File No. 70-8405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
Amendment No. 2 to
APPLICATION-DECLARATION
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Arkansas Power & Light Company
425 West Capitol, 40th Floor
Little Rock, Arkansas 72201
(Name of company filing this statement and
address of principal executive offices)
Entergy Corporation
(Name of top registered holding company parent of each applicant
or declarant)
Glenn E. Harder
Vice President - Financial
Strategies and Treasurer
Arkansas Power & Light Company
639 Loyola Avenue
New Orleans, Louisiana 70113
(Name and address of agent for service)
The Commission is also requested to send copies of any
communications in connection with this matter to:
Laurence M. Hamric, Esq. Paul B. Benham, III, Esq.
Entergy Services, Inc. Friday, Eldredge & Clark
225 Baronne Street 2000 First Commercial Building
New Orleans, Louisiana 70112 400 West Capitol Avenue
Little Rock, Arkansas 72201
Bonnie Wilkinson, Esq. David P. Falck, Esq.
Reid & Priest Winthrop, Stimson, Putnam &
40 West 57th Street Roberts
New York, New York 10019 One Battery Park Plaza
New York, New York 10004
<PAGE>
Item 2. Fees, Commissions and Expenses.
The fees and expenses to be incurred in connection with the
issuance and sale of the Tax-Exempt Bonds are estimated not to
exceed the following:
Each Sale
*Filing fee - Securities and
Exchange Commission..........................$ 2,000
*Rating Agencies' fees.......................... 40,000
*Trustees' fees................................. 35,000
*Fees of Bond Counsel........................... 55,000
*Fees of Company's Counsel:
Friday, Eldredge & Clark..................... 35,000
Reid & Priest................................ 25,000
*Fees of Entergy Services, Inc.................. 10,000
*Accountants' fees.............................. 8,000
*Printing and engraving costs................... 10,000
*Miscellaneous expenses (including
blue-sky expenses)........................... 10,000
*Total expenses.......................$230,000
Item 4. Procedure.
The Company respectfully requests that the Commission's
order authorizing the transactions proposed herein be issued as
soon as practicable, but in any event no later than June 6, 1994.
The Company requests that the Commission's order contain
reservations of jurisdiction over the Company's entering into
arrangements for the issuance of a letter of credit and insurance
arrangements, pending completion of the record with respect
thereto. The Company hereby waives a recommended decision by a
hearing officer or any other responsible officer of the
Commission; agrees that the staff of the Division of Investment
Management may assist in the preparation of the Commission's
decision; and requests that there be no waiting period between
the date of the Commission's order and the date it is to become
effective.
Item 6. Exhibits and Financial Statements.
(a) Exhibits
B-1 Form of Loan Agreement between the Company and the
Issuer.
B-2 Form of Installment Sale Agreement between the
Company and the Issuer.
B-3 Form of Trust Indenture between the Issuer and the
Trustee.
D-1a Application to the Arkansas Public Service
Commission.
D-1b Order of the Arkansas Public Service Commission.
D-2a Application to the Tennessee Public Service
Commission.
D-2b Order of the Tennessee Public Service Commission.
F-1 Opinion of Reid & Priest.
F-2 Opinion of Friday, Eldredge & Clark.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
amendment to be signed on its behalf by the undersigned thereunto
duly authorized.
ARKANSAS POWER & LIGHT COMPANY
By: /s/ Glenn E. Harder
Glenn E. Harder
Vice President-Financial
Strategies and Treasurer
Date: June 1, 1994
Exhibit B-1
_________________________________________________________________
_________ COUNTY, ARKANSAS
and
ARKANSAS POWER & LIGHT COMPANY
______________
LOAN AGREEMENT
______________
Dated as of __________________
_________________________________________________________________
$_________ _________ County, Arkansas Pollution Control Revenue
Refunding Bonds, Series ____ (Arkansas Power & Light Company
Project)
<PAGE>
LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of
the Loan Agreement and is only
for convenience of reference.)
Parties 1
Recitals 1
ARTICLE I
DEFINITIONS
Section 1.01 Definitions 2
Section 1.02 Use of Words and Phrases 4
ARTICLE II
REPRESENTATIONS
Section 2.01 Representations and Warranties of the County 5
Section 2.02 Representations and Warranties of the Company 5
ARTICLE III
THE FACILITIES
Section 3.01 Construction of the Facilities 7
Section 3.02 Maintenance of Facilities; Remodeling 7
Section 3.03 Insurance 7
ARTICLE IV
ISSUANCE OF BONDS; DISPOSITION OF PROCEEDS OF BONDS
Section 4.01 Issuance of the Series ____ Bonds 8
Section 4.02 Additional Bonds 8
Section 4.03 Disposition of Bond Proceeds 8
ARTICLE V
LOAN PROVISIONS; FIRST MORTGAGE BONDS;
OTHER OBLIGATIONS
Section 5.01 Loan of Bond Proceeds 9
Section 5.02 Repayment of Loan 9
Section 5.03 Issuance, Delivery and Surrender of
First Mortgage Bonds 10
Section 5.04 Payments Assigned; Obligation Absolute 12
Section 5.05 Payment of Expenses 12
Section 5.06 Indemnification 12
Section 5.07 Payment of Taxes; Discharge of Liens 13
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS
Section 6.01 Maintenance of Corporate Existence 14
Section 6.02 Permits or Licenses 14
Section 6.03 County's and Trustee's Access to Facilities 14
Section 6.04 Arbitrage Covenant 14
Section 6.05 Use of Facilities 15
Section 6.06 Tax Exempt Status of Bonds 15
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
Section 7.01 By the County 17
Section 7.02 By the Company 17
Section 7.03 Limitation 17
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01 Events of Default 18
Section 8.02 Force Majeure 18
Section 8.03 Remedies on Default 19
Section 8.04 No Remedy Exclusive 19
Section 8.05 Agreement to Pay Attorneys' Fees and Expenses20
Section 8.06 Waiver of Breach 20
ARTICLE IX
REDEMPTION OR PURCHASE OF BONDS
Section 9.01 Redemption of Bonds 21
Section 9.02 Purchase of Bonds 21
ARTICLE X
RECORDATION AND OTHER INSTRUMENTS
Section 10.01 Recording and Filing 22
Section 10.02 Photocopies and Reproductions 22
ARTICLE XI
MISCELLANEOUS
Section 11.01 Notices 23
Section 11.02 Severability 23
Section 11.03 Execution of Counterparts 23
Section 11.04 Amounts Remaining in Bond Fund 23
Section 11.05 Amendments, Changes and Modifications 24
Section 11.06 Governing Law 24
Section 11.07 Authorized Company Representatives 24
Section 11.08 Term of the Agreement 24
Section 11.09 No Personal Liability 24
Section 11.10 Parties in Interest 24
Signatures and Seals 26
Acknowledgments 27
Exhibit A - Description of Facilities 29
<PAGE>
LOAN AGREEMENT
This LOAN AGREEMENT, dated as of __________ _, ____, by
and between _________ COUNTY, ARKANSAS, a political subdivision
under the Constitution and laws of the State of Arkansas
(hereinafter referred to as the "County"), and ARKANSAS POWER &
LIGHT COMPANY, a corporation organized and existing under and by
virtue of the laws of the State of Arkansas (hereinafter referred
to as the "Company").
W I T N E S S E T H:
WHEREAS, the County is authorized and empowered under
the laws of the State of Arkansas, including particularly Title
14, Chapter 267 of the Arkansas Code of 1987 Annotated (the
"Act"), to issue revenue bonds and to expend the proceeds thereof
to finance and refinance the acquisition, construction,
reconstruction, extension, equipment or improvement of pollution
control facilities for the disposal or control of sewage, solid
waste, water pollution, air pollution, or any combination
thereof; and
WHEREAS, certain pollution control facilities
(hereinafter referred to as the "Facilities") have been acquired,
constructed and equipped at _______ and _ of the electric
generating plant jointly owned by the Company and others located
within the boundaries of the County near ________, Arkansas and
known as the __________________________________ (hereinafter
referred to as the "Plant"); and
WHEREAS, pursuant to and in accordance with the
provisions of the Act, the County has heretofore issued and
delivered its Pollution Control Revenue Bonds, Series ____
(Arkansas Power & Light Company Project), in the aggregate
principal amount of $_________ (the "Prior Bonds"), for the
purpose of financing and refinancing the cost of acquiring,
constructing and equipping all or part of the Company's interest
in the Facilities (hereinafter referred to as the "Project"), and
paying the expenses of authorizing and issuing the Prior Bonds;
and
WHEREAS, the County proposes to issue $_________
aggregate principal amount of its revenue bonds under the Act
(the "Series ____ Bonds") for the purpose of refunding the Prior
Bonds; and
WHEREAS, in connection with the issuance of the Series
____ Bonds the proceeds of the Series ____ Bonds will be loaned
by the County to the Company upon the terms and conditions set
forth herein; and
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants herein made, and subject to the
conditions herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. In addition to the words
and terms elsewhere defined in this Agreement or in the
Indenture, the following words and terms as used in this
Agreement shall have the following meanings unless the context or
use indicates another or different meaning:
"Act" -- Title 14, Chapter 267 of the Arkansas Code of
1987 Annotated, as amended and enacted from time to time.
"Additional Bonds" -- Bonds in addition to the Series
____ Bonds, which are issued under the provisions of Section 211
of the Indenture.
"Administration Expenses" -- The reasonable and
necessary expenses incurred by the County with respect to this
Agreement, the Indenture and any transaction or event
contemplated by this Agreement or the Indenture including the
compensation and reimbursement of expenses and advances payable
to the Trustee, any paying agent, any co-paying agent, and the
registrar under the Indenture.
"Agreement" -- This Loan Agreement and any amendments
and supplements hereto.
"Authorized Company Representative" -- The person or
persons at the time designated to act on behalf of the Company,
such designation in each case to be evidenced by a certificate
furnished to the County and the Trustee containing the specimen
signature of such person or persons and signed on behalf of the
Company by its President, any Senior Vice President, any Vice
President, or the Treasurer.
"Bonds" -- The Series ____ Bonds and all Additional
Bonds issued by the County pursuant to the Indenture.
"Bond Counsel" -- Any firm of nationally recognized
municipal bond counsel selected by the Company and acceptable to
the County and the Trustee.
"Bond Fund" -- The fund by that name created and
established in Section 501 of the Indenture.
"Clearing Fund" -- The fund by that name created and
established in Section 601 of the Indenture.
"Code" -- The Internal Revenue Code of 1954, as
heretofore amended (the "1954 Code"), and the Internal Revenue
Code of 1986, as heretofore or hereafter amended (the "1986
Code"), as applicable.
"Company" -- Arkansas Power & Light Company, a
corporation organized and operating under the laws of the State
of Arkansas, and its permitted successors and assigns.
"Company Mortgage" -- The Mortgage and Deed of Trust,
dated as of October 1, 1944, between the Company and Guaranty
Trust Company of New York (now Morgan Guaranty Trust Company of
New York) and Henry A. Theis (John W. Flaherty, successor), and,
as to property, real or personal, situated or being in Missouri,
Marvin A. Mueller (The Boatmen's National Bank of St. Louis,
successor), as trustees, as heretofore and hereafter amended and
supplemented.
"Company Mortgage Trustees" -- The trustees under the
Company Mortgage.
"County" -- _________ County, Arkansas, a political
subdivision under the Constitution and laws of the State of
Arkansas.
"Event of Default" -- Any event of default specified in
Section 8.01 hereof.
"Facilities" -- The pollution control facilities at the
Plant which were financed and refinanced, in whole or in part,
with the proceeds of the Prior Bonds, which facilities are
generally described in Exhibit A hereto.
"First Mortgage Bonds" -- The bonds of one or more
series issued and delivered under the Company Mortgage and held
by the Trustee pursuant to Section 5.03 hereof.
"Indenture" -- The Trust Indenture dated as of
__________ _, ____, between the County and the Trustee, securing
the Bonds, and any amendments and supplements thereto.
"outstanding" -- When used with reference to the Bonds,
as of any particular date, all Bonds authenticated and delivered
under the Indenture except:
(a) Bonds canceled at or prior to such date or
delivered to or acquired by the Trustee prior to such date for
cancellation;
(b) Bonds deemed to be paid in accordance with Article
IX of the Indenture; and
(c) Bonds in lieu of or in exchange or substitution
for which other Bonds shall have been authenticated and delivered
pursuant to the Indenture.
"Plant" -- The electric generating plant jointly owned
by the Company and others located within the boundaries of the
Countynear ________, Arkansas and known as the
__________________________ _______.
"Plant Agreements" -- All of the contracts relating to
the ownership, construction and operation of the Plant, as from
time to time amended or supplemented.
"Prior Bonds" -- The County's Pollution Control Revenue
Bonds, Series ____, in the aggregate principal amount of
$_________.
"Project" -- The interest of the Company in the
Facilities on the date of issuance of the Prior Bonds.
"Series ____ Bonds" -- The initial issue of Bonds under
and secured by the Indenture in the aggregate principal amount of
$_________.
"Trustee" -- The banking corporation or association
designated as Trustee in the Indenture, and its successor or
successors as such Trustee. The original Trustee is
_____________ _____________, __________, ________.
Section 1.02. Use of Words and Phrases. "Herein",
"hereby", "hereunder", "hereof", "hereinabove", "hereinafter",
and other equivalent words and phrases refer to this Agreement
and not solely to the particular portion thereof in which any
such word is used. The definitions set forth in Section 1.01
hereof include both singular and plural. Whenever used herein,
any pronoun shall be deemed to include both singular and plural
and to cover all genders.
ARTICLE II
REPRESENTATIONS
Section 2.01. Representations and Warranties of the
County. The County makes the following representations and
warranties as the basis for the undertakings on the part of the
Company herein contained:
(a) The County is a political subdivision duly
existing under the Constitution and laws of the State of
Arkansas.
(b) The County has the power to enter into the trans
actions contemplated by this Agreement and to carry out its
obligations hereunder. By proper action of the governing body of
the County, the County has been duly authorized to execute and
deliver this Agreement.
(c) The County has not, and will not, except as
otherwise required by mandatory provisions of law, assign its
interest in this Agreement other than to secure the Bonds.
(d) The Facilities and their operation promote the
securing and developing of industry and the health, safety and
physical and economic welfare of the County and its inhabitants,
and thereby further the public purposes of the Act.
Section 2.02. Representations and Warranties of the
Company. The Company makes the following representations and
warranties as the basis for the undertakings on the part of the
County herein contained:
(a) The Company is a corporation duly incorporated and
in good standing under the laws of the State of Arkansas, is not
in violation of any provision of its Articles of Incorporation,
or its Bylaws, has power to enter into this Agreement and to
perform and observe the agreements and covenants on its part
contained herein, including without limitation the power to issue
the First Mortgage Bonds as contemplated herein and in the
Company Mortgage, and has duly authorized the execution and
delivery of this Agreement by proper corporate action.
(b) The Facilities constitute a pollution control
project of the type authorized and permitted by the Act.
(c) Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, including, without limitation, the
issuance and delivery of the First Mortgage Bonds, conflicts with
or results in a breach of the terms, conditions or provisions of
any restriction or any agreement or instrument to which the
Companyis now a party or by which the Company is bound, or con
stitutes a default under any of the foregoing, or results in the
creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of the Company
except any interests created herein and under the Company
Mortgage.
(d) The Securities and Exchange Commission, the
Arkansas Public Service Commission, the Tennessee Public Service
Commission, and the Public Service Commission of Missouri have
each approved all matters relating to the Company's participation
in the transactions contemplated by this Agreement which require
said approval, and no other consent, approval, authorization or
other order of any regulatory body or administrative agency or
other governmental body is legally required for the Company's
participation therein, except such as may have been obtained or
may be required under the securities laws of any state or in
connection with the issuance of series of Additional Bonds.
ARTICLE III
THE FACILITIES
Section 3.01. Construction of the Facilities. The
Company, in the exercise of its rights, powers, elections and
options under the Plant Agreements, has caused the Facilities to
be constructed in order to effectuate the purposes of the Act.
Section 3.02. Maintenance of Facilities; Remodeling.
The Company shall, at its expense, exercise all of its rights,
powers, elections and options under the Plant Agreements to cause
the Facilities, and every element and unit thereof, to be main
tained, preserved and kept in good repair, working order and
condition, and from time to time to cause all needful and proper
repairs, replacements, additions, betterments and improvements to
be made thereto; provided, however, that the Company may exercise
all of such rights, powers, elections and options to cause the
discontinuance of the operation of, or reduce the capacity of,
the Facilities, or any element or unit thereof, if, in the
judgment of the Company, any such action is necessary or
desirable in the conduct of the business of the Company, or if
the Company is ordered so to do by any regulatory authority
having jurisdiction in the premises, or if the Company intends to
sell or dispose of the same and within a reasonable time shall
endeavor to effectuate such sale. The Company shall notify the
County as to the nature and extent of any material damage or loss
to the Facilities and of the discontinuance of the operation of
the Facilities, or any material element or unit thereof.
The Company may at its own expense cause the Facilities
to be remodeled or cause substitutions, modifications and
improvements to be made to the Facilities from time to time as
it, in its discretion, may deem to be desirable for its uses and
purposes, which remodeling, substitutions, modifications and
improvements shall be included under the terms of this Agreement
as part of the Facilities.
Section 3.03. Insurance. The Company shall, at its
expense, exercise all of its rights, powers, elections and
options under the Plant Agreements to cause the Facilities to be
kept insured against fire to the extent that property of similar
character is usually so insured by companies similarly situated
and operating like properties, to a reasonable amount, by
reputable insurance companies or, in lieu of or supplementing
such insurance in whole or in part, adopt some other method or
plan of protection against loss by fire at least equal in
protection to the method or plan of protection against such loss
of companies similarly situated and operating like properties.
All proceeds of such insurance, or such other method or plan,
shall be for the account of the Company.
ARTICLE IV
ISSUANCE OF BONDS; DISPOSITION OF PROCEEDS OF BONDS
Section 4.01. Issuance of the Series _____ Bonds. The
County shall issue the Series ____ Bonds under and in accordance
with the Indenture, subject to the provisions of any bond
purchase agreement between the County and the original purchaser
or purchasers of the Series ____ Bonds. The Company hereby
approves the issuance of the Series ____ Bonds and all terms and
conditions thereof.
Section 4.02. Additional Bonds. So long as the
Company shall not be in default hereunder, and at the request of
the Company, the County may authorize and issue Additional Bonds
in aggregate principal amounts specified from time to time by the
Company in order to provide funds for the purpose of refunding
the Series ____ Bonds or any series of Additional Bonds, in whole
or in part, or any combination thereof.
The right to issue Additional Bonds set forth in this
Agreement and the Indenture shall not imply that the County and
the Company may not enter into, and the County and the Company
expressly reserve the right to enter into, to the extent
permitted by law, another agreement or agreements with respect to
the issuance by the County, under an indenture or indentures
other than the Indenture, of refunding bonds to refund all or any
principal amount of any series of Bonds, and the provisions of
this Agreement and the Indenture governing the issuance of
Additional Bonds shall not apply thereto.
Section 4.03. Disposition of Bond Proceeds. The
proceeds of the issuance and sale of the Series ____ Bonds and
any Additional Bonds, other than accrued interest, if any, paid
by the initial purchaser or purchasers thereof, shall be
deposited into the Clearing Fund, and any such accrued interest
shall be deposited into the Bond Fund, all in accordance with the
provisions of the Indenture.
ARTICLE V
LOAN PROVISIONS; FIRST MORTGAGE BONDS;
OTHER OBLIGATIONS
Section 5.01. Loan of Bond Proceeds. Concurrently
with the sale and delivery of each series of the Bonds, the
County covenants and agrees that it will, upon the terms and
conditions in this Agreement, lend to the Company an amount equal
to the proceeds (other than accrued interest) of such series.
Pursuant to said covenant and agreement, the County will issue
the Bonds upon the terms and conditions contained in this
Agreement and the Indenture and will cause the Bond proceeds to
be applied as provided in Article IV hereof. The Bonds may be
sold by the County, with the consent of the Company, at a
discount from their principal amount. If the County does sell
Bonds at a discount, the amount of such discount shall be deemed
to have been loaned to the Company pursuant to the terms and
conditions hereof.
Section 5.02. Repayment of Loan. On or before any
date that principal of or interest on the Bonds is due as set
forth in the Indenture, or any date fixed for the redemption of
any or all of the Bonds pursuant to the Indenture, the Company
covenants and agrees to pay or to cause to be paid in lawful
money of the United States of America to the Trustee for deposit
in the Bond Fund, as a repayment of the loan made to the Company
pursuant to Section 5.01 hereof, a sum equal to the amount
payable on such payment date as principal (whether at maturity,
upon redemption or otherwise) of and premium, if any, and
interest on the Bonds as provided in the Indenture. Each payment
made pursuant to this Section shall be made in immediately
available funds at the principal corporate trust office of the
Trustee during normal banking hours.
In the event that the payment of the principal of and
accrued interest on the Bonds is accelerated under Section 1002
of the Indenture, the Company covenants and agrees to pay, or
cause to be paid, to the Trustee as provided above a sum equal to
all the principal of and interest on the Bonds then outstanding.
Each payment pursuant to this Section shall at all
times be sufficient to pay the amount of principal (whether at
maturity, upon redemption or otherwise) of and premium, if any,
and interest payable on the Bonds on the date that such payment
is due; provided that the obligation of the Company to make any
payment of the principal of or premium, if any, or interest on
the Bonds, whether at maturity, upon redemption or otherwise,
shall be reduced by the amount of any reduction under the
Indenture of the amount of the corresponding payment required to
be made by the County thereunder in respect of the principal of
or premium, if any, or interest on the Bonds.
Section 5.03. Issuance, Delivery and Surrender of
First Mortgage Bonds. (a) The obligation of the Company set
forth in Section 5.02 hereof to repay the Bonds may be evidenced,
in whole or in part, by the First Mortgage Bonds. With respect
to the Series ____ Bonds, the Company shall issue and deliver to
the County First Mortgage Bonds as provided in subsection (b) of
this Section 5.03. With respect to any series of Additional
Bonds, the Company shall issue and deliver to the County First
Mortgage Bonds as provided in any amendment of or supplement to
this Agreement.
(b) Concurrently with the issuance and delivery by the
County of the Series ____ Bonds, and in order to evidence the
obligation of the Company under Section 5.02 hereof to repay
those installments of the loan from the County which correspond
to payment of the principal of the Series ____ Bonds, the excess
of the principal amount thereof to be applied to the payment of
accrued interest on the Series ____ Bonds, the Company shall
issue and deliver to the County a series of First Mortgage Bonds
(i) maturing on the stated maturity date of the Series ____
Bonds, (ii) in a principal amount equal to the principal of the
Series ____ Bonds plus eight months (8/12) of the annual interest
on the Series ____ Bonds, (iii) containing redemption provisions
correlative to any provisions of the Indenture relating to the
Series ____ Bonds requiring mandatory redemption thereof, (iv)
requiring payments to be made to the Trustee for the account of
the County, and (v) bearing no interest.
(c) The obligation of the Company to make any payment
of the principal of or premium, if any, or interest on the First
Mortgage Bonds, whether at maturity, upon redemption or
otherwise, shall be reduced by the amount of any reduction under
the Indenture of the amount of the corresponding payment required
to be made by the County thereunder in respect of the principal
of or premium, if any, or interest on the Bonds.
(d) The County shall not sell, assign or transfer the
First Mortgage Bonds, except to the extent provided in Section
5.04 hereof. In view of the pledge and assignment referred to in
said Section 5.04, the County agrees that (i) in satisfaction of
the obligations of the Company set forth in paragraph (b) of this
Section 5.03 with respect to the Series ____ Bonds, or in any
amendment of or supplement to this Agreement with respect to any
series of Additional Bonds, the First Mortgage Bonds shall be
issued and delivered to, registered in the name of and held by
the Trustee for the benefit of the owners and holders from time
to time of the Bonds; (ii) the Indenture shall provide that the
Trustee shall not sell, assign or transfer the First Mortgage
Bonds except to a successor trustee under the Indenture, and
shall surrender First Mortgage Bonds to the Company Mortgage
Trustees in accordance with the provisions of subsection (e) of
this Section 5.03; and (iii) the Company may take such actions as
it shall deem to be desirable to effect compliance with such
restrictions on transfer,including the placing of an appropriate
legend on each First Mortgage Bond and the issuance of
stop-transfer instructions to the Company Mortgage Trustees or
any other transfer agent under the Company Mortgage. Any action
taken by the Trustee in accordance with the provisions of Section
410 of the Indenture shall be binding upon the Company.
(e) At the time any Bonds of any series cease to be
outstanding (other than by reason of the payment or redemption of
First Mortgage Bonds of the corresponding series and other than
by reason of the applicability of clause (c) in the definition of
"outstanding" herein):
(i) in the event that such Bonds were not subject
to redemption pursuant to a sinking fund therefor, the
County shall cause the Trustee to surrender to the
Company Mortgage Trustees a corresponding principal
amount of First Mortgage Bonds, plus, in the case of
the Series ____ Bonds, a principal amount of such First
Mortgage Bonds equal to eight months (8/12) of the
annual interest payable in respect of such series, of
the series corresponding to such series of Bonds,
maturing on the same date as such Bonds; or
(ii) in the event that such Bonds were subject to
redemption pursuant to a sinking fund therefor, the
County shall cause the Trustee to surrender to the
Company Mortgage Trustees a corresponding principal
amount of First Mortgage Bonds, of the series
corresponding to such series of Bonds, maturing, at the
election of the Company:
(A) on the same date as such Bonds; or
(B) on any sinking fund redemption date relating
to outstanding Bonds of such series; provided,
however, that the Company shall have delivered to
the Trustee pursuant to the Indenture an
irrevocable certificate specifying that such Bonds
are to be credited against the sinking fund
payment or payments to be made on the maturity
date, and in the principal amount, of the First
Mortgage Bonds so to be surrendered.
(f) For the purpose of determining whether or not any
payment of the principal of or premium, if any, or interest on
the First Mortgage Bonds shall have been made in full, any moneys
paid by the Company in respect of the First Mortgage Bonds which
shall have been withdrawn by the Trustee from the Bond Fund
pursuant to Section 1102 of the Indenture shall be deemed to have
been paid by the Company to the Trustee pursuant to Section 5.05
hereof and notto have been paid by the Company in respect of the
First Mortgage Bonds.
Section 5.04. Payments Assigned; Obligation Absolute.
It is understood and agreed that all payments to be made by the
Company of the loan by the County are, by the Indenture, to be
pledged by the County to the Trustee, and that all rights and
interest of the County hereunder (except for the County's rights
under Sections 5.05, 5.06, 5.07, 6.03 and 8.05 hereof and any
rights of the County to receive notices, certificates, requests,
requisitions, directions and other communications hereunder),
including the right to receive the First Mortgage Bonds and the
First Mortgage Bonds, are to be pledged and assigned to the
Trustee. The Company assents to such pledge and assignment and
agrees that the obligation of the Company to make the payments of
the purchase price of the Facilities shall be absolute,
irrevocable and unconditional and shall not be subject to
cancellation, termination or abatement, or to any defense other
than payment or to any right of set-off, counterclaim or
recoupment arising out of any breach under this Agreement, the
Indenture or otherwise by the County or the Trustee or any other
party, or out of any obligation or liability at any time owing to
the Company by the County, the Trustee or any other party, and,
further, that the payments of the loan from the County to the
Company and the other payments due hereunder shall continue to be
payable at the times and in the amounts specified herein and in
the First Mortgage Bonds, whether or not the Facilities or the
Plant, or any portion thereof, shall have been completed or shall
have been destroyed by fire or other casualty, or title thereto,
or the use thereof, shall have been taken by the exercise of the
power of eminent domain, and that there shall be no abatement of
or diminution in any such payments by reason thereof, whether or
not the Facilities or the Plant shall be used or useful, and
whether or not any applicable laws, regulations or standards
shall prevent or prohibit the use of the Facilities or the Plant,
or for any other reason.
Section 5.05. Payment of Expenses. The Company shall
pay, or cause to be paid, all of the Administration Expenses of
the County, the payment of the compensation and the reimbursement
of expenses and advances of the Trustee, any paying agent, any
co-paying agent, and the registrar under the Indenture to be made
directly to such entity.
Section 5.06. Indemnification. The Company releases
the County and the Trustee from, agrees that the County and the
Trustee shall not be liable for, and agrees to indemnify and hold
the County and the Trustee free and harmless from, any liability
for any loss or damage to property or any injury to or death of
any person that may be occasioned by any cause whatsoever
pertaining to the Facilities, except in any case as a result of
the negligence or bad faith of the County or the Trustee.
