever shall occur
first; or
(e) Lessee becomes insolvent (however such insolvency may
be evidenced) or admits insolvency or bankruptcy or its inability
to pay its debts as they mature, makes an assignment for the
benefit of creditors or applies for or consents to the
appointment of a custodian, trustee or receiver for Lessee, or
for the major part of its property or commences a voluntary case
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or
(f) a proceeding shall have been instituted in a court
having jurisdiction in the premises, seeking a decree or order
(i) for relief in respect of Lessee in an involuntary case under
any applicable bankruptcy, reorganization, insolvency or other
similar law now or hereafter in effect or (ii) for the
appointment of a custodian, receiver, trustee or similar official
of Lessee or of its property, or (iii) for the winding up or
liquidation of the affairs of Lessee, and either (I) any such
proceeding shall remain undismissed or unstayed and in effect for
a period of 90 consecutive days or (II) such court shall enter a
decree or order granting the relief sought in such proceeding or
Lessee shall consent to such entry.
SECTION 19. REMEDIES UPON DEFAULT.
Upon the occurrence of any Event of Default, and at any
time thereafter so long as such Event of Default shall not have
been remedied, Lessor may, at its option, by written notice to
Lessee, exercise any one or more of the following remedies as
Lessor in its sole discretion shall elect (provided that this
Lease shall automatically be deemed to be declared in default
without the necessity of such written notice upon the occurrence
of any Event of Default described in Section 18(e) or (f)):
(a) Lessor may terminate or cancel this Lease, without
prejudice to any other remedies of Lessor hereunder, with respect
to all or any Item of Equipment, and may enter the premises of
Lessee to take immediate possession of the Equipment and remove
all or any Item of Equipment by summary proceedings or otherwise,
or may cause Lessee, at Lessee's expense, to surrender and
deliver possession of the Equipment or such Item in the same
manner as provided in Section 5 hereof;
(b) Lessor may hold, keep idle or lease to others the
Equipment or any Item of Equipment, as Lessor in its sole
discretion may determine, free and clear of any rights of Lessee
and without any duty to account to Lessee with respect to such
action or inaction or for any proceeds with respect thereto,
except that Lessee's obligation to pay Fixed Rent payable after
Lessee shall have been deprived of possession pursuant to this
Section 19 shall be reduced by the net proceeds, if any, received
by Lessor from leasing the Equipment or such Item to any Person
other than Lessee after Lessee shall have been so deprived of
possession;
(c) Lessor may sell any Item of Equipment at public or
private sale as Lessor may determine, free and clear of any
rights of Lessee, and Lessee shall pay to Lessor all unpaid Fixed
Rent payable up to and including the date on which such sale
occurs (computed on a daily equivalent basis for the period from
and including the Rent Payment Date immediately preceding the
date of such sale on which Fixed Rent was paid to and including
the date of such sale), plus, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the Fixed Rent for such
Item sold payable after the date on which such sale occurs), an
amount equal to the excess, if any, of (i) the Stipulated Loss
Value of such Item so sold, computed as of the Rent Payment Date
coincident with or immediately preceding the date of such sale,
over (ii) the net proceeds of such sale;
(d) Lessor, by written notice to Lessee, may demand that
Lessee pay to Lessor, and Lessee shall pay to Lessor all unpaid
Fixed Rent payable therefor up to and including the date of such
notice plus, as liquidated damages for loss of a bargain and not
as a penalty (in lieu of the Fixed Rent for any Item of Equipment
payable after the date of such notice and in lieu of the exercise
by Lessor of its rights under such subsection (c) above with
respect to such Item of Equipment), whichever of the following
amounts Lessor, in its sole discretion, shall specify in such
notice: (i) an amount, with respect to such Item of Equipment,
equal to the excess, if any, of the Fixed Rent payable for such
Item of Equipment for the remainder of the then current Lease
Term, over the Fair Market Rental Value of such Item of Equipment
for the remainder of the then current Lease Term, after
discounting such excess to present worth as of the payment date
specified in such notice at the lower of (I) the Prime Rate and
(II) the interest rate of the Notes; or (ii) an amount, with
respect to each Item of Equipment, equal to the excess, if any,
of the Stipulated Loss Value of such Item of Equipment computed
as of the Rent Payment Date coincident with or next following the
Event of Default, over the Fair Market Sales Value of the
Equipment as of the said date;
(e) Lessor may proceed by appropriate court action to
enforce the terms hereof or to recover damages for the breach
hereof or to rescind this Lease; and
(f) Lessor may exercise any other right or remedy which may
be available to it under applicable law.
No remedy referred to in this Section 19 is intended to
be exclusive, but each shall be cumulative and may be exercised
concurrently or consecutively and shall be in addition to any
other remedy referred to above or otherwise available to Lessor
at law or in equity, and the exercise in whole or in part by
Lessor of any one or more of such remedies shall not preclude the
simultaneous or later exercise by Lessor of any or all such other
remedies. Lessee hereby waives any mandatory requirements of
law, now or hereafter in effect, which might limit or modify the
remedies herein provided, to the extent that such waiver is
effective under applicable law. Lessee hereby waives any and all
existing or future claims to any offset against the Rent payments
due hereunder, and agrees to make such payments regardless of any
offset or claim which may be asserted by Lessee or on its behalf.
Except as otherwise provided in this Lease, Lessee, to the full
extent effective under applicable law, hereby waives all
statutory or other legal requirements for any notice of any kind,
any other requirements with respect to the enforcement of
Lessor's rights under this Lease and any and all rights of
redemption. No waiver by Lessor of any Event of Default
hereunder shall in any way be, or be construed to be, a waiver of
any future or subsequent Event of Default.
In addition, the Lessee shall be liable for any and all
unpaid Rent due hereunder before or during the exercise of any of
the foregoing remedies, including during the appeal or
enforcement of any judgment, and for all reasonable legal fees
and other costs and expenses incurred by reason of the occurrence
of any Default or Event of Default or the exercise of the
Lessor's remedies with respect thereto, including without
limitation, the repayment in full of any costs and expenses
necessary to be expended in repairing or modifying any Item in
order to cause it to be in compliance with all maintenance and
regulatory standards imposed by this Lease.
Upon the date of termination of this Lease by Lessor
pursuant to Section 19(a), Lessee shall, without expense to the
Lessor, promptly redeliver the Items of Equipment or cause the
Items of Equipment to be redelivered, to the Lessor with all
reasonable dispatch, in the same manner and in the same condition
as if such Items of Equipment were being redelivered on the last
day of the Lease Term in accordance with the provisions of
Section 5, and all obligations of the Lessee under Section 5
shall apply to such redelivery. Lessor, without further notice,
may, but shall be under no obligation to, retake such Items of
Equipment wherever found, without the Lessor incurring any
liability by reason of such retaking, whether for the restoration
of damage to property caused by such retaking or otherwise.
Without in any way limiting the obligation of Lessee under
the foregoing provisions of this Section, Lessee hereby
irrevocably appoints Lessor as the agent and attorney of Lessee
with full power and authority to, upon the occurrence and
continuance of an Event of Default hereunder, exercise Lessor's
rights under this Section, at any time while Lessee is obligated
to deliver possession of any Item of Equipment to Lessor, to
demand and take possession of such Item of Equipment in the name
and on behalf of Lessee from whomever shall then be in possession
of such Item.
SECTION 20. LESSOR'S RIGHT TO PERFORM FOR LESSEE.
If Lessee fails to perform or comply with any of its
agreements or covenants contained herein, Lessor may (but shall
not be obligated to) itself, after notice to Lessee, perform or
comply with such agreement or covenant or make advances to
perform the same, and the amount of the reasonable expenses of
Lessor incurred in connection with the performance of or
compliance with such agreement or covenants, shall, if not paid
by Lessee to Lessor on demand, be payable as Supplemental Rent
hereunder.
SECTION 21. LATE CHARGES.
Lessee shall pay to Lessor as Supplemental Rent, to the
extent permitted by applicable law, interest on any amount of
Interim Rent, Fixed Rent and any Supplemental Rent which is not
paid when due, for any period for which the same is overdue
(without regard to any grace period) at a rate equal to the Late
Rate.
SECTION 22. COVENANT OF QUIET ENJOYMENT.
During the Lease Term of any Item of Equipment
hereunder and so long as no Default or Event of Default has
occurred and is continuing, Lessor covenants and agrees that
Lessee shall have the right to uninterrupted use and enjoyment of
such Item on the terms and conditions provided herein without any
interference from Lessor or Owner Participant or those claiming
through or against Lessor (other than claims of mechanics,
suppliers, materialmen and laborers for work or services
performed or materials furnished in connection with the Equipment
or any Item thereof which are claims by or through the Lessor),
including, but not limited to, any assignee or lender or
mortgagee of Lessor or Owner Participant. For purposes of this
Section 22, the delivery of notices of default or nonperformance
delivered under and pursuant to Section 18 shall not be deemed to
constitute a violation of this Section 22.
SECTION 23. OTHER DOCUMENTS.
Except as otherwise provided herein, Lessee will, at
Lessee's expense, execute and deliver to Lessor such other
documents as may be reasonably required by Lessor, including,
without limitation, such amendments to this Lease, and Uniform
Commercial Code financing statements and continuation statements
and any filings required by the ICC or the AAR.
SECTION 24. NOTICES AND REQUESTS.
Unless otherwise expressly specified or permitted by
the terms hereof, all communications and notices provided for
herein shall be in writing or by a telecommunications device
capable of creating a written record, and any such notice shall
become effective upon receipt by the addressee or, if such
receipt is rejected, upon rejection, at its address set forth
below or, in the case of any such party hereto, at such other
address as such party may from time to time designate by written
notice to the other parties hereto:
If to Lessee: Kansas City Power & Light Company
1201 Walnut Street
Kansas City, Missouri 64106-2124
Attention: Treasurer
Fax No.: (816) 556-2992
Confirmation No.: (816) 556-2059
If to Lessor: First Security Bank of Utah,
National Association, as Trustee
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Fax No.: (801) 246-5053
All notices required to be delivered under this Lease
to Lessor shall, so long as the Lien of the Security Agreement
shall not have been discharged, also be delivered to the Security
Trustee.
SECTION 25. LESSEE'S RENEWAL AND PURCHASE OPTIONS.