The Company will indemnify and hold the County and the
Trustee free and harmless from any loss, claim, damage, tax,
penalty, liability (including but not limited to liability for
any patent infringement), disbursement, litigation expenses,
attorneys' fees and expenses or court costs arising out of, or in
any way relating to, the execution or performance of this
Agreement, the issuance or sale of the Bonds, actions taken under
the Indenture, or any other cause whatsoever pertaining to the
Facilities, including without limitation, recovery costs arising
from the presence of hazardous substances, except in any case as
a result of the negligence or bad faith of the Trustee, or as a
result of the gross negligence or bad faith of the County.
Under this Section 5.06, the Company shall also be
deemed to release, indemnify and agree to hold harmless each
employee, official or officer of the County and the Trustee to
the same extent as the County and the Trustee.
Section 5.07. Payment of Taxes; Discharge of Liens.
The Company shall: (a) pay, or make provision for payment of, all
lawful taxes and assessments, including income, profits, property
or excise taxes, if any, or other municipal or governmental
charges, levied or assessed by any federal, state or municipal
government or political body upon the County with respect to the
Facilities or any part thereof or upon any amounts payable
hereunder; and (b) pay or cause to be satisfied and discharged or
make adequate provision to satisfy and discharge, within sixty
(60) days after the same shall accrue, any lien or charge upon
any amounts payable hereunder, and all lawful claims or demands
for labor, materials, supplies or other charges which, if unpaid,
might be or become a lien upon such amounts; provided that if the
Company shall first notify the County and the Trustee of its
intention so to do, the Company may in good faith contest any
such lien or charge or claims or demands in appropriate legal
proceedings, and in such event may permit the items so contested
to remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom, unless the County or the
Trustee shall notify the Company in writing that, in the opinion
of counsel to the County or the Trustee, by nonpayment of any
such items the lien of the Indenture as to the amounts payable
hereunder will be materially endangered, in which event the
Company shall promptly pay and cause to be satisfied and
discharged all such unpaid items. The County shall cooperate
fully with the Company in any such contest.
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS
Section 6.01. Maintenance of Corporate Existence. The
Company shall maintain its corporate existence, will not dissolve
or otherwise dispose of all or substantially all its assets and
will not consolidate with or merge with or into another
corporation; provided, however, that the Company may consolidate
with or merge with or into, or sell or otherwise transfer all or
substantially all of its assets (and may thereafter dissolve) to,
another corporation, incorporated under the laws of the United
States, one of the states thereof or the District of Columbia, if
the surviving, resulting or transferee corporation, as the case
may be (if other than the Company), prior to or simultaneously
with such consolidation, merger, sale or transfer, assumes, by
delivery to the Trustee of an instrument in writing satisfactory
in form and substance to the Trustee, all the obligations of the
Company hereunder and on the First Mortgage Bonds.
If consolidation, merger or sale or other transfer is
made as permitted by this Section 6.01, the provisions of this
Section 6.01 shall continue in full force and effect and no
further consolidation, merger or sale or other transfer shall be
made except in compliance with the provisions of this Section
6.01.
Section 6.02. Permits or Licenses. In the event that
it may be necessary for the proper performance of this Agreement
on the part of the Company or the County that any application or
applications for any permit or license to do or to perform
certain things be made to any governmental or other agency by the
Company or the County, the Company and the County each shall,
upon the request of either, execute such application or
applications.
Section 6.03. County's and Trustee's Access to
Facilities. The County and the Trustee shall have the right,
upon appropriate prior notice to the Company, to have reasonable
access to the Facilities during normal business hours for the
purpose of making examinations and inspections of the same.
Section 6.04. Arbitrage Covenant. The County and the
Company covenant that the proceeds of the sale of the Bonds, the
earnings thereon, and any other moneys on deposit in any fund or
account maintained in respect of the Bonds (whether such moneys
were derived from the proceeds of the sale of the Bonds or from
other sources) will not be used in a manner which would cause the
Bonds to be treated as "arbitrage bonds" within the meaning of
Section 148 of the Code. The Company further covenants that: (a)
all actions with respect to the Bonds required by Section 148(f)
of the Code shall be taken; (b) it shall make the determinations
required by paragraph (b) of Section 702 of the Indenture and
promptly notify the Trustee of the same, together with
supportingcalculations; and (c) it shall within twenty-five (25)
days after (i) the calendar date which corresponds to the final
maturity of the respective series of Bonds and each anniversary
thereof falling on or after the date of initial authentication
and delivery thereof up to and including the final maturity of
such series of the Bonds, unless the final payment, whether upon
redemption in whole or at maturity, of such Bonds shall have
occurred prior to such anniversary, and (ii) such final payment,
file with the Trustee a statement signed by the chief financial
officer of the Company to the effect that the Company is then in
compliance with its covenants contained in clauses (a) and (b) of
this sentence, together with supporting calculations; provided,
however, that if the Company shall furnish an opinion of Bond
Counsel to the Trustee to the effect that no further action by
the Company is required for such compliance with respect to the
Bonds, the Company shall not thereafter be required to deliver
any such statements or calculations.
Section 6.05. Use of Facilities. The Company shall
exercise all of its rights, powers, elections and options under
the Plant Agreements to cause the Facilities to be used for the
abatement or control of pollution or for the disposal of sewage
or solid waste.
Section 6.06. Tax Exempt Status of Bonds. The County
and the Company mutually covenant and agree that neither of them
shall take or authorize or permit any action to be taken, and
have not taken or authorized or permitted any action to be taken,
which results in interest paid on the Bonds being included in
gross income for purposes of federal income taxes. Without
limiting the generality of the foregoing, the Company further
covenants and agrees as follows:
(a) Not less than 90% of the proceeds (within the
meaning of Section 103(b)(4) of the 1954 Code and
regulations thereunder) from the sale of the Prior
Bonds was expended (or was used to retire bonds not
less than 90% of the proceeds from the sale of which
was expended) (i) for proper costs of land or property
of a character subject to the allowance for
depreciation under Section 167 of the Code, or which
will be, for federal income tax purposes, chargeable to
capital account or would have been so chargeable either
with a proper election by the Company (for example
under Section 266 of the Code) or but for a proper
election by the Company to deduct such amounts, and
(ii) to provide sewage or solid waste disposal
facilities within the meaning of Section 103(b)(4)(E)
or (F) of the Code and regulations thereunder.
(b) Within thirty-one (31) days of the date of
issuance of the Series ____ Bonds, there neither have
been nor will be any private activity bonds (within the
meaning of Section 141(a) of the 1986 Code) sold to
finance facilities of the Company or any related person
within the meaning of Section 147(a)(2) of the Code,
under a common plan of marketing, at substantially the
same rate of interest, and for which a common or pooled
security will be used or available to pay debt service.
(c) The average maturity of the Series ____ Bonds
(within the meaning of Section 147(b) of the 1986 Code
and regulations thereunder) does not exceed 120% of the
average reasonably expected economic life of the
Facilities (within the meaning of Section 147(b) of the
1986 Code and regulations thereunder).
(d) No changes will be made in the Facilities
which in any way impairs the exclusion of interest on
any of the Bonds from gross income for purposes of
federal income taxation.
(e) No action shall be taken that will cause the
Series ____ Bonds to be "federally guaranteed" as
defined in Section 149(b) of the Code.
(f) No portion of the proceeds of the Series ____
Bonds in excess of 2% of the proceeds thereof (within
the meaning of Section 147(g) of the Code and
regulations thereunder) will be used to finance costs
of issuance of the Series ____ Bonds.
(g) (i) The Facilities being refinanced out of
the proceeds of the Series ____ Bonds are part of the
facilities described in the Memorandum of Agreement
dated ______, ____, between the County and the Company;
(ii) acquisition and construction of each of such
Facilities commenced on or after ______, ____, and
(iii) none of such Facilities was placed in service or
acquired (whichever occurred last) more than one year
prior to the date of issuance of the Prior Bonds.
The covenants and agreements contained in this Section 6.06 shall
survive any termination of this Agreement.
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
Section 7.01. By the County. Except as provided in
Article V of this Agreement, the County will not sell, lease,
assign, transfer, convey or otherwise dispose of its interest in
the Facilities or any portion thereof or interest therein or in
the revenues therefrom without the written consent of the
Company, nor will it create or suffer to be created any debt,
lien or charge thereon, not consented to by the Company, except
Permitted Encumbrances.
Section 7.02. By the Company. The Company's interest
in this Agreement may be assigned in whole or in part, and the
Facilities may be leased or sold as a whole or in part (whether a
specific element or unit or an undivided interest), by the
Company, subject, however, to the condition that no assignment,
lease or sale (other than as described in Section 6.01 hereof)
shall relieve the Company from primary liability for its
obligations under Section 5.02 and 5.03 hereof (including its
obligations on the First Mortgage Bonds) to repay the loan from
the County to the Company, or for any other of its obligations
hereunder, other than those obligations relating to the
operation, maintenance and insurance of the Facilities which
obligations (to the extent of the interest assigned, leased or
sold and to the extent assumed by the assignee, lessee or
purchaser) shall be deemed to be satisfied and discharged.
After any lease or sale of any element or unit of the
Facilities, or any interest therein, such element or unit, or
interest therein, shall no longer be deemed to be part of the
Facilities for the purposes of this Agreement.
The Company shall, within fifteen (15) days after the
delivery thereof, furnish to the County and the Trustee a true
and complete copy of the agreements or other documents
effectuating any such assignment, lease or sale.
Section 7.03. Limitation. This Agreement shall not be
assigned nor shall the Facilities be leased or sold, in whole or
in part, except as provided in this Article VII or in Section
6.01 or in the Indenture.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. Each of the
following events shall constitute and is referred to in this
Agreement as an "Event of Default":
(a) a "Default" as such term is defined in Section 65
of the Company Mortgage;
(b) a failure by the Company to make when due any
payment required to be made pursuant to Section 5.02 hereof,
which failure shall have resulted in an "Event of Default"
under clause (a) or (b) of Section 1001 of the Indenture; or
(c) a failure by the Company to pay when due any other
amount required to be paid under this Agreement or to
observe and perform any covenant, condition or agreement on
its part to be observed or performed which failure shall
continue for a period of ninety (90) days after written
notice, specifying such failure and requesting that it be
remedied, shall have been given to the Company by the County
or the Trustee, unless the County and the Trustee shall
agree in writing to an extension of such period prior to its
expiration; provided, however, that the County and the
Trustee shall be deemed to have agreed to an extension of
such period if corrective action is initiated by the Company
within such period and is being diligently pursued.
Section 8.02. Force Majeure. The provisions of
Section 8.01 hereof are subject to the following limitations: If
by reason of acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders or other acts of any
kind of the Government of the United States or of the State of
Arkansas, or any other sovereign entity or body politic, or any
department, agency, political subdivision, court or official of
any of them, or any civil or military authority; insurrections;
riots; epidemics; landslides; lightning; earthquakes; volcanoes;
fires; hurricanes; tornados; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances;
explosions; breakage or accident to machinery; partial or entire
failure of utilities; or any cause or event not reasonably within
the control of the Company, the Company is unable in whole or in
part to carry out any one or more of its agreements or
obligations contained herein, other than its obligations under
Section 5.02 hereof to repay the loan made to the Company and its
obligations under Sections 5.06, 6.01, 6.04, 6.06 and 9.01
hereof, the Company shall not be deemed in default by reason of
not carrying out said agreement or agreements or performing said
obligation or obligations during the continuance of such
inability. The Company agrees, however, to use its best efforts
to remedy with all reasonable dispatch the causeor causes
preventing it from carrying out its agreements; provided, that
the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the
Company, and the Company shall not be required to make settlement
of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the
Company.
Section 8.03. Remedies on Default. (a) Upon the
occurrence and continuance of any Event of Default described in
clause (a) of Section 8.01 hereof, the Trustee, as the holder of
the First Mortgage Bonds, shall, subject to the provisions of the
Indenture, have the rights provided in the Company Mortgage.
(b) Upon the occurrence and continuance of any Event
of Default described in clause (b) of Section 8.01 hereof, and
further upon the condition that, in accordance with the terms of
the Indenture, the Bonds shall have become immediately due and
payable pursuant to any provision of the Indenture, the payments
required to be paid pursuant to Section 5.02 hereof shall,
without further action, become and be immediately due and
payable.
(c) Upon the occurrence and continuance of any Event
of Default, the County with the prior consent of the Trustee, or
the Trustee, may take any action at law or in equity to collect
the payments then due and thereafter to come due hereunder, or to
enforce performance and observance of any obligation, agreement
or covenant of the Company under this Agreement.
(d) Any amounts collected pursuant to action taken
under this Section shall be applied in accordance with the
Indenture.
(e) In case any proceeding taken by the County or the
Trustee on account of any Event of Default shall have been dis
continued or abandoned for any reason, or shall have been
determined adversely to the County or the Trustee, then and in
every case the County and the Trustee, shall be restored to their
former positions and rights hereunder, respectively, and all
rights, remedies and powers of the County and the Trustee shall
continue as though no such proceeding had been taken.
Section 8.04. No Remedy Exclusive. No remedy
conferred upon or reserved to the County or the Trustee by this
Agreement is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in
equity or by statute. No delay or omission to exercise any right
or power accruing upon any Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the County
or the Trustee toexercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice other than
such notice as may be required in this Article.
Section 8.05. Agreement to Pay Attorneys' Fees and
Expenses. In the event the Company should default under any of
the provisions of this Agreement and the County or the Trustee
should employ attorneys or incur other expenses for the
collection of payments due hereunder or on the First Mortgage
Bonds or for the enforcement of performance or observance of any
obligation or agreement on the part of the Company contained
herein, the Company agrees that it will on demand therefor pay to
the County or the Trustee, as the case may be, the reasonable
fees of such attorneys and such other expenses so incurred.
Section 8.06. Waiver of Breach. In the event that any
agreement contained herein shall be breached by either the
Company or the County and such breach shall thereafter be waived
by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any
other breach hereunder. In view of the assignment of the
County's rights in and under this Agreement to the Trustee under
the Indenture, the County shall have no power to waive any
default hereunder by the Company without the consent of the
Trustee. Any waiver of any "Event of Default" under the
Indenture and a rescission and annulment of its consequences, and
any waiver of any "Default" under the Company Mortgage and a
rescission and annulment of its consequences, shall constitute a
waiver of the corresponding Event of Default hereunder and a
rescission and annulment of the consequence thereof.
ARTICLE IX
REDEMPTION OR PURCHASE OF BONDS
Section 9.01. Redemption of Bonds. The County shall
take the actions required by the Indenture to discharge the lien
thereof through the redemption, or provision for payment or
redemption, of all Bonds then outstanding, or to effect the
redemption, or provision for payment or redemption, of less than
all the Bonds then outstanding, upon receipt by the County and
the Trustee from the Company of a notice designating the
principal amounts, series and maturities of the Bonds to be
redeemed, or for the payment or redemption of which provision is
to be made, and, in the case of redemption of Bonds, or provision
therefor, specifying the date of redemption, which shall not be
less than forty-five (45) days from the date such notice is
given, and the applicable redemption provision of the Indenture.
Unless otherwise stated therein or otherwise required by the
Indenture, such notice shall be revocable by the Company at any
time prior to the time at which the Bonds to be redeemed, or for
the payment or redemption of which provision is to be made, are
first deemed to be paid in accordance with Article IX of the
Indenture. The Company shall furnish, as a prepayment of the
amounts due under Section 5.02 hereof, any moneys or Government
Securities (as defined in the Indenture) required by the
Indenture to be deposited with the Trustee or otherwise paid by
the County in connection with any of the foregoing purposes.
Section 9.02. Purchase of Bonds. The Company may at
any time, and from time to time, furnish moneys to the Trustee
accompanied by a notice directing the Trustee to apply such
moneys to the purchase in the open market of Bonds in the
principal amounts and of the series and maturities specified in
such notice, and any Bonds so purchased shall thereupon be
canceled by the Trustee.
ARTICLE X
RECORDATION AND OTHER INSTRUMENTS
Section 10.01. Recording and Filing. The Company shall
record and file, or cause to be recorded and filed, all documents
and statements referred to in Section 404 of the Indenture.
Section 10.02. Photocopies and Reproductions. A
photocopy or other reproduction of this Agreement may be filed as
a financing statement pursuant to the Uniform Commercial Code,
although the signatures of the Company and the County on such
reproduction are not original manual signatures.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Notices. Except as otherwise provided
in this Agreement, all notices, certificates or other
communications shall be sufficiently given and shall be deemed
given when mailed by registered or certified mail, postage
prepaid, to the County, the Company or the Trustee. Copies of
each notice, certificate or other communication given hereunder
by or to the Company shall be mailed by registered or certified
mail, postage prepaid, to the Trustee; provided, however, that
the effectiveness of any such notice shall not be affected by the
failure to send any such copies. Notices, certificates or other
communications shall be sent to the following addresses:
Company: Arkansas Power & Light Company
P.O. Box 551
Little Rock, Arkansas 72203
Attention: Treasurer
County: _________ County, Arkansas
_________ County Courthouse
___________________________
__________, Arkansas ______
Attention: County Judge
Trustee: ___________________________
___________________________
___________________________
Attention: Corporate Trust Department
Any of the foregoing may, by notice given hereunder, designate
any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 11.02. Severability. If any provision of this
Agreement shall be held or deemed to be or shall, in fact, be
illegal, inoperative or unenforceable, the same shall not affect
any other provision or provisions herein contained or render the
same invalid, inoperative, or unenforceable to any extent
whatever.
Section 11.03. Execution of Counterparts. This
Agreement may be simultaneously executed in several counterparts,
each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 11.04. Amounts Remaining in Bond Fund. It is
agreed by the parties hereto that after payment in full of (i)
the Bonds (or the provision for payment thereof having been made
in accordance with the provisions of the Indenture), (ii) the
Administration Expenses of the County, and (iii) all other
amountsrequired to be paid under this Agreement and the
Indenture, any amounts remaining in the Bond Fund shall belong to
and be paid by the Trustee to the Company.
Section 11.05. Amendments, Changes and Modifications.
Except as otherwise provided in this Agreement or the Indenture,
subsequent to the initial issuance of Bonds and prior to payment
in full of the Bonds (or the provision for payment thereof having
been made in accordance with the provisions of the Indenture),
this Agreement may not be effectively amended, changed, modified,
altered or terminated nor any provision waived, without the
written consent of the Trustee which shall not be unreasonably
withheld.
Section 11.06. Governing Law. This Agreement shall be
governed exclusively by and construed in accordance with the
applicable laws of the State of Arkansas.
Section 11.07. Authorized Company Representatives. An
Authorized Company Representative shall act on behalf of the
Company whenever the approval of the Company is required or the
Company requests the County to take some action, and the County
and the Trustee shall be authorized to act on any such approval
or request and neither party hereto shall have any complaint
against the other or against the Trustee as a result of any such
action taken.
Section 11.08. Term of the Agreement. This Agreement
shall be in full force and effect from the date hereof until the
right, title and interest of the Trustee in and to the Trust
Estate (as defined in the Indenture) shall have ceased,
determined and become void in accordance with Article IX of the
Indenture and until all payments required under this Agreement
shall have been made.
Section 11.09. No Personal Liability. No covenant or
agreement contained in this Agreement shall be deemed to be the
covenant or agreement of any official, officer, agent, or
employee of the County in his individual capacity, and no such
person shall be subject to any personal liability or
accountability by reason of the issuance thereof.
Section 11.10. Parties in Interest. This Agreement
shall inure to the benefit of and shall be binding upon the
County, the Company and their respective successors and assigns,
and no other person, firm or corporation shall have any right,
remedy or claim under or by reason of this Agreement; provided,
however, that any obligation of the County created by or arising
out of this Agreement shall be payable solely out of the revenues
derived from this Agreement or the sale of the Bonds or income
earned on invested funds as provided in the Indenture and shall
not constitute, and no breach of this Agreement by the County
shallimpose, a pecuniary liability upon the County or a charge
upon the County's general credit or against its taxing powers.
IN WITNESS WHEREOF, the County and the Company have
caused this Agreement to be executed in their respective
corporate names and their respective corporate seals to be
hereunto affixed and attested by their duly authorized officers,
all as of the date first above written.
_________ COUNTY, ARKANSAS
ATTEST:
By _____________________________
___________________________ County Judge
County Clerk
(SEAL)
ARKANSAS POWER & LIGHT COMPANY
ATTEST:
By _____________________________
___________________________
_____________________________
___________________________ (title)
(title)
(SEAL)
<PAGE>
ACKNOWLEDGMENT
STATE OF ARKANSAS )
)
COUNTY OF _________ )
On this ____ day of __________, ____, before me, a
Notary Public duly commissioned, qualified and acting, within and
for the County and State aforesaid, appeared in person the within
named __________ and ____________________, County Judge and
County Clerk, respectively, of _________ County, Arkansas, to me
personally well known, who stated that they were duly authorized
in their respective capacities to execute the foregoing
instrument for and in the name of the County, and further stated
and acknowledged that they had signed, executed and delivered the
foregoing instrument for the consideration, uses and purposes
therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this ____ day of __________, ____.
________________________________
Notary Public
My commission expires:
___________________________
(SEAL)
<PAGE>
ACKNOWLEDGMENT
STATE OF ______________ )
)
COUNTY OF _____________ )
On this ____ day of __________, ____, before me, a
Notary Public duly commissioned, qualified and acting within and
for the County and State aforesaid, appeared in person the within
named Glenn E. Harder and Lee W. Randall, Vice President-
Financial Strategies and Treasurer and Vice President, Chief
Accounting Officer and Assistant Secretary, respectively, of
Arkansas Power & Light Company, an Arkansas corporation, to me
personally well known, who stated that they were duly authorized
in their respective capacities to execute the foregoing
instrument for and in the name and behalf of the corporation, and
further stated and acknowledged that they had so signed, executed
and delivered the foregoing instrument for the consideration,
uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this ____ day of __________, ____.
________________________________
Notary Public
My commission expires:
__________________________
(SEAL)
<PAGE>
EXHIBIT A
DESCRIPTION OF FACILITIES
Exhibit B-2
_________________________________________________________________
____ COUNTY, ARKANSAS
and
ARKANSAS POWER & LIGHT COMPANY
__________________________
INSTALLMENT SALE AGREEMENT
__________________________
Dated as of _______________
_________________________________________________________________
$__________ ____ County, Arkansas Pollution Revenue Refunding
Bonds, Series ____ (Arkansas Power & Light Company Project)
<PAGE>
INSTALLMENT SALE AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of
the Installment Sale Agreement and is only
for convenience of reference.)
Parties 1
Recitals 1
ARTICLE I
DEFINITIONS
Section 1.01
Definitions 2
Section 1.02
Use of Words and Phrases 6
ARTICLE II
REPRESENTATIONS
Section 2.01
Representations and Warranties of the County 7
Section 2.02
Representations and Warranties of the Company 7
Section 2.03
Official Action Toward the Issuance 8
of the Series ____ Bonds
ARTICLE III
THE FACILITIES; CONVEYANCE TO THE COUNTY
Section 3.01
Construction of the Facilities 10
Section 3.02
Insufficient Moneys in Construction Fund 10
Section 3.03
Revision of Plans and Specifications 10
Section 3.04
Certification of Completion Date 11
Section 3.05
Maintenance of Facilities; Remodeling 11
Section 3.06
Insurance 12
Section 3.07
Condemnation; Eminent Domain 12
Section 3.08
Termination of Construction 13
Section 3.09
Conveyance to the County 14
Section 3.10
Ledger 14
ARTICLE IV
ISSUANCE OF BONDS; DISPOSITION OF PROCEEDS OF BONDS
Section 4.01
Issuance of the Series ____ Bonds 15
Section 4.02
Additional Bonds 15
Section 4.03
Disposition of Bond Proceeds 15
Section 4.04
Disbursements from the Construction Fund 16
ARTICLE V
SALE AND PURCHASE OF THE PROJECT;
PURCHASE PRICE; FIRST MORTGAGE BONDS; OTHER OBLIGATIONS
Section 5.01
Sale and Purchase of the Facilities 18
Section 5.02
Purchase Price 18
Section 5.03
Issuance, Delivery and Surrender of
First Mortgage Bonds 19
Section 5.04
Payments Assigned; Obligation Absolute 21
Section 5.05
Payment of Expenses 21
Section 5.06
Indemnification 21
Section 5.07
Payment of Taxes; Discharge of Liens 22
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS
Section 6.01
Maintenance of Corporate Existence 23
Section 6.02
Permits or Licenses 23
Section 6.03
County's and Trustee's Access to Facilities 23
Section 6.04
Arbitrage Covenant 23
Section 6.05
Use of Facilities 24
Section 6.06
No Warranties 24
Section 6.07
Quiet Enjoyment 24
Section 6.08
Tax Exempt Status of Bonds 24
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
Section 7.01
By the County 27
Section 7.02
By the Company 27
Section 7.03
Limitation 27
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01
Events of Default 28
Section 8.02
Force Majeure 28
Section 8.03
Remedies on Default 29
Section 8.04
No Remedy Exclusive 29
Section 8.05
Agreement to Pay Attorneys' Fees and
Expenses 30
Section 8.06
Waiver of Breach 30
ARTICLE IX
REDEMPTION OR PURCHASE OF BONDS
Section 9.01
Redemption of Bonds 31
Section 9.02
Purchase of Bonds 31
ARTICLE X
RECORDATION AND OTHER INSTRUMENTS
Section 10.01
Recording and Filing 32
Section 10.02
Photocopies and Reproductions 32
ARTICLE XI
MISCELLANEOUS
Section 11.01
Notices 33
Section 11.02
Severability 33
Section 11.03
Execution of Counterparts 33
Section 11.04
Amounts Remaining in Bond Fund 33
Section 11.05
Amendments, Changes and Modifications 34
Section 11.06
Governing Law 34
Section 11.07
Authorized Company Representatives 34
Section 11.08
Term of the Agreement 34
Section 11.09
No Personal Liability 34
Section 11.10
Parties in Interest 34
Signatures and Seals 36
Acknowledgments 37
Exhibit A - Description of Facilities 39
<PAGE>
INSTALLMENT SALE AGREEMENT
This INSTALLMENT SALE AGREEMENT, dated as of _______ _,
____, by and between ____ COUNTY, ARKANSAS, a political
subdivision under the Constitution and laws of the State of
Arkansas (hereinafter referred to as the "County"), and ARKANSAS
POWER & LIGHT COMPANY, a corporation organized and existing under
and by virtue of the laws of the State of Arkansas (hereinafter
referred to as the "Company").
W I T N E S S E T H:
WHEREAS, the County is authorized and empowered under
the laws of the State of Arkansas, including particularly Title
14, Chapter 267 of the Arkansas Code of 1987 Annotated (the
"Act"), to issue revenue bonds and to expend the proceeds thereof
to finance and refinance the acquisition, construction,
reconstruction, extension, equipment or improvement of pollution
control facilities for the disposal or control of sewage, solid
waste, water pollution, air pollution, or any combination
thereof; and
WHEREAS, certain pollution control facilities
(hereinafter referred to as the "Facilities") have been acquired,
constructed and equipped at _______ and _ of the electric
generating plant jointly owned by the Company and others located
within the boundaries of the County near ________, Arkansas and
known as the __________________________________ (hereinafter
referred to as the "Plant"); and
WHEREAS, pursuant to and in accordance with the
provisions of the Act, the County has heretofore issued and
delivered its Pollution Control Revenue Bonds, Series ____
(Arkansas Power & Light Company Project), in the aggregate
principal amount of $_________ (the "Prior Bonds"), for the
purpose of financing and refinancing the cost of acquiring,
constructing and equipping all or part of the Company's interest
in the Facilities (hereinafter referred to as the "Project"), and
paying the expenses of authorizing and issuing the Prior Bonds;
and
WHEREAS, the County proposes to issue $_________
aggregate principal amount of its revenue bonds under the Act
(the "Series ____ Bonds") for the purpose of refunding the Prior
Bonds; and
WHEREAS, in connection with the issuance of the Bonds
the Facilities will be acquired by purchase by the County and
sold to the Company upon the terms and conditions set forth
herein; and
WHEREAS, there are initially being issued Bonds in the
aggregate principal amount of $__________ (identified in Article
I hereof and referred to herein as the "Series ____ Bonds");
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants herein made, and subject to the
conditions herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. In addition to the words
and terms elsewhere defined in this Agreement or in the
Indenture, the following words and terms as used in this
Agreement shall have the following meanings unless the context or
use indicates another or different meaning:
"Act" -- Title 14, Chapter 267 of the Arkansas Code of
1987 Annotated, as amended and enacted from time to time.
"Additional Bonds" -- Bonds in addition to the Series
____ Bonds, which are issued under the provisions of Section 211
of the Indenture.