(a) Lessee's Renewal Option. If no Default or Event of Default
shall have occurred and be continuing, and this Lease shall not
have been earlier terminated, Lessee shall be entitled, at its
option upon written notice to Lessor, as hereinafter provided, to
renew this Lease in accordance with the following terms:
(i) commencing at the end of the Basic Term, Lessee shall
have the option to renew this Lease for a period of not less than
one year nor more than three and one-half years (1) with respect
to all, or if less than all not less than 20% nor more than 80%,
of the Items of Equipment then subject to this Lease, chosen on a
random basis, and the Fixed Rent payable during the first Renewal
Term for any Item of Equipment shall be at a rate equal to 50% of
the average amount of each installment of Fixed Rent payable in
respect of such Item of Equipment during the Basic Term ("Fixed
Rate Renewal Rent Rate") or (2) with respect to all, or if less
than all not less than 20% nor more than 80%, of the Items of
Equipment then subject to this Lease, chosen on a random basis,
and the Fixed Rent payable during the first Renewal Term for any
Item of Equipment shall be at a rate equal to such Item of
Equipment's Fair Market Rental Value ("Fair Market Renewal Rent
Rate");
(ii) commencing at the end of the first Renewal Term, Lessee
shall have the option to renew this Lease for a period of at
least one year, as selected by Lessee, but in no event shall (1)
such Renewal Term when added to the Interim Term, the Basic Term
and the first Renewal Term exceed 80% of the economic life of
such Item(s) of Equipment and (2) the expected residual value of
such Equipment at the end of such second Renewal Term be an
amount less than 20% of the Purchase Price of such Equipment
(without regard to inflation or deflation occurring or expected
to occur from the Acceptance Date until the end of the second
Renewal Term) determined in each case in the manner described in
Section 25(c) hereof, provided that (A) if the Lessee shall have
elected the Fixed Rate Renewal Rent Rate during the first Renewal
Term, the Lessee may elect to renew this Lease (x) with respect
to all, or if less than all not less than 20% nor more than 80%,
of the Items of Equipment then subject to this Lease, chosen on a
random basis, and that the Fixed Rent payable during the second
Renewal Term for any Item of Equipment shall be at a rate equal
to the Fixed Rate Renewal Rent Rate or (y) with respect to all,
or if less than all not less than 20% nor more than 80%, of the
Items of Equipment then subject to this Lease, chosen on a random
basis, and the Fixed Rent payable during the second Renewal Term
for any Item of Equipment shall be at a rate equal to such Item
of Equipment's Fair Market Rental Value or (B) if the Lessee
shall have elected the Fair Market Renewal Rent Rate during the
first Renewal Term, the Lessee may elect to renew this Lease with
respect to all, or if less than all not less than 20% nor more
than 80%, of the Items of Equipment subject to this Lease at the
end of the Basic Term, chosen on a random basis, and the Fixed
Rent payable during the second Renewal Term for any Item of
Equipment shall be at a rate equal to such Item of Equipment's
Fair Market Rental Value; provided that if the Lessee shall have
elected to renew this Lease pursuant to this clause (B) with
respect to less than all of the Items of Equipment then subject
to this Lease, the maximum amount of Items of Equipment that the
Lessee may renew this Lease with respect to shall not exceed the
amount of Items of Equipment subject to this Lease at the end of
the first Renewal Term minus 20% of the amount of Items of
Equipment subject to the Lease at the end of the Basic Term; and
(iii) commencing at the expiration of the second Renewal
Term and at the expiration of each Renewal Term thereafter,
Lessee shall have the option to renew this Lease with respect to
all, or if less than all not less than 20% nor more than 80%, of
the Items of Equipment subject to the Lease at the end of the
Basic Term, chosen on a random basis, for periods of integral
multiples of six months (provided no such Renewal Term be less
than one year), but in no event shall (1) such Renewal Term when
added to the Interim Term, the Basic Term and all preceding
Renewal Terms exceed 80% of the economic life of such Item(s) of
Equipment and (2) the expected residual value of such Equipment
at the end of such Renewal Term be an amount less than 20% of the
Purchase Price of such Equipment (without regard to inflation or
deflation occurring or expected to occur from the Acceptance Date
until the end of such Renewal Term) determined in each case in
the manner described in Section 25(c) hereof, and the Fixed Rent
payable during any such Renewal Term for any Item of Equipment
shall be at a rate equal to the Fair Market Rental Value of such
Item of Equipment determined in accordance with Section 25(c)
hereof; provided that if the Lessee shall have elected to renew
this Lease pursuant to this clause (iii) with respect to less
than all of the Items of Equipment then subject to this Lease,
the maximum amount of Items of Equipment that the Lessee may
renew this Lease with respect to shall not exceed the amount of
Items of Equipment subject to this Lease at the end of the second
Renewal Term or any such Renewal Term thereafter minus 20% of the
amount of Items of Equipment subject to the Lease at the end of
the Basic Term.
Except as stated above, all of the provisions of this Lease
(other than Section 27) shall be applicable during each Renewal
Term for each Item of Equipment. Stipulated Loss Values and
Termination Values for each Item of Equipment on any Rent Payment
Date during any Renewal Term shall be an amount equal to
Stipulated Loss Value or the Termination Value, as the case may
be, for such Item of Equipment determined as of the last Rent
Payment Date of the Basic Term. If Lessee will exercise said
renewal option with respect to any of said Renewal Terms, Lessee
shall give irrevocable written notice to Lessor to such effect
at least two hundred and forty (240) days prior to the expiration
of the Basic Term and any Renewal Term.
(b) Lessee's Purchase Option. If (i) no Default or Event of
Default shall have occurred and be continuing, and (ii) this
Lease shall not have been earlier terminated, Lessee shall be
entitled, at its option, upon irrevocable written notice to
Lessor as hereinafter provided, to purchase all, or if less than
all not less than 20% nor more than 80%, of the Items of
Equipment then subject to this Lease, chosen on a random basis,
on the date immediately following the date of the expiration of
the Basic Term of each such Item of Equipment, for an amount,
with respect to each such Item of Equipment, payable in
immediately available funds, equal to the lesser of (i) the Fair
Market Sales Value thereof determined in accordance with Section
25(c) hereof or (ii) 44.5% of the Purchase Price of such Item(s)
of Equipment (the "FPPO"), plus, in each case, any applicable
sales, use, transfer, documentary, recording excise or other
taxes imposed as a result of such sale (other than net income
taxes attributable to such sale). In addition, Lessee shall have
the option to purchase at the end of any Renewal Term those Items
of Equipment for which the Lessee has not elected to renew the
Lease for the Fair Market Sales Value of such Item(s) of
Equipment.
If Lessee intends to exercise said purchase options,
Lessee shall give irrevocable written notice to Lessor to such
effect at least two hundred and forty (240) days prior to the
expiration of the Basic Term or Renewal Term of such Item(s) of
Equipment. In the event that Lessee exercises its purchase
options under this Section 25(b), Lessor shall execute and
deliver to Lessee a bill of sale, in which Lessor transfers the
Item to Lessee "as is" and represents only that it is
transferring whatever title was transferred to it, free and clear
of all liens in favor of any person claiming by, through or under
Lessor, in a form reasonably acceptable to Lessee, upon payment
of the sale price by Lessee.
(c) Determination of Fair Market Sales Value and Fair Market
Rental Value; Appraisal Procedure. If Lessee intends to exercise
its renewal option, as provided in Section 25(a) hereof, or
intends to exercise its purchase option, as provided in Section
25(b) hereof, then at least 260 days prior to the expiration of
the Basic Term or any Renewal Term, Lessee shall select an
appraiser mutually acceptable to Lessor for the purpose of
determining the Fair Market Rental Value or Fair Market Sales
Value, as the case may be, of each such Item of Equipment as of
the end of the Basic Term thereof, or, if this Lease has been
renewed pursuant to Section 25(a) hereof, then as of the end of
the then current Renewal Term thereof, and in the event this
Lease is being renewed pursuant to Section 25(a)(ii) or
25(a)(iii), the economic life and residual value of such
Equipment as set forth in Section 25(a). For the purposes of
determining the economic life and the residual value of the
Equipment pursuant to Section 25(a)(ii) or 25(a)(iii) hereof, all
non-severable improvements made by the Lessee, other than
improvements required by law or required to maintain the
Equipment in the condition required by this Lease, shall be
ignored.
In the event Lessor and Lessee fail to agree upon a
qualified independent appraiser within 30 days of Lessee's notice
of intent to exercise either its renewal or purchase option (such
30-day period being herein referred to as the "Initial Selection
Period"), each party shall appoint an independent appraiser (an
"Independent Appraiser") within 15 Business Days after the end of
the Initial Selection Period, and the two appraisers so appointed
shall within 30 Business Days after the end of the Initial
Selection Period appoint a third independent appraiser (the
"Third Independent Appraiser"). If no Third Independent
Appraiser is appointed within 30 Business Days after the end of
the Initial Selection Period, either party may request the
American Arbitration Association to appoint a Third Independent
Appraiser (which Third Independent Appraiser may be the American
Arbitration Association), and both parties shall be bound by any
such appointment.
Any appraiser or appraisers appointed pursuant to the
foregoing procedure shall be instructed to determine the Fair
Market Sales Value and/or the Fair Market Rental Value, as the
case may be, and the economic life or residual value, if
applicable, of such Item(s) of Equipment within 90 days after the
appointment of such appraiser(s). If the parties shall have
appointed a single appraiser, such appraiser's determination of
such values and economic life shall be final and binding. If
three appraisers shall be appointed, the values determined by the
three appraisers shall be averaged, and, unless such average
shall equal the values determined by the middle appraisal (in
which event such average shall be final and binding), the
determination which differs most from such average shall be
excluded, the remaining two determinations shall be averaged and
such average shall be final and binding. The fees and expenses
of any appraiser appointed under this Section 25(c) shall be paid
for as follows: (i) if the parties shall have elected a single
appraiser, the appraisal fees and expenses incurred in connection
with such appraiser shall be paid by Lessee, (ii) if Lessee and
Lessor each select an Independent Appraiser, each party shall pay
the respective fees and expenses incurred in connection with such
Independent Appraiser selected by it, and (iii) the fees and
expenses incurred in connection with any Third Independent
Appraiser and in connection with any American Arbitration
Association appointment shall be shared equally by Lessee and
Lessor. The above-described procedure shall be from time to time
referred to as the "Appraisal Procedure".
SECTION 26. FINANCIAL INFORMATION; REPORTS.
(a) Lessee agrees to furnish Lessor, the Owner Participant, the
Security Trustee and each holder of a Note, in duplicate, (1)
within 90 days after the close of its fiscal year, an annual
report of Lessee, consisting of its audited financial statements
including balance sheets as of the end of such fiscal year,
statements of income and cash flows for the year then ended with
all notes thereto in each case certified as true and correct by
the auditor thereof; (2) within 45 days after the close of each
of the first three quarterly periods of Lessee's fiscal year, a
balance sheet of Lessee as of the end of such quarter, and
comparative statements of income and cash flows for such quarter;
(3) promptly upon Lessee obtaining knowledge that there has
occurred and is continuing any condition, event, act or omission
which constitutes a Default or an Event of Default or a Lien
(other than Permitted Encumbrances) on the Equipment, notice of
such condition, event, act or omission and the steps which Lessee
has taken or is taking to remedy the same; and (4) such
additional information concerning the location, condition, use
and operation of the Equipment and financial condition and
operations of Lessee as Lessor, Security Trustee or such holder
may from time to time reasonably request.
(b) Lessee shall permit any person designated by Lessor to visit
and inspect the Equipment and the records (and to make copies
thereof) maintained in connection therewith, all at such
reasonable times as Lessor may reasonably request.
SECTION 27. VOLUNTARY TERMINATION FOR OBSOLESCENCE.