"Administration Expenses" -- The reasonable and
necessary expenses incurred by the County with respect to this
Agreement, the Indenture and any transaction or event
contemplated by this Agreement or the Indenture including the
compensation and reimbursement of expenses and advances payable
to the Trustee, any paying agent, any co-paying agent, and the
registrar under the Indenture.
"Agreement" -- This Installment Sale Agreement and any
amendments and supplements hereto.
"Authorized Company Representative" -- The person or
persons at the time designated to act on behalf of the Company,
such designation in each case to be evidenced by a certificate
furnished to the County and the Trustee containing the specimen
signature of such person or persons and signed on behalf of the
Company by its President, any Senior Vice President, any Vice
President, or the Treasurer.
"Bonds" -- The Series ____ Bonds and all Additional
Bonds issued by the County pursuant to the Indenture.
"Bond Counsel" -- Any firm of nationally recognized
municipal bond counsel selected by the Company and acceptable to
the County and the Trustee.
"Bond Fund" -- The fund by that name created and
established in Section 501 of the Indenture.
"Capital Account" -- Any accounts by that name
established under Section 601 of the Indenture.
"Code" -- The Internal Revenue Code of 1986, as
heretofore or hereafter amended.
"Company" -- Arkansas Power & Light Company, a
corporation organized and operating under the laws of the State
of Arkansas, and its permitted successors and assigns.
"Company Mortgage" -- The Mortgage and Deed of Trust,
dated as of October 1, 1944, between the Company and Guaranty
Trust Company of New York (now Morgan Guaranty Trust Company of
New York) and Henry A. Theis (John W. Flaherty, successor), and,
as to property, real or personal, situated or being in Missouri,
Marvin A. Mueller (The Boatmen's National Bank of St. Louis,
successor), as trustees, as heretofore and hereafter amended and
supplemented.
"Company Mortgage Trustees" -- The trustees under the
Company Mortgage.
"Completion Date" -- The date of completion of the
Facilities as that date shall be certified as provided in Section
3.04 hereof.
"construction" (and other forms of the word "con
struct") -- When used with respect to the Facilities, the
acquisition, construction and equipment of the Facilities within
the meaning of the Act, including, without limitation, the
acquisition, construction, reconstruction, extension, equipment
or improvement of the Facilities.
"Construction Fund" -- The fund by that name created
and established in Section 601 of the Indenture.
"Cost of Construction" -- All costs paid or incurred by
the Company with respect to the Facilities and the financing
thereof for the payment of which the County is authorized to
issue bonds under the Act, and shall include without limitation
(a) obligations paid or incurred by the Company for labor,
materials and other expenses and to contractors, builders and
materialmen in connection with the construction of the
Facilities; (b) the costs paid or incurred by the Company of
contract bonds and of insurance of all kinds that may be deemed
by the Company to be desirable or necessary during the course of
construction of the Facilities; (c) the expenses paid or incurred
by the Company for test borings, surveys, estimates, plans and
specifications, and preliminary investigations therefor, with
respect to the Facilities and for supervising construction, as
well as for the performance of all other duties required by or
reasonably necessary for the proper construction of the
Facilities; (d) Administration Expenses, legal, accounting,
financial, underwriting, advertising, recording and printing
expenses and all other expenses paid or incurred by the Company,
in connection with the authorization, issuance and sale of the
Bonds and the issuance of the First Mortgage Bonds; (e) the
amount of the allowance for funds used during construction
entered by the Company upon its accounting records in respect of
any element or unit of the Facilities in accordance with the
applicableregulatory uniform systems of accounts prior to the
first issuance of Bonds to defray the Company's share of costs of
constructing such element or unit; (f) interest (exclusive of
accrued interest paid by the initial purchasers upon delivery
thereof) accruing upon the Bonds during the period of
construction of the Facilities; (g) all other costs that the
Company shall be required to pay under the terms of any contract
or contracts for the construction of the Facilities; (h) any
other costs or expenses paid or incurred by the Company, and any
sums required to reimburse the Company for work done by it, with
respect to the Facilities which are properly chargeable to the
capital account of the Company with respect to the Facilities or
would be so chargeable for federal income tax purposes either
with a proper election or but for a proper election to deduct the
same; and (i) all costs and expenses relating to transfers of
title between the Company and the County pursuant to this
Agreement.
"County" -- ____ County, Arkansas, a political
subdivision under the Constitution and laws of the State of
Arkansas.
"Event of Default" -- Any event of default specified in
Section 8.01 hereof.
"Facilities" -- The pollution control facilities at the
Plant which were financed and refinanced, in whole or in part,
with the proceeds of the Prior Bonds, which facilities are
generally described in Exhibit A hereto.
"First Mortgage Bonds" -- The bonds of one or more
series issued and delivered under the Company Mortgage and held
by the Trustee pursuant to Section 5.03 hereof.
"Indenture" -- The Trust Indenture dated as of
_______ _, ____, between the County and the Trustee, securing the
Bonds, and any amendments and supplements thereto.
"Investment Account" -- Any of the accounts by that
name established under Section 601 of the Indenture.
"outstanding" -- When used with reference to the Bonds,
as of any particular date, all Bonds authenticated and delivered
under the Indenture except:
(a) Bonds canceled at or prior to such date or
delivered to or acquired by the Trustee prior to such date for
cancellation;
(b) Bonds deemed to be paid in accordance with Article
IX of the Indenture; and
(c) Bonds in lieu of or in exchange or substitution
for which other Bonds shall have been authenticated and delivered
pursuant to the Indenture.
"Permitted Encumbrances" -- (a) The Installment Sale
Agreement dated as of _________ _, ____, by and between the
County and the Company, recorded in the office of the Circuit
Clerk and Ex Officio Recorder of ____ County, Arkansas in Record
Book ___ at page ___, and any amendments and supplements thereto;
(b) the Trust Indenture dated as of _________ _, ____, by and
between the County and ______________________________________,
_____________________, as Trustee, recorded in the office of the
Circuit Clerk and Ex Officio Recorder of ____ County, Arkansas in
Record Book ___ at page ___, and any amendments and supplements
thereto; (c) the Installment Sale Agreement dated as of
________ _, ____, by and between the County and the Company,
recorded in the office of the Circuit Clerk and Ex Officio
Recorder of ____ County, Arkansas in Record Book ____ at page
___, and any amendments and supplements thereto; (d) the Trust
Indenture dated as of ________ _, ____, by and between the County
and ___________________________________ _____, __________,
________, as Trustee, recorded in the office of the Circuit Clerk
and Ex Officio Recorder of ____ County, Arkansas in Record Book
____ at page ___, and any amendments and supplements thereto; (e)
the Installment Sale Agreement dated as of ________ _, ____, by
and between the County and the Company, recorded in the office of
the Circuit Clerk and Ex Officio Recorder of ____ County,
Arkansas in Record Book ____ at page ___, and any amendments and
supplements thereto; (f) the Trust Indenture dated as of
________ _, ____, by and between the County and _____________
___________________________, __________, ________, as Trustee,
recorded in the office of the Circuit Clerk and Ex Officio
Recorder of ____ County, Arkansas in Record Book ____ at page
___, and any amendments and supplements thereto; (g) liens for
taxes, assessments and other governmental charges not delinquent
or which can be paid without penalty; (h) unfiled, inchoate
mechanics' and materialmen's liens for construction work in
progress; (i) workmen's, repairmen's, warehousemen's and
carriers' liens and other similar liens, if any, arising in the
ordinary course of business; (j) all the following, if they do
not individually or in the aggregate materially impair the use of
the Facilities or materially detract from the value thereof to
the Company, viz.: any easements, restrictions, mineral, oil, gas
and mining rights and reservations, zoning laws and defects in
title or other encumbrances to which the Facilities may be
subject because of the installation thereof at the Plant; (k) any
lien for the satisfaction and discharge of which a sum of money
or a surety bond is on deposit with the Trustee; (l) the rights
of the County and the Company under this Agreement and any
subsequent installment sale agreement or lease relating to all or
any part of the Facilities; (m) the rights of the Trustee under
the Indenture; and (n) the lien of the Company Mortgage and the
"Excepted Encumbrances" referred to therein.
"Plant" -- The Company's electric generating plant
located within the boundaries of the County near ____________,
Arkansas and known as Arkansas ___________.
"Plans and Specifications" -- The plans and
specifications prepared by or on behalf of the Company for the
Facilities, as the same may be revised from time to time in
accordance with Section 3.03 hereof.
"Prior Bonds" -- The County's Pollution Control Revenue
Bonds, Series ____, in the aggregate principal amount of
$_________.
"Series ____ Bonds" -- The initial issue of Bonds under
and secured by the Indenture in the aggregate principal amount of
$__________.
"Trustee" -- The banking corporation or association
designated as Trustee in the Indenture, and its successor or
successors as such Trustee. The original Trustee is
_____________ ___________________________, ____________________.
Section 1.02. Use of Words and Phrases. "Herein",
"hereby", "hereunder", "hereof", "hereinabove", "hereinafter",
and other equivalent words and phrases refer to this Agreement
and not solely to the particular portion thereof in which any
such word is used. The definitions set forth in Section 1.01
hereof include both singular and plural. Whenever used herein,
any pronoun shall be deemed to include both singular and plural
and to cover all genders.
ARTICLE II
REPRESENTATIONS
Section 2.01. Representations and Warranties of the
County. The County makes the following representations and
warranties as the basis for the undertakings on the part of the
Company herein contained:
(a) The County is a political subdivision duly
existing under the Constitution and laws of the State of
Arkansas.
(b) The County has the power to enter into the trans
actions contemplated by this Agreement and to carry out its
obligations hereunder. By proper action of the governing body of
the County, the County has been duly authorized to execute and
deliver this Agreement.
(c) The County has not, and will not, except as
otherwise required by mandatory provisions of law, assign its
interest in this Agreement other than to secure the Bonds.
(d) The Facilities and their operation will promote
the securing and developing of industry and the health, safety
and physical and economic welfare of the County and its
inhabitants, and will thereby further the public purposes of the
Act.
Section 2.02. Representations and Warranties of the
Company. The Company makes the following representations and
warranties as the basis for the undertakings on the part of the
County herein contained:
(a) The Company is a corporation duly incorporated and
in good standing under the laws of the State of Arkansas, is not
in violation of any provision of its Articles of Incorporation,
or its Bylaws, has power to enter into this Agreement and to
perform and observe the agreements and covenants on its part
contained herein, including without limitation the power to issue
the First Mortgage Bonds as contemplated herein and in the
Company Mortgage, and has duly authorized the execution and
delivery of this Agreement by proper corporate action.
(b) The Facilities constitute a pollution control
project of the type authorized and permitted by the Act.
(c) The estimated Cost of Construction has been
determined in accordance with sound engineering and accounting
principles, and the Company estimates that all of the proceeds of
the Bonds (exclusive of accrued interest, if any, paid by the
original purchaser or purchasers of such Bonds upon delivery
thereof) will be expended to pay such Cost of Construction.
(d) Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, including, without limitation, the
issuance and delivery of the First Mortgage Bonds, conflicts with
or results in a breach of the terms, conditions or provisions of
any restriction or any agreement or instrument to which the
Company is now a party or by which the Company is bound, or con
stitutes a default under any of the foregoing, or results in the
creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of the Company
except any interests created herein and under the Company
Mortgage.
(e) The Securities and Exchange Commission, the
Arkansas Public Service Commission, the Tennessee Public Service
Commission, and the Public Service Commission of Missouri have
each approved all matters relating to the Company's participation
in the transactions contemplated by this Agreement which require
said approval, and no other consent, approval, authorization or
other order of any regulatory body or administrative agency or
other governmental body is legally required for the Company's
participation therein, except such as may have been obtained or
may be required under the securities laws of any state or in
commection with the issuance of series of Additional Bonds.
(f) (i) With respect to the Facilities at the date of
this Agreement the Company has, (ii) with respect to the
Facilities on the date of the first issuance of the Bonds the
Company will have, and (iii) with respect to each portion or item
of the Facilities constructed after the date of this Agreement
the Company will, when the same is constructed and title thereto
is to pass hereunder to the County, have good and marketable
title to the Facilities, free and clear of all claims, liens and
encumbrances other than Permitted Encumbrances.
Section 2.03. Official Action Toward the Issuance of
the Series ____ Bonds. The governing body of the County has
heretofore authorized a Memorandum of Agreement dated
_________ __, ____ (authorized by Order of the County Court
entered as of ______ _, ____), a Memorandum of Agreement dated
_____ _, ____ (authorized by Order of the County Court entered on
_____ _, ____, and by Ordinance No. _______ adopted by the Quorum
Court on _____ _, ____), and a Memorandum of Agreement dated
_______ __, ____ (authorized by Order of the County Court entered
on _______ __, ____), undertaking to furnish permanent financing
of the pollution control facilities necessary to the construction
and operation of the Plant by the issuance of one or more series
of revenue bonds under the Act. The County intends each
Memorandum of Agreement and the Order and Ordinance authorizing
it as official action toward the issuance of the Series ____
Bonds within the meaning of the Code and regulations thereunder.
The Company represents and warrants (i) that the Facilities being
financed out of the proceedsof the Series ____ Bonds are part of
the facilities described in the Memorandum of Agreement dated
_________ __, ____, the Memorandum of Agreement dated _____ _,
____, or the Memorandum of Agreement dated _______ __, ____; (ii)
that acquisition and construction of each of the Facilities
described in the Memorandum of Agreement dated _________ __,
____, commenced prior to _________ _, ____, and that none of such
Facilities had reached a degree of completion which would permit
operation, nor was any of such Facilities in fact in operation,
at substantially the level for which it was designed prior to
_________ __, ____; and (iii) that acquisition and construction
of each of the Facilities described in the Memorandum of
Agreement dated _____ _, ____, commenced on or after _____ _,
____, that acquisition and construction of each of the Facilities
described in the Memorandum of Agreement dated _______ __, ____,
commenced on or after _______ __, ____, and that none of such
Facilities will have been placed in service or acquired
(whichever occurs last) more than one year prior to the date of
issuance of the Series ____ Bonds.
ARTICLE III
THE FACILITIES; CONVEYANCE TO THE COUNTY
Section 3.01. Construction of the Facilities. (a) The
Company shall cause the Facilities to be constructed with all
reasonable dispatch in order to effectuate the purposes of the
Act. As between the Company and the County, the Company shall
have the sole responsibility under this Agreement for the
construction of the Facilities and may perform the same itself or
through its agents, acting both on its own behalf and as agent
for others, and may make or issue such contracts, orders,
receipts and instructions, and in general do or cause to be done
all such other things as it may in its sole discretion consider
requisite or advisable for the construction of the Facilities and
for fulfilling its obligations under this Article III.
(b) The Company, itself or through its agents, acting
both on its own behalf and as agent for others, may prosecute or
defend any actions or proceedings arising out of the construction
of the Facilities, and the County agrees to cooperate fully with
the Company in any such action or proceeding.
Section 3.02. Insufficient Moneys in Construction
Fund. In the event the moneys in the Construction Fund available
for payment of the Cost of Construction, together with moneys
made available to pay the Cost of Construction from the proceeds
of previous or subsequent issues of revenue bonds, should not be
sufficient to pay the Cost of Construction in full, the Company
agrees to pay all that portion of the Cost of Construction in
excess of the moneys available therefor.
The County does not make any warranty, either express
or implied, that the moneys which will be paid into the
Construction Fund and available for payment of the Cost of
Construction will be sufficient to pay the Cost of Construction
in full.
If the Company shall make any payments pursuant to this
Section 3.02, it shall not be entitled to any reimbursement
therefor from the County, the Trustee or the holders of any of
the Bonds, nor shall it be entitled to any diminution in or
postponement of the payment of the principal of and premium, if
any, and interest on the First Mortgage Bonds or the payment of
any other amounts payable under this Agreement.
Section 3.03. Revision of Plans and Specifications.
The Company may revise the Plans and Specifications for the
Facilities at any time and from time to time prior to the
Completion Date in any respect, including without limitation any
changes therein, additions thereto, substitutions therefor and
deletions therefrom; provided, however, that, after giving effect
to such revision, the representations contained in Section 2.02
of this Agreement shallremain true and correct; and provided,
further, that no material revision to the Plans and
Specifications shall be made, and no revision which shall render
inaccurate the description of the Facilities contained in Exhibit
A hereto shall be made, unless, in each case, the Company shall
have theretofore delivered to the Trustee:
(i) a certificate of an Authorized Company
Representative describing the proposed revision and certifying
that it complies with the requirements of this Section and will
not have the effect of disqualifying the Facilities as facilities
which can be financed under the Act, or as sewage or solid waste
disposal facilities within the meaning of Section 142(a)(5) or
(6) of the Code and regulations thereunder;
(ii) an opinion of Bond Counsel to the effect that the
proposed revision is such that the expenditure of the proceeds of
Series ____ Bonds and any Additional Bonds thereon pursuant to
this Agreement shall not impair the validity of the Bonds under
the Act, or the exclusion of the interest on the Bonds from gross
income for purposes of federal income taxation; and
(iii) such documents, certificates and showings as may
be required by Bond Counsel rendering the opinion in clause (ii)
of this paragraph.
Section 3.04. Certification of Completion Date. The
Completion Date shall be the date on which the Facilities are com
pleted in their entirety and ready to be placed in service and
operated as sewage or solid waste disposal facilities at
substantially the level for which they were designed, all as
determined by the Company. Promptly after the Completion Date,
the Company shall submit to the County and the Trustee a
certificate, executed by an Authorized Company Representative,
which shall specify the Completion Date and shall state that (a)
construction of the Facilities has been completed and the Cost of
Construction has been paid, except for any Costs of Construction
which have been incurred but are not then due and payable, or the
liability for the payment of which is being contested or disputed
by the Company, and for the payment of which the Trustee is
directed to retain specified amounts of moneys in specified
accounts within the Construction Fund, and (b) the Facilities are
suitable for operation for sewage or solid waste disposal
purposes. Notwithstanding the foregoing, such certificate may
state that it is given without prejudice to any rights against
third parties which exist at the date thereof or which may
subsequently come into being.
Section 3.05. Maintenance of Facilities; Remodeling.
The Company shall, at its expense, cause the Facilities, and
every element and unit thereof, to be maintained, preserved and
kept in good repair, working order and condition, and from time
to time tocause all needful and proper repairs, replacements,
additions, betterments and improvements to be made thereto;
provided, however, that the Company may exercise all of such
rights, powers, elections and options to cause the discontinuance
of the operation of, or reduce the capacity of, the Facilities,
or any element or unit thereof, if, in the judgment of the
Company, any such action is necessary or desirable in the conduct
of the business of the Company, or if the Company is ordered so
to do by any regulatory authority having jurisdiction in the
premises, or if the Company intends to sell or dispose of the
same and within a reasonable time shall endeavor to effectuate
such sale. The Company shall notify the County as to the nature
and extent of any material damage or loss to the Facilities and
of the discontinuance of the operation of the Facilities, or any
material element or unit thereof.
After the Completion Date, the Company may at its own
expense cause the Facilities to be remodeled or cause
substitutions, modifications and improvements to be made to the
Facilities from time to time as it, in its discretion, may deem
to be desirable for its uses and purposes, which remodeling,
substitutions, modifications and improvements shall be included
under the terms of this Agreement as part of the Facilities.
Section 3.06. Insurance. The Company shall, at its
expense, cause the Facilities to be kept insured against fire to
the extent that property of similar character is usually so
insured by companies similarly situated and operating like
properties, to a reasonable amount, by reputable insurance
companies or, in lieu of or supplementing such insurance in whole
or in part, adopt some other method or plan of protection against
loss by fire at least equal in protection to the method or plan
of protection against such loss of companies similarly situated
and operating like properties. All proceeds of such insurance,
or such other method or plan, shall be for the account of the
Company.
Section 3.07. Condemnation; Eminent Domain. (a) In
the event that title to or the temporary use of the Facilities,
or any part thereof, shall be taken in condemnation or by the
exercise of the power of eminent domain by any governmental body
or by any person, firm or corporation acting under governmental
authority, any proceeds received by the County from any award or
awards in respect of the Facilities or any part thereof made in
such condemnation or eminent domain proceedings, after payment of
all expenses incurred in the collection thereof, shall to the
extent of the Company's interest therein be paid for the account
of the Company, and the County hereby assigns to the Company all
of its right, title and interest in and to any claim for and
rights with respect to any such condemnation award.
(b) The County shall cooperate fully with the Company
in the handling and conduct of any prospective or pending
condemnation proceedings with respect to the Facilities or any
part thereof. Inno event will the County voluntarily settle or
consent to the settlement of any prospective or pending
condemnation proceedings with respect to the Facilities or any
part thereof without the written consent of the Company, and the
County will, at the request of the Company, accept a sum in
payment therefor at any stage of the condemnation proceedings
which the Company shall certify to the County to be fair. Unless
and until such a request is made by the Company, the County will
take or cause to be taken all actions necessary to obtain the
award of fair compensation for the taking and the collecting
thereof.
(c) The Company shall be entitled to the entire
proceeds of any condemnation award or portion thereof made for
damages to or takings of its own property other than the
Facilities.
Section 3.08. Termination of Construction. (a) Any
thing in this Agreement to the contrary notwithstanding, the
Company shall have the right at any time to terminate the
construction of the Facilities, if:
(i) the Company shall have determined that the
continued operation of the Plant is impracticable,
uneconomical or undesirable for any reason;
(ii) the Company shall have determined that the
continued construction or operation of the Facilities
is impracticable, uneconomical or undesirable due to
(A) the imposition of taxes, other than ad valorem
taxes currently levied upon privately owned property
used for the same general purpose as the Facilities, or
other liabilities or burdens with respect to the
Facilities or the construction or operation thereof,
(B) changes in technology, in environmental standards
or legal re-quirements or in the economic availability
of materials, supplies, equipment or labor or (C)
destruction of or damage to all or part of the
Facilities;
(iii) all or substantially all of the Facilities
or the Plant shall have been condemned or taken by
eminent domain; or
(iv) the construction or operation of the
Facilities or the Plant shall have been enjoined or
shall have otherwise been prohibited by, or shall
conflict with, any order, decree, rule or regulation of
any court or of any federal, state or local regulatory
body, administrative agency or other governmental body.
(b) Promptly after the termination of the construction
of the Facilities, the Company shall submit to the County and the
Trustee a certificate, executed by an Authorized Company
Representative, which shall state the reasons for such
terminationand state that the Cost of Construction, to the extent
of the construction of the Facilities as of the date of such
termination, has been paid, except for any Costs of Construction
which have been incurred but are not then due and payable, or the
liability for the payment of which is being contested or disputed
by the Company, and for the payment of which the Trustee is
directed to retain specified amounts of moneys in specified
accounts within the Construction Fund. Notwithstanding the
foregoing, such certificate may state that it is given without
prejudice to any rights against third parties which exist at the
date thereof or which may subsequently come into being.
Section 3.09. Conveyance to the County. The Company
agrees to and hereby does sell and convey, and the County agrees
to and hereby does purchase, upon the terms and conditions of,
and at the times specified in, this Agreement, all of the
Company's right, title and interest in the Facilities, subject
only to Permitted Encumbrances.
The right, title and interest of the Company in the
Facilities shall remain in the Company until the first issuance
of Bonds. Thereupon, all right, title and interest of the
Company in the Facilities theretofore constructed shall vest in
the County, and thereafter, as each portion or item of the
Facilities is constructed, all right, title and interest therein
shall thereupon vest in the County, without further action by the
Company or the County.
At any time or times upon or subsequent to the first
issuance of Bonds, the Company may, and within forty-five (45)
days after receipt of a written notice from the County requesting
the same shall, deliver to the County such instrument or
instruments further evidencing the conveyance and transfer from
the Company to the County of the Company's right, title and
interest in and to the Facilities theretofore having vested in
the County in accordance with the foregoing provisions of this
Section 3.09 as the County shall deem necessary or desirable for
the purposes of this Agreement.
Section 3.10. Ledger. The Company shall maintain or
cause to be maintained a ledger in which it shall list each item
of the Facilities on a current basis (reflecting all changes,
additions, substitutions and deletions pursuant to Section 3.03
hereof) and reference is hereby made to such ledger for a
complete itemization of the Facilities as they exist at any
particular time. It shall not be necessary to amend Exhibit A
hereto at any time to reflect such changes, additions,
substitutions and deletions. The Company shall file a copy of
the ledger (and all information from time to time necessary to
keep the ledger current) with the Trustee.
ARTICLE IV
ISSUANCE OF BONDS; DISPOSITION OF PROCEEDS OF BONDS
Section 4.01. Issuance of the Series ____ Bonds. The
County shall issue the Series ____ Bonds under and in accordance
with the Indenture, subject to the provisions of any bond
purchase agreement between the County and the original purchaser
or purchasers of the Series ____ Bonds. The Company hereby
approves the issuance of the Series ____ Bonds and all terms and
conditions thereof.
Section 4.02. Additional Bonds. So long as the
Company shall not be in default hereunder, and at the request of
the Company, the County may authorize and issue Additional Bonds
in aggregate principal amounts specified from time to time by the
Company in order to provide funds for the purpose of (1)
financing the cost of completing the Facilities, (2) financing
the cost of additional sewage or solid waste disposal facilities
at the Plant in conformity with the Act and the representations
concerning the Facilities herein contained, and (3) refunding the
Series ____ Bonds or any series of Additional Bonds, in whole or
in part, or any combination thereof.
The right to issue Additional Bonds set forth in this
Agreement and the Indenture shall not imply that the County and
the Company may not enter into, and the County and the Company
expressly reserve the right to enter into, to the extent
permitted by law, another agreement or agreements with respect to
the issuance by the County, under an indenture or indentures
other than the Indenture, of bonds to provide additional funds to
pay the Cost of Construction or refunding bonds to refund all or
any principal amount of all or any series of Bonds, or any
combination thereof, and the provisions of this Agreement and the
Indenture governing the issuance of Additional Bonds shall not
apply thereto.
Section 4.03. Disposition of Bond Proceeds. In con
sideration of the conveyance by the Company to the County of the
Company's right, title and interest in the Facilities as provided
in Section 3.09 hereof, the County agrees that the proceeds of
the Bonds shall be applied as in this Section 4.03 described.
The proceeds of the issuance and sale of the Series
____ Bonds and any Additional Bonds issued for other than
refunding purposes, other than accrued interest, if any, paid by
the initial purchaser or purchasers thereof, shall be deposited
into the Construction Fund, and any such accrued interest shall
be deposited into the Bond Fund, all in accordance with the
provisions of the Indenture. The proceeds of the issuance and
sale of Additional Bonds issued for the purpose of refunding the
Series ____ Bonds or any series of Additional Bonds shall be
applied in accordance with the provisions of the Indenture and
this Agreement, as each may besupplemented and amended in
connection with the issuance of such Additional Bonds.
The moneys on deposit in the Construction Fund shall be
applied by the Trustee as provided in Section 4.04 hereof and as
otherwise provided in Article VI of the Indenture. Until the
moneys on deposit in the Construction Fund are so applied, such
moneys shall be and remain the property of the County, subject to
the lien of the Indenture, and the Company shall have no right,
title or interest therein except as expressly provided in this
Agreement and the Indenture.
Section 4.04. Disbursements from the Construction
Fund. (a) The moneys on deposit in the Construction Fund shall be
disbursed from time to time to reimburse the Company for portions
of the Cost of Construction paid by it or to make payments to
persons designated by the Company in respect of portions of the
Cost of Construction, upon receipt by the Trustee of requisitions
executed by, or communications by telegram, telex or facsimile
transmission from, an Authorized Company Representative, which
requisitions or communications shall state with respect to each
payment to be made: (i) the requisition number, (ii) the name
and address of the person, firm or corporation to whom payment is
due or has been made (or, in the case of payments to the Bond
Fund, instructions to make such payments thereto), (iii) the
amount paid or to be paid, (iv) the account or accounts within
the Construction Fund from which payment of such requisition, or
any portion thereof, shall be made, (v) that each obligation,
item of cost or expense mentioned therein has been properly
incurred and has been paid or is then due and payable as an item
of the Cost of Construction, is a proper charge against the
Construction Fund, and has not been the basis of any previous
final payment therefrom or from the proceeds of any other revenue
bonds issued by the County, and (vi) that the payment of such
requisition will not result in a breach of any of the covenants
of the Company contained in subsection (c) or (d) of this Section
4.04. Any such communication by telegram, telex or facsimile
transmission shall be promptly confirmed by a requisition
executed by an Authorized Company Representative. The Company
shall upon request promptly furnish to the County a copy of any
requisition delivered to the Trustee.
(b) In paying any requisition under this Section 4.04,
the Trustee shall be entitled to rely as to the completeness and
accuracy of all statements in such requisition upon the approval
of such requisition by an Authorized Company Representative,
execution thereof to be conclusive evidence of such approval, and
the Company shall indemnify and save harmless the County and the
Trustee from any liability incurred in connection with any
requisition so executed by an Authorized Company Representative.
(c) The Company shall not submit any requisition
which, if paid, would result, as of the date of such payment, in
less than95% of the net proceeds (within the meaning of Section
142(a) of the Code and regulations thereunder) from the sale of
any series of Bonds, including earnings, if any, on amounts held
in the Construction Fund, having been used (i) for the
acquisition, construction, reconstruction or improvement of land
or property of a character subject to the allowance for
depreciation under Section 167 of the Code, or for payment of
amounts which are, for federal income tax purposes, chargeable to
the Facilities' capital account (for example under Section 263 of
the Code) or would be so chargeable either with a proper election
by the Company or but for a proper election by the Company to
deduct such amounts, (ii) to provide sewage or solid waste
disposal facilities within the meaning of Section 142(a)(5) or
(6) of the Code and regulations thereunder, and (iii) applied to
pay any rebate owing to the United States with respect to the
Bonds, pursuant to Section 148(f) of the Code; provided, however,
that the moneys paid from the Investment Account within the
Construction Fund shall be disregarded for purposes of any
computation made in accordance with the foregoing covenant if the
Company shall have submitted to the Trustee an opinion of Bond
Counsel to the effect that such moneys may be so disregarded
without impairing the exclusion of interest on the Bonds from
gross income for purposes of federal income taxation.
(d) The Company shall not submit or cause to be
submitted to the Trustee any requisition pursuant to this Section
4.04, and shall have no claim upon any moneys in the Construction
Fund, so long as there shall have occurred and be continuing any
Event of Default described in Section 8.01 hereof.
ARTICLE V
SALE AND PURCHASE OF THE PROJECT;
PURCHASE PRICE; FIRST MORTGAGE BONDS; OTHER OBLIGATIONS
Section 5.01. Sale and Purchase of the Facilities. The
County agrees to, and hereby does, sell and convey to the
Company, without warranty of any kind whatsoever, and the Company
agrees to, and hereby does, purchase and acquire from the County,
upon the terms and conditions of, and at the times specified in,
this Agreement, the right, title and interest in the Facilities
acquired by the County under Section 3.09 hereof.
Immediately upon the vesting in the County pursuant to
Section 3.09 hereof of right, title and interest in the
Facilities theretofore constructed and thereafter as each portion
or item of the Facilities is constructed and all the Company's
right, title and interest therein vests in the County pursuant to
Section 3.09 hereof, all right, title and interest of the County
in each and every such portion or item of the Facilities
theretofore constructed shall, without any further action by the
County or the Company, pass to and vest in the Company as part of
the Facilities, subject to those liens and encumbrances existing
prior to acquisition by the County of the Company's right, title
and interest in such item or items or portion or portions of the
Facilities or created by the Company or to the creation or
suffering of which the Company consented and to Permitted
Encumbrances.
At any time or times upon or subsequent to the vesting
in the Company of all the County's right, title and interest in
and to any portion or item of the Facilities in accordance with
the foregoing provisions of this Section 5.01, the County shall
deliver to the Company such instrument or instruments further
evidencing the conveyance and transfer from the County to the
Company of the same as the Company shall deem necessary or
desirable for the purposes of this Agreement. The Company shall
pay all expenses, taxes, fees and charges applicable to or
arising from the delivery of such instrument or instruments.
Section 5.02. Purchase Price. The price to be paid by
the Company for the Facilities shall be an amount equal to the
aggregate principal amount of Bonds outstanding under the
Indenture, and the interest to be paid by the Company on its
obligation to pay such price shall be an amount equal to the
aggregate of the premium, if any, and interest on the Bonds, such
price together with such interest thereon being for all purposes
of this Agreement referred to as the "purchase price of the
Facilities". The Company shall pay the purchase price of the
Facilities in installments due on the dates and in the amounts
and in the manner provided in the Indenture for the County to
cause payment to be made to the Trustee of principal of and
premium, ifany, and interest on the Bonds, whether at maturity,
upon redemption or acceleration, or otherwise; provided, however,
that the obligation of the Company to make any such payment
hereunder shall be reduced by the amount of any reduction under
the Indenture of the amount of the corresponding payment required
to be made by the County thereunder in respect of the principal
of or premium, if any, or interest on the Bonds.
Section 5.03. Issuance, Delivery and Surrender of
First Mortgage Bonds. (a) The obligation of the Company set
forth in Section 5.02 hereof to pay the purchase price of the
Facilities may be evidenced, in whole or in part, by the First
Mortgage Bonds. With respect to the Series ____ Bonds, the
Company shall issue and deliver to the County First Mortgage
Bonds as provided in subsection (b) of this Section 5.03. With
respect to any series of Additional Bonds, the Company shall
issue and deliver to the County First Mortgage Bonds as provided
in any amendment of or supplement to this Agreement.
(b) Concurrently with the issuance and delivery by the
County of the Series ____ Bonds, and in order to evidence the
obligation of the Company under Section 5.02 hereof to pay those
installments of the purchase price of the Facilities which
correspond to payment of the principal of the Series ____ Bonds,
the excess of the principal amount thereof to be applied to the
payment of accrued interest on the Series ____ Bonds, the Company
shall issue and deliver to the County a series of First Mortgage
Bonds (i) maturing on the stated maturity date of the Series ____
Bonds, (ii) in a principal amount equal to the principal of the
Series ____ Bonds plus eight months (8/12) of the annual interest
on the Series ____ Bonds, (iii) containing redemption provisions
correlative to any provisions of the Indenture relating to the
Series ____ Bonds requiring mandatory redemption thereof, (iv)
requiring payments to be made to the Trustee for the account of
the County, and (v) bearing no interest.
(c) The obligation of the Company to make any payment
of the principal of or premium, if any, or interest on the First
Mortgage Bonds, whether at maturity, upon redemption or
otherwise, shall be reduced by the amount of any reduction under
the Indenture of the amount of the corresponding payment required
to be made by the County thereunder in respect of the principal
of or premium, if any, or interest on the Bonds.
(d) The County shall not sell, assign or transfer the
First Mortgage Bonds, except to the extent provided in Section
5.04 hereof. In view of the pledge and assignment referred to in
said Section 5.04, the County agrees that (i) in satisfaction of
the obligations of the Company set forth in paragraph (b) of this
Section 5.03 with respect to the Series ____ Bonds, or in any
amendment of or supplement to this Agreement with respect to any
series of Additional Bonds, the First Mortgage Bonds shall
beissued and delivered to, registered in the name of and held by
the Trustee for the benefit of the owners and holders from time
to time of the Bonds; (ii) the Indenture shall provide that the
Trustee shall not sell, assign or transfer the First Mortgage
Bonds except to a successor trustee under the Indenture, and
shall surrender First Mortgage Bonds to the Company Mortgage
Trustees in accordance with the provisions of subsection (e) of
this Section 5.03; and (iii) the Company may take such actions as
it shall deem to be desirable to effect compliance with such
restrictions on transfer, including the placing of an appropriate
legend on each First Mortgage Bond and the issuance of
stop-transfer instructions to the Company Mortgage Trustees or
any other transfer agent under the Company Mortgage. Any action
taken by the Trustee in accordance with the provisions of Section
410 of the Indenture shall be binding upon the Company.
(e) At the time any Bonds of any series cease to be
outstanding (other than by reason of the payment or redemption of
First Mortgage Bonds of the corresponding series and other than
by reason of the applicability of clause (c) in the definition of
"outstanding" herein):
(i) in the event that such Bonds were not subject
to redemption pursuant to a sinking fund therefor, the
County shall cause the Trustee to surrender to the
Company Mortgage Trustees a corresponding principal
amount of First Mortgage Bonds, plus, in the case of
the Series ____ Bonds, a principal amount of such First
Mortgage Bonds equal to eight months (8/12) of the
annual interest payable in respect of such series, of
the series corresponding to such series of Bonds,
maturing on the same date as such Bonds; or
(ii) in the event that such Bonds were subject to
redemption pursuant to a sinking fund therefor, the
County shall cause the Trustee to surrender to the
Company Mortgage Trustees a corresponding principal
amount of First Mortgage Bonds, of the series
corresponding to such series of Bonds, maturing, at the
election of the Company:
(A) on the same date as such Bonds; or
(B) on any sinking fund redemption date relating
to outstanding Bonds of such series; provided,
however, that the Company shall have delivered to
the Trustee pursuant to the Indenture an
irrevocable certificate specifying that such Bonds
are to be credited against the sinking fund
payment or payments to be made on the maturity
date, and in the principal amount, of the First
Mortgage Bonds so to be surrendered.
(f) For the purpose of determining whether or not any
payment of the principal of or premium, if any, or interest on
the First Mortgage Bonds shall have been made in full, any moneys
paid by the Company in respect of the First Mortgage Bonds which
shall have been withdrawn by the Trustee from the Bond Fund
pursuant to Section 1102 of the Indenture shall be deemed to have
been paid by the Company to the Trustee pursuant to Section 5.05
hereof and not to have been paid by the Company in respect of the
First Mortgage Bonds.
Section 5.04. Payments Assigned; Obligation Absolute.
It is understood and agreed that all payments to be made by the
Company of the purchase price of the Facilities are, by the
Indenture, to be pledged by the County to the Trustee, and that
all rights and interest of the County hereunder (except for the
County's rights under Sections 5.05, 5.06, 5.07, 6.03 and 8.05
hereof and any rights of the County to receive notices,
certificates, requests, requisitions, directions and other
communications hereunder), including the right to receive the
First Mortgage Bonds and the First Mortgage Bonds, are to be
pledged and assigned to the Trustee. The Company assents to such
pledge and assignment and agrees that the obligation of the
Company to make the payments of the purchase price of the
Facilities shall be absolute, irrevocable and unconditional and
shall not be subject to cancellation, termination or abatement,
or to any defense other than payment or to any right of set-off,
counterclaim or recoupment arising out of any breach under this
Agreement, the Indenture or otherwise by the County or the
Trustee or any other party, or out of any obligation or liability
at any time owing to the Company by the County, the Trustee or
any other party, and, further, that the payments of the purchase
price of the Facilities and the other payments due hereunder
shall continue to be payable at the times and in the amounts
specified herein and in the First Mortgage Bonds, whether or not
the Facilities or the Plant, or any portion thereof, shall have
been completed or shall have been destroyed by fire or other
casualty, or title thereto, or the use thereof, shall have been
taken by the exercise of the power of eminent domain, and that
there shall be no abatement of or diminution in any such payments
by reason thereof, whether or not the Facilities or the Plant
shall be used or useful, and whether or not any applicable laws,
regulations or standards shall prevent or prohibit the use of the
Facilities or the Plant, or for any other reason.
Section 5.05. Payment of Expenses. The Company shall
pay, or cause to be paid out of the Construction Fund, all of the
Administration Expenses of the County, the payment of the
compensation and the reimbursement of expenses and advances of
the Trustee, any paying agent, any co-paying agent, and the
registrar under the Indenture to be made directly to such entity.
Section 5.06. Indemnification. The Company releases
the County and the Trustee from, agrees that the County and the
Trusteeshall not be liable for, and agrees to indemnify and hold
the County and the Trustee free and harmless from, any liability
for any loss or damage to property or any injury to or death of
any person that may be occasioned by any cause whatsoever
pertaining to the Facilities, except in any case as a result of
the negligence or bad faith of the County or the Trustee.
The Company will indemnify and hold the County and the
Trustee free and harmless from any loss, claim, damage, tax,
penalty, liability (including but not limited to liability for
any patent infringement), disbursement, litigation expenses,
attorneys' fees and expenses or court costs arising out of, or in
any way relating to, the execution or performance of this
Agreement, the issuance or sale of the Bonds, actions taken under
the Indenture, or any other cause whatsoever pertaining to the
Facilities, including without limitation, recovery costs arising
from the presence of hazardous substances, except in any case as
a result of the negligence or bad faith of the Trustee, or as a
result of the gross negligence or bad faith of the County.
Under this Section 5.06, the Company shall also be
deemed to release, indemnify and agree to hold harmless each
employee, official or officer of the County and the Trustee to
the same extent as the County and the Trustee.
Section 5.07. Payment of Taxes; Discharge of Liens.
The Company shall: (a) pay, or make provision for payment of, all
lawful taxes and assessments, including income, profits, property
or excise taxes, if any, or other municipal or governmental
charges, levied or assessed by any federal, state or municipal
government or political body upon the County with respect to the
Facilities or any part thereof or upon any amounts payable
hereunder; and (b) pay or cause to be satisfied and discharged or
make adequate provision to satisfy and discharge, within sixty
(60) days after the same shall accrue, any lien or charge upon
any amounts payable hereunder, and all lawful claims or demands
for labor, materials, supplies or other charges which, if unpaid,
might be or become a lien upon such amounts, except Permitted
Encumbrances; provided, that, if the Company shall first notify
the County and the Trustee of its intention so to do, the Company
may in good faith contest any such lien or charge or claims or
demands in appropriate legal proceedings, and in such event may
permit the items so contested to remain undischarged and
unsatisfied during the period of such contest and any appeal
therefrom, unless the County or the Trustee shall notify the
Company in writing that, in the opinion of counsel to the County
or the Trustee, by nonpayment of any such items the lien of the
Indenture as to the amounts payable hereunder will be materially
endangered, in which event the Company shall promptly pay and
cause to be satisfied and discharged all such unpaid items. The
County shall cooperate fully with the Company in any such
contest.
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS
Section 6.01. Maintenance of Corporate Existence. The
Company shall maintain its corporate existence, will not dissolve
or otherwise dispose of all or substantially all its assets and
will not consolidate with or merge with or into another
corporation; provided, however, that the Company may consolidate
with or merge with or into, or sell or otherwise transfer all or
substantially all of its assets (and may thereafter dissolve) to,
another corporation, incorporated under the laws of the United
States, one of the states thereof or the District of Columbia, if
the surviving, resulting or transferee corporation, as the case
may be (if other than the Company), prior to or simultaneously
with such consolidation, merger, sale or transfer, assumes, by
delivery to the Trustee of an instrument in writing satisfactory
in form and substance to the Trustee, all the obligations of the
Company hereunder and on the First Mortgage Bonds.
If consolidation, merger or sale or other transfer is
made as permitted by this Section 6.01, the provisions of this
Section 6.01 shall continue in full force and effect and no
further consolidation, merger or sale or other transfer shall be
made except in compliance with the provisions of this Section
6.01.
Section 6.02. Permits or Licenses. In the event that
it may be necessary for the proper performance of this Agreement
on the part of the Company or the County that any application or
applications for any permit or license to do or to perform
certain things be made to any governmental or other agency by the
Company or the County, the Company and the County each shall,
upon the request of either, execute such application or
applications.
Section 6.03. County's and Trustee's Access to
Facilities. The County and the Trustee shall have the right,
upon appropriate prior notice to the Company, to have reasonable
access to the Facilities during normal business hours for the
purpose of making examinations and inspections of the same.
Section 6.04. Arbitrage Covenant. The County and the
Company covenant that the proceeds of the sale of the Bonds, the
earnings thereon, and any other moneys on deposit in any fund or
account maintained in respect of the Bonds (whether such moneys
were derived from the proceeds of the sale of the Bonds or from
other sources) will not be used in a manner which would cause the
Bonds to be treated as "arbitrage bonds" within the meaning of
Section 148 of the Code. The Company further covenants that: (a)
all actions with respect to the Bonds required by Section 148(f)
of the Code shall be taken; (b) it shall make the determinations
required by paragraph (b) of Section 702 of the Indenture and
promptly notify the Trustee of the same, together with
supportingcalculations; and (c) it shall within twenty-five (25)
days after (i) the calendar date which corresponds to the final
maturity of the respective series of Bonds and each anniversary
thereof falling on or after the date of initial authentication
and delivery thereof up to and including the final maturity of
such series of the Bonds, unless the final payment, whether upon
redemption in whole or at maturity, of such Bonds shall have
occurred prior to such anniversary, and (ii) such final payment,
file with the Trustee a statement signed by the chief financial
officer of the Company to the effect that the Company is then in
compliance with its covenants contained in clauses (a) and (b) of
this sentence, together with supporting calculations; provided,
however, that if the Company shall furnish an opinion of Bond
Counsel to the Trustee to the effect that no further action by
the Company is required for such compliance with respect to the
Bonds, the Company shall not thereafter be required to deliver
any such statements or calculations.
Section 6.05. Use of Facilities. The Company shall
cause the Facilities to be used for the abatement or control of
pollution or for the disposal of sewage or solid waste.
Section 6.06. No Warranties. The County makes no
warranty, either express or implied, with respect to the
Facilities as a whole or with respect to any item or portion of
the Facilities. Without limiting the effect of the preceding
sentence, it is expressly agreed that in connection with each
sale or conveyance pursuant to Section 5.01 of this Agreement (a)
the County makes no warranty that the title conveyed shall be
good or that its transfer is rightful or that the goods shall be
delivered free from any security interest or other lien or
encumbrance, (b) the County makes NO WARRANTY OF MERCHANTABILITY,
and (c) THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE
DESCRIPTION ON THE FACE HEREOF.
Section 6.07. Quiet Enjoyment. The County covenants
that the Company, upon observing and performing the terms,
conditions and covenants on the Company's part to be observed and
performed under this Agreement, shall peaceably and quietly have,
hold and enjoy the Facilities as purchaser in possession, free
from molestation, hindrance, eviction or disturbance by the
County or by any other person or persons claiming the same by,
through or under the County.
Section 6.08. Tax Exempt Status of Bonds. The County
and the Company mutually covenant and agree that neither of them
shall take or authorize or permit any action to be taken, and
have not taken or authorized or permitted any action to be taken,
which results in interest paid on the Bonds being included in
gross income for purposes of federal income taxes. Without
limiting the generality of the foregoing, the Company further
covenants and agrees as follows:
(a) Not less than 95% of the net proceeds (within
the meaning of Section 142(a) of the Code and
regulations thereunder) from the sale of the Series
____ Bonds and any issue of Additional Bonds will be
expended (i) (A) for Cost of Construction which consist
of proper costs of land or property of a character
subject to the allowance for depreciation under Section
167 of the Code, or which will be, for federal income
tax purposes, chargeable to capital account or would
have been so chargeable either with a proper election
by the Company (for example under Section 266 of the
Code) or but for a proper election by the Company to
deduct such amounts, and (B) to provide sewage or solid
waste disposal facilities within the meaning of Section
142(a)(5) and (6) of the Code and regulations
thereunder; (ii) for the redemption of all or part of
the Series ____ Bonds or Additional Bonds the proceeds
of which were used as stated in (i) above; or (iii) any
combination thereof.
(b) Within thirty-one (31) days of the date of
issuance of the Series ____ Bonds or any series of
Additional Bonds, there neither have been nor will be
any private activity bonds (within the meaning of
Section 141(a) of the Code) sold to finance facilities
of the Company or any related person within the meaning
of Section 147(a)(2) of the Code, under a common plan
of marketing, at substantially the same rate of
interest, and for which a common or pooled security
will be used or available to pay debt service.
(c) The average maturity of the Series ____ Bonds
or any series of Additional Bonds (within the meaning
of Section 147(b) of the Code and regulations
thereunder) does not exceed 120% of the average
reasonably expected economic life of the Facilities
financed by such Bonds (within the meaning of Section
147(b) of the Code and regulations thereunder),
determined with respect to any facility as of the later
of the date on which the Bonds are issued or the date
on which such facilities are or were placed in service
(or expected to be placed in service).
(d) No changes will be made in the Facilities
which in any way impairs the exclusion of interest on
any of the Bonds from gross income for purposes of
federal income taxation.
(e) No more than 25% of the proceeds of the
Series ____ Bonds or any series of Additional Bonds
will be used to provide land or a facility the primary
purpose of which is one of the following: retail, food
and beverageservices, automobile sales or service, or
the provision of recreation or entertainment.
(f) No portion of the proceeds of the Series ____
Bonds or any series of Additional Bonds will be used to
provide or acquire any of the following: (i) any
private or commercial golf course, country club,
massage parlor, tennis club, skating facility
(including roller skating, skateboard and ice skating),
racquet sports facility (including any handball or
racquetball court), hot tub facility, suntan facility,
racetrack, airplane, skybox or other private luxury
box, health club facility, facility primarily used for
gambling, store the principal business of which is the
sale of alcoholic beverages for consumption off
premises; (ii) land to be used for farming purposes; or
(iii) residential real property for family units.
(g) No portion of the proceeds of the Series ____
Bonds or any series of Additional Bonds will be used
for the acquisition of any property (or an interest
therein) unless the first use of such property is
pursuant to such acquisition, except for property with
respect to which qualified rehabilitation expenditures
are made pursuant to and in the amounts specified in
Section 147(d) of the Code.
(h) No action shall be taken that will cause the
Series ____ Bonds or any series of Additional Bonds to
be "federally guaranteed" as defined in Section 149(b)
of the Code.
(i) No portion of the proceeds of the Series ____
Bonds or any series of Additional Bonds in excess of 2%
of the proceeds thereof (within the meaning of Section
147(g) of the Code and regulations thereunder) will be
used to finance costs of issuance of such Bonds.
The covenants and agreements contained in this Section 6.08 shall
survive any termination of this Agreement.
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
Section 7.01. By the County. Except as provided in
Article V of this Agreement, the County will not sell, lease,
assign, transfer, convey or otherwise dispose of its interest in
the Facilities or any portion thereof or interest therein or in
the revenues therefrom without the written consent of the
Company, nor will it create or suffer to be created any debt,
lien or charge thereon, not consented to by the Company, except
Permitted Encumbrances.
Section 7.02. By the Company. The Company's interest
in this Agreement may be assigned in whole or in part, and the
Facilities may be leased or sold as a whole or in part (whether a
specific element or unit or an undivided interest), by the
Company, subject, however, to the condition that no assignment,
lease or sale (other than as described in Section 6.01 hereof)
shall relieve the Company from primary liability for its
obligations under Section 5.02 and 5.03 hereof (including its
obligations on the First Mortgage Bonds) to pay the purchase
price of the Facilities, or for any other of its obligations
hereunder, other than those obligations relating to the
construction of the Facilities (if such assignment, lease or sale
occurs prior to the Completion Date) and to the operation,
maintenance and insurance of the Facilities which obligations (to
the extent of the interest assigned, leased or sold and to the
extent assumed by the assignee, lessee or purchaser) shall be
deemed to be satisfied and discharged.
After any lease or sale of any element or unit of the
Facilities, or any interest therein, such element or unit, or
interest therein, shall no longer be deemed to be part of the
Facilities for the purposes of this Agreement.
The Company shall, within fifteen (15) days after the
delivery thereof, furnish to the County and the Trustee a true
and complete copy of the agreements or other documents
effectuating any such assignment, lease or sale.
Section 7.03. Limitation. This Agreement shall not be
assigned nor shall the Facilities be leased or sold, in whole or
in part, except as provided in this Article VII or in Section
6.01 or in the Indenture.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. Each of the
following events shall constitute and is referred to in this
Agreement as an "Event of Default":
(a) a "Default" as such term is defined in Section 65
of the Company Mortgage;
(b) a failure by the Company to make when due any
payment required to be made pursuant to Section 5.02 hereof,
which failure shall have resulted in an "Event of Default"
under clause (a) or (b) of Section 1001 of the Indenture; or
(c) a failure by the Company to pay when due any other
amount required to be paid under this Agreement or to
observe and perform any covenant, condition or agreement on
its part to be observed or performed which failure shall
continue for a period of ninety (90) days after written
notice, specifying such failure and requesting that it be
remedied, shall have been given to the Company by the County
or the Trustee, unless the County and the Trustee shall
agree in writing to an extension of such period prior to its
expiration; provided, however, that the County and the
Trustee shall be deemed to have agreed to an extension of
such period if corrective action is initiated by the Company
within such period and is being diligently pursued.
Section 8.02. Force Majeure. The provisions of
Section 8.01 hereof are subject to the following limitations: If
by reason of acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders or other acts of any
kind of the Government of the United States or of the State of
Arkansas, or any other sovereign entity or body politic, or any
department, agency, political subdivision, court or official of
any of them, or any civil or military authority; insurrections;
riots; epidemics; landslides; lightning; earthquakes; volcanoes;
fires; hurricanes; tornados; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances;
explosions; breakage or accident to machinery; partial or entire
failure of utilities; or any cause or event not reasonably within
the control of the Company, the Company is unable in whole or in
part to carry out any one or more of its agreements or
obligations contained herein, other than its obligations under
Section 5.02 hereof to pay the purchase price of the Facilities
and its obligations under Sections 5.07, 6.01, 6.08 and 9.01
hereof, the Company shall not be deemed in default by reason of
not carrying out said agreement or agreements or performing said
obligation or obligations during the continuance of such
inability. The Company agrees, however, to use its best efforts
to remedy with all reasonable dispatch the causeor causes
preventing it from carrying out its agreements; provided, that
the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the
Company, and the Company shall not be required to make settlement
of strikes, lockouts and other industrial disturbances by
acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the
Company.
Section 8.03. Remedies on Default. (a) Upon the
occurrence and continuance of any Event of Default described in
clause (a) of Section 8.01 hereof, the Trustee, as the holder of
the First Mortgage Bonds, shall, subject to the provisions of the
Indenture, have the rights provided in the Company Mortgage.
(b) Upon the occurrence and continuance of any Event
of Default described in clause (b) of Section 8.01 hereof, and
further upon the condition that, in accordance with the terms of
the Indenture, the Bonds shall have become immediately due and
payable pursuant to any provision of the Indenture, the payments
required to be paid pursuant to Section 5.02 hereof shall,
without further action, become and be immediately due and
payable.
(c) Upon the occurrence and continuance of any Event
of Default, the County with the prior consent of the Trustee, or
the Trustee, may take any action at law or in equity to collect
the payments then due and thereafter to come due hereunder, or to
enforce performance and observance of any obligation, agreement
or covenant of the Company under this Agreement.
(d) Any amounts collected pursuant to action taken
under this Section shall be applied in accordance with the
Indenture.
(e) In case any proceeding taken by the County or the
Trustee on account of any Event of Default shall have been dis
continued or abandoned for any reason, or shall have been
determined adversely to the County or the Trustee, then and in
every case the County and the Trustee, shall be restored to their
former positions and rights hereunder, respectively, and all
rights, remedies and powers of the County and the Trustee shall
continue as though no such proceeding had been taken.
Section 8.04. No Remedy Exclusive. No remedy
conferred upon or reserved to the County or the Trustee by this
Agreement is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given
under this Agreement or now or hereafter existing at law or in
equity or by statute. No delay or omission to exercise any right
or power accruing upon any Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the County
or the Trustee toexercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice other than
such notice as may be required in this Article.
Section 8.05. Agreement to Pay Attorneys' Fees and
Expenses. In the event the Company should default under any of
the provisions of this Agreement and the County or the Trustee
should employ attorneys or incur other expenses for the
collection of payments due hereunder or on the First Mortgage
Bonds or for the enforcement of performance or observance of any
obligation or agreement on the part of the Company contained
herein, the Company agrees that it will on demand therefor pay to
the County or the Trustee, as the case may be, the reasonable
fees of such attorneys and such other expenses so incurred.
Section 8.06. Waiver of Breach. In the event that any
agreement contained herein shall be breached by either the
Company or the County and such breach shall thereafter be waived
by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any
other breach hereunder. In view of the assignment of the
County's rights in and under this Agreement to the Trustee under
the Indenture, the County shall have no power to waive any
default hereunder by the Company without the consent of the
Trustee. Any waiver of any "Event of Default" under the
Indenture and a rescission and annulment of its consequences, and
any waiver of any "Default" under the Company Mortgage and a
rescission and annulment of its consequences, shall constitute a
waiver of the corresponding Event of Default hereunder and a
rescission and annulment of the consequence thereof.
ARTICLE IX
REDEMPTION OR PURCHASE OF BONDS
Section 9.01. Redemption of Bonds. The County shall
take the actions required by the Indenture to discharge the lien
thereof through the redemption, or provision for payment or
redemption, of all Bonds then outstanding, or to effect the
redemption, or provision for payment or redemption, of less than
all the Bonds then outstanding, upon receipt by the County and
the Trustee from the Company of a notice designating the
principal amounts, series and maturities of the Bonds to be
redeemed, or for the payment or redemption of which provision is
to be made, and, in the case of redemption of Bonds, or provision
therefor, specifying the date of redemption, which shall not be
less than forty-five (45) days from the date such notice is
given, and the applicable redemption provision of the Indenture.