(a) Right of Termination. So long as no Default or Event of
Default shall have occurred and be continuing hereunder, Lessee
shall have the right, by giving at least one hundred twenty (120)
days' prior written notice to Lessor, at its option, to terminate
this Lease on or after August 13, 2002 with respect to all Items
of Equipment then leased hereunder if, in Lessee's good faith
opinion as evidenced by a certificate of the President, any Vice
President or the Chairman of the Board of the Lessee, such Items
shall have become no longer useful in, or surplus to, Lessee in
its business, such termination to be effective on the Rent
Payment Date specified in such notice (for purposes of this
Section 27, called the "termination date"), upon payment to
Lessor of the sum of (i) the installment of Fixed Rent due on
such termination date, (ii) any other Rent or other sums due and
owing on or in respect of the Equipment, (iii) an amount equal to
the Termination Value of such Equipment as of the termination
date, and (iv) an amount equal to the Make Whole Premium then due
and payable by Lessor on the Notes under and pursuant to Section
6.2(a) of the Security Agreement. If Lessee shall fail to pay
all amounts due under and pursuant to this Section 27(a), this
Lease shall continue in full force and effect and it shall be
deemed that Lessee has rescinded its notice of termination.
Lessee shall not be entitled to give notice of its intention to
terminate this Lease pursuant to this Section 27 and/or Section
29 hereof more than one time during any 12 consecutive month
period during the Lease Term and a maximum of three times during
the Lease Term. During the period from the giving of such notice
until the termination date, Lessee, as non-exclusive agent for
Lessor, shall use its reasonable efforts to secure the highest
obtainable bids for the purchase of such Items and in the event
it receives any bid during such period, Lessee shall promptly
certify to Lessor in writing the amount and terms of such bid and
the name and address of the party submitting such bid. Lessor or
the Owner Participant may obtain bids, but shall be under no duty
to solicit bids, inquire into the efforts of Lessee to obtain
bids or otherwise take any action in connection with arranging
such sale. Neither Lessee nor any person, firm or corporation,
affiliated with Lessee, may purchase any such Item(s) of
Equipment.
(b) Sale of Equipment and Termination of Lease. Upon, but not
until, payment by the Lessee of all sums required to be paid
pursuant to Section 27(a), including without limitation the Make
Whole Premium payable thereunder, Lessor shall sell the Equipment
for cash to the highest bidder certified by Lessee or obtained by
Lessor or the Owner Participant and the net proceeds realized at
such sale (after deduction of all reasonable out-of-pocket costs
incurred by the Lessor or the Owner Participant) in an amount
equal to the sum of the amounts specified in clauses (iii) and
(iv) of the first sentence of the first paragraph of this Section
27 shall be retained by Lessee and any proceeds in excess of such
amounts specified in such clauses shall be retained by Lessor.
On the termination date, upon payment in full of the sums
required by this Section 27, Lessee shall request the Security
Trustee, so long as the Lien of the Security Agreement remains
undischarged, to execute a release of such Item(s) from the Lien
of the Security Agreement and Lessee shall deliver possession of
such Item(s) to the bidder, if any, which shall have submitted
the highest bid during such period, and Lessor shall, without
recourse or warranty, simultaneously therewith sell such Item(s)
on an "as-is", "where-is" basis for cash to such bidder. Upon,
but not until, disposition of the Equipment and payment of the
sums required by this Section 27, including without limitation
the Make Whole Premium payable thereunder, this Lease shall
terminate with respect to the Equipment. In disposing of the
Equipment pursuant to this Section, Lessee shall take such action
as Lessor or the Owner Participant shall reasonably request to
terminate any contingent liability which Lessor or the Owner
Participant might have arising after such disposition.
(c) Right of Lessor to Retain Terminated Items. Notwithstanding
the foregoing provisions of this Section 27(a) and (b), Lessor
may, within 60 days after Lessee's certification under this
Section 27 of a bid or, if Lessee does not certify any such bids,
at any time up to 30 days prior to the termination date, notify
the Lessee in writing of its preemptive election to take
possession of such Items of Equipment on the termination date;
provided that Lessor may not so elect unless it shall
simultaneously (i) agree to provide the funds necessary to pay in
full the Notes on or before the termination date, and (ii)
provide to Lessee evidence to Lessee's satisfaction that funds
have been set aside for the payment provided in clause (i) above.
Lessee shall pay the premium, if any, on the Notes required to be
paid by the Lessor pursuant to Section 6.2(a) of the Security
Agreement. If Lessor has not, after making its preemptive
election referred to above, caused the Notes (including, without
limitation, premium, if any) to be paid on or before the
termination date and thereby caused this Lease to terminate, the
Lessee shall on the termination date pay the amounts required to
be paid by the first sentence of Section 27(a) hereof, and
thereupon this Lease shall terminate with respect to such Items
of Equipment. Upon receipt of such notice (and, in the case of
the Lessee, evidence that the conditions of the proviso to the
third preceding sentence have been satisfied), Lessee and Lessor
shall cease efforts to obtain bids as provided above and shall
reject all other bids theretofore or thereafter received. If the
Lessor shall have made such election, on the termination date,
Lessee shall deliver the Equipment to Lessor in accordance with
Section 5(a) hereof and shall pay all Fixed Rent due on the
termination date with respect to the Equipment, whereupon the
obligation of Lessee to pay Fixed Rent due and payable after the
termination date with respect to such Equipment shall cease and
from and after the termination date such Equipment shall no
longer be subject to this Lease. It shall be an absolute
condition precedent to Lessee's right to terminate this Lease and
Lessor's right to make its preemptive election under this Section
27(c) that on the termination date the Lessor shall have received
and paid to the Security Trustee funds of the type specified in
this Section 27 in an amount sufficient to enable it to pay in
full the unpaid principal amount of all Notes which may be
outstanding on such date with respect to the terminated
Equipment, together with accrued interest thereon to such date
and premium, if any, pursuant to Section 6.2(a) of the Security
Agreement, plus all other sums then due and payable by the Lessee
or the Lessor on such date under the Operative Agreements. If
Lessee or the Lessor, as the case may be, shall fail to pay all
amounts due and owing under the provisions of this Section 27(c),
this Lease shall continue in full force and effect and it shall
be deemed that Lessee has rescinded its notice of termination.
SECTION 28. CONSOLIDATION, MERGER AND SALE OF ALL ASSETS.
Lessee will not merge or consolidate with any other
corporation or sell, lease or otherwise dispose of all or
substantially all of its assets to any person, firm or
corporation unless (a) immediately after such transaction, no
Default or Event of Default shall have occurred and be
continuing, (b) such consolidation, merger or sale will not
materially and adversely affect the ability of the surviving or
acquiring corporation to perform its obligations under the
Operative Agreements and (c) the corporation which is to be the
surviving or acquiring corporation in such transaction (i) shall
be a corporation organized and existing under the laws of the
United States of America or a state thereof, and (ii) shall, if
the surviving or acquiring corporation is other than Lessee, by
agreement in writing, satisfactory to the Participants, expressly
assume the due and punctual payment of the Rent and other sums
due and to become due under this Lease, the Participation
Agreement and the Tax Indemnification Agreement and the
Participants shall have received an opinion of counsel reasonably
satisfactory to the Participants, in form and substance
reasonably satisfactory to them, to the effect that the
instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract
and agreement of the surviving corporation enforceable in
accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally.
SECTION 29. SPECIAL TERMINATION.
(a) Right of Termination. So long as no Default or Event of
Default shall have occurred and be continuing hereunder, if any
event shall occur that results in an increase of 15% or more in
the average annual Rent that is payable by Lessee hereunder (as
evidenced by a certificate of the President, any Vice President
or the Chairman of the Board of the Lessee), Lessee shall have
the right on at least one hundred twenty (120) days' prior
written notice to Lessor, to terminate this Lease with respect to
all Items of Equipment then leased hereunder, such termination to
be effective on the Rent Payment Date specified in such notice
(for purposes of this Section 29, called the "special termination
date"), upon payment to Lessor of the sum of (i) the installment
of Fixed Rent due on such special termination date, (ii) any
other Rent or other sums due and owing on or in respect of the
Equipment, (iii) an amount equal to the greater of the
Termination Value and the Fair Market Sales Value (as determined
in accordance with Section 25(c) hereof) of such Equipment as of
the special termination date, and (iv) an amount equal to the
Make Whole Premium then due and payable by Lessor on the Notes
under and pursuant to Section 6.2(b) of the Security Agreement.
If Lessee shall fail to pay all amounts due under and pursuant to
this Section 29(a), this Lease shall continue in full force and
effect and it shall be deemed that Lessee has rescinded its
notice of termination. Lessee shall not be entitled to give
notice of its intention to terminate this Lease pursuant to this
Section 29 and/or Section 27 hereof more than one time during any
12 consecutive month period during the Lease Term and a maximum
of three times during the Lease Term. During the period from the
giving of such notice until the special termination date, Lessee,
as non-exclusive agent for Lessor, shall use its reasonable
efforts to secure the highest obtainable bids for the purchase of
such Items and in the event it receives any bid during such
period, Lessee shall promptly certify to Lessor in writing the
amount and terms of such bid and the name and address of the
party submitting such bid. Lessor or the Owner Participant may
obtain bids, but shall be under no duty to solicit bids, inquire
into the efforts of Lessee to obtain bids or otherwise take any
action in connection with arranging such sale. Neither Lessee
nor any person, firm or corporation, affiliated with Lessee, may
purchase any such Item(s) of Equipment.
(b) Sale of Equipment and Termination of Lease. Upon, but not
until, payment by the Lessee of all sums required to be paid
pursuant to Section 29(a), including without limitation the Make
Whole Premium payable thereunder, Lessor shall sell the Equipment
for cash to the highest bidder certified by Lessee or obtained by
Lessor or the Owner Participant and the net proceeds realized at
such sale (after deduction of all reasonable out-of-pocket costs
incurred by the Lessor or the Owner Participant) in an amount
equal to the sum of the amounts specified in clauses (iii) and
(iv) of the first sentence of the first paragraph of this Section
29 shall be retained by Lessee and any proceeds in excess of such
amounts specified in such clauses shall be retained by Lessor.
On the special termination date, upon payment in full of the sums
required by this Section 29, Lessee shall request the Security
Trustee, so long as the Lien of the Security Agreement remains
undischarged, to execute a release of such Item(s) from the Lien
of the Security Agreement and Lessee shall deliver possession of
such Item(s) to the bidder, if any, which shall have submitted
the highest bid during such period, and Lessor shall, without
recourse or warranty, simultaneously therewith sell such Item(s)
on an "as-is", "where-is" basis for cash to such bidder. Upon,
but not until, disposition of the Equipment and payment of the
sums required by this Section 29, including without limitation
the Make Whole Premium payable thereunder, this Lease shall
terminate with respect to the Equipment. In disposing of the
Equipment pursuant to this Section, Lessee shall take such action
as Lessor or the Owner Participant shall reasonably request to
terminate any contingent liability which Lessor or the Owner
Participant might have arising after such disposition.
(c) Right of Lessor to Retain Terminated Items. Notwithstanding
the foregoing provisions of this Section 29(a) and (b), Lessor
may, within 60 days after Lessee's certification under this
Section 29 of a bid or, if Lessee does not certify any such bids,
at any time up to 30 days prior to the special termination date,
notify the Lessee in writing of its preemptive election to take
possession of such Items of Equipment on the special termination
date; provided that Lessor may not so elect unless it shall
simultaneously (i) agree to provide the funds necessary to pay in
full the Notes on or before the special termination date, and
(ii) provide to Lessee evidence to Lessee's satisfaction that
funds have been set aside for the payment provided in clause (i)
above. Lessee shall pay the premium, if any, on the Notes
required to be paid by the Lessor pursuant to Section 6.2(b) of
the Security Agreement. If Lessor has not, after making its
preemptive election referred to above, caused the Notes
(including, without limitation, premium, if any) to be paid on or
before the special termination date and thereby caused this Lease
to terminate, the Lessee shall on the special termination date
pay the amounts required to be paid by the first sentence of
Section 29(a) hereof, and thereupon this Lease shall terminate
with respect to such Items of Equipment. Upon receipt of such
notice (and, in the case of the Lessee, evidence that the
conditions of the proviso to the third preceding sentence have
been satisfied), Lessee and Lessor shall cease efforts to obtain
bids as provided above and shall reject all other bids
theretofore or thereafter received. If the Lessor shall have
made such election, on the special termination date, Lessee shall
deliver the Equipment to Lessor in accordance with Section 5(a)
hereof and shall pay all Fixed Rent due on the special
termination date with respect to the Equipment, whereupon the
obligation of Lessee to pay Fixed Rent due and payable after the
special termination date with respect to such Equipment shall
cease and from and after the special termination date such
Equipment shall no longer be subject to this Lease. It shall be
an absolute condition precedent to Lessee's right to terminate
this Lease and Lessor's right to make its preemptive election
under this Section 29(c) that on the special termination date the
Lessor shall have received and paid to the Security Trustee funds
of the type specified in this Section 29 in an amount sufficient
to enable it to pay in full the unpaid principal amount of all
Notes which may be outstanding on such date with respect to the
terminated Equipment, together with accrued interest thereon to
such date and premium, if any, pursuant to Section 6.2(b) of the
Security Agreement, plus all other sums then due and payable by
the Lessee or the Lessor on such date under the Operative
Agreements. If Lessee or the Lessor, as the case may be, shall
fail to pay all amounts due and owing under the provisions of
this Section 29(c), this Lease shall continue in full force and
effect and it shall be deemed that Lessee has rescinded its
notice of termination.
SECTION 30. MISCELLANEOUS.
Each party agrees that the other party shall not by
act, delay, omission or otherwise be deemed to have waived any of
its rights or remedies hereunder unless such waiver is given in
writing. A waiver on one occasion shall not be construed to be a
waiver on any other occasion. The captions in this Lease are for
convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof. Any
provision of this Lease which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without
invalidating or diminishing Lessor's or Lessee's rights under the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
No term or provision of this Lease may be amended, altered,
waived, discharged or terminated orally, but may be amended,
altered, waived, discharged or terminated only by an instrument
in writing signed by a duly authorized officer of the party
against which the enforcement of the amendment, alteration,
waiver, discharge or termination is sought. All of the
covenants, conditions and obligations contained in this Lease
shall be binding upon and shall inure to the benefit of the
respective successors and assigns of Lessor and Lessee. This
Lease, each Lease Supplement and each related instrument,
document, agreement and certificate, collectively constitute the
entire agreement of Lessor and Lessee with respect to the
acquisition and leasing of the Equipment, and cancel and
supersede any and all prior oral or written understandings with
respect thereto. This Lease shall in all respects be governed
by, and construed in accordance with, the laws of the State of
Missouri, including all matters of construction, validity and
performance.
SECTION 31. THIRD-PARTY BENEFICIARIES.
Nothing in this Lease shall be deemed to create any
right in any person not a party hereto (other than Owner
Participant, Security Trustee and each holder from time to time
of a Note and the permitted successors and assigns of any such
person and any party hereto) and this instrument shall not be
construed in any respect to be a contract in whole or in part for
the benefit of a third party except as aforesaid.
SECTION 32. LIABILITY OF LESSOR LIMITED.
It is expressly agreed, anything herein to the contrary
notwithstanding, that each and all of the representations,
warranties, covenants, undertakings and agreements herein made on
the part of Lessor are made and intended not as personal
representations, warranties, covenants, undertakings and
agreements by First Security Bank of Utah, National Association
or for the purpose or with the intention of binding First
Security Bank of Utah, National Association personally, but are
made and intended for the purpose of binding only the Trust
Estate, and this Lease is executed and delivered by First
Security Bank of Utah, National Association not in its own right
but solely in the exercise of the powers expressly conferred upon
it as trustee under the Trust Agreement; and no personal
liability or personal responsibility in the case of willful
misconduct or gross negligence (other than with respect to the
handling of funds, in which case Lessor shall be accountable for
its failure to exercise ordinary care), is assumed by or shall at
any time be asserted or enforceable against First Security Bank
of Utah, National Association on account of this Lease or on
account of any representation, warranty, covenant, undertaking or
agreement of Lessor, either expressed or implied herein, all such
personal liability, if any, being expressly waived and released
by Lessee and by all persons claiming by, through or under it,
and that all recourse against First Security Bank of Utah,
National Association under this Lease shall be limited to the
Trust Estate.
SECTION 33. EXECUTION.
This Lease may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts (or upon separate signature pages bound together
into one or more counterparts), each of which when so executed
and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument. To
the extent, if any, that this Lease or any Lease Supplement
constitutes chattel paper or other collateral within the meaning
of the Uniform Commercial Code (or other law respecting security
interests) as in effect in any applicable jurisdiction, no
security interest in Lessor's interest under this Lease or any
such Lease Supplement may be created through the transfer or
possession of any counterpart of this Lease or such Supplement
other than the original executed Counterpart No. 1 hereof or
thereof which shall be identified on the cover, the receipt of
which is acknowledged by the Security Trustee.
IN WITNESS WHEREOF, Lessor and Lessee have caused this
instrument to be executed, all as of the day and year first above
written.
Kansas City Power & Light Company, a Missouri corporation
By /s/John J. DeStefano
Its Vice President-Finance and Treasurer
First Security Bank of Utah, National Association, not
individually but solely as Owner Trustee
By /s/Brett R. King
Its Trust Officer
STATE OF MISSOURI )
) SS.:
COUNTY OF JACKSON )
On this, the 2nd day of February, 1995, before me, a
Notary Public in and for said County and State, personally
appeared John J. DeStefano, Vice President-Finance and Treasurer
of KANSAS CITY POWER & LIGHT COMPANY, who acknowledged himself to
be a duly authorized officer of KANSAS CITY POWER & LIGHT
COMPANY, and that, as such officer, being authorized to do so, he
executed the foregoing instrument for the purposes therein
contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal on the date above mentioned.
Name: /s/Jacquetta L. Hartman
Notary Public
My Commission Expires: April 8, 1996
Residing in Ray County, Missouri
STATE OF UTAH )
) SS.:
COUNTY OFSALT LAKE )
On this, the 2nd day of February, 1995, before me, a
Notary Public in and for said County and State, personally
appeared Brett R. the Trust Officer of FIRST SECURITY BANK OF
UTAH, NATIONAL ASSOCIATION, who acknowledged herself/himself to
be a duly authorized officer of FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, and that, as such officer, being authorized
to do so, she/he executed the foregoing instrument for the
purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal on the date above mentioned.
Name:/s/Dianne Moreno
Notary Public
My Commission Expires: November 30, 1998
Residing in Salt Lake County, Utah
DEFINITIONS
Re: KANSAS CITY POWER & LIGHT COMPANY
ANNEX 1
TABLE OF CONTENTS
(Not a part of the Agreement)
HEADING . . . . . . . . . . . . . . . . . . . . . .PAGE
GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .1
DEFINED TERMS . . . . . . . . . . . . . . . . . . . . 1
AAR . . . . . . . . . . . . . . . . . . . . . . 1
Acceptance Date. . . . . . . . . . . . . . . . . 1
Acquisition Agreements . . . . . . . . . . . . . 1
Affiliate. . . . . . . . . . . . . . . . . . . . 1
After-Tax Basis. . . . . . . . . . . . . . . . . 1
Appraisal Procedure. . . . . . . . . . . . . . ..2
Assigned Agreement . . . . . . . . . . . . . . . 2
Bankruptcy Code. . . . . . . . . . . . . . . . . 2
Basic Term . . . . . . . . . . . . . . . . . . . 2
Basic Term Commencement Date . . . . . . . . . . 2
Beneficial Interest. . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . 2
Closing Dates. . . . . . . . . . . . . . . . . . 2
Code . . . . . . . . . . . . . . . . . . . . . . 2
Collateral . . . . . . . . . . . . . . . . . . . 2
Debtor . . . . . . . . . . . . . . . . . . . . . 2
Default under the Lease. . . . . . . . . . . . . 2
Default under the Security Agreement . . . . . . 2
Employee benefit plan. . . . . . . . . . . . . . 2
Enforcement Date . . . . . . . . . . . . . . . . 2
Enforcement Notice . . . . . . . . . . . . . . . 2
Equipment. . . . . . . . . . . . . . . . . . . . 3
Equipment Cost . . . . . . . . . . . . . . . . . 3
Equipment Lease. . . . . . . . . . . . . . . . . 3
ERISA. . . . . . . . . . . . . . . . . . . . . . 3
Event of Default under the Lease . . . . . . . . 3
Event of Default under the Security Agreement. . 3
Event of Loss. . . . . . . . . . . . . . . . . . 3
Excepted Rights in Collateral. . . . . . . . . . 3
Fair Market Sales Value. . . . . . . . . . . . . 3
Fair Market Rental Value . . . . . . . . . . . . 4
Final Determination. . . . . . . . . . . . . . . 4
First Closing Date . . . . . . . . . . . . . . . 4
Fixed Rent . . . . . . . . . . . . . . . . . . . 4
FPPO . . . . . . . . . . . . . . . . . . . . . . 4
Guidelines . . . . . . . . . . . . . . . . . . . 4
ICC. . . . . . . . . . . . . . . . . . . . . . . 4
Indebtedness Hereby Secured. . . . . . . . . . . 4
Indemnified Parties. . . . . . . . . . . . . . . 4
Indemnitors. . . . . . . . . . . . . . . . . . . 4
Independent Tax Counsel. . . . . . . . . . . . . 5
Interchange Rules. . . . . . . . . . . . . . . . 5
Interest . . . . . . . . . . . . . . . . . . . . 5
Interim Rent . . . . . . . . . . . . . . . . . . 5
Interim Rent Payment Date. . . . . . . . . . . . 5
Interim Term . . . . . . . . . . . . . . . . . . 5
IRS. . . . . . . . . . . . . . . . . . . . . . . 5
Late Rate. . . . . . . . . . . . . . . . . . . . 5
Lease or Equipment Lease . . . . . . . . . . . . 5
Lease Supplement . . . . . . . . . . . . . . . . 5
Lease Term . . . . . . . . . . . . . . . . . . . 5
Lessee . . . . . . . . . . . . . . . . . . . . . 5
Lessee Agreements. . . . . . . . . . . . . . . . 5