Unless otherwise stated therein or otherwise required by the
Indenture, such notice shall be revocable by the Company at any
time prior to the time at which the Bonds to be redeemed, or for
the payment or redemption of which provision is to be made, are
first deemed to be paid in accordance with Article IX of the
Indenture. The Company shall furnish, as a prepayment of the
purchase price of the Facilities, any moneys or Government
Securities (as defined in the Indenture) required by the
Indenture to be deposited with the Trustee or otherwise paid by
the County in connection with any of the foregoing purposes.
Section 9.02. Purchase of Bonds. The Company may at
any time, and from time to time, furnish moneys to the Trustee
accompanied by a notice directing the Trustee to apply such
moneys to the purchase in the open market of Bonds in the
principal amounts and of the series and maturities specified in
such notice, and any Bonds so purchased shall thereupon be
canceled by the Trustee.
ARTICLE X
RECORDATION AND OTHER INSTRUMENTS
Section 10.01. Recording and Filing. The Company
shall record and file, or cause to be recorded and filed, all
documents and statements referred to in Section 404 of the
Indenture.
Section 10.02. Photocopies and Reproductions. A
photocopy or other reproduction of this Agreement may be filed as
a financing statement pursuant to the Uniform Commercial Code,
although the signatures of the Company and the County on such
reproduction are not original manual signatures.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Notices. Except as otherwise provided
in this Agreement, all notices, certificates or other
communications shall be sufficiently given and shall be deemed
given when mailed by registered or certified mail, postage
prepaid, to the County, the Company or the Trustee. Copies of
each notice, certificate or other communication given hereunder
by or to the Company shall be mailed by registered or certified
mail, postage prepaid, to the Trustee; provided, however, that
the effectiveness of any such notice shall not be affected by the
failure to send any such copies. Notices, certificates or other
communications shall be sent to the following addresses:
Company: Arkansas Power & Light Company
P.O. Box 551
Little Rock, Arkansas 72203
Attention: Treasurer
County: ____ County, Arkansas
____ County Courthouse
____________, Arkansas _____
Attention: County Judge
Trustee: ______________________________
______________________________
______________________________
______________________________
Attention: Corporate Trust Department
Any of the foregoing may, by notice given hereunder, designate
any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 11.02. Severability. If any provision of this
Agreement shall be held or deemed to be or shall, in fact, be
illegal, inoperative or unenforceable, the same shall not affect
any other provision or provisions herein contained or render the
same invalid, inoperative, or unenforceable to any extent
whatever.
Section 11.03. Execution of Counterparts. This
Agreement may be simultaneously executed in several counterparts,
each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 11.04. Amounts Remaining in Bond Fund. It is
agreed by the parties hereto that after payment in full of (i)
the Bonds (or the provision for payment thereof having been made
in accordance with the provisions of the Indenture), (ii) the
Administration Expenses of the County, and (iii) all other
amountsrequired to be paid under this Agreement and the
Indenture, any amounts remaining in the Bond Fund shall belong to
and be paid by the Trustee to the Company.
Section 11.05. Amendments, Changes and Modifications.
Except as otherwise provided in this Agreement or the Indenture,
subsequent to the initial issuance of Bonds and prior to payment
in full of the Bonds (or the provision for payment thereof having
been made in accordance with the provisions of the Indenture),
this Agreement may not be effectively amended, changed, modified,
altered or terminated nor any provision waived, without the
written consent of the Trustee which shall not be unreasonably
withheld.
Section 11.06. Governing Law. This Agreement shall be
governed exclusively by and construed in accordance with the
applicable laws of the State of Arkansas.
Section 11.07. Authorized Company Representatives. An
Authorized Company Representative shall act on behalf of the
Company whenever the approval of the Company is required or the
Company requests the County to take some action, and the County
and the Trustee shall be authorized to act on any such approval
or request and neither party hereto shall have any complaint
against the other or against the Trustee as a result of any such
action taken.
Section 11.08. Term of the Agreement. This Agreement
shall be in full force and effect from the date hereof until the
right, title and interest of the Trustee in and to the Trust
Estate (as defined in the Indenture) shall have ceased,
determined and become void in accordance with Article IX of the
Indenture and until all payments required under this Agreement
shall have been made.
Section 11.09. No Personal Liability. No covenant or
agreement contained in this Agreement shall be deemed to be the
covenant or agreement of any official, officer, agent, or
employee of the County in his individual capacity, and no such
person shall be subject to any personal liability or
accountability by reason of the issuance thereof.
Section 11.10. Parties in Interest. This Agreement
shall inure to the benefit of and shall be binding upon the
County, the Company and their respective successors and assigns,
and no other person, firm or corporation shall have any right,
remedy or claim under or by reason of this Agreement; provided,
however, that any obligation of the County created by or arising
out of this Agreement shall be payable solely out of the revenues
derived from this Agreement or the sale of the Bonds or income
earned on invested funds as provided in the Indenture and shall
not constitute, and no breach of this Agreement by the County
shallimpose, a pecuniary liability upon the County or a charge
upon the County's general credit or against its taxing powers.
IN WITNESS WHEREOF, the County and the Company have
caused this Agreement to be executed in their respective
corporate names and their respective corporate seals to be
hereunto affixed and attested by their duly authorized officers,
all as of the date first above written.
____ COUNTY, ARKANSAS
ATTEST:
By _____________________________
___________________________ County Judge
County Clerk
(SEAL)
ARKANSAS POWER & LIGHT COMPANY
ATTEST:
By _____________________________
___________________________ Senior Vice President
Assistant Secretary
(SEAL)
<PAGE>
ACKNOWLEDGMENT
STATE OF ARKANSAS )
)
COUNTY OF _________ )
On this ____ day of _______, ____, before me, a Notary
Public duly commissioned, qualified and acting, within and for
the County and State aforesaid, appeared in person the within
named _______________ and ___________, County Judge and County
Clerk, respectively, of ____ County, Arkansas, to me personally
well known, who stated that they were duly authorized in their
respective capacities to execute the foregoing instrument for and
in the name of the County, and further stated and acknowledged
that they had signed, executed and delivered the foregoing
instrument for the consideration, uses and purposes therein
mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this ____ day of _______, ____.
________________________________
Notary Public
My commission expires:
___________________________
(SEAL)
<PAGE>
ACKNOWLEDGMENT
STATE OF ARKANSAS )
)
COUNTY OF _______ )
On this ____ day of _______, ____, before me, a Notary
Public duly commissioned, qualified and acting within and for the
County and State aforesaid, appeared in person the within named
______________ and ______________, Senior Vice President and
Assistant Secretary, respectively, of Arkansas Power & Light
Company, an Arkansas corporation, to me personally well known,
who stated that they were duly authorized in their respective
capacities to execute the foregoing instrument for and in the
name and behalf of the corporation, and further stated and
acknowledged that they had so signed, executed and delivered the
foregoing instrument for the consideration, uses and purposes
therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this ____ day of _______, ____.
________________________________
Notary Public
My commission expires:
__________________________
(SEAL)
<PAGE>
EXHIBIT A
DESCRIPTION OF FACILITIES
Exhibit B-3
________________________________________________________________
___________ COUNTY, ARKANSAS
to
_________________________________________
____________________
_______________
TRUST INDENTURE _______________
Dated as of _______________
_________________________________________________________________
$__________ _________ County, Arkansas Pollution Control Revenue
Refunding Bonds, Series ____ (Arkansas Power & Light Company
Project)
<PAGE>
TRUST INDENTURE
TABLE OF CONTENTS
(This Table of Contents is not
part of the Trust Indenture
and is only for convenience of reference.)
Parties 1
Recitals 1
Granting Clauses 2
ARTICLE I
DEFINITIONS
Section 101 Definitions 5
Section 102 Use of Words 9
ARTICLE II
THE BONDS
Section 201 Authorized Form and Amount of Bonds 10
Section 202 Details of Series ____ Bonds 10
Section 203 Payment 11
Section 204 Execution 11
Section 205 Limited Obligation 11
Section 206 Authentication 11
Section 207 Delivery of the Bonds 12
Section 208 Mutilated, Destroyed or Lost Bonds 12
Section 209 Registration and Exchange of Bonds 13
Section 210 Cremation and Other Dispositions 14
Section 211 Additional Bonds 14
Section 212 Temporary Bonds 15
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 301 Redemption Applicable to Series 16
____ Bonds Only
Section 302 Notice 17
Section 303 Redemption Payments 18
Section 304 Cancellation 18
Section 305 Partial Redemption of Bonds 18
ARTICLE IV
GENERAL COVENANTS; THE FIRST MORTGAGE BONDS
Section 401 Payment of Principal, Premium, If 19
Any, and Interest
Section 402 Performance of Covenants 19
Section 403 Instruments of Further Assurance 20
Section 404 Recordation and Other Instruments 20
Section 405 Inspection of Project Books 20
Section 406 Rights Under Sale Agreement 20
Section 407 Prohibited Activities 20
Section 408 No Transfer of First Mortgage Bonds 21
Section 409 Voting of First Mortgage Bonds 21
Section 410 Surrender of First Mortgage Bonds 21
Section 411 Notice to Company Mortgage Trustees 21
ARTICLE V
REVENUES AND FUNDS
Section 501 Creation of Bond Fund 23
Section 502 Payments Into Bond Fund 23
Section 503 Use of Moneys in Bond Fund 23
Section 504 Withdrawals from Bond Fund 23
Section 505 Non-Presentment of Bonds 23
Section 506 Administration Expenses 24
Section 507 Moneys to be Held in Trust 24
Section 508 Refund to Company of Excess Payments 25
ARTICLE VI
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
Section 601 Creation of Construction Fund 26
Section 602 Payments Into Construction Fund 26
Section 603 Disbursements From Construction Fund 26
Section 604 Balance In Construction Fund 26
Section 605 Redemption of Bonds Pursuant to 27
Section 301(a) or Similar Provisions
Section 606 Redemption Upon Taxability of Interest 28
Section 607 Acceleration of Bonds 28
Section 608 Refunding of Bonds 28
ARTICLE VII
INVESTMENTS
Section 701 Investment of Moneys 29
Section 702 Arbitrage Law Requirements 30
ARTICLE VIII
RIGHTS OF THE COMPANY
Section 801 Rights of Company Under Sale Agreement 32
Section 802 Enforcement of Rights and Obligations 32
ARTICLE IX
DISCHARGE OF LIEN
Section 901 Discharge of Lien 33
ARTICLE X
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
Section 1001 Events of Default 35
Section 1002 Acceleration 35
Section 1003 Other Remedies; Rights of Bondholders 36
Section 1004 Right of Bondholders to Direct 37
Proceedings
Section 1005 Appointment of Receiver 37
Section 1006 Waiver 37
Section 1007 Application of Moneys 37
Section 1008 Remedies Vested in Trustee 39
Section 1009 Rights and Remedies of Bondholders 39
Section 1010 Termination of Proceedings 39
Section 1011 Waivers of Events of Default 40
ARTICLE XI
THE TRUSTEE AND PAYING AGENTS
Section 1101 Acceptance of Trusts 41
Section 1102 Fees, Charges and Expenses of Trustee 43
and Paying Agents
Section 1103 Notice to Bondholders of Default 44
Section 1104 Intervention by Trustee 44
Section 1105 Merger or Consolidation of Trustee 44
Section 1106 Resignation by Trustee 44
Section 1107 Removal of Trustee 45
Section 1108 Appointment of Successor Trustee 45
Section 1109 Concerning Any Successor Trustee 45
Section 1110 Reliance Upon Instruments 46
Section 1111 Appointment of Co-Trustee 46
Section 1112 Designation and Succession of Paying Agents 47
Section 1113 Several Capacities 47
ARTICLE XII
SUPPLEMENTAL INDENTURES
Section 1201 Supplemental Indentures without 48
Bondholder Consent
Section 1202 Supplemental Indentures requiring Bondholder 49
Consent
Section 1203 Consent of Company 50
Section 1204 Opinion of Bond Counsel 50
ARTICLE XIII
AMENDMENT TO SALE AGREEMENT
Section 1301 Amendments Not Requiring Consent of 51
Bondholders
Section 1302 Amendments Requiring Consent of 51
Bondholders
Section 1303 Opinion of Bond Counsel 51
ARTICLE XIV
MISCELLANEOUS
Section 1401 Consents, etc. of Bondholders 52
Section 1402 Limitation of Rights 52
Section 1403 Severability 52
Section 1404 Notices 53
Section 1405 Applicable Provisions of Law 53
Section 1406 Counterparts 53
Section 1407 Successors and Assigns 54
Section 1408 Captions 54
Section 1409 Photocopies and Reproductions 54
Section 1410 Bonds Owned by the County or the Company 54
Section 1411 Holidays 54
Signatures and Seals 55
Acknowledgments 56
Exhibit A - Form of Series ____ Bond 58
<PAGE>
TRUST INDENTURE
This TRUST INDENTURE dated as of _______ _, ____, by
and between _________ COUNTY, ARKANSAS, a political subdivision
under the Constitution and laws of the State of Arkansas (here
inafter referred to as the "County"), as party of the first part,
and _________________________________________, an institution
organized under and existing by virtue of the laws of the United
States of America with its principal office, domicile and post
office address in __________, ________ (hereinafter referred to
as the "Trustee"), as party of the second part;
W I T N E S S E T H:
WHEREAS, the County is authorized and empowered under
the laws of the State of Arkansas, including particularly Title
14, Chapter 267 of the Arkansas Code of 1987 Annotated (the
"Act"), to issue revenue bonds and to expend the proceeds thereof
to finance and refinance the acquisition, construction,
reconstruction, extension, equipment or improvement of pollution
control facilities for the disposal or control of sewage, solid
waste, water pollution, air pollution, or any combination
thereof; and
WHEREAS, certain pollution control facilities
(hereinafter referred to as the "Facilities") have been, and are
being, acquired, constructed and equipped at the electric
generating plant of Arkansas Power & Light Company, an Arkansas
corporation (the "Company"), located within the boundaries of the
County near ____________, Arkansas and known as ________________
___ (hereinafter referred to as the "Plant"); and
WHEREAS, pursuant to and in accordance with the
provisions of the Act, the County has heretofore issued and
delivered its Pollution Control Revenue Bonds, Series ____
(Arkansas Power & Light Company Project), in the aggregate
principal amount of $_________ (the "Prior Bonds"), for the
purpose of financing the cost of acquiring, constructing and
equipping all or part of the Company's interest in the Facilities
(hereinafter referred to as the "Project"), and paying the
expenses of authorizing and issuing the Prior Bonds; and
WHEREAS, the County proposes to issue $_________
aggregate principal amount of its revenue bonds under the Act
(identified in Article I hereof and referred to herein as the
"Series ____ Bonds") for the purpose of refunding the Prior
Bonds; and
WHEREAS, the Series ____ Bonds bear interest, mature
and are subject to redemption as hereinafter in this Trust
Indenture set forth in detail; and
WHEREAS, all things necessary to make the Bonds, when
authenticated by the Trustee and issued as in this Trust
Indenture provided, the valid, binding and legal obligations of
the Countyaccording to the import thereof, and to constitute this
Trust Indenture a valid assignment and pledge of revenues to the
payment of the principal of and premium, if any, and interest on
the Bonds, in accordance with the provisions hereof, have or will
have been done and performed, and the creation, execution and
delivery of this Trust Indenture and the creation, execution and
issuance of the Bonds, subject to the terms hereof, have in all
respects been duly authorized;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THIS
TRUST INDENTURE WITNESSETH:
That the County, in consideration of the premises and
the acceptance by the Trustee of the trusts hereby created and of
the purchase and acceptance of the Bonds by the holders and
owners thereof, and the sum of One Dollar ($1.00), lawful money
of the United States of America, to it duly paid by the Trustee,
at or before the execution and delivery of these presents, and
for other good and valuable considerations, the receipt of which
is hereby acknowledged, and in order to secure the payment of the
principal of and premium, if any, and interest on the Bonds
according to their tenor and effect and to secure the performance
and observance by the County of all the covenants expressed or
implied herein and in the Bonds, subject to all of the provisions
hereof, does hereby grant, bargain, sell, convey, mortgage,
assign and pledge unto the Trustee, and unto its successor or
successors in trust, and to them and their assigns forever, for
the securing of the performance of the obligations of the County
hereinafter set forth:
1.
All the rights and interest of the County in and to the
Sale Agreement (as hereinafter defined) (except for the rights of
the County under Sections 5.05, 5.06, 5.07, 6.03, and 8.05 of the
Sale Agreement and any rights of the County to receive notices,
certificates, requests, requisitions, directions and other
communications under the Sale Agreement), including, without
limitation, its right to receive the First Mortgage Bonds (as
hereinafter defined); all Revenues (as hereinafter defined) and
the proceeds of all thereof; and the First Mortgage Bonds issued
and delivered by the Company pursuant to the Sale Agreement.
2.
All the rights and interest of the County in and to the
Bond Fund and the Construction Fund (as hereinafter defined), and
all moneys and investments therein, but subject to the provisions
of this Trust Indenture pertaining thereto, including those
pertaining to the making of disbursements therefrom.
3.
All moneys, securities and obligations from time to
time held by the Trustee under the terms of this Trust Indenture
and any and all real and personal property of every kind and
nature from time to time hereafter by delivery or by writing of
any kind conveyed, mortgaged, pledged, assigned or transferred,
as and for additional security hereunder by the County or by
anyone in its behalf or with its written consent to the Trustee
which is hereby authorized to receive any and all such property
at any and all times and to hold and apply the same subject to
the terms hereof; except for moneys, securities or obligations
deposited with or paid to the Trustee for redemption or payment
of Bonds which are deemed to have been paid in accordance with
Article IX hereof and funds held pursuant to Section 505 hereof,
which shall be held by the Trustee in accordance with the
provisions of said Article IX or Section 505, as the case may be.
TO HAVE AND TO HOLD all the same with all privileges
and appurtenances hereby conveyed and assigned, or agreed or
intended so to be, to the Trustee and its successors in said
trusts and to them and their assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein
set forth for the equal and proportionate benefit and security of
all owners of the Bonds issued under and secured by this Trust
Indenture without preference, priority or distinction as to lien
of any Bonds over any other Bonds, except insofar as any sinking,
amortization or other fund, or any terms or conditions of
redemption or purchase, established under this Trust Indenture
may afford additional benefit or security for the Bonds of any
particular series.
PROVIDED, HOWEVER, that if the County shall pay or
cause to be paid to the owners of the Bonds the principal of and
premium, if any, and interest to become due thereon at the times
and in the manner stipulated therein, and if the County shall
keep, perform and observe all and singular the covenants and
promises in the Bonds and in this Trust Indenture expressed as to
be kept, performed and observed by it on its part, all as
provided in and subject to the provisions of Article IX hereof,
then and in that case these presents and the estate and rights
hereby granted, except as otherwise provided in Article IX, shall
cease, determine and be void, and thereupon the Trustee shall
cancel and discharge the lien of this Trust Indenture and execute
and deliver to the County such instruments in writing as shall be
requisite to evidence the discharge hereof pursuant to the
provisions of said Article IX; otherwise this Trust Indenture to
be and remain in full force and effect.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is
expressly declared, that all Bonds issued and secured hereunder
areto be issued, authenticated and delivered, and the Trust
Estate (as hereinafter defined) and the other estate and rights
hereby granted, are to be dealt with and disposed of, under, upon
and subject to the terms, conditions, stipulations, covenants,
agreements, trusts, uses and purposes as hereinafter expressed,
and the County has agreed and covenanted, and does hereby agree
and covenant, with the Trustee and with the respective owners,
from time to time, of the Bonds, as follows:
ARTICLE I
DEFINITIONS
Section 101. Definitions. In addition to the words
and terms elsewhere defined in this Indenture, the following
words and terms as used in this Indenture shall have the
following meanings:
"Act" -- Title 14, Chapter 267 of the Arkansas Code of
1987 Annotated, as amended and enacted from time to time.
"Additional Bonds" -- The Bonds in addition to the
Series ____ Bonds, which are issued under the provisions of
Section 211 of this Indenture.
"Administration Expenses" -- The reasonable and
necessary expenses incurred by the County with respect to the
Sale Agreement, this Indenture and any transaction or event
contemplated by the Sale Agreement or this Indenture including
the compensation and reimbursement of expenses and advances
payable to the Trustee, any Paying Agent, and the Bond Registrar.
"Authorized Company Representative" -- The person or
persons at the time designated to act on behalf of the Company,
such designation in each case, to be evidenced by a certificate
furnished to the County and the Trustee containing the specimen
signature of such person or persons and signed on behalf of the
Company by its President, any Senior Vice President, any Vice
President, or the Treasurer.
"Bonds" -- The Series ____ Bonds and all Additional
Bonds issued by the County pursuant to this Indenture.
"Bond Counsel" -- Any firm of nationally recognized
municipal bond counsel selected by the Company and acceptable to
the County and the Trustee.
"Bond Fund" -- The fund by that name created and
established in Section 501 of this Indenture.
"Bond Registrar" -- The registrar of Bonds named
herein.
"Capital Account" -- Any of the accounts by that name
created and established in Section 601 of this Indenture.
"Clerk" -- The person holding the office and performing
the duties of the County Clerk of the County.
"Code" -- The Internal Revenue Code of 1986, as
heretofore or hereafter amended.
"Company" -- Arkansas Power & Light Company, an
Arkansas corporation. The Company is a party to the Sale
Agreement, and the reference includes any successor or assignee
pursuant to the provisions thereof.
"Company Mortgage" -- The Mortgage and Deed of Trust
dated as of October 1, 1944, between the Company and Guaranty
Trust Company of New York (now Morgan Guaranty Trust Company of
New York) and Henry A. Theis (John W. Flaherty, successor), and,
as to property, real or personal, situated or being in Missouri,
Marvin A. Mueller (The Boatmen's National Bank of St. Louis,
successor), as trustees, as heretofore and hereafter amended and
supplemented.
"Company Mortgage Trustees" -- The trustees under the
Company Mortgage.
"Completion Date" -- The date of completion of the
Facilities as that date shall be certified as provided in Section
3.04 of the Sale Agreement.
"Construction Fund" -- The fund by that name created
and established in Section 601 of this Trust Indenture.
"Cost of Construction" -- All costs paid or incurred by
the Company with respect to the Facilities and the financing
there-of for the payment of which the County is authorized to
issue bonds under the Act, more particularly identified in the
Sale Agreement.
"County" -- ________ County, Arkansas, a political
subdivi-sion under the Constitution and laws of the State of
Arkansas.
"County Judge" -- The person holding the office and
performing the duties of the County Judge of the County.
"Event of Default" -- Any event of default specified in
Section 1001 hereof.
"Facilities" -- The pollution control facilities at the
Plant to be financed, in whole or in part, with the proceeds of
the Bonds (including any changes in, additions to, substitutions
for, or deletions of facilities or portions thereof made under
Section 3.03 of the Sale Agreement), more particularly identified
in the Sale Agreement.
"First Mortgage Bonds" -- The bonds of one or more
series issued and delivered under the Company Mortgage and held
by the Trustee pursuant to Section 5.03 of the Sale Agreement.
"Government Securities" -- (a) Direct or fully
guaranteed obligations of the United States of America (including
any suchsecurities issued or held in book-entry form on the books
of the Department of Treasury of the United States of America);
and
(b) Certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof; provided,
however, that the custodian of such obligations or specific
interest or principal payments shall be a bank or trust company
organized under the laws of the United States of America or of
any state or territory thereof or of the District of Columbia,
with a combined capital stock surplus and undivided profits of at
least $50,000,000; and provided, further, that except as may be
otherwise required by law, such custodian shall be obligated to
pay to the holders of such certificates, depositary receipts or
other instruments the full amount received by such custodian in
respect of such obligations or specific payments and shall not be
permitted to make any deduction therefrom.
"holder" or "bondholder" or "owner of the Bonds" -- The
registered owner of any Bond.
"Indenture" -- This Trust Indenture and all amendments
and supplements hereto.
"Investment Account" -- Any of the accounts by that
name created and established in Section 601 of this Indenture.
"outstanding" -- When used with reference to the Bonds,
as of any particular date, all Bonds authenticated and delivered
under this Indenture except:
(a) Bonds canceled at or prior to such date or
delivered to or acquired by the Trustee at or prior to such date
for cancellation;
(b) Bonds deemed to be paid in accordance with Article
IX of this Indenture; and
(c) Bonds in lieu of or in exchange or substitution
for which other Bonds shall have been authenticated and delivered
pursuant to this Indenture.
"Paying Agent" -- Any bank or trust company designated
pursuant to this Indenture as the place at which the principal of
and premium, if any, and interest on the Bonds of a series are
payable, and any successor designated pursuant to this Indenture.
With respect to the Series ____ Bonds, the Trustee is the
original Paying Agent.
"Permitted Encumbrances" -- (a) The Installment Sale
Agreement dated as of _________ _, ____, by and between the
Countyand the Company, recorded in the office of the Circuit
Clerk and Ex Officio Recorder of _______ County, Arkansas in
Record Book ___ at page ___, and any amendments and supplements
thereto; (b) the Trust Indenture dated as of _________ _, ____,
by and between the County and
______________________________________, ___________, ________, as
Trustee, recorded in the office of the Circuit Clerk and Ex
Officio Recorder of _______ County, Arkansas in Record Book ___
at page ___, and any amendments and supplements thereto; (c) the
Installment Sale Agreement dated as of ________ _, ____, by and
between the County and the Company, recorded in the office of the
Circuit Clerk and Ex Officio Recorder of ______ County, Arkansas
in Record Book ____ at page ___, and any amendments and
supplements thereto; (d) the Trust Indenture dated as of ________
_, ____, by and between the County and
___________________________________ ________________, ________,
as Trustee, recorded in the office of the Circuit Clerk and Ex
Officio Recorder of ______ County, Arkansas in Record Book ____
at page ___, and any amendments and supplements thereto; (e) the
Installment Sale Agreement dated as of ________ _, ____, by and
between the County and the Company, recorded in the office of the
Circuit Clerk and Ex Officio Recorder of ________ County,
Arkansas in Record Book ____ at page ___, and any amendments and
supplements thereto; (f) the Trust Indenture dated as of
________ _, ____, by and between the County and
_________________________________________, __________, ________,
as Trustee, recorded in the office of the Circuit Clerk and Ex
Officio Recorder of _______ County, Arkansas in Record Book ____
at page ___, and any amendments and supplements thereto; (g)
liens for taxes, assess-ments and other governmental charges not
delinquent or which can be paid without penalty; (h) unfiled,
inchoate mechanics' and materialmen's liens for construction work
in progress; (i) workmen's, repairmen's, warehousemen's and
carriers' liens and other similar liens, if any, arising in the
ordinary course of business; (j) all the following, if they do
not individually or in the aggregate materially impair the use of
the Facilities or materially detract from the value thereof to
the Company, viz.: any easements, restrictions, mineral, oil, gas
and mining rights and reservations, zoning laws and defects in
title or other encumbrances to which the Facilities may be
subject because of the installation thereof at the Plant; (k) any
lien for the satisfaction and discharge of which a sum of money
or a surety bond is on deposit with the Trustee; (l) the rights
of the County and the Company under the Sale Agreement and any
subsequent installment sale agreement or lease relating to all or
any part of the Facilities; (m) the rights of the Trustee under
this Indenture; and (n) the lien of the Company Mortgage and the
"Excepted Encumbrances" referred to therein.
"person" -- Includes natural persons, firms,
associations, corporations and public bodies.
"Plant" -- The Company's electric generating plant
located within the boundaries of the County near ____________,
Arkansas and known as ____________________.
"Prior Bonds" -- The County's Pollution Control Revenue
Bonds, Series ____, in the aggregate principal amount of
$_________.
"Record Date" -- With respect to any interest payment
date of the Bonds occurring on the first day of any month, the
fifteenth day of the calendar month next preceding such interest
payment date; and with respect to any interest payment date of
the Bonds occurring on the fifteenth day of any month, the first
day of such month.
"Revenues" -- All moneys paid or payable by the Company
to the Trustee for the account of the County in respect of the
principal of and premium, if any, and interest on the First
Mortgage Bonds, including, without limitation, amounts paid or
payable by the Company pursuant to Sections 5.02 and 9.01 of the
Sale Agreement, and all receipts of the Trustee credited under
the provisions of this Indenture against such payments.
"Sale Agreement" -- The Installment Sale Agreement
dated as of _______ _, ____, by and between the County and the
Company, and any amendments and supplements thereto.
"Series ____ Bonds" -- The initial issue of Bonds under
and secured by this Indenture in the aggregate principal amount
of $__________.
"Trustee" -- The banking corporation or association
designated as Trustee herein, and its successor or successors as
such Trustee. The original Trustee is
___________________________ _____________, __________, ________.
"Trust Estate" -- The property conveyed to the Trustee
pursuant to the Granting Clauses hereof.
Section 102. Use of Words. Words of the masculine
gender shall be deemed and construed to include correlative words
of the feminine and neuter genders. Unless the context shall
otherwise indicate, the words "Bond", "owner", "holder" and
"person" shall include the plural, as well as the singular,
number.