Lessor . . . . . . . . . . . . . . . . . . . . . 5
Lessor's Liens . . . . . . . . . . . . . . . . . 5
Lien . . . . . . . . . . . . . . . . . . . . . . 6
Loan Value . . . . . . . . . . . . . . . . . . . 6
Loss . . . . . . . . . . . . . . . . . . . . . . 6
Make Whole Premium . . . . . . . . . . . . . . . 6
Net Economic Return. . . . . . . . . . . . . . . 6
Note and Notes . . . . . . . . . . . . . . . . . 7
Noteholder . . . . . . . . . . . . . . . . . . . 7
Note Purchaser . . . . . . . . . . . . . . . . . 7
Officer's Certificate. . . . . . . . . . . . . . 7
Operative Agreements . . . . . . . . . . . . . . 7
Owner Participant. . . . . . . . . . . . . . . . 7
Owner Participant Agreements . . . . . . . . . . 8
Owner Trustee. . . . . . . . . . . . . . . . . . 8
Owner Trustee Agreements . . . . . . . . . . . . 8
Participants . . . . . . . . . . . . . . . . . . 8
Participation Agreement. . . . . . . . . . . . . 8
Permitted Contest. . . . . . . . . . . . . . . .8
Permitted Encumbrances . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . 8
Pricing Assumptions. . . . . . . . . . . . . . 8
Prime Rate . . . . . . . . . . . . . . . . . . . 8
Purchase Agreement . . . . . . . . . . . . . . . 9
Purchase Price . . . . . . . . . . . . . . . . . 9
Reasonable Basis . . . . . . . . . . . . . . . . 9
Register . . . . . . . . . . . . . . . . . . . . 9
Regulations. . . . . . . . . . . . . . . . . . . 9
Renewal Term . . . . . . . . . . . . . . . . . . 9
Rent . . . . . . . . . . . . . . . . . . . . . . 9
Rent Payment Dates . . . . . . . . . . . . . . . 9
Replacement Item . . . . . . . . . . . . . . . . 9
Responsible Officer of the Owner Trustee . . . . 9
Responsible Officer of the Security Trustee. . 10
Second Closing Date. . . . . . . . . . . . . . 10
Security . . . . . . . . . . . . . . . . . . . .10
Security Agreement . . . . . . . . . . . . . . .10
Security Agreement Supplement. . . . . . . . . .10
Security Trustee . . . . . . . . . . . . . . . .10
Seller . . . . . . . . . . . . . . . . . . . . .10
Separate Account . . . . . . . . . . . . . . . .10
Stipulated Loss Value. . . . . . . . . . . . . .10
Subsidiary . . . . . . . . . . . . . . . . . . .10
Supplemental Rent. . . . . . . . . . . . . . . .10
Tax Assumptions. . . . . . . . . . . . . . . . .11
Tax Indemnification Agreement. . . . . . . . . .11
Term . . . . . . . . . . . . . . . . . . . . . 11
Termination Value. . . . . . . . . . . . . . . .11
Transaction Costs. . . . . . . . . . . . . . . .11
Treasury Rate. . . . . . . . . . . . . . . . . .11
Trust. . . . . . . . . . . . . . . . . . . . . .11
Trust Agreement. . . . . . . . . . . . . . . . .12
Trust Estate . . . . . . . . . . . . . . . . . .12
Voting Stock . . . . . . . . . . . . . . . . . .12
Warranty Bill of Sale. . . . . . . . . . . . . .12
Weighted Average Life to Maturity. . . . . . . .12
DEFINITIONS
Re: Kansas City Power & Light Company
GENERAL PROVISIONS
The following terms shall have the following meanings for
all purposes of the Operative Agreements referred to below,
unless otherwise defined in an Operative Agreement or the context
thereof shall otherwise require. In the case of any conflict
between the provisions of this Definition Annex and the
provisions of the main body of any Operative Agreement, the
provisions of the main body of such Operative Agreement shall
control the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to
agreements shall be deemed to mean and include such agreements as
the same may be amended and supplemented from time to time, and
(ii) references to parties to agreements shall be deemed to
include the successors and permitted assigns of such parties.
DEFINED TERMS
"AAR" shall mean the Association of American Railroads or
any successor thereto.
"Acceptance Date" for each Item of Equipment means the date
on which Lessee has accepted such Item for lease under the Lease,
as evidenced by Lessee's execution and delivery of a Lease
Supplement for such Item dated such date.
"Acquisition Agreements" shall mean (i) the Purchase
Agreement, as assigned by the Purchase Agreement Assignment dated
the First Closing Date from the Lessee to the Owner Trustee,
substantially in the form of Exhibit B to the Participation
Agreement.
"Affiliate" shall mean any person, firm or corporation who
or which, directly or indirectly, through one or more
intermediaries controls, or is controlled by, or is under common
control with, another person, firm or corporation. The term
"control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of a person, firm or corporation, whether though the
ownership of voting securities, by contract or otherwise.
"After-Tax Basis" means on a basis such that any payment to
be received or deemed to be received shall be supplemented by a
further payment so that the sum of the two payments, after
deducting from such payments the amount of all taxes resulting
from receipt or accrual of such payments (net of any current
credits or deductions or other tax benefits arising therefrom, to
the extent actually realized), assuming that the Person receiving
such payments is subject to taxes at the highest marginal rate
applicable to corporations, shall be equal to the payments to be
received or deemed to have been received.
"Appraisal Procedure" shall have the meaning specified in
Section 25(c) of the Lease.
"Assigned Agreement" shall mean the Lease and all of the
other agreements referred to in Division III of the Granting
Clauses of the Security Agreement.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code as
amended from time to time, 11 U.S.C. paragraph 101 et seq.
"Basic Term" shall have the meaning specified in Section 4
of the Lease.
"Basic Term Commencement Date" shall have the meaning
specified in Section 4 of the Lease.
"Beneficial Interest" shall mean the interest of the Owner
Participant under the Trust Agreement.
"Business Day' shall mean any day other than a Saturday,
Sunday or other day on which banking institutions in the State of
Delaware, Massachusetts or Utah are authorized or required to be
closed.
"Closing Dates" shall have the meaning specified in Section
2.3(a) of the Participation Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor code.
"Collateral" shall have the meaning specific in the Granting
Clauses of the Security Agreement.
"Debtor" shall mean the Owner Trustee, as debtor under the
Security Agreement.
"Default" under the Lease shall mean any event which would
constitute an Event of Default under the Lease if any requirement
in connection therewith for the giving of notice or the lapse of
time, or both, had been satisfied.
"Default" under the Security Agreement shall mean any event
which would constitute an Event of Default under the Security
Agreement if any requirement in connection therewith for the
giving of notice, or the lapse of time, or both, had been
satisfied.
"Employee benefit plan" has the meaning specified in Section
3 of ERISA.
"Enforcement Date" shall have the meaning specified in
Section 7.3 of the Security Agreement.
"Enforcement Notice" shall have the meaning specified in
Section 7.3 of the Security Agreement.
"Equipment" shall mean collectively those new 120-ton high
side rotary dump aluminum gondola railcars (and "Item" or "Item
of Equipment" shall mean individually each railcar) described in
the Lease Supplement delivered on each Closing Date, together
with any and all accessions, additions, improvements and
replacements from time to time incorporated or installed on any
item thereof which are the property of the Owner Trustee pursuant
to the terms of the Lease.
"Equipment Cost" shall mean the aggregate cost of all Items
of Equipment subject to the Lease.
"Equipment Lease" -- See "Lease".
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, or any successor law.
"Event of Default" under the Lease is defined in Section 18
thereof.
"Event of Default" under the Security Agreement is defined
in Section 7.1 thereof.
"Event of Loss" with respect to any Item of Equipment shall
mean (i) the loss of such Item of Equipment or any substantial
part thereof or of the use thereof due to theft or disappearance
for a period in excess of 180 days during the Lease Term, or
existing at the expiration or earlier termination of the Lease
Term, (ii) the destruction, or damage beyond repair which, in
Lessee's good faith opinion, makes such Item of Equipment or any
substantial part thereof permanently unfit for normal use for any
reason whatsoever, (iii) the condemnation, confiscation, seizure,
or requisition of use by any governmental authority under the
power of eminent domain or otherwise for a period in excess of
180 days during the Lease Term, or existing at the expiration or
earlier termination of the Lease Term, or (iv) the requisition of
title to such Item of Equipment or any substantial part thereof
by any governmental authority under the power of eminent domain
or otherwise.
"Excepted Rights in Collateral" shall have the meaning
specified in the Granting Clauses of the Security Agreement.
"Fair Market Sales Value" shall be determined on the basis
of, and shall equal in value, the retail amount (as opposed to
the wholesale amount) which would be obtained in an arm's-length
transaction between an informed and willing buyer-user (other
than a lessee currently in possession) and an informed and
willing seller under no compulsion to sell, and in such
determination, costs of removal from the location of current use
shall not be a deduction from such value. Any such determination
made (i) under Section 11 or 19 of the Lease shall be made on the
assumption that the Equipment is sold on an "as-is, where-is"
basis, and (ii) at any other time shall be made on the assumption
that the Equipment is in the condition and state of repair
required by the terms and provisions of the Lease.
"Fair Market Rental Value" shall be determined on the basis
of, and shall equal in value, the amount which would be obtained
in an arm's-length transaction between an informed and willing
lessee (other than a lessee currently in possession) and an
informed and willing lessor under no compulsion to lease, and in
such determination, costs of removal from the location of current
use shall not be a deduction from such value. Any such
determination made (i) under Section 11 or 19 of the Lease shall
be made on the assumption that the Equipment is leased on an "as-
is, where-is" basis, and (ii) at any other time shall be made on
the assumption that the Equipment is in the condition and state
of repair required by the terms and provisions of the Lease.
"Final Determination", with respect to a Loss, shall have
the meaning specified in Section 8(f)10 of the Tax
Indemnification Agreement.
"First Closing Date" shall have the meaning specified in
Section 2.3(a) of the Participation Agreement.
"Fixed Rent" shall mean all rent payable pursuant to Section
6(b) of the Lease for the Basic Term and all Rent payable
pursuant to Section 25(a) of the Lease for the Renewal Term, if
any.
"FPPO" shall have the meaning set forth in Section 25(b) of
the Lease.
"Guidelines" shall mean the guidelines set forth in Revenue
Procedure 75-21, 1975-1 C.B. 715, as further set forth in Revenue
Procedure 75-28, 1975-1 C.B. 752, and as modified in Revenue
Procedure 76-30, 1976-2 C.B. 647 and Revenue Procedure 79-48,
1979-2 C.B. 529 that are applied by the Internal Revenue Service
in determining, for advance ruling purposes, whether leveraged
lease transactions (other than transactions which are treated as
leases pursuant to Section 168(f)(8) of the Code) are leases for
Federal income tax purposes.
"ICC" means the Interstate Commerce Commission or any
successor thereto.
"Indebtedness Hereby Secured" shall mean the outstanding
Notes and all principal thereof (and premium, if any) and
interest thereon and all additional amounts and other sums at any
time due and owing from or required to be paid by the Owner
Trustee under the terms of the outstanding Notes, the Security
Agreement or the Participation Agreement.
"Indemnified Parties" shall mean the Participants, the Owner
Trustee (in its individual or trust capacities), the Trust Estate
and the Security Trustee (in its individual or trust capacities),
and successors, assigns, agents, servants, officers, directors
and employees of each of the foregoing.
"Indemnitors" shall have the meaning specified in Section 8
of the Participation Agreement.
"Independent Tax Counsel" means independent tax counsel
selected by Owner Participant and reasonably acceptable to
Lessee.
"Interchange Rules" shall have the meaning specified in
Section 10 of the Lease.
"Interest" shall mean the Beneficial Interest or a Note,
individually, and "Interests" shall mean the Beneficial Interest
and the Notes, collectively.
"Interim Rent" shall mean for the Equipment, the aggregate
amounts payable for such Equipment pursuant to Section 6(a) of
the Lease during the Interim Term.
"Interim Rent Payment Date" shall mean August 13, 1995.
"Interim Term" shall have the meaning specified in Section 4
of the Lease.
"IRS" shall mean the Internal Revenue Service or any
successor agency.
"Late Rate" shall mean interest at the annual rate equal to
the higher of (i) 9.55%, and (ii) the Prime Rate plus 1%.
"Lease" or "Equipment Lease" shall mean the Railcar Lease
dated as of January 31, 1995, between the Lessor, as lessor, and
the Lessee, as lessee, as amended or supplemented from time to
time.
"Lease Supplement" shall mean each Lease Supplement,
substantially in the form of Exhibit B to the Lease, entered into
between the Lessor and the Lessee pursuant to Section 3 of the
Lease on each Closing Date, and shall include any supplement,
amendment or restatement thereof. Each Lease Supplement shall
contain a description of the Equipment to be delivered on such
Closing Date, shall confirm that the Equipment has been accepted
by the Lessee and shall set forth a summary of the Purchase Price
of the Equipment. Each reference to "the Lease" shall include
the Lease and the Lease Supplements.
"Lease term" shall mean the Interim Term, the Basis Term and
each Renewal Term.
"Lessee" shall mean Kansas City Power & Light Company, a
Missouri corporation, and any corporation which succeeds thereto
by merger or consolidation or which acquires all or substantially
all of the assets thereof subject to Section 28 of the Lease.
"Lessee Agreements" shall mean the Operative Agreements to
which the Lessee is a party.
"Lessor" shall mean the Owner Trustee, as lessor under the
Lease.
"Lessor's Liens" shall mean the Liens arising as a result of
(i) claims against Lessor, in its individual capacity or as Owner
Trustee or Owner Participant not related to the transactions
contemplated by the Participation Agreement, (ii) acts of Lessor
in its individual capacity or as Owner Trustee, and in the case
of Lessor arising out of its gross negligence or willful
misconduct either not related to the transactions contemplated by
the Participation Agreement or expressly prohibited under the
Lease or under the Participation Agreement, (iii) "taxes, fees or
other charges" as defined in Section 6(a) of the Participation
Agreement imposed against Lessor, in its individual capacity or
as Owner Trustee, Owner Participant, the Trust or the Trust
Estate which are not indemnified against by Lessee pursuant to
Section 6 of the Participation Agreement other than Liens which
are not due and payable or the amount or validity of which are
being contested in good faith by appropriate legal proceedings
which will not result in the forfeiture or sale of the Equipment
or materially and adversely affect Owner Trustee's title thereto
or interfere with the due payment by the Lessee to the Security
Trustee, the Owner Trustee or the Owner Participant of any Rent
or the due application by the Security Trustee of any such Rent
pursuant to the Security Agreement and which do not otherwise
materially and adversely affect the interest and rights of the
Security Trustee in the Collateral or (iv) claims against Lessor
arising out of the voluntary transfer by Lessor or Owner
Participant of its interest in the Equipment other than a
transfer of the Equipment pursuant to Sections 15, 25 or 27 and
other than a transfer made while an Event of Default under the
Lease has occurred and is continuing.
"Lien" shall mean any mortgage, pledge, security interest,
lien, encumbrance or other charge of any kind on property.
"Loan Value" shall have the meaning specified in Section
5.1(d) of the Security Agreement.
"Loss" shall have the meaning given in Section 6 of the Tax
Indemnification Agreement.
"Make Whole Premium" shall mean, with respect to the
termination of the Lease pursuant to Section 27 of the Lease or a
refinancing pursuant to Section 2.7 of the Participation
Agreement and the prepayment of the Notes under Section 6.2 of
the Security Agreement, the excess of (a) the present value of
the principal and interest payments (exclusive of interest
accrued to the date of such payment or prepayment) on and in
respect of the Notes being prepaid or paid, as the case may be,
that would otherwise become due and payable (without giving
effect to such prepayment or payment) (including the final
payment on the maturity date of Notes), all determined by
discounting such payments and prepayments semiannually at a rate
which is equal to the Treasury Rate over (b) the aggregate
principal amount of the Notes then to be paid or prepaid. To the
extent that the Treasury Rate at the time of such payment is
equal to or higher than 8.55%, the Make Whole Premium is zero.
"Net Economic Return" means the Owner Participant's
anticipated after-tax yield and aggregate after-tax cash flow,
utilizing the multiple investment sinking fund method of
analysis, computed on the basis of the same methodology and
assumptions as were utilized by the Owner Participant in
determining Interim Rent, Fixed Rent, Stipulated Loss Values,
Termination Values and the FPPO as of the First Closing Date and
maintaining the general pattern of FASB Statement No. 13
accounting over the remainder of the Term. Net Economic Return
shall not mean or include Owner Participant's return on equity or
return on assets.
"Note" shall mean any of, and "Notes" shall mean all of, the
then outstanding Notes, and "outstanding", when used with
reference to Notes shall mean, as of any particular time, all
Notes delivered by the Debtor and secured by the Security
Agreement, except:
(a) Notes theretofore cancelled by the Security Trustee or
delivered to the Security Trustee for cancellation;
(b) Notes for the payment of prepayment of which moneys in
the necessary amount shall have been deposited in trust with the
Security Trustee; provided that if such Notes are to be prepaid
prior to the maturity thereof, notice of such prepayment shall
have been given as provided in Section 6.4 of the Security
Agreement, or provision satisfactory to the Security Trustee
shall have been made for giving such notice; and
(c) Notes in lieu of or in substitution for which other
Notes shall have been delivered pursuant to the terms of Section
2.4 of the Security Agreement.
"Noteholder" shall mean the holder of any Note issued and
outstanding under the Security Agreement.
"Note Purchasers" shall mean the Note Purchasers named in
Schedule 2 to the Participation Agreement and their successors
and assigns, including successive holders of the Notes.
"Officer's Certificate" shall mean a certificate signed in
the case of a corporation by the Chairman of the Board, the
President or any Vice President, the Treasurer or an Assistant
Treasurer of such corporation, in the case of a partnership by
the Chairman of the Board, the President or any Vice President,
the Treasurer or an Assistant Treasurer of a corporate general
partner, and in the case of a commercial bank or trust company,
the Chairman or Vice Chairman of the Executive Committee, or the
Treasurer, any Trust Officer, any Vice President, any Executive
or Senior or Second or Assistant Vice President, Secretary or
Assistant Secretary, or any other officer or assistant officer
customarily performing the functions similar to those performed
by the Persons who at the time shall be such officers, or to whom
any corporate trust matter is referred because of his knowledge
of and familiarity with the particular subject.
"Operative Agreements" shall mean and include the
Participation Agreement, the Warranty Bill of Sale, the
Acquisition Agreements, the Trust Agreement, the Lease, the Lease
Supplements, the Notes outstanding at the time of reference, the
Security Agreement, the Security Agreement Supplements and the
Tax Indemnification Agreement.
"Owner Participant" shall mean Shawmut Bank, National
Association, a national banking association, and its successors
and permitted assigns of its Beneficial Interest.
"Owner Participant Agreements" shall mean the Operative
Agreements to which the Owner Participant is a party.
"Owner Trustee" shall mean First Security Bank of Utah,
National Association, not in its individual capacity but solely
in its capacity as trustee under the Trust Agreement and its
successors in trust thereunder.
"Owner Trustee Agreements" shall mean the Operative
Agreements to which First Security Bank of Utah, National
Association, either in its individual or trust capacity, is a
party.
"Participants" shall mean the Note Purchaser and the Owner
Participant.
"Participation Agreement" shall mean the Participation
Agreement dated as of January 31, 1995, among the Lessee, the
Participants, the Owner Trustee and the Security Trustee.
"Permitted Contest" shall mean a good-faith contest
conducted in a manner so as to prevent the imposition of any
criminal penalty on, or adverse effect on the title, property or
right of, such Indemnified Party, of the legality or validity of
any of the taxes, assessments, levies, fees or other governmental
charges, or other claims, Liens or impositions which, under the
terms of the Lease, are required to be paid or discharged by the
Lessee or the Lessor, as the case may be, but for such contest.
"Permitted Encumbrances" which respect to the Equipment and
each Item thereof, shall mean (i) the interest of the Lessee and
the Owner Trustee, respectively, under the Lease; (ii) any Liens
thereon for taxes, assessments, levies, fees and other
governmental and similar charges not due and payable or the
amount or validity of which is being contested by a Permitted
Contest; (iii) any Liens of mechanics, suppliers, materialmen and
laborers for work or services performed or materials furnished in
connection with the Equipment or any Item thereof which are not
more than 30 days past due or the amount or validity of which is
being contested by a Permitted Contest; (iv) the Lien and
security interest granted to the Security Trustee under and
pursuant to the Security Agreement; and (v) the rights of any
sublessee or assignee pursuant to Section 13 of the Lease in
respect of the Equipment.
"Person" shall mean an individual, partnership, corporation,
firm, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Pricing Assumptions" shall mean the assumptions set forth
in Annex 2 to the Lease.
"Prime Rate" shall mean for any day the rate announced by
Shawmut Bank, National Association, from time to time at its
principal office in Boston, Massachusetts, as its prime rate for
domestic (United States) commercial loans in effect on such day
(such Prime Rate is not necessarily intended to be the lowest
rate of interest charged by Shawmut Bank, National Association,
in connection with the extensions of credit).
"Purchase Agreement" shall mean the written agreement
between the Lessee and the Seller with respect to the Equipment,
as amended or modified.
"Purchase Price" shall mean $31,855,625; provided that, with
respect to any calculation under any Operative Agreement
affecting less than all of the Items of Equipment, the Purchase
Price shall be the product of (i) the quotient of (A) the number
of affected Items of Equipment involved in such calculation
divided by (b) 625, multiplied by (ii) the Purchase Price. In
the event that any Item or Items of Equipment shall have been
removed from the Lease and no Replacement Item or Replacement
Items shall have been substituted therefor, then from and after
the date of such removal the Purchase Price shall mean the
product of (i) the quotient of (A) the number of Items of
Equipment subject to the Lease immediately following such removal
divided by (B) the number of Items of Equipment subject to the
Lease immediately prior to such removal, multiplied by (ii) the
Purchase Price immediately prior to such removal.
"Reasonable Basis" for a position shall exist if tax counsel
may properly advise reporting such position on a tax return in
accordance with Formal Opinion 85-352 issued by the Standing
Committee on Ethics and Professional Responsibility of the
American Bar Association.
"Register" shall mean the register caused to be kept by the
Owner Trustee at the principal office of the Security Trustee for
the purpose of recording the registration and transfer of the
Notes.
"Regulations" shall mean the income tax regulations issued,
published or promulgated under the Code.