ARTICLE II
THE BONDS
Section 201. Authorized Form and Amount of Bonds. No
Bonds may be issued under the provisions of this Indenture except
in accordance with this Article. All Bonds issued hereunder
shall be in the form of registered Bonds without coupons. The
total principal amount of Bonds that may be issued is hereby
expressly limited to $__________, except as provided in Sections
208, 211 and 212 hereof.
Section 202. Details of Series ____ Bonds. The Series
____ Bonds (i) shall be designated "______ County, Arkansas
Pollution Control Revenue Refunding Bonds, Series ____ (Arkansas
Power & Light Company Project)," (ii) shall be in the aggregate
principal amount of $__________, (iii) shall be issued in the
denomination of $_____ each, or any integral multiple thereof,
(iv) shall be numbered consecutively from 1 upwards in order of
issuance according to the records of the Trustee, (v) shall be
dated as hereinafter provided, (vi) shall bear interest as
hereinafter provided, payable semiannually on _______ 1 and
____ 1 of each year commencing ____ 1, ____, and (vii) shall
mature on _______ 1, ____.
The Series ____ Bonds shall bear interest from and
including the date thereof until the principal thereof shall have
become due and payable in accordance with the provisions hereof,
whether at maturity, upon redemption or otherwise, at the rate of
_____ percent (____%) per annum. Overdue principal of the Series
____ Bonds shall bear interest at the rate of ___ percent (_%)
per annum until paid. Overdue installments of interest shall not
bear interest.
Series ____ Bonds issued before ____ 1, ____, shall be
dated as of _______ 1, ____, and Series ____ Bonds issued on or
subsequent to ____ 1, ____, shall be dated as of the interest
payment date next preceding the date of authentication and
delivery thereof by the Trustee, unless such date of
authentication and delivery shall be an interest payment date, in
which case they shall be dated as of such date of authentication
and delivery; provided, however, that if, as shown by the records
of the Trustee, interest on any Bonds surrendered for transfer or
exchange shall be in default, the Bonds issued in exchange for
Bonds surrendered for transfer or exchange shall be dated as of
the date to which interest has been paid in full on the Bonds
surrendered.
The Series ____ Bonds shall be substantially in the
form set forth in Exhibit A attached hereto with such appropriate
variations, omissions and insertions as are permitted or required
by this Indenture.
Section 203. Payment. The principal of and premium,
if any, on the Bonds shall be paid upon the presentation and
surrender of said Bonds at the principal corporate trust office
of the Trustee. The interest on the Bonds shall be payable by
check drawn upon the Trustee and mailed to the registered owners
as of the close of business on the Record Date with respect to
the interest payment date at their respective addresses as such
appear on the bond registration books kept by the Trustee. All
payments shall be made in lawful money of the United States of
America.
Section 204. Execution. The Bonds shall be executed
on behalf of the County by the County Judge and the County Clerk
(by their manual or facsimile signatures) and shall have
impressed or imprinted thereon the seal of the County. A
facsimile signature shall have the same force and effect as if
personally signed. In case any officer whose signature or
facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the delivery of such Bonds, such
signature or such facsimile shall nevertheless be valid and
sufficient for all purposes, the same as if he had remained in
office until delivery.
Section 205. Limited Obligation. The Bonds, together
with interest thereon, shall be payable from the Bond Fund, as
hereinafter set forth, and shall be a valid claim of the holders
thereof only against the Bond Fund and the revenues pledged to
the Bond Fund, which revenues are hereby pledged and mortgaged
for the equal and ratable payment of the Bonds (principal,
premium, if any, and interest) and shall be used for no other
purpose than to pay the principal of and premium, if any, and
interest on the Bonds, except as may be otherwise expressly
authorized in this Indenture. The Bonds (including premium, if
any) and interest thereon shall not constitute an indebtedness of
the County within the meaning of any constitutional or statutory
provision and shall never constitute an obligation of or a charge
against the general credit or taxing powers of the County.
Section 206. Authentication. Only such Bonds as shall
have endorsed thereon a Certificate of Authentication
substantially in the form set forth in Exhibit A attached hereto
duly executed by the Trustee shall be entitled to any right or
benefit under this Indenture. No Bond shall be valid and
obligatory for any purpose unless and until such Certificate of
Authentication shall have been duly executed by the Trustee, and
such Certificate of the Trustee upon any such Bond shall be
conclusive evidence that such Bond has been authenticated and
delivered under this Indenture. The Trustee's Certificate of
Authentication on any Bond shall be deemed to have been executed
if signed by an authorized officer of the Trustee, but it shall
not be necessary that the same officer sign the Certificate of
Authentication on all of the Bonds issued hereunder.
Section 207. Delivery of the Bonds. The County shall
execute and deliver to the Trustee and the Trustee shall
authenticate the Bonds of any series and deliver said Bonds to
the original purchaser or purchasers thereof as may be directed
hereinafter in this Section 207, in Section 211 hereof, or in any
supplemental indenture.
Prior to the delivery on original issuance by the
Trustee of any authenticated Bonds of any series there shall be
or have been delivered to the Trustee:
(a) An original duly executed counterpart or a duly
certified copy of this Indenture and, in the case of Additional
Bonds, a supplemental indenture by and between the County and the
Trustee setting forth the details concerning such Bonds.
(b) An original duly executed counterpart or a duly
certified copy of the Sale Agreement and, in the case of
Additional Bonds, an amendment of or supplement to the Sale
Agreement, if any.
(c) (i) An original duly executed counterpart or a
duly certified copy of the indenture supplemental to the Company
Mortgage creating the series of First Mortgage Bonds to be issued
in respect of such series of Bonds as provided in Section 5.03 of
the Sale Agreement and (ii) such First Mortgage Bonds.
(d) A written order to the Trustee by the County to
authenticate and deliver the Bonds of such series to the original
purchasers thereof upon payment to Trustee, but for the account
of the County, of a sum specified in such order.
(e) A copy, duly certified by the Clerk, of the
proceedings of the governing body of the County authorizing the
issuance of the Bonds.
(f) In the case of any series of Additional Bonds, a
written opinion of Bond Counsel, to the effect that the issuance
of such Bonds and the execution thereof have been duly
authorized, all conditions precedent to the delivery thereof have
been fulfilled, and that the exclusion of the interest on the
Series ____ Bonds and any Additional Bonds theretofore issued
from gross income for federal income tax purposes will not be
affected by the issuance of the Bonds being issued.
Section 208. Mutilated, Destroyed or Lost Bonds. In
case any Bond issued hereunder shall become mutilated or be
destroyed or lost, the County shall, if not then prohibited by
law, cause to be executed and the Trustee shall authenticate and
deliver a new Bond of the same series of like date, number,
maturity and tenor in exchange and substitution for and upon
cancellation of such mutilated Bond, or in lieu of and in
substitution for such Bond destroyed or lost, upon the holder's
paying the reasonable expensesand charges of the County and
Trustee in connection therewith, and, in the case of a Bond
destroyed or lost, his filing with the Trustee evidence
satisfactory to the Company and the Trustee that such Bonds were
destroyed or lost, and of his ownership thereof, and furnishing
the County, the Company and the Trustee with indemnity
satisfactory to them. The Trustee is hereby authorized to
authenticate any such new Bond. In the event any such Bonds
shall have matured, instead of issuing a new Bond, the County may
pay the same without the surrender thereof.
Section 209. Registration and Exchange of Bonds. The
County hereby constitutes and appoints the Trustee as Bond
Registrar of the County, and as Bond Registrar the Trustee shall
keep books for the registration and for the transfer of the Bonds
as provided in this Indenture at the principal corporate trust
office of the Trustee. The person in whose name any Bond shall
be registered shall be deemed and regarded as the absolute owner
thereof for all purposes, and payment of or on account of the
principal of and interest on any such Bond shall be made only to
or upon the order of the registered owner thereof or his legal
representative, and neither the County, the Trustee, nor the Bond
Registrar shall be affected by any notice to the contrary but
such registration may be changed as herein provided. All
payments shall be valid and effectual to satisfy and discharge
the liability upon such Bond to the extent of the sum or sums so
paid.
Bonds may be transferred on the books of registration
kept by the Trustee by the registered owner in person or by his
duly authorized attorney, upon surrender thereof, together with a
written instrument of transfer duly executed by the registered
owner or his duly authorized attorney in such form as shall be
satisfactory to the Trustee. Upon surrender for transfer of any
Bond at the principal corporate office of the Trustee, the County
shall execute and the Trustee shall authenticate and deliver in
the name of the transferee or transferees a new Bond or Bonds in
the same aggregate principal amount and of any authorized
denomination or denominations.
Bonds may be exchanged at the principal corporate trust
office of the Trustee for an equal aggregate principal amount of
Bonds of any other authorized denomination or denominations of
the same series with corresponding maturities. The County shall
execute and the Trustee shall authenticate and deliver Bonds
which the bondholder making the exchange is entitled to receive,
bearing numbers not then outstanding. The execution by the
County of any Bond of any denomination shall constitute full and
due authorization of such denomination and the Trustee shall
thereby be authorized to authenticate and deliver such Bond.
Such transfers of registration or exchanges of Bonds
shall be without charge to the holders of such Bonds, but any
taxes or other governmental charges required to be paid with
respect tothe same shall be paid by the holder of the Bond
requesting such transfer or exchange as a condition precedent to
the exercise of such privilege.
The Trustee shall not be required to transfer or
exchange any Bond after the mailing of notice calling such Bond
for redemption has been made, nor during the period of fifteen
(15) days next preceding mailing of a notice of redemption of any
Bonds.
At reasonable times and under reasonable regulations
established by the Trustee, the list of registered owners of the
Bonds may be inspected and copied by the Company or by holders or
owners (or a designated representative thereof) of 10% or more in
principal amount of Bonds then outstanding, such possession or
ownership and the authority of such designated representative to
be evidenced to the satisfaction of the Trustee.
Section 210. Cremation and Other Dispositions. All
Bonds surrendered for the purpose of payment or retirement, or
for exchange, or for replacement or payment as provided above, or
for cancellation, shall be canceled upon surrender thereof to the
Trustee and, at the option of the Trustee, either cremated,
shredded or otherwise disposed of. The Trustee shall execute and
forward to the County an appropriate certificate describing the
Bonds involved and the manner of disposition.
Section 211. Additional Bonds. The County, at the
request of the Company and to the extent permitted by law in
effect at the time thereof, may issue from time to time one or
more series of Additional Bonds for the purposes provided in
Section 4.02 of the Sale Agreement. Additional Bonds shall be
secured equally and ratably with the Series ____ Bonds and any
other Additional Bonds theretofore issued and then outstanding,
except insofar as any sinking, amortization or other fund, or any
terms or conditions of redemption or purchase, established under
this Indenture may afford additional benefit or security for the
Bonds of any particular series, and except as set forth in
Section 5.03 of the Sale Agreement. Before any Additional Bonds
are authenticated there shall be delivered to the Trustee the
items required for the issuance of Bonds by Section 207 hereof.
The right to issue Additional Bonds set forth in this
Indenture shall not imply that the County may not issue, and the
County expressly reserves the right to issue, to the extent
permitted by law, obligations under another indenture or
indentures to provide additional funds to pay the Cost of
Construction, or to refund all or any principal amount of all or
any series of Bonds, or any combination thereof, and the
provisions of this Indenture governing the issuance of Additional
Bonds shall not apply thereto.
The proceeds of the issuance and sale of any series of
Additional Bonds, including purchase premium, if any, and
accruedinterest, if any, thereon to the date of delivery thereof
paid by the original purchasers thereof, shall be applied
simultaneously with the delivery of such Additional Bonds in the
manner provided in this Indenture and in the supplemental
indenture authorizing such Additional Bonds.
Notwithstanding anything herein to the contrary, no
Additional Bonds shall be issued unless (i) the Sale Agreement is
in effect, and (ii) at the time of issuance there is no Event of
Default (as defined in the Sale Agreement) under the Sale
Agreement or Event of Default under this Indenture.
Section 212. Temporary Bonds. Until Bonds in
definitive form are ready for delivery, the County may execute,
and upon the request of the County, the Trustee shall
authenticate and deliver, subject to the provisions, limitations
and conditions set forth herein, one or more Bonds in temporary
form, whether printed, typewritten, lithographed or otherwise
produced, substantially in the form of the definitive Bonds, with
appropriate omissions, variations and insertions, and in
authorized denominations. Until exchanged for Bonds in
definitive form, such Bonds in temporary form shall be entitled
to the lien and benefit of this Indenture. Upon the presentation
and surrender of any Bond or Bonds in temporary form, the County
shall, without unreasonable delay, prepare, execute and deliver
to the Trustee and the Trustee shall authenticate and deliver, in
exchange therefor, a Bond or Bonds in definitive form. Such
exchange shall be made by the Trustee without making any charge
therefor to the holder of such Bond in temporary form.
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 301. Redemption Applicable to Series ____
Bonds Only. The Series ____ Bonds shall be subject to redemption
prior to maturity as follows:
(a) The Series ____ Bonds shall be subject to optional
redemption by the County, at the direction of the Company, in
whole but not in part, at any time, at a redemption price equal
to the principal amount being redeemed plus accrued interest to
the redemption date, if:
(i) the Company shall have determined that the
continued operation of the Plant is impracticable,
uneconomical or undesirable for any reason;
(ii) the Company shall have determined that the
continued construction or operation of the Facilities
is impracticable, uneconomical or undesirable due to
(A) the imposition of taxes, other than ad valorem
taxes currently levied upon privately owned property
used for the same general purpose as the Facilities, or
other liabilities or burdens with respect to the
Facilities or the construction or operation thereof,
(B) changes in technology, in environmental standards
or legal re-quirements or in the economic availability
of materials, supplies, equipment or labor or (C)
destruction of or damage to all or part of the
Facilities;
(iii) all or substantially all of the Facilities
or the Plant shall have been condemned or taken by
eminent domain; or
(iv) the construction or operation of the
Facilities or the Plant shall have been enjoined or
shall have otherwise been prohibited by any order,
decree, rule or regulation of any court or of any
federal, state or local regulatory body, administrative
agency or other governmental body.
(b) The Series ____ Bonds shall be subject to
mandatory redemption, at a redemption price equal to the
principal amount being redeemed plus accrued interest to the
redemption date, on the one hundred eightieth day (or such
earlier date as may be designated by the Company) after a final
determination by a court of competent jurisdiction or an
administrative agency, to the effect that as a result of a
failure by the Company to perform or observe any covenant,
agreement or representation contained in the Sale Agreement, the
interest payable on the Series ____ Bonds is included for federal
income tax purposes in the gross income of thebondholders
thereof, other than any bondholder who is a "substantial user" of
the Facilities or a "related person" within the meaning of
Section 147(a) of the Code. No determination by any court or
administrative agency will be considered final unless the Company
has participated in the proceeding which resulted in such
determination, either directly or through a bondholder, to a
degree it reasonably deems sufficient and until the conclusion of
any appellate review sought by any party to such proceeding or
the expiration of the time for seeking such review. The Series
____ Bonds shall be redeemed either in whole or in part in such
principal amount that the interest payable on the Series ____
Bonds remaining outstanding after such redemption would not be
included in the gross income of any bondholder thereof, other
than a bondholder who is a "substantial user" of the Facilities
or a "related person" within the meaning of Section 147(a) of the
Code.
(c) The Series ____ Bonds shall be subject to optional
redemption by the County, at the direction of the Company, on and
after _______ _, ____, in whole at any time or in part from time
to time (and if in part, by lot or in such other manner as may be
determined by the Trustee to be fair and equitable), at the
redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued interest to the redemption date:
Redemption Redemption
Period Price
_________, ____ through ________ __, ____ ___%
_________, ____ through ________ __, ____ ___%
_________, ____ through ________ __, ____ ___%
_________, ____ through ________ __, ____ ___%
_________, ____ and thereafter 100%
The Series ____ Bonds shall also be subject to optional
redemption by the County, at the direction of the Company, in
whole but not in part, at any time prior to _______ _, ____, at a
redemption price equal to ___% of the principal amount being
redeemed plus accrued interest to the redemption date, if the
Company shall have consolidated with or merged with or into
another corporation, or sold or otherwise transferred all or
substantially all of its assets.
In case a Series ____ Bond is of a denomination larger
than $_____, a portion of such Bond ($_____ or any integral
multiple thereof) may be redeemed if otherwise permitted, but
Series ____ Bonds shall be redeemed only in the principal amount
of $_____ or any integral multiple thereof.
Section 302. Notice. Notice of the call for any
redemption, identifying the Bonds or portions thereof being
called and the date on which they shall be presented for payment,
shall be given by the Trustee by first class mail, postage
prepaid, to theregistered owner of each such Bond addressed to
such registered owner at his registered address and placed in the
mails not less than thirty (30) days nor more than sixty (60)
days prior to the date fixed for redemption; provided, however,
that failure to give such notice by mailing, or any defect
therein, shall not affect the validity of any proceeding for the
redemption of any Bond with respect to which no such failure or
defect has occurred.
Any notice mailed as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the
holder or owner receives the notice.
With respect to notice of redemption of the Bonds at
the option of the County (at the direction of the Company),
unless moneys sufficient to pay the principal of and premium, if
any, and interest on the Bonds to be redeemed shall have been
received by the Trustee prior to the giving of such notice, such
notice shall state that said redemption shall be conditional upon
the receipt of such moneys by the Trustee on or prior to the date
fixed for such redemption. If such moneys shall not have been so
received, such notice shall be of no force and effect, the County
shall not redeem such Bonds and the Trustee shall give notice, in
the manner in which the notice of redemption was given, that such
moneys were not so received.
Section 303. Redemption Payments. Subject to the
provisions of the last paragraph of Section 302 hereof, on or
prior to the date fixed for redemption, funds shall be deposited
with the Trustee to pay, and the Trustee is hereby authorized and
directed to apply such funds to the payment of, the Bonds or
portions thereof to be redeemed, together with accrued interest
thereon to the redemption date and any required premium. Upon
the giving of notice and the deposit of funds for redemption,
interest on the Bonds or portions thereof thus redeemed shall no
longer accrue after the date fixed for redemption.
Section 304. Cancellation. All Bonds which have been
redeemed shall not be reissued but shall be canceled and disposed
of by the Trustee in accordance with Section 210 hereof.
Section 305. Partial Redemption of Bonds. Upon
surrender of any Bond for redemption in part only, the County
shall execute and the Trustee shall authenticate and deliver to
the holder thereof a new Bond or Bonds of the same series and the
same maturity, of authorized denominations in an aggregate
principal amount equal to the unredeemed portion of the Bond
surrendered.
ARTICLE IV
GENERAL COVENANTS; THE FIRST MORTGAGE BONDS
Section 401. Payment of Principal, Premium, If Any,
and Interest. The County covenants that it will promptly pay or
cause to be paid the principal of and premium, if any, and
interest on every Bond issued under this Indenture at the place,
on the dates and in the manner provided herein and in the Bond
according to the true intent and meaning thereof; provided,
however, that the obligation of the County hereunder to make or
cause to be made any payment to the Trustee in respect of the
principal of or premium, if any, or interest on the Bonds shall
be reduced by the amount of moneys, if any, on deposit in the
Bond Fund and available to be applied by the Trustee toward the
payment of the principal of or premium, if any, or interest on
the Bonds. The principal and premium, if any, and interest
(except interest paid from the proceeds from the sale of the
Bonds) are payable solely from the Revenues, which Revenues are
hereby specifically pledged to the payment thereof in the manner
and to the extent herein specified, and nothing in the Bonds or
this Indenture should be considered as assigning or pledging any
funds or assets of the County other than the Revenues and the
right, title and interest of the County in the Sale Agreement
(except for the rights of the County under Sections 5.05, 5.06,
5.07, 6.03, and 8.05 of the Sale Agreement and any rights of the
County to receive notices, certificates, requests, requisitions,
directions and other communications under the Sale Agreement) in
the manner and to the extent herein specified. Anything in this
Indenture to the contrary notwithstanding, it is understood that
whenever the County makes any covenants involving financial
commitments, including, without limitation, those in the various
sections of this Article IV, it pledges no funds or assets other
than the Revenues and the right, title and interest of the County
in the Sale Agreement (except for the rights of the County under
Sections 5.05, 5.06, 5.07, 6.03, and 8.05 of the Sale Agreement
and any rights of the County to receive notices, certificates,
requests, requisitions, directions and other communications under
the Sale Agreement), the Bond Fund and the Construction Fund in
the manner and to the extent herein specified, but nothing herein
shall be construed as prohibiting the County from using any other
funds or assets.
Section 402. Performance of Covenants. The County
covenants that it will faithfully perform at all times any and
all covenants, undertakings, stipulations and provisions
contained in this Indenture, in any and every Bond executed,
authenticated and delivered hereunder and in all ordinances
pertaining thereto. The County covenants that it is duly
authorized under the Constitution and laws of the State of
Arkansas, including particularly and without limitation the Act,
to issue Bonds authorized hereby and to execute this Indenture
and to make the pledge and covenants in the manner and to the
extent herein set forth; that all action on itspart for the
issuance of the Bonds and the execution and delivery of this
Indenture has been duly and effectively taken; and that the Bonds
in the hands of the holders and owners thereof are and will be
valid and enforceable obligations of the County according to the
import thereof.
Section 403. Instruments of Further Assurance. The
County covenants that it will do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and
delivered, such indenture or indentures supplemental hereto and
such further acts, instruments and transfers as the Trustee may
reasonably require for the better assuring, transferring,
mortgaging, pledging, assigning and confirming unto the Trustee
the Trust Estate.
Section 404. Recordation and Other Instruments. The
County and the Trustee covenant that they will cooperate with the
Company in causing this Indenture, the Sale Agreement, such
security agreements, financing statements and all supplements
thereto and other instruments as may be required from time to
time to be kept, to be recorded and filed in such manner and in
such places as may be required by law in order to fully preserve
and protect the security of the holders and owners of the Bonds
and the rights of the Trustee hereunder, and to perfect the
security interest created by this Indenture.
Section 405. Inspection of Project Books. The County
and the Trustee covenant and agree that all books and documents
in their possession relating to the Facilities and the revenues
derived from the Facilities (including the records pertaining to
the Construction Fund) shall at all reasonable times be open to
inspection by such accountants or other agencies as the other
party may from time to time designate and by the Company.
Section 406. Rights Under Sale Agreement. The Sale
Agreement, a duly executed counterpart of which has been filed
with the Trustee, sets forth the covenants and obligations of the
County and the Company, including provisions that subsequent to
the issuance of Bonds and prior to their payment in full or
provision for payment thereof in accordance with the provisions
hereof the Sale Agreement may not be effectively amended,
changed, modified, altered or terminated, or any provision waived
without the written consent of the Trustee, and reference is
hereby made to the same for a detailed statement of said
covenants and obligations of the Company thereunder, and the
County agrees that the Trustee in its name or in the name of the
County may enforce all rights of the County and all obligations
of the Company under and pursuant to the Sale Agreement, for and
on behalf of the bondholders, whether or not the County is in
default hereunder.
Section 407. Prohibited Activities. The County and
the Trustee covenant that neither of them shall take any action
or suffer or permit any action to be taken or condition to exist
whichcauses or may cause the interest payable on the Bonds to be
includable in gross income for purposes of federal income
taxation. Without limiting the generality of the foregoing, the
County and the Trustee covenant that (a) the proceeds of the sale
of the Bonds, the earnings thereon, and any other moneys on
deposit in any fund or account maintained in respect of the Bonds
(whether such moneys were derived from the proceeds of the sale
of the Bonds or from other sources) will not be used in a manner
which would cause the Bonds to be treated as "arbitrage bonds"
within the meaning of Section 148 of the Code, and (b) all action
with respect to the Bonds required by Section 148(f) of the Code
shall be taken in a timely manner.
Section 408. No Transfer of First Mortgage Bonds. The
Trustee shall not sell, assign or transfer the First Mortgage
Bonds except to a successor trustee under this Indenture.
Section 409. Voting of First Mortgage Bonds. The
Trustee shall, as the holder of the First Mortgage Bonds, attend
such meeting or meetings of bondholders under the Company
Mortgage or, at its option, deliver its proxy in connection
therewith, as relate to matters with respect to which it is
entitled to vote or consent. So long as no Event of Default
hereunder shall have occurred and be continuing, either at any
such meeting or meetings, or otherwise when the consent of the
holders of the Company's first mortgage bonds issued under the
Company Mortgage is sought without a meeting, the Trustee shall
vote as the holder of the First Mortgage Bonds, or shall consent
with respect thereto, proportionately with what the Trustee
reasonably believes will be the vote or consent of the holders of
all other first mortgage bonds of the Company then outstanding
under the Company Mortgage the holders of which are eligible to
vote or consent; provided, however, that the Trustee shall not
vote as such holder in favor of, or give its consent to, any
amendment or modification of the Company Mortgage which is
correlative to any amendment or modification of this Indenture
referred to in Section 1202 hereof without the prior consent and
approval, obtained in the manner prescribed in said Section 1202,
of bondholders which would be required under said Section 1202
for such correlative amendment or modification of this Indenture.
Any action taken by the Trustee in accordance with the
provisions of this Section 409 shall be binding upon the County
and the bondholders.
Section 410. Surrender of First Mortgage Bonds. The
Trustee shall surrender First Mortgage Bonds to the Company
Mortgage Trustees in accordance with the provisions of Section
5.03(d) of the Sale Agreement.
Section 411. Notice to Company Mortgage Trustees. In
the event that a payment on the First Mortgage Bonds shall
havebecome due and payable and shall not have been fully paid,
the Trustee shall forthwith give notice thereof to the Company
Mortgage Trustees specifying the amount of funds required to make
such payment. In the event that any Bonds are to be redeemed
pursuant to any provisions of this Indenture requiring mandatory
redemption of Bonds of any series (other than at the direction of
the Company), except for provisions which establish sinking fund
redemption requirements, the Trustee shall forthwith give notice
thereof to the Company Mortgage Trustees specifying the principal
amount of Bonds so to be redeemed and the redemption date
therefor. Any such notice given by the Trustee shall be signed by
its President, a Vice President or a Trust Officer thereof. The
Trustee shall incur no liability for failure to give any such
notice and such failure shall have no effect on the obligations
of the Company on the First Mortgage Bonds or on the rights of
the Trustee or of the bondholders.
ARTICLE V
REVENUES AND FUNDS
Section 501. Creation of Bond Fund. There is hereby
created and ordered to be established with the Trustee a trust
fund of and in the name of the County to be designated "________
County, Arkansas Pollution Control Revenue Refunding Bond Fund -
Arkansas Power & Light Company Project".
Section 502. Payments Into Bond Fund. There shall be
deposited into the Bond Fund as and when received:
(a) All accrued interest received at the time of
the issuance and delivery of the Bonds;
(b) Amounts transferred to the Bond Fund pursuant
to the provisions of Sections 604, 605, 606
and 607 hereof;
(c) All Revenues; and
(d) All moneys received by the Trustee under and
pursuant to any of the provisions of the Sale
Agreement or this Indenture which are not
directed to be paid into a fund (or held)
other than the Bond Fund.
Section 503. Use of Moneys in Bond Fund. Except as
otherwise provided in Sections 508 and 1102 hereof, moneys in the
Bond Fund shall be used solely for the payment of the principal
of and premium, if any, and interest on the Bonds.
Section 504. Withdrawals from Bond Fund. The Bond
Fund shall be in the name of the County, designated as set forth
in Section 501, and the County hereby irrevocably authorizes and
directs the Trustee to withdraw from the Bond Fund sufficient
funds to pay the principal of and premium, if any, and interest
on the Bonds at maturity and redemption prior to maturity and to
use such funds for the purpose of paying principal, premium, if
any, and interest in accordance with the provisions hereof
pertaining to payment, which authorization and direction the
Trustee hereby accepts.
Section 505. Non-Presentment of Bonds. In the event
any Bonds shall not be presented for payment when the principal
thereof becomes due, either at maturity or otherwise, or at the
date fixed for redemption thereof, if there shall have been
deposited with the Trustee for that purpose, or left in trust if
previously so deposited, funds sufficient to pay the principal
thereof, and premium, if any, together with all interest unpaid
and due thereon, to the due date thereof, for the benefit of the
holder thereof, allliability of the County to the holder thereof
for the payment of the principal thereof, premium, if any, and
interest thereon, shall forthwith cease, determine and be
completely discharged, and thereupon it shall be the duty of the
Trustee to hold such fund or funds, without liability for
interest thereon, for benefit of the holder of such Bond, who
shall thereafter be restricted exclusively to such fund or funds
for any claim of whatever nature on his part under this Indenture
or on, or with respect to, the Bond.