"Renewal Term" shall mean any term in respect of which the
Lessee shall have exercised its option to renew the Lease
pursuant to Section 25(a) thereof.
"Rent" shall mean Interim Rent, Fixed Rent and Supplemental
Rent.
"Rent Payment Dates" shall mean for each Item of Equipment
(i) for the Basic Term thereof, February 13, 1996, and the
thirteenth day of each August and February thereafter throughout,
to and including August 13, 2015, and (ii) for each Renewal Term
thereof, each date on which a payment of Fixed Rent is due and
payable for such Item as provided in Section 25(a) of the Lease.
"Replacement Item" shall mean an item of railroad rolling
stock of a similar make and model and made of aluminum and having
a similar capacity as the Item of Equipment for which it is a
replacement and which shall have been leased under the Lease
pursuant to Section 15 thereof.
"Responsible Officer" of the Owner Trustee shall mean any
Officer in the Corporate Trust Administration department of the
Owner Trustee.
"Responsible Officer" of the Security Trustee shall mean the
President, any Vice President, Trust Officer, Corporate Trust
Officer or any other Officer of the Corporate Trust
Administration department of the Security Trustee.
"Second Closing Date" shall have the meaning specified in
Section 2.3(a) of the Participation Agreement.
"Security" shall have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.
"Security Agreement" shall mean the Security Agreement -
Trust Deed dated as of January 31, 1995, between the Owner
Trustee, as debtor, and the Security Trustee, as secured party,
as amended or supplemented from time to time.
"Security Agreement Supplement" shall mean each Security
Agreement Supplement, substantially in the form of Exhibit B to
the Security Agreement, entered into between the Debtor and the
Security Trustee on each Closing Date, covering the Equipment to
be delivered on such Closing Date.
"Security Trustee" shall mean Wilmington Trust Company and
its successors in trust not in its individual capacity but solely
as security trustee under the Security Agreement.
"Seller" shall mean Johnstown America Corporation.
The term "separate account" shall have the meaning specified
in Section 3 of ERISA.
"Stipulated Loss Value" of an Item as of any Rent Payment
Date shall mean the amount determined in accordance with Exhibit
C of the Lease as such percentage or percentages may be adjusted
in accordance with the provisions of Section 6(f) of the Lease.
Notwithstanding any other provision of the Lease, the
Participation Agreement or the Security Agreement, each
Stipulated Loss Value for the Equipment shall be, under any
circumstances and in any event, an amount, together with Fixed
Rent due and owing through the date of such Stipulated Loss
Value, at least equal to the aggregate unpaid principal amount of
and accrued interest on the Notes outstanding on such date.
"Subsidiary" shall mean any corporation, trust or
association of which more than 50% (by number of votes) of the
Voting Stock at the time outstanding shall at the time be owned,
directly or indirectly, by the Lessee or by any other
corporation, association or trust which is itself a Subsidiary
within the meaning of this definition, or collectively by the
Lessee and any one or more such Subsidiaries.
"Supplemental Rent" shall mean all amounts, liabilities and
obligations (other than Fixed Rent) which the Lessee is obligated
to pay under the Lease or the Participation Agreement, including,
but not limited to, Stipulated Loss Value and Termination Value
payments, payment of the Make Whole Premium under Section 27 of
the Lease, and amounts, if any, payable under Section 2.6 of the
Participation Agreement (to the extent such payment does not give
rise to a rental adjustment under Section 6(f) of the Lease) by
the Lessee.
"Tax Assumptions" shall have the meaning given in Section 2
of the Tax Indemnification Agreement.
"Tax Indemnification Agreement" shall mean the Tax
Indemnification Agreement dated as of January 31, 1995, between
the Lessee and the Owner Participant.
"Term" shall mean the Lease Term.
"Termination Value" of an Item of Equipment as of any Rent
Payment Date shall mean with respect to such Item of Equipment an
amount determined in accordance with Exhibit C of the Lease as
such percentage or percentages may be adjusted in accordance with
the provisions of Section 6(f) of the Lease. Notwithstanding any
other provision of the Lease, the Participation Agreement or the
Security Agreement, each Termination Value for the Equipment
shall be, under any circumstances and in any event, an amount,
together with Fixed Rent due and owing through the date of such
Termination Value, at least equal to the aggregate unpaid
principal amount of and accrued interest on the Notes outstanding
on such date of payment.
"Transaction Costs" shall have the meaning set forth in
Section 2.6 of the Participation Agreement.
"Treasury Rate" shall mean at any time with respect to the
Notes being prepaid the sum of (i) .50%, plus (ii) the weekly
average of the yield to maturity on the United States Treasury
obligations with a constant maturity (as compiled by and
published in the most recently published issue of the United
States Federal Reserve Statistical Release designated H.15(519)
or its successor publication) most nearly equal to (by rounding
to the nearest month) the Weighted Average Life to Maturity of
the Notes then being prepaid or (2) in the event that no such
United States Federal Reserve Statistical Release is available,
Treasury Rate shall mean the sum of (i) .50%, plus (ii) the yield
reported on page "USD" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other nationally
recognized trading screen reporting on-line intraday trading in
the United States government Securities) at 11:00 A.M. (New York,
New York time) for the United States government Securities having
a maturity most nearly equal to (by rounding to the nearest
month) the Weighted Average Life to Maturity of the Notes then
being prepaid. If no maturity exactly corresponding to such
Weighted Average Life to Maturity of the Notes shall appear
therein, the weekly average yields for the two most closely
corresponding published maturities shall be calculated pursuant
to the foregoing sentence and the Treasury Rate shall be
interpolated from such yields on a straight-line basis (rounding,
in the case of relevant periods, to the nearest month).
"Trust" shall have the meaning specified in the Trust
Agreement.
"Trust Agreement" shall mean the Trust Agreement dated as of
January 31, 1995, between the Owner Participant and First
Security Bank of Utah, National Association.
"Trust Estate" shall have the meaning specified in Section
1.2 of the Trust Agreement.
"Voting Stock" shall mean Securities of any class or classes
of a corporation, the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of the
corporate directors (or persons performing similar functions).
"Warranty Bill of Sale" shall mean each Warranty Bill of
Sale dated a Closing Date from the Seller or to the Owner Trustee
pursuant to which the Seller shall convey to the Owner Trustee
title to the Equipment for which settlement is being made on such
date.
"Weighted Average Life to Maturity" with respect to the
Notes shall mean, as at the time of determination, the number of
years obtained by dividing the then Remaining Dollar-years of the
Notes by the sum of the remaining scheduled principal payments on
such Notes. The term "Remaining Dollar-years" of the Notes means
the product obtained by (1) multiplying (A) the amount of each
then scheduled required principal payment (including payment at
final maturity), by (B) the number of years (calculated to the
nearest one-twelfth) which will elapse between the date of
determination of the Weighted Average Life to Maturity of the
Notes and the date of such required payment is due, and (2)
totalling all the products obtained in (1).
PRICING ASSUMPTIONS
CLOSING DATE: First Closing Date: February 14, 1995 - 250 Items
of Equipment
Second Closing Date: March 7, 1995 - 375 Items of Equipment
ASSETS: 625 new 120-ton high side rotary dump aluminum gondola
railcars, as listed in Exhibit B to the Railcar Lease
PURCHASE PRICE OF ASSETS: $31,855,625
INTERIM TERM
COMMENCEMENT DATE: First Closing: February 14, 1995
Second Closing: March 7, 1995
BASIC TERM
COMMENCEMENT DATE: August 13, 1995
BASIC TERM: Twenty years
INTERIM RENT: Interest only on Notes, payable by the Lessor on
the Basic Term Commencement Date
FIXED RENT DURING
THE BASIC TERM: As set forth in Exhibit C to the Railcar Lease.
INTEREST RATE ON NOTES: 8.55%
PERCENTAGE OF PURCHASE PRICE OF ASSETS FUNDED BY NOTES: 70.93%
AMORTIZATION OF NOTES: As set forth in Annex 2 of the Security Agreement.
TAX ASSUMPTIONS: As set forth in Section 2 of the Tax
Indemnification Agreement.
ASSUMED TRANSACTION COSTS: 0.88%
DESCRIPTION OF EQUIPMENT
625 new 120-ton high side rotary dump aluminum gondola railcars,
as more specifically described in the Lease Supplements delivered
on each Closing Date.
LEASE SUPPLEMENT NO. ______
THIS LEASE SUPPLEMENT NO. _____ dated _________, 1995
between FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, not
individually but solely as OWNER TRUSTEE ("LESSOR"), AND KANSAS
CITY POWER & LIGHT COMPANY, a Missouri corporation ("Lessee"),
WITNESSETH:
1. Lessor and Lessee have heretofore entered into a
Railcar Lease dated as of January 31, 1995 (the "Lease")
providing for the execution and delivery of Lease Supplements
substantially in the form hereof. The terms defined in the Lease
shall have the same meanings when used herein.
2. Lessee hereby acknowledges and confirms that on or prior
to the date hereof, the Equipment described in Schedule 1
attached hereto has been delivered and accepted by the Lessee.
Lessee represents that the Equipment is free and clear of all
liens and encumbrances (except Permitted Encumbrances) and in a
condition which in all respects is satisfactory to the Lessee and
in compliance with the Lease.
3. Lessee hereby certifies that the date of acceptance of the
Equipment and commencement of the Interim Term with respect
thereto is the date of this Lease Supplement No. ____.
4. Lessee hereby certifies that the Purchase Price for the
Equipment is $__________________.
5. Interim Rent for the Equipment is payable in the amount
set forth in Section 6(a) of the Lease on August 13, 1995. Fixed
Rent, Stipulated Loss Values and Termination Values for the
Equipment is payable in the amounts and on the Rent Payment Dates
set forth in Schedule 2 attached hereto.
Counterpart No. ______ of 11.
IN WITNESS WHEREOF, Lessor and Lessee have caused this
instrument to be executed, all as of the day and year first above
written.
KANSAS CITY POWER & LIGHT COMPANY, A MISSOURI CORPORATION
BY
ITS
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, NOT
INDIVIDUALLY BUT SOLELY AS OWNER TRUSTEE
BY
ITS
STATE OF ________________ )
) SS.:
COUNTY OF _______________ )
On this, the _______ day of _____________,1995, before
me, a Notary Public in and for said County and State, personally
appeared ________, the _________________ of KANSAS CITY POWER &
LIGHT COMPANY, who acknowledged himself to be a duly authorized
officer of KANSAS CITY POWER & LIGHT COMPANY, and that, as such
officer, being authorized to do so, he executed the foregoing
instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal on the date above mentioned.
Name:
Notary Public
My Commission Expires:
Residing in
STATE OF ________________ )
) SS.:
COUNTY OF _______________ )
On this, the _________ day of _____________, 1995,
before me, a Notary Public in and for said County and State,
personally appeared ______________, the _____________ of FIRST
SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, who acknowledged
herself/himself to be a duly authorized officer of FIRST SECURITY
BANK OF UTAH, NATIONAL ASSOCIATION, and that, as such officer,
being authorized to do so, she/he executed the foregoing
instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal on the date above mentioned.
Name:
Notary Public
My Commission Expires:
Residing in
Receipt of this original counterpart of the foregoing Lease
Supplement is hereby acknowledged this ______ day of ___________,
1995.