Section 506. Administration Expenses. It is
understood and agreed that pursuant to the provisions of Section
5.05 of the Sale Agreement, the Company agrees to pay the
Administration Expenses of the County. All such payments under
the Sale Agreement which are received by the Trustee shall not be
paid into the Bond Fund, but shall be segregated by the Trustee
and expended solely for the purpose for which such payments are
received.
Section 507. Moneys to be Held in Trust. All moneys
required to be deposited with or paid to the Trustee for deposit
into the Bond Fund or the Construction Fund under any provision
of this Indenture and all moneys withdrawn from the Bond Fund and
held by any Paying Agent, shall be held by the Trustee or such
Paying Agent in trust, and except for moneys deposited with or
paid to the Trustee for the redemption of Bonds, notice of which
redemption has been duly given, and for moneys deposited with or
paid to the Trustee pursuant to Article IX hereof, shall, while
held by the Trustee or any Paying Agent, constitute part of the
Trust Estate and be subject to the lien hereof. Any moneys
received by or paid to the Trustee pursuant to any provisions of
the Sale Agreement calling for the Trustee to hold, administer
and disburse the same in accordance with the specific provisions
of the Sale Agreement shall be held, administered and disbursed
pursuant to such provisions, and where required by the provisions
of the Sale Agreement the Trustee shall set the same aside in a
separate account. The County agrees that if it shall receive any
moneys pursuant to applicable provisions of the Sale Agreement,
it will forthwith upon receipt thereof pay the same over to the
Trustee to be held, administered and disbursed by the Trustee in
accordance with the provisions of the Sale Agreement pursuant to
which the County may have received the same. Furthermore, if for
any reason the Sale Agreement ceases to be in force and effect
while any Bonds are outstanding, the County agrees that if it
shall receive any moneys derived from the Facilities, it will
forthwith upon receipt thereof pay the same over to the Trustee
to be held, administered and disbursed by the Trustee in
accordance with provisions of the Sale Agreement that would be
applicable if the Sale Agreement were then in force and effect,
and if there be no such provisions which would be so applicable,
then the Trustee shall hold, administer and disburse such moneys
solely for the discharge of the County's obligations under this
Indenture.
Section 508. Refund to Company of Excess Payments.
Anything herein to the contrary notwithstanding, the Trustee is
authorized and directed to refund to the Company all excess
amounts as specified in the Sale Agreement, whether such excess
amounts be in the Bond Fund or in special accounts.
ARTICLE VI
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
Section 601. Creation of Construction Fund. There is
hereby created and ordered to be established with the Trustee a
special account of the County to be designated "_________ County,
Arkansas Pollution Control Revenue Refunding Bond Construction
Fund - Arkansas Power & Light Company Project". The Trustee
shall establish and maintain within the Construction Fund, in
respect of each series of Bonds issued hereunder, a "Capital
Account" and an "Investment Account."
Section 602. Payments into Construction Fund. The
proceeds from the issuance and sale of each series of Bonds,
other than accrued interest, if any, on such Bonds to the date of
delivery thereof paid by the original purchaser or purchasers
thereof, shall be deposited into the Capital Account established
in respect of such series of Bonds. All income or other gain
from the investment of moneys in the Capital Account or the
Investment Account maintained in respect of any series of Bonds
shall be deposited into the Investment Account for such series of
Bonds.
Section 603. Disbursements from Construction Fund.
Moneys in the Construction Fund shall be disbursed by the Trustee
to pay Cost of Construction or to reimburse the Company for Cost
of Construction paid by it, all in accordance with and pursuant
to the provisions of the Sale Agreement. The Trustee shall keep
and maintain adequate records pertaining to each account within
the Construction Fund and all disbursements therefrom and shall
file an accounting thereof if and when requested by the County or
the Company.
Section 604. Balance in Construction Fund. Upon
receipt by the Trustee of a certificate furnished pursuant to
Section 3.04 or Section 3.08 of the Sale Agreement, any balance
remaining in the Capital Account or the Investment Account
maintained within the Construction Fund in respect of a series of
Bonds (except for amounts retained by the Trustee at the
Company's direction for Cost of Construction not then due and
payable), shall at the direction of the Company be transferred by
the Trustee into the Bond Fund; provided, however, no amount
shall be transferred into the Bond Fund unless an amount equal to
at least 95% of the sum of the net proceeds of such series of
Bonds (within the meaning of Section 142(a) of the Code), and the
total amount of moneys accrued in the Investment Account and the
investment income expected to be received from amounts so
deposited in the Bond Fund, have been used (i) for the
acquisition, construction, reconstruction or improvement of land
or property of a character subject to the allowance for
depreciation under Section 167 of the Code, or for payment of
amounts which are, for federal income tax purposes, chargeable to
the Facilities' capital account (for example, underSection 263 of
the Code) or would be so chargeable either with a proper election
by the Company or but for a proper election by the Company to
deduct such amounts, and (ii) to provide sewage or solid waste
disposal facilities within the meaning of Section 142(a)(5) or
(6) of the Code and regulations thereunder, provided that the
moneys paid from the Investment Account shall be disregarded for
purposes of the foregoing computation if the Company shall have
submitted to the Trustee an opinion of Bond Counsel to the effect
that such moneys may be so disregarded without impairing the
exemption from federal income taxes of interest on the Bonds.
Any amount not transferred into the Bond Fund as provided above
(exclusive of amounts retained by the Trustee in the Construction
Fund for payment of Costs of Construction not then due and
payable) shall be segregated by the Trustee and used by the
Trustee for (a) the redemption of Bonds of the same series of
Bonds from which such moneys were derived on or prior to the
earliest redemption date permitted by this Indenture without a
premium or penalty in accordance with the provisions of this
Indenture; or (b) the payment of a portion of the annual
principal due on Bonds of the same series from which such moneys
were derived (i) in years before such Bonds are subject to
redemption without premium or penalty, or (ii) in years when such
Bonds are subject to redemption without premium or penalty but
only in an amount in excess of the unexpended proceeds of such
Bonds, provided, however, that the portion of the annual
principal payment, if any, due on such Bonds that may be paid
hereunder shall not exceed an amount that bears the same ratio to
the annual principal due that the total unexpended proceeds of
such Bonds (exclusive of investment earnings) bear to the face
amount of such Bonds; or (c) any other purpose provided that the
Trustee is furnished with an opinion of Bond Counsel to the
effect that such use is lawful under the Act and will not
adversely affect the exclusion of interest on any of the Bonds
from gross income for purposes of federal income taxation. Until
used for one or more of the foregoing purposes, such segregated
amount may be invested as permitted by this Indenture but may not
be invested, without an opinion of Bond Counsel to the effect
that such investment will not adversely affect the exclusion of
interest on any of the Bonds from gross income for purposes of
federal income taxation, to produce a yield greater than the
yield on the Bonds, all in accordance with Section 148 of the
Code and regulations thereunder.
Section 605. Redemption of Bonds Pursuant to Section
301(a) or Similar Provisions. In the event that Bonds of any
series are to be redeemed pursuant to Section 301(a) hereof or
any similar provision contained in any supplemental indenture,
the Trustee shall, at the direction of the Company, withdraw from
the Capital Account or the Investment Account maintained within
the Construction Fund in respect of such series of Bonds, or
both, and deposit into the Bond Fund amounts in the aggregate not
exceeding the aggregate principal amount of, and accrued interest
on, the Bonds of such series so to be redeemed, with advice to
the Countyand the Company of such action, such withdrawals and
deposits to be made on the date specified in such direction.
Section 606. Redemption Upon Taxability of Interest.
In the event that Bonds of any series are to be redeemed pursuant
to Section 301(b) hereof, or any similar provision contained in
any supplemental indenture, the Trustee shall, at the direction
of the Company, withdraw from the Capital Account or the
Investment Account maintained within the Construction Fund in
respect of such series of Bonds, or both, and deposit into the
Bond Fund amounts in the aggregate not exceeding the aggregate
principal amount of, and accrued interest on, the Bonds so to be
redeemed, with advice to the County and the Company of such
action, such withdrawals and deposits to be made on the date
specified in such direction.
Section 607. Acceleration of Bonds. In the event that
the principal of the Bonds shall have become due and payable
pursuant to Section 1002 hereof, the Trustee may, and at the
direction of the holders of twenty-five percent (25%) in
aggregate principal amount of Bonds outstanding hereunder, shall
deposit into the Bond Fund all amounts remaining in the
Construction Fund, with advice to the County and the Company of
such action.
Section 608. Refunding of Bonds. In the event that
all outstanding Bonds of any series are paid, redeemed or deemed
to have been paid within the meaning of Article IX hereof by
reason of the application of the proceeds of the sale of any
obligations issued by the County under an indenture other than
this Indenture, the Trustee shall, at the direction of the
Company, withdraw all amounts remaining in the Capital Account
and the Investment Account maintained within the Construction
Fund in respect of such series of Bonds and deposit such amounts
into corresponding accounts in the construction, acquisition or
other similar fund created under the indenture under which such
obligations of the County are issued, with advice to the County
and the Company of such action, such withdrawals and deposits to
be made, in accordance with the provisions of such indenture, on
the date on which such Bonds are so paid, redeemed or deemed to
have been paid.
ARTICLE VII
INVESTMENTS
Section 701. Investment of Moneys. (a) Moneys held
for the credit of the Construction Fund shall, upon direction by
the Authorized Company Representative, be invested and reinvested
by the Trustee in any one or more of the following obligations or
securities on which neither the Company nor any of its
subsidiaries is the obligor: (i) Government Securities; (ii)
interest bearing deposit accounts (which may be represented by
certificates of deposit) in national or state banks (which may
include the Trustee, any Paying Agent, and the Bond Registrar)
having a combined capital and surplus of not less than
$10,000,000, or savings and loan associations having total assets
of not less than $40,000,000; (iii) bankers' acceptances drawn on
and accepted by commercial banks (which may include the Trustee,
any Paying Agent, and the Bond Registrar) having a combined
capital and surplus of not less than $10,000,000; (iv) direct
obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, any State of the United
States of America, the District of Columbia or the Commonwealth
of Puerto Rico, or any political subdivision of any of the
foregoing, which are rated in any of the three highest rating
categories by a nationally recognized rating agency; (v)
obligations of any agency or instrumentality of the United States
of America; (vi) commercial or finance company paper which is
rated in any of the three highest rating categories by a
nationally recognized rating agency; (vii) corporate debt
securities rated in any of the three highest rating categories by
a nationally recognized rating agency; and (viii) repurchase
agreements with banking or financial institutions having a
combined capital and surplus of not less than $10,000,000 (which
may include the Trustee, any Paying Agent, and the Bond
Registrar) with respect to any of the foregoing obligations or
securities. As used above, the reference to rating categories
shall mean generic categories which may include numerical or
other qualifications of ratings within each such generic rating
category such as "+" or "-". Such investments shall have
maturity dates, or shall be subject to redemption by the holder
at the option of the holder, on or prior to the dates the moneys
invested therein will be needed as reflected by a statement of
the Authorized Company Representative which statement must be on
file with the Trustee prior to any investment.
(b) Moneys held for the credit of any other fund or
account, including, without limitation, the Bond Fund, shall to
the extent practicable be invested and reinvested in Government
Securities which will mature, or which will be subject to
redemption at the option of the holder, not later than the date
or dates on which the money held for credit of the particular
fund shall be required for the purposes intended. The Trustee
shall soinvest and reinvest pursuant to instructions from the
Authorized Company Representative.
(c) Obligations so purchased as an investment of
moneys in any fund or account shall be deemed at all times a part
of such fund or account. Subject to the provisions of Section
602 hereof, any profit and income realized from such investments
shall be credited to the fund or account and any loss shall be
charged to the fund or account.
Section 702. Arbitrage Law Requirements. In
compliance with the provisions of Section 148 of the Code and
regulations thereunder, all investments and reinvestments made
under this Article VII shall be subject to the following:
(a) In the event that the County or the Company is of
the opinion that it is necessary or advisable to restrict or
limit the yield on the investment of any moneys held in the
Construction Fund, the Bond Fund or any other fund in order to
avoid the Bonds being considered "arbitrage bonds" within the
meaning of Section 148 of the Code, or any proposed, temporary or
final regulations thereunder as such regulations may apply to
obligations issued as of the date of original issuance and
delivery of the Bonds, the County or the Company may issue to the
Trustee a written certificate to such effect together with
appropriate written instructions, in which event the Trustee
shall take such action as is necessary so as to restrict or limit
the yield on such investment in accordance with such certificate
and instructions, irrespective of whether the Trustee shares such
opinion.
(b) The Trustee shall establish and maintain within
the Bond Fund, the Construction Fund or any other fund, in
respect of each series of Bonds issued hereunder, a separate
account into which shall be deposited as and when received any
amounts which are subject or could be subject to rebate to the
United States under Section 148(f)(6) of the Code, which amounts
shall be held in such separate accounts until paid to the United
States pursuant to said Section or until the Trustee determines
that no such payment is required. Moneys in such separate
account within the Construction Fund shall be subject to prior
withdrawal to pay the Cost of Construction in accordance with the
provisions of the Sale Agreement; provided, however, that no
withdrawal shall be permitted unless and until (i) all other
moneys in the Construction Fund, together with any other moneys
constituting gross proceeds (within the meaning of Section 148(f)
of the Code) have first been so used within six (6) months of the
date of issuance of the Bonds as provided in Section 148(f)(4)(B)
of the Code, or (ii) the Company shall furnish an opinion of Bond
Counsel to the Trustee to the effect that such moneys will not be
subject to rebate to the United States under Section 148(f) of
the Code and regulations thereunder.
(c) The County and the Trustee shall not make or agree
to make any payments or participate in any non-arms-length
transaction which would have the effect of reducing the earnings
on investments, thereby reducing the amount required to be
rebated to the United States under Section 148(f) of the Code and
regulations thereunder.
(d) The Company has undertaken in the Sale Agreement
to make the determinations required by paragraph (b) of this
Section 702 and to provide statements to the Trustee to the
effect that all actions with respect to the Bonds required by
Section 148(f) of the Code has been taken. The Trustee shall be
entitled to rely upon such determinations and statements as
sufficient evidence of the facts therein contained.
ARTICLE VIII
RIGHTS OF THE COMPANY
Section 801. Rights of Company Under Sale Agreement.
Nothing herein contained shall be deemed to impair the rights and
privileges of the Company set forth in the Sale Agreement and an
Event of Default hereunder shall not constitute an "Event of
Default" under the Sale Agreement unless by the terms of the Sale
Agreement it constitutes an "Event of Default" thereunder.
Section 802. Enforcement of Rights and Obligations.
The County and the Trustee agree that the Company in its own name
or in the name of the County may enforce all of the rights of the
County, all obligations of the Trustee, and all of the Company's
rights provided for in this Indenture.
ARTICLE IX
DISCHARGE OF LIEN
Section 901. Discharge of Lien. If the County shall
pay or cause to be paid to the holders and owners of the Bonds
the principal of and premium, if any, and interest to become due
thereon at the times and in the manner stipulated therein, and if
the County shall keep, perform and observe all and singular the
covenants and promises in the Bonds and in this Indenture
expressed as to be kept, performed and observed by it on its part
and shall pay or cause to be paid all other sums payable
hereunder by the County, then these presents and the estate and
rights hereby granted shall cease, determine and be void, and
thereupon the Trustee shall cancel and discharge the lien of this
Indenture, and execute and deliver to the County such instruments
in writing as shall be requisite to satisfy the lien hereof, and
reconvey to the County the estate hereby conveyed, and assign and
deliver to the County any property at the time subject to the
lien of this Indenture which may then be in its possession,
except moneys or Government Securities held by it for the payment
of the principal of and premium, if any, and interest on the
Bonds.
Any Bond shall be deemed to be paid within the meaning
of this Article when payment of the principal of and premium, if
any, and interest on such Bond (whether at maturity or upon
redemption as provided in this Indenture, or otherwise), either
(a) shall have been made or caused to be made in accordance with
the terms thereof, or (b) shall have been provided for by
irrevocably depositing with the Trustee, in trust and irrevocably
set aside exclusively for such payment, (i) moneys sufficient to
make such payment or (ii) Government Securities (provided that
the Trustee shall have received an opinion of Bond Counsel to the
effect that such deposit will not affect the exclusion of the
interest on any of the Bonds from gross income for purposes of
federal income taxation or cause any of the Bonds to be treated
as arbitrage bonds within the meaning of Section 148(a) of the
Code) maturing as to principal and interest in such amounts and
at such times as will provide sufficient moneys to make such
payment when due, and all necessary and proper fees, compensation
and expenses of the Trustee and any Paying Agent pertaining to
the Bonds with respect to which such deposit is made and all
other liabilities of the Company under the Sale Agreement shall
have been paid or the payment thereof provided for to the
satisfaction of the Trustee. No deposit under (b) above shall
constitute such discharge and satisfaction until the Company
shall have irrevocably notified the Trustee of the date for
payment of such Bond either at maturity or on a date on which
such Bond may be redeemed in accordance with the provisions
hereof and notice of such redemption shall have been given or
irrevocable provisions shall have been made for the giving of
such notice.
The County or the Company may at any time surrender to
the Trustee for cancellation by it any Bonds previously
authenticated and delivered hereunder, which the County or the
Company may have acquired in any manner whatsoever, and such
Bonds, upon such surrender and cancellation, shall be deemed to
be paid and retired.
ARTICLE X
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
Section 1001. Events of Default. Each of the
following events shall constitute and is referred to in this
Indenture as an "Event of Default":
(a) default in the due and punctual payment of any
interest on any Bond hereby secured and outstanding and the
continuance thereof for a period of sixty (60) days;
(b) default in the due and punctual payment of the
principal of and premium, if any, on any Bond hereby secured and
outstanding, whether at the stated maturity thereof, or upon
unconditional proceedings for redemption thereof, or upon the
maturity thereof by acceleration;
(c) an "Event of Default" as such term is defined in
Section 8.01(a) of the Sale Agreement; or
(d) default in the payment of any other amount
required to be paid under this Indenture or the performance or
observance of any other of the covenants, agreements or
conditions contained in this Indenture, or in the Bonds issued
under this Indenture, and continuance thereof for a period of
ninety (90) days after written notice specifying such failure and
requesting that it be remedied, shall have been given to the
County and the Company by the Trustee, which may give such notice
in its discretion and shall give such notice at the written
request of Bondholders of not less than 10% in aggregate
principal amount of the Bonds then outstanding, unless the
Trustee, or the Trustee and bondholders of an aggregate principal
amount of Bonds not less than the aggregate principal amount of
Bonds the bondholders of which requested such notice, as the case
may be, shall agree in writing to an extension of such period
prior to its expiration; provided, however, that the Trustee, or
the Trustee and the bondholders of such principal amount of
Bonds, as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is instituted by
the County, or the Company on behalf of the County within such
period and is being diligently pursued.
The term "default" as used in clauses (a), (b) and (d)
above shall mean default by the County in the performance or
observance of any of the covenants, agreements or conditions on
its part contained in this Indenture, or in the Bonds outstanding
hereunder, exclusive of any period of grace required to
constitute a default an "Event of Default" as hereinabove
provided.
Section 1002. Acceleration. Upon the occurrence and
continuance of an Event of Default described in clause (a) or
(b)of the first paragraph of Section 1001 hereof, the Bonds
shall, without further action, become and be immediately due and
payable, anything in this Indenture or in the Bonds to the
contrary notwithstanding, and the Trustee shall give notice
thereof in writing to the County and the Company, and notice to
bondholders in the same manner as a notice of redemption under
Section 302 hereof.
Upon the occurrence and continuance of an Event of
Default described in clause (c) of the first paragraph of Section
1001 hereof, and further upon the condition that, in accordance
with the terms of the Company Mortgage, the First Mortgage Bonds
shall have become immediately due and payable pursuant to any
provision of the Company Mortgage, the Bonds shall, without
further action, become and be immediately due and payable,
anything in this Indenture or in the Bonds to the contrary
notwithstanding, and the Trustee shall give notice thereof in
writing to the County and the Company, and notice to bondholders
in the same manner as a notice of redemption under Section 302
hereof.
Section 1003. Other Remedies; Rights of Bondholders.
Upon the occurrence and continuance of an Event of Default, the
Trustee may, in addition or as an alternative, pursue any
available remedy by suit at law or in equity to enforce the
payment of the principal of and premium, if any, and interest on
the Bonds then outstanding hereunder, then due and payable.
If an Event of Default shall have occurred, and if it
shall have been requested so to do by the holders of twenty-five
percent (25%) in aggregate principal amount of Bonds outstanding
hereunder and shall have been indemnified as provided in Section
1101 hereof, the Trustee shall be obligated to exercise such one
or more of the rights and powers conferred upon it by this
Section as the Trustee, being advised by counsel, shall deem most
expedient in the interests of the bondholders.
No remedy by the terms of this Indenture conferred upon
or reserved to the Trustee (or to the bondholders) is intended to
be exclusive of any other remedy, but each and every such remedy
shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity
or by statute.
No delay or omission to exercise any right or power
accruing upon any default or Event of Default shall impair any
such right or power or shall be construed to be a waiver of any
such default or Event of Default or acquiescence therein; and
every such right and power may be exercised from time to time and
as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder,
whether by the Trustee or by the bondholders, shall extend to
orshall affect any subsequent default or Event of Default or
shall impair any rights or remedies consequent thereon.
Section 1004. Right of Bondholders to Direct
Proceedings. Anything in this Indenture to the contrary
notwithstanding the holders of a majority in aggregate principal
amount of Bonds outstanding hereunder shall have the right, at
any time, by an instrument or instruments in writing executed and
delivered to the Trustee, to direct the method and place of
conducting all proceedings to be taken in connection with the
enforcement of the terms and conditions of this Indenture, or for
the appointment of a receiver or any other proceeding hereunder;
provided that such direction shall not be otherwise than in
accordance with the provisions of law and of this Indenture.
Section 1005. Appointment of Receiver. Upon the
occurrence and continuance of an Event of Default, and upon the
filing of a suit or other commencement of judicial proceedings to
enforce the rights of the Trustee and of the bondholders under
this Indenture, the Trustee shall be entitled, as a matter of
right, to the appointment of a receiver or receivers of the Trust
Estate and of the tolls, rents, revenues, issues, earnings,
income, products and profits thereof, pending such proceedings
with such powers as the court making such appointment shall
confer.
Section 1006. Waiver. In case of an Event of Default
on the part of the County, as aforesaid, to the extent that such
rights may then lawfully be waived, neither the County nor anyone
claiming through it or under it shall or will set up, claim, or
seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, in order
to prevent or hinder the enforcement of this Indenture, but the
County, for itself and all who may claim through or under it,
hereby waives, to the extent that it lawfully may do so, the
benefit of all such laws and all right of appraisement and
redemption to which it may be entitled under the laws of the
State of Arkansas.
Section 1007. Application of Moneys. Available moneys
remaining after discharge of costs, charges and liens prior to
this Indenture shall be applied by the Trustee as follows:
(a) Unless the principal of all the Bonds shall have
become due and payable, all such moneys shall be applied:
First: To the payment to the persons entitled thereto
of all installments of interest then due, in the order of the
maturity of the installments of such interest, and, if the amount
available shall not be sufficient to pay in full any particular
installment, then to the payment ratably, according to the
amounts due on such installment, to the persons entitled thereto,
without any discrimination or privilege;
Second: To the payment to the persons entitled thereto
of the unpaid principal of any of the Bonds which shall have
become due (other than Bonds called for redemption for the
payment of which moneys are held pursuant to the provisions of
this Indenture), in the order of their due dates, with interest
on such Bonds from the respective dates upon which they become
due, and, if the amount available shall not be sufficient to pay
in full Bonds due on any particular date, together with such
interest, then to the payment ratably, according to the amount of
principal due on such date, to the persons entitled thereto
without any discrimination or privilege of any Bond over any
other Bond and without preference or priority of principal over
interest or of interest over principal; and
Third: To the payment of the interest on and the
principal of the Bonds, and to the redemption of Bonds, all in
accordance with the provisions of Article V of this Indenture.
(b) If the principal of all the Bonds shall have
become due and payable, all such moneys shall be applied to the
payment of the principal and interest then due and unpaid upon
the Bonds, without preference or priority of principal over
interest or of interest over principal, or of any Bond over any
other Bond, ratably, according to the amounts due respectively
for principal and interest, to the person entitled thereto
without discrimination or privilege.
(c) If the principal of all the Bonds shall have
become due and payable, and if acceleration of the maturity of
the Bonds by reason of an Event of Default shall thereafter have
been rescinded and annulled under the provisions of this Article
then, subject to the provisions of paragraph (b) of this Section
in the event that the principal of all the Bonds shall later
become due and payable, the moneys shall be applied in accordance
with the provisions of paragraph (a) of this Section.
Whenever moneys are to be applied by the Trustee
pursuant to the provisions of this Section, such moneys shall be
applied by it at such times, and from time to time, as it shall
determine, having due regard to the amount of such moneys
available for application and the likelihood of additional moneys
becoming available for such application in the future. Whenever
the Trustee shall apply such funds, it shall fix the date (which
shall be an interest payment date unless it shall deem another
date more suitable) upon which such application is to be made and
upon such date interest on the amounts of principal to be paid on
such dates shall cease to accrue. The Trustee shall give such
notice as it may deem appropriate of the deposit with it of any
such moneys and of the fixing of any such date and shall not be
required to make payment to the holder of any Bond until such
Bond shall be presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Section 1008. Remedies Vested in Trustee. All rights
of action (including the right to file proof of claim) under this
Indenture or under any of the Bonds may be enforced by the
Trustee without the possession of any of the Bonds or the
production thereof in any trial or other proceeding relating
thereto and any such suit or proceeding instituted by the Trustee
shall be brought in its name as Trustee, without the necessity of
joining as plaintiffs or defendants any holders of the Bonds
hereby secured, and any recovery of judgment shall be for the
equal benefit of the holders of the outstanding Bonds.
Section 1009. Rights and Remedies of Bondholders. No
holder of any Bond shall have any right to institute any suit,
action or proceeding in equity or at law for the enforcement of
this Indenture or for the execution of any trust hereof or for
the appointment of a receiver or any other remedy hereunder,
unless a default has occurred of which the Trustee has been
notified as provided in subsection (g) of Section 1101, or of
which by said subsection it is deemed to have notice, nor unless
such default shall have become an Event of Default and the
holders of twenty-five percent (25%) in aggregate principal
amount of Bonds outstanding hereunder shall have made written
request to the Trustee and shall have offered it reasonable
opportunity either to proceed to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its
own name, nor unless also they have offered to the Trustee
indemnity as provided in Section 1101 nor unless the Trustee
shall thereafter fail or refuse to exercise the powers
hereinbefore granted, or to institute such action, suit or
proceeding in its own name; and such notification, request and
offer of indemnity are hereby declared in every such case at the
option of the Trustee to be conditions precedent to the execution
of the powers and trusts of this Indenture, and to any action or
cause of action for the enforcement of this Indenture or for the
appointment of a receiver or for any other remedy hereunder; it
being understood and intended that no one or more holders of the
Bonds shall have any right in any manner whatsoever to affect,
disturb or prejudice the lien of this Indenture by his or their
action or to enforce any right hereunder except in the manner
herein provided, and that all proceedings at law or in equity
shall be instituted, held and maintained in the manner herein
provided for the equal benefit of the holders of all Bonds
outstanding hereunder. Nothing in this Indenture contained
shall, however, affect or impair the right of any bondholders to
enforce the payment of the principal of and interest on any Bonds
at and after the maturity thereof, or the obligation of the
County to pay the principal of and interest on each of the Bonds
issued hereunder to the respective holders thereof at the time
and place in said Bonds expressed.
Section 1010. Termination of Proceedings. In case the
Trustee shall have proceeded to enforce any right under this
Indenture by the appointment of a receiver or otherwise, and
suchproceedings shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Trustee,
then and in every such case the County and the Trustee shall be
restored to their former positions and rights hereunder with
respect to the property herein conveyed, and all rights, remedies
and powers of the Trustee shall continue as if no such
proceedings had been taken, except to the extent the Trustee is
legally bound by such adverse determination.
Section 1011. Waivers of Events of Default. The
provisions of Article X are subject to the condition that any
waiver of any "Default" under the Company Mortgage and a
rescission and annulment of its consequences shall constitute a
waiver of the corresponding Event or Events of Default under
clause (c) of the first paragraph of Section 1001 hereof and a
rescission and annulment of the consequences thereof, but no such
waiver, rescission and annulment shall extend to or affect any
subsequent Event of Default or impair any right or remedy
consequent thereon.