WILMINGTON TRUST COMPANY, not in its individual capacity, but
solely as Security Trustee
By
Its
DESCRIPTION OF EQUIPMENT
SCHEDULE OF FIXED RENT, STIPULATED LOSS VALUE
AND TERMINATION VALUE RATE FACTORS
I. FIXED RENT
RENT INSTALLMENT
FOR THE ITEM OF EQUIPMENT
EQUAL TO PURCHASE PRICE OF THE
RENT EQUIPMENT TIMES THE
PAYMENT DATE FOLLOWING FIXED RENT FACTOR
II. STIPULATED LOSS VALUE AND TERMINATION VALUE
STIPULATED LOSS VALUE OR
TERMINATION VALUE, AS A
PERCENT OF THEPURCHASE PRICE
OF THE ITEM OF EQUIPMENT
(IN ADDITION TO FIXED RENT
RENT INSTALLMENT FOR SUCH ITEM OF
PAYMENT DATE EQUIPMENT DUE ON SUCH DATE)
SCHEDULE OF FIXED RENT
RENT INSTALLMENT FOR THE ITEM OF EQUIPMENT
EQUAL TO THE PURCHASE PRICE OF THE EQUIPMENT
TIMES THE FOLLOWING FIXED RENTAL FACTOR
RENT
PAYMENT DATE DUE IN ARREARS DUE IN ADVANCE
_______________________________________________________
8/13/95 0.00000000% 0.00000000%
2/13/96 0.90000002% 2.13205304%
8/13/96 4.50297579% 0.00000000%
2/13/97 0.90000002% 2.06917111%
8/13/97 4.56585777% 0.00000000%
2/13/98 0.90000002% 2.00091274%
8/13/98 4.63411611% 0.00000000%
2/13/99 0.90000002% 1.92681829%
8/13/99 4.70821056% 0.00000000%
2/13/00 0.90000002% 1.84638879%
8/13/00 4.78864012% 0.00000000%
2/13/01 0.90000002% 1.75908252%
8/13/01 4.87594630% 0.00000000%
2/13/02 0.90000002% 1.66431162%
8/13/02 4.97071729% 0.00000000%
2/13/03 0.90000005% 1.56143777%
8/13/03 5.07359112% 0.00000000%
2/13/04 0.90000002% 2.03244852%
8/13/04 4.60258036% 0.00000000%
2/13/05 0.90000002% 5.10312251%
8/13/05 3.20635608% 0.00000000%
2/13/06 0.90000002% 5.17131213%
8/13/06 3.13816646% 0.00000000%
2/13/07 0.90000002% 6.45922219%
8/13/07 1.85025640% 0.00000000%
2/13/08 0.90000002% 7.53786061%
8/13/08 0.77161798% 0.89999998%
2/13/09 0.00000000% 7.68095095%
8/13/09 0.62852765% 0.89999998%
2/13/10 0.00000000% 7.92005974%
8/13/10 0.38941882% 0.90000002%
2/13/11 0.00000000% 8.21617874%
8/13/11 0.09329985% 0.89999998%
2/13/12 0.00000000% 8.30947856%
8/13/12 0.00000000% 0.89999998%
2/13/13 0.00000000% 8.30947856%
8/13/13 0.00000000% 0.89999998%
2/13/14 0.00000000% 8.30947859%
8/13/14 0.00000000% 0.90000002%
2/13/15 0.00000000% 8.30947859%
8/13/15 0.00000000%
EXHIBIT C
(to Railcar Lease)
Schedule of
Stipulated Loss Value and Termination Value
Values are net of any ADVANCE OR ARREARS
Rent due that day. The Lessee pays the
Loss Value plus the "Rental Received" to
the extent the "Rent Received" has not
already been paid.
RENT STIPULATED LOSS OR RENTAL
PAYMENT DATE TERMINATION VALUE RECEIVED
_______________________________________________________
8/13/95 107.44792714% 0.00000000%
2/13/96 109.13593901% 3.03205305%
8/13/96 109.14593092% 4.50297579%
2/13/97 110.34737247% 2.96917113%
8/13/97 109.77718734% 4.56585777%
2/13/98 110.61080273% 2.90091276%
8/13/98 109.59243374% 4.63411611%
2/13/99 110.17737389% 2.82681831%
8/13/99 108.80336669% 4.70821056%
2/13/00 109.22713410% 2.74638881%
8/13/00 107.53937001% 4.78864012%
2/13/01 107.80728745% 2.65908253%
8/13/01 105.78575813% 4.87594630%
2/13/02 105.89155633% 2.56431164%
8/13/02 103.55426460% 4.97071729%
2/13/03 103.59640084% 2.46143782%
8/13/03 101.04283453% 5.07359112%
2/13/04 100.55162667% 2.93244854%
8/13/04 98.39092592% 4.60258036%
2/13/05 94.76551059% 6.00312253%
8/13/05 93.81685707% 3.20635608%
2/13/06 90.01123886% 6.07131215%
8/13/06 89.01542136% 3.13816646%
2/13/07 83.80700675% 7.35922221%
8/13/07 83.93877619% 1.85025640%
2/13/08 77.54085338% 8.43786063%
8/13/08 77.68398733% 1.67161796%
2/13/09 71.88170181% 7.68095095%
8/13/09 72.03244443% 1.52852763%
2/13/10 65.87586250% 7.92005974%
8/13/10 66.15547409% 1.28941884%
2/13/11 59.61164601% 8.21617874%
8/13/11 60.09201395% 0.99329983%
2/13/12 53.37485844% 8.30947856%
8/13/12 53.86686309% 0.89999998%
2/13/13 47.07577485% 8.30947856%
8/13/13 47.49682257% 0.89999998%
2/13/14 40.63456794% 8.30947859%
8/13/14 40.97417166% 0.90000002%
2/13/15 33.94785981% 8.30947859%
8/13/15 35.00000002% 0.00000000%
EXHIBIT D
(to Railcar Lease)
<PAGE>
<TABLE>
Exhibit 12
KANSAS CITY POWER & LIGHT COMPANY
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<CAPTION>
Year Ended December 31
1994 1993 1992 1991 1990
(Thousands)
<S> <C> <C> <C> <C> <C>
Income from continuing
operations $104,775 $105,772 $ 86,334 $103,893 $102,732
Add:
Taxes on income 66,377 67,953 52,196 60,278 57,062
Kansas City earnings tax 524 495 382 242 376
Total taxes on income 66,901 68,448 52,578 60,520 57,438
Interest on value of leased
property 6,732 7,273 6,366 5,075 4,357
Interest on long-term debt 43,962 50,118 54,266 63,057 68,853
Interest on short-term notes 1,170 750 2,749 3,299 6,199
Other interest expense
and amortization 4,128 4,113 2,173 2,665 2,492
Total fixed charges 55,992 62,254 65,554 74,096 81,901
Earnings before taxes on
income and fixed charges $227,668 $236,474 $204,466 $238,509 $242,071
Ratio of earnings to fixed charges 4.07 3.80 3.12 3.22 2.96
</TABLE>
Exhibit 23-a
OPINION AND CONSENT OF COUNSEL
As Vice President-Law and Corporate Secretary of Kansas City
Power & Light Company, I have reviewed the statements as to matters
of law and legal conclusions in the Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, and consent to the
incorporation by reference of such statements in the Company's
previously-filed Form S-3 Registration Statements (Registration
No. 33-54196, Registration No. 33-51799 and Registration
No. 33-56309) and Form S-8 Registration Statements (Registration
No. 33-45618 and Registration No. 33-62942).
/s/Jeanie Sell Latz
Kansas City, Missouri
March 28, 1995
Exhibit 23-b
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Kansas City Power & Light Company on Form S-3 (File Nos. 33-
51799, 33-54196 and 33-56309) and Form S-8 (File Nos. 33-45618 and 33-62942)
of our report dated January 30, 1995, on our audits of the consolidated
financial statements of Kansas City Power & Light Company and Subsidiary as
of December 31, 1994 and 1993, and for the years ended December 31, 1994,
1993, and 1992, which report is included in this Annual Report on Form 10-K.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Kansas City, Missouri
March 28, 1995 <PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
6th day of February, 1995.
/s/David L. Bodde
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 6th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared David L. Bodde, to be known to
be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/William H. Clark
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared William H. Clark, to be known
to be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/Robert J. Dineen
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared Robert J. Dineen, to be known
to be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/Arthur J. Doyle
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared Arthur J. Doyle, to be known
to be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/W. Thomas Grant II
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared W. Thomas Grant II, to be
known to be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/George E. Nettels, Jr.
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared George E. Nettels, Jr., to be
known to be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/Linda H. Talbott
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared Linda H. Talbott, to be known
to be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light
Company, a Missouri corporation, does hereby constitute and appoint
Drue Jennings, his true and lawful attorney and agent, with full
power and authority to execute in the name and on behalf of the
undersigned as such director an Annual Report on Form 10-K; hereby
granting unto such attorney and agent full power of substitution
and revocation in the premises; and hereby ratifying and confirming
all that such attorney and agent may do or cause to be done by
virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
7th day of February, 1995.
/s/Robert H. West
STATE OF MISSOURI )
) ss
COUNTY OF JACKSON )
On this 7th day of February, 1995, before me the undersigned,
a Notary Public, personally appeared Robert H. West, to be known to
be the person described in and who executed the foregoing
instrument, and who, being by me first duly sworn, acknowledged
that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year last above written.
/s/Jacquetta L. Hartman
Notary Public for State of
Missouri, Ray County
My Commission Expires:
April 8, 1996
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-END> Dec-31-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,336,142
<OTHER-PROPERTY-AND-INVEST> 98,429
<TOTAL-CURRENT-ASSETS> 135,439
<TOTAL-DEFERRED-CHARGES> 200,387
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,770,397
<COMMON> 449,697
<CAPITAL-SURPLUS-PAID-IN> (1,736)
<RETAINED-EARNINGS> 426,738
<TOTAL-COMMON-STOCKHOLDERS-EQ> 874,699
1,596
89,000
<LONG-TERM-DEBT-NET> 798,470
<SHORT-TERM-NOTES> 1,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 31,000
<LONG-TERM-DEBT-CURRENT-PORT> 33,419
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 941,213
<TOT-CAPITALIZATION-AND-LIAB> 2,770,397
<GROSS-OPERATING-REVENUE> 868,272
<INCOME-TAX-EXPENSE> 70,949
<OTHER-OPERATING-EXPENSES> 647,632
<TOTAL-OPERATING-EXPENSES> 718,581
<OPERATING-INCOME-LOSS> 149,691
<OTHER-INCOME-NET> 2,500
<INCOME-BEFORE-INTEREST-EXPEN> 152,191
<TOTAL-INTEREST-EXPENSE> 47,416
<NET-INCOME> 104,775
3,457
<EARNINGS-AVAILABLE-FOR-COMM> 101,318
<COMMON-STOCK-DIVIDENDS> 92,854
<TOTAL-INTEREST-ON-BONDS> 43,962
<CASH-FLOW-OPERATIONS> 276,585
<EPS-PRIMARY> 1.64
<EPS-DILUTED> 1.64
</TABLE>