ARTICLE XI
THE TRUSTEE AND PAYING AGENTS
Section 1101. Acceptance of Trusts. The Trustee
hereby accepts the trust imposed upon it by this Indenture, and
agrees to perform said trust (i) except during the continuance of
an Event of Default as an ordinarily prudent trustee under a
corporate mortgage, and (ii) during the continuance of an Event
of Default, with the same degree of care and skill in the
exercise of its rights hereunder as a prudent man would exercise
or use under the circumstances in the conduct of his affairs, but
only upon and subject to the following expressed terms and
conditions:
(a) The Trustee may execute any of the trusts or
powers hereof and perform any duties required of it by or through
attorneys, agents, receivers or employees, and shall be entitled
to advice of counsel concerning all matters of trusts hereof and
its duties hereunder, and may in all cases pay reasonable
compensation to all such attorneys, agents, receivers and
employees as may reasonably be employed in connection with the
trusts hereof. The Trustee may act upon the opinion or advice of
any attorney, surveyor, engineer or accountant selected by it in
the exercise of reasonable care, or, if selected or retained by
the County prior to the occurrence of a default of which the
Trustee has been notified as provided in subsection (g) of this
Section 1101, or of which by said subsection the Trustee is
deemed to have notice, approved by the Trustee in the exercise of
such care. The Trustee shall not be responsible for any loss or
damage resulting from an action or non-action in accordance with
any such opinion or advice.
(b) The Trustee shall not be responsible for any
recital herein, or in the Bonds (except in respect to the
certificate of the Trustee endorsed on such Bonds), or for
insuring the property herein conveyed or collecting any insurance
moneys, or for the validity of the execution by the County of
this Indenture or of any supplemental indentures or instrument of
further assurance, or for the sufficiency of the security for the
Bonds issued hereunder or intended to be secured hereby, or for
the value of the title of the property herein conveyed or
otherwise as to the maintenance of the security hereof; except
that in the event the Trustee enters into possession of a part or
all of the property herein conveyed pursuant to any provision of
this Indenture, it shall use due diligence in preserving such
property; and the Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants,
conditions and agreements aforesaid as to the condition of the
property herein conveyed.
(c) The Trustee may become the owner of Bonds secured
hereby with the same rights which it would have if not Trustee.
(d) The Trustee shall be protected in acting upon any
notice, request, consent, certificate, order, affidavit, letter,
telegram or other paper or document believed by it, in the
exercise of reasonable care, to be genuine and correct and to
have been signed or sent by the proper person or persons. Any
action taken by the Trustee pursuant to this Indenture upon the
request or authority or consent of the owner of any Bond secured
hereby, shall be conclusive and binding upon all future owners of
the same Bond and upon Bonds issued in exchange therefor or in
place thereof.
(e) As to the existence or non-existence of any fact
or as to the sufficiency or validity of any instrument, paper or
proceeding, the Trustee shall be entitled to rely upon a
certificate of the County signed by its County Judge and attested
by the Clerk of the County, as sufficient evidence of the facts
therein contained and prior to the occurrence of a default of
which it has been notified as provided in subsection (g) of this
Section 1101, or of which by that subsection it is deemed to have
notice, and shall also be at liberty to accept a similar
certificate to the effect that any particular dealing,
transaction or action is necessary or expedient, but may at its
discretion, at the reasonable expense of the County, in every
case secure such further evidence as it may think necessary or
advisable but shall in no case be bound to secure the same. The
Trustee may accept a certificate of the Clerk of the County under
its seal to the effect that a resolution or ordinance in the form
therein set forth has been adopted by the County as conclusive
evidence that such resolution or ordinance has been duly adopted,
and is in full force and effect.
(f) The permissive right of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty of
the Trustee.
(g) The Trustee shall not be required to take notice
or be deemed to have notice of any default hereunder (except a
default under clause (a) or (b) of the first paragraph of
Section 1001 hereof concerning which the Trustee shall be deemed
to have notice) unless the Trustee shall be specifically notified
in writing of such default by the County or by the holders of at
least ten percent (10%) in aggregate principal amount of Bonds
outstanding hereunder and all notices or other instruments
required by this Indenture to be delivered to the Trustee must,
in order to be effective, be delivered to the office of the
Trustee, and in the absence of such notice so delivered, the
Trustee may conclusively assume there is no such default except
as aforesaid.
(h) The Trustee shall not be personally liable for any
debts contracted or for damages to persons or to personal
property injured or damaged, or for salaries or non-fulfillment
of contracts during any period in which it may be in the
possession of ormanaging the real and tangible personal property
as in this Indenture provided.
(i) At any and all reasonable times the Trustee, and
its duly authorized agents, attorneys, experts, engineers,
accountants and representatives, shall have the right fully to
inspect any and all of the property herein conveyed, including
all books, papers and records of the County pertaining to the
Facilities and the Bonds, and to take such memoranda from and in
regard thereto as may be desired, provided, however, that nothing
contained in this subsection or in any other provision of this
Indenture shall be construed to entitle the above named persons
to any information or inspection involving the confidential
know-how of the Company.
(j) The Trustee shall not be required to give any bond
or surety in respect of the execution of the said trusts and
powers or otherwise in respect of the premises.
(k) Notwithstanding anything elsewhere in this
Indenture contained, the Trustee shall have the right, but shall
not be required, to demand, in respect of the authentication of
any Bonds, the withdrawal of any cash, the release of any
property, or any action whatsoever within the purview of this
Indenture, any showings, certificates, opinions, appraisals, or
other information, or corporate action or evidence thereof, in
addition to that by the terms hereof required as a condition of
such action by the Trustee, deemed desirable for the purpose of
establishing the right of the County to the authentication of any
Bonds, the withdrawal of any cash, the release of any property,
or the taking of any other action by the Trustee.
(l) Before taking such action hereunder, the Trustee
may require that it be furnished an indemnity bond satisfactory
to it for the reimbursement to it of all expenses to which it may
be put and to protect it against all liability, except liability
which is adjudicated to have resulted from the negligence or
willful default of the Trustee, by reason of any action so taken
by the Trustee.
Section 1102. Fees, Charges and Expenses of Trustee
and Paying Agents. The Trustee and any Paying Agent shall be
entitled to payment and/or reimbursement for reasonable fees for
services rendered hereunder and all advances, counsel fees and
other expenses reasonably and necessarily made or incurred in and
about the execution of the trusts created by this Indenture. The
County has made provisions in the Sale Agreement for the payment
of such Administration Expenses and reference is hereby made to
the Sale Agreement for the provisions so made. In this regard,
it is understood that the County pledges no funds or revenues
other than those derived from and the avails of the Trust Estate
to the payment of any obligation of the County set forth in this
Indenture, including the obligations set forth in this Section
1102, but nothing herein shall be construed as prohibiting
theCounty from using any other funds and revenues for the payment
of any of its obligations under this Indenture. Upon an Event of
Default, but only upon an Event of Default, the Trustee and the
Paying Agents shall have a first lien with right of payment prior
to payment on account of principal or interest of any Bond issued
hereunder upon the Trust Estate for such reasonable and necessary
advances, fees, costs and expenses incurred by them respectively.
Section 1103. Notice to Bondholders of Default. The
Trustee shall be required to make demand upon and give notice to
the Company and each registered owner of Bonds then outstanding
as follows:
(a) If the Company shall fail to make any installment
payment under the Sale Agreement on the day such payment is due
and payable, the Trustee shall give notice to and make demand
upon the Company on the next succeeding business day.
(b) If a default occurs of which the Trustee is
pursuant to the provisions of Section 1101(g) deemed to have or
is given notice, the Trustee shall promptly give notice to the
Company and to bondholders.
Section 1104. Intervention by Trustee. In any
judicial proceeding to which the County is a party and which in
the opinion of the Trustee and its counsel has a substantial
bearing on the interests of holders of Bonds issued hereunder,
the Trustee may intervene on behalf of bondholders and shall do
so if requested in writing by the holders of at least ten percent
(10%) of the aggregate principal amount of Bonds outstanding
hereunder. The rights and obligations of the Trustee under this
Section 1104 are subject to the approval of the court having
jurisdiction in the premises.
Section 1105. Merger or Consolidation of Trustee. Any
bank or trust company to which the Trustee may be merged, or with
which it may be consolidated, or to which it may sell or transfer
its trust business and assets as a whole or substantially as a
whole, or any bank or trust company resulting from any such sale,
merger, consolidation or transfer to which it is a party, ipso
facto, shall be and become successor trustee hereunder and vested
with all of the title to the whole property or Trust Estate and
all the trusts, powers, discretions, immunities, privileges, and
all other matters as was its predecessor, without the execution
or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that
such successor trustee shall have capital and surplus of at least
$10,000,000.
Section 1106. Resignation by Trustee. The Trustee and
any successor trustee may at any time resign from the trusts
hereby created by giving thirty (30) days written notice to the
County andto the Company, and such resignation shall take effect
at the end of such thirty (30) days, or upon the earlier
appointment of a successor trustee by the bondholders or by the
County. Such notice may be served personally or sent by
registered mail.
Section 1107. Removal of Trustee. The Trustee may be
removed at any time by an instrument or concurrent instruments in
writing delivered to the Trustee and to the County, and signed by
the holders of a majority in aggregate principal amount of Bonds
outstanding hereunder.
Section 1108. Appointment of Successor Trustee. In
case the Trustee hereunder shall resign or be removed, or be
dissolved, or shall be in course of dissolution or liquidation,
or otherwise become incapable of acting hereunder, or in case it
shall be taken under the control of any public officer or
officers, or of a receiver appointed by the court, a successor
may be appointed by the holders of a majority in aggregate
principal amount of Bonds outstanding hereunder, by an instrument
or concurrent instruments in writing signed by such holders, or
by their attorneys in fact, duly authorized; provided,
nevertheless, that in case of such vacancy the County by an
instrument executed and signed by its County Judge and attested
by its Clerk under its seal, shall appoint a temporary trustee to
fill such vacancy until a successor trustee shall be appointed by
the bondholders in the manner above provided; and any such
temporary trustee so appointed by the County shall immediately
and without further act be superseded by the trustee so appointed
by such bondholders. Every such temporary trustee and every such
successor trustee shall be a trust company or bank in good
standing, having capital and surplus of not less than
$10,000,000.
Section 1109. Concerning Any Successor Trustee. Every
successor or temporary trustee appointed hereunder shall execute,
acknowledge and deliver to its predecessor and also to the County
an instrument in writing accepting such appointment hereunder,
and thereupon such successor or temporary trustee, without any
further act or conveyance, shall become fully vested with all the
estates, properties, rights, powers, trusts, duties and
obligations of its predecessor; but such predecessor shall,
nevertheless, on the written request of the County or of its
successor trustee, execute and deliver an instrument transferring
to such successor all the estate, properties, rights, powers and
trusts of such predecessor hereunder; and every predecessor
trustee shall deliver all securities, moneys and any other
property held by it as trustee hereunder to its successor.
Should any instrument in writing from the County be required by
any successor trustee for more fully and certainly vesting in
such successor the estates, rights, powers and duties hereby
vested or intended to be vested in the predecessor trustee, any
and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the County. The
resignation of any trustee and the instrument or
instrumentsremoving any trustee and appointing a successor
hereunder, together with all other instruments provided for in
this Article shall, at the expense of the County, be forthwith
filed and/or recorded by the successor trustee in each recording
office where the Indenture shall have been filed and/or recorded.
Section 1110. Reliance Upon Instruments. The
resolutions, opinions, certificates and other instruments
provided for in this Indenture may be accepted and relied upon by
the Trustee as conclusive evidence of the facts and conclusions
stated therein and shall be full warrant, protection and
authority to the Trustee for its actions taken hereunder.
Section 1111. Appointment of Co-Trustee. The County
and the Trustee shall have power to appoint and upon the request
of the Trustee the County shall for such purpose join with the
Trustee in the execution of all instruments necessary or proper
to appoint another corporation or one or more persons approved by
the Trustee, and satisfactory to the Company so long as there is
no termination of the interest of the Company by virtue of an
event of default or otherwise, either to act as co-trustee or
co-trustees jointly with the Trustee of all or any of the
property subject to the lien hereof, or to act as separate
trustee or co-trustee of all or any such property, with such
powers as may be provided in the instrument of appointment and to
vest in such corporation or person or persons as such separate
trustee or co-trustee any property, title, right or power deemed
necessary or desirable. In the event that the County shall not
have joined in such appointment within fifteen (15) days after
the receipt by it of a request so to do, the Trustee alone shall
have the power to make such appointment. Should any deed,
conveyance or instrument in writing from the County be required
by separate trustee or co-trustee so appointed for more fully and
certainly vesting in and confirming to him or to it such
properties, rights, powers, trusts, duties and obligations, any
and all such deeds, conveyances and instruments in writing shall,
on request, be executed, acknowledged and delivered by the
County. Every such co-trustee and separate trustee shall, to the
extent permitted by law, be appointed subject to the following
provisions and conditions, namely:
(1) The Bonds shall be authenticated and
delivered, and all powers, duties, obligations and
rights conferred upon the Trustee in respect of
the custody of all money and securities pledged or
deposited hereunder, shall be exercised solely by
the Trustee; and
(2) The Trustee, at any time by an instrument in
writing, may remove any such separate trustee or
co-trustee.
Every instrument, other than this Indenture, appointing
any such co-trustee or separate trustee, shall refer to this
Indenture and the conditions of this Article XI expressed, and
upon the acceptance in writing by such separate trustee or
co-trustee, he, they or it shall be vested with the estate or
property specified in such instrument, jointly with the Trustee
(except insofar as local law makes it necessary for any separate
trustee to act alone), subject to all the trusts, conditions and
provisions of this Indenture. Any such separate trustee or
co-trustee may at any time, by an instrument in writing,
constitute the Trustee as his, their or its agent or
attorney-in-fact with full power and authority, to the extent
authorized by law, to do all acts and things and exercise all
discretion authorized or permitted by him, them or it, for and on
behalf of him, them or it and in his, their or its name. In case
any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all the estate, properties, rights,
powers, trusts, duties and obligations of said separate trustee
or co-trustee shall vest in and be exercised by the Trustee until
the appointment of a new trustee or a successor to such separate
trustee or co-trustee.
Section 1112. Designation and Succession of Paying
Agents. The Trustee and any other banks or trust companies, if
any, designated as Paying Agent or Paying Agents in any
supplemental indenture providing for the issuance of Additional
Bonds as provided in Section 211 hereof or in an instrument
appointing a successor Trustee, shall be the Paying Agent or
Paying Agents for the applicable series of Bonds.
Any bank or trust company with which or into which any
Paying Agent may be merged or consolidated, or to which the
assets and business of such Paying Agent may be sold, shall be
deemed the successor of such Paying Agent for the purposes of
this Indenture. If the position of Paying Agent shall become
vacant for any reason, the County shall, within thirty (30) days
thereafter, appoint such bank or trust company as shall be
specified by the Company as such Paying Agent to fill such
vacancy; provided, however, that, if the County shall fail to
appoint such Paying Agent within said period, the Trustee shall
make such appointment.
The Paying Agents shall enjoy the same protective
provisions in the performance of their duties hereunder as are
specified in Section 1101 hereof with respect to the Trustee
insofar as such provisions may be applicable.
Section 1113. Several Capacities. Anything in this
Indenture to the contrary notwithstanding, the same entity may
serve hereunder as the Trustee, the Paying Agent, and the Bond
Registrar and in any other combination of such capacities, to the
extent permitted by law.
ARTICLE XII
SUPPLEMENTAL INDENTURES
Section 1201. Supplemental Indentures Without
Bondholder Consent. The County and the Trustee may, from time to
time and at any time, without the consent of or notice to the
bondholders, enter into supplemental indentures as follows:
(a) to cure any formal defect, omission,
inconsistency or ambiguity in this Indenture;
(b) to grant to or confer or impose upon the
Trustee for the benefit of the bondholders any
additional rights, remedies, powers, authority,
security, liabilities or duties which may lawfully be
granted, conferred or imposed and which are not
contrary to or inconsistent with this Indenture as
theretofore in effect, provided that no such additional
liabilities or duties shall be imposed upon the Trustee
without its consent;
(c) to add to the covenants and agreements of,
and limitations and restrictions upon, the County in
this Indenture other covenants, agreements, limitations
and restrictions to be observed by the County which are
not contrary to or inconsistent with this Indenture as
theretofore in effect;
(d) to confirm, as further assurance, any pledge
under, and the subjection to any claim, lien or pledge
created or to be created by, this Indenture, of the
Revenues of the County from the Sale Agreement or of
any other moneys, securities or funds;
(e) to authorize the issuance and sale of one or
more series of Additional Bonds;
(f) to comply with the requirements of the Trust
Indenture Act of 1939, as from time to time amended;
(g) to provide for the registration and
registration of transfer of the Bonds through a
book-entry or similar method, whether or not the Bonds
are evidenced by certificates; or
(h) to modify, alter, amend or supplement this
Indenture in any other respect which is not materially
adverse to the bondholders and which does not involve a
change described in clause (a), (b), (c), (d), (e) or
(f) of Section 1202 hereof and which, in the judgment
of the Trustee, is not to the prejudice of the Trustee.
Section 1202. Supplemental Indentures Requiring
Bondholder Consent. Subject to the terms and provisions
contained in this Section, and not otherwise, the holders of not
less than a majority in aggregate principal amount of the Bonds
then outstanding shall have the right, from time to time,
anything contained in this Indenture to the contrary
notwithstanding, to consent to and approve the execution by the
County and the Trustee of such indenture or indentures
supplemental hereto as shall be deemed necessary and desirable by
the County for the purpose of modifying, altering, amending,
adding to or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any supplemental
indenture; provided, however, that nothing herein contained shall
permit, or be construed as permitting, unless approved by the
holders of all Bonds then outstanding (a) an extension of the
maturity (or mandatory sinking fund or other mandatory redemption
date) of the principal of or the interest on any Bond issued
hereunder, or (b) a reduction in the principal amount of or
redemption premium or rate of interest on any Bond issued
hereunder, or (c) the creation of any lien ranking prior to or on
a parity with the lien of this Indenture on the Trust Estate or
any part thereof, except as hereinbefore expressly permitted, or
(d) a privilege or priority of any Bond or Bonds over any other
Bond or Bonds, or (e) a reduction in the aggregate principal
amount of the Bonds required for consent to such supplemental
indenture, or (f) depriving the holder of any Bond then
outstanding of the lien hereby created on the Trust Estate.
Nothing herein contained, however, shall be construed as making
necessary the approval of bondholders of the execution of any
supplemental indenture as provided in Section 1201 of this
Article.
If, at any time the County shall request the Trustee to
enter into any supplemental indenture for any of the purposes of
this Section, the Trustee shall, at the expense of the County,
cause notice of the proposed execution of such supplemental
indenture to be mailed by first class mail to each registered
owner of the Bonds. Such notice shall briefly set forth the
nature of the proposed supplemental indenture and shall state
that copies thereof are on file at the principal corporate trust
office of the Trustee for inspection by bondholders. The Trustee
shall not, however, be subject to any liability to any bondholder
by reason of its failure to mail such notice, and any such
failure shall not affect the validity of such supplemental
indenture when consented to and approved as provided in this
Section. If the holders of not less than a majority in aggregate
principal amount of the Bonds outstanding at the time of the
execution of any such supplemental indenture shall have consented
to and approved the execution thereof as herein provided, no
holder of any Bond shall have any right to object to any of the
terms and provisions contained therein, or the operation thereof,
or in any manner to question the propriety of the execution
thereof, or to enjoin or restrain the Trustee or the County from
executing the same or from taking any action pursuant to the
provisions thereof. Upon the execution ofany such supplemental
indenture, this Indenture shall be deemed to be modified and
amended in accordance therewith.
Section 1203. Consent of Company. Anything herein to
the contrary notwithstanding, a supplemental indenture under this
Article XII shall not become effective unless and until the
Company shall have consented to the execution and delivery of
such supplemental indenture. In this regard, the Trustee shall
cause notice of the proposed execution and delivery of any such
supplemental indenture together with a copy of the proposed
supplemental indenture to be mailed by certified or registered
mail to the Company at least fifteen (15) days prior to the
proposed date of execution and delivery of any such supplemental
indenture. The Company shall be deemed to have consented to the
execution and delivery of any such supplemental indenture if the
Trustee receives a letter or other instrument signed by an
authorized officer of the Company expressing consent.
Section 1204. Opinion of Bond Counsel. Anything
herein to the contrary notwithstanding, a supplemental indenture
under this Article XII shall not become effective unless and
until the Trustee shall have received an opinion of Bond Counsel
to the effect that such supplemental indenture will not affect
the exclusion of interest on the Bonds from gross income for
purposes of federal income taxation.
ARTICLE XIII
AMENDMENT TO SALE AGREEMENT
Section 1301. Amendments Not Requiring Consent of
Bondholders. The Trustee may from time to time, and at any time,
consent to any amendment, change or modification of the Sale
Agreement for the purpose of curing any ambiguity or formal
defect or omission or making any other change therein, which in
the reasonable judgment of the Trustee is not to the prejudice of
the Trustee or the holders of the Bonds. The Trustee shall not
consent to any other amendment, change or modification of the
Sale Agreement without the approval or consent of the holders of
not less than a majority in aggregate principal amount of the
Bonds at the time outstanding, evidenced in the manner provided
in Section 1401 hereof; provided the Trustee shall not, without
the unanimous consent of the holders of all Bonds then
outstanding, evidenced in the manner provided in Section 1401
hereof, consent to any amendment which would change the
obligations of the Company under Section 5.02 or 5.03 of the Sale
Agreement or the nature of the obligations of the Company on the
First Mortgage Bonds as provided in Section 5.03 of the Sale
Agreement.
Section 1302. Amendments Requiring Consent of
Bondholders. If at any time the County or the Company shall
request the Trustee's consent to a proposed amendment, change or
modification requiring bondholder approval under Section 1301,
the Trustee, shall, at the expense of the requesting party, cause
notice of such proposed amendment, change or modification to the
Sale Agreement to be mailed in the same manner as provided by
Section 1202 hereof with respect to supplemental indentures.
Such notice shall briefly set forth the nature of such proposed
amendment, change or modification and shall state that copies of
the instrument embodying the same are on file in the principal
office of the Trustee for inspection by any interested
bondholder. The Trustee shall not, however, be subject to any
liability to any bondholder by reason of its failure to publish
or mail such notice, and any such failure shall not affect the
validity of such amendment, change or modification when consented
to by the Trustee in the manner hereinabove provided.
Section 1303. Opinion of Bond Counsel. Anything
herein to the contrary notwithstanding, any amendment to the Sale
Agreement shall not become effective unless and until the Trustee
shall have received an opinion of Bond Counsel to the effect that
such amendment will not affect the exclusion of interest on the
Bonds from gross income for purposes of federal income taxation.
ARTICLE XIV
MISCELLANEOUS
Section 1401. Consents, etc. of Bondholders. Any
request, direction, objection or other instrument required by
this Indenture to be signed and executed by the bondholders may
be in any number of concurrent writings of similar tenor and may
be signed or executed by such bondholders in person or by agent
appointed in writing. Proof of the execution of any such
request, direction, objection or other instrument or of the
writing appointing any such agent and of the ownership of Bonds,
if made in the following manner, shall be sufficient for any of
the purposes of this Indenture, and shall be conclusive in favor
of the Trustee with regard to any action taken by it under such
request or other instrument, namely:
(a) The fact and date of the execution by any person
of any such writing may be proved by the certificate of any
officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the person signing
such writing acknowledged before him the execution thereof, or by
an affidavit of any witness to such execution.
(b) The fact of ownership of Bonds and the amount or
amounts, numbers and other identification of such Bonds, and the
date of holding the same shall be proved by the registration
books of the County maintained by the Trustee as Bond Registrar.
Section 1402. Limitation of Rights. With the
exception of rights herein expressly conferred, nothing expressed
or mentioned in or to be implied from this Indenture, or the
Bonds issued hereunder, is intended or shall be construed to give
to any person or company other than the parties hereto, the
Company, and the holders of the Bonds secured by this Indenture
any legal or equitable rights, remedy or claim under or in
respect to this Indenture or any covenants, conditions and
provisions herein contained; this Indenture and all of the
covenants, conditions and provisions hereof being intended to be
and being for the sole exclusive benefit of the parties hereto,
the Company, and the holders of the Bonds hereby secured as
herein provided.
Section 1403. Severability. If any provisions of this
Indenture shall be held or deemed to be or shall, in fact, be
inoperative or unenforceable as applied in any particular case in
any jurisdiction or jurisdictions or in all jurisdictions or in
all cases because it conflicts with any provisions of any
constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable
in any other case or circumstance, or of rendering any other
provision or provisionsherein contained invalid, inoperative or
unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences,
clauses or paragraphs in this Indenture contained shall not
affect the remaining portions of this Indenture or any part
thereof.
Section 1404. Notices. Except as otherwise provided
in this Indenture, all notices, certificates or other
communications shall be sufficiently given and shall be deemed
given when mailed by registered or certified mail, postage
prepaid, to the County, the Company, the Trustee and any Paying
Agent. Notices, certificates or other communications shall be
sent to the following addresses:
Company: Arkansas Power & Light Company
P.O. Box 551
Little Rock, Arkansas 72203
Attention: Treasurer
County: ___________ County, Arkansas
___________ County Courthouse
____________, Arkansas ______
Attention: County Judge
Trustee: ______________________________
______________________________
______________________________
Attention: Corporate Trust Department
Any Paying
Agent other
than the
Trustee: At the address designated to the
County and the Trustee.
Any of the foregoing may, by notice given hereunder, designate
any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 1405. Applicable Provisions of Law. This
Indenture shall be considered to have been executed in the State
of Arkansas and it is the intention of the parties that the
substantive law of the State of Arkansas govern as to all
questions of interpretation, validity and effect.
Section 1406. Counterparts. This Indenture may be
executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.
Section 1407. Successors and Assigns. All the
covenants, stipulations, provisions, agreements, rights, remedies
and claims of the parties hereto in this Indenture contained
shall bind and inure to the benefit of their successors and
assigns.
Section 1408. Captions. The captions or headings in
this Indenture are for convenience only and in no way define,
limit or describe the scope or intent of any provisions or
sections of this Indenture.
Section 1409. Photocopies and Reproductions. A
photocopy or other reproduction of this Indenture may be filed as
a financing statement pursuant to the Uniform Commercial Code,
although the signatures of the County and the Trustee on such
reproduction are not original manual signatures.
Section 1410. Bonds Owned by the County or the
Company. In determining whether bondholders of the requisite
aggregate principal amount of the Bonds have concurred in any
direction, consent or waiver under this Indenture, Bonds which
are owned by the County or the Company or by any person directly
or indirectly controlling or controlled by or under direct or
indirect common control with the Company shall be disregarded and
deemed not to be outstanding for the purpose of any such
determination, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Bonds which the Trustee knows
are so owned shall be so disregarded. Bonds so owned which have
been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Bonds and that the
pledgee is not the County or the Company or any person directly
or indirectly controlling or controlled by or under direct or
indirect common control with the Company. In 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 1411. Holidays. If the date for making any
payment or the last date for performance of any act or the
exercising of any right, as provided in this Indenture, shall be
a legal holiday or a day on which banking institutions in the
city in which is located the principal corporate trust office of
the Trustee are authorized by law to remain closed, such payment
may be made or act performed or right exercised on the next
succeeding day not a legal holiday or a day on which such banking
institutions are authorized by law to remain closed, with the
same force and effect as if done on the nominal date provided in
this Indenture, and no interest shall accrue for the period after
such nominal date.
<PAGE>
IN WITNESS WHEREOF, the County has caused these
presents to be signed in its name and behalf by its County Judge
and its corporate seal to be hereunto affixed and attested by its
County Clerk, and, to evidence its acceptance of the trust hereby
created, the Trustee has caused these presents to be signed in
its behalf by its Executive Vice President and Trust Officer and
its corporate seal to be hereto affixed and attested by its
Corporate Trust Officer.
___________ COUNTY, ARKANSAS
By ___________________________
ATTEST: County Judge
_______________________________
County Clerk
(SEAL)
________________________________
________________________________
TRUSTEE
By _____________________________
Executive Vice President and
Trust Officer
ATTEST:
______________________________
Corporate Trust Officer
(SEAL)
<PAGE>
ACKNOWLEDGMENT
STATE OF ARKANSAS )
)
COUNTY OF _________ )
On this ____ day of _______, ____, before me, a Notary
Public duly commissioned, qualified and acting within and for the
State and County aforesaid, appeared in person the within named
_________________ and _______________, County Judge and County
Clerk, respectively, of _________ County, Arkansas, to me
personally well known, who stated that they were duly authorized
in their respective capacities to execute the foregoing
instrument for and in the name of the municipality, and further
stated and acknowledged that they had signed, executed and
delivered the foregoing instrument for the consideration, uses
and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this ____ day of _______, ____.
________________________________
Notary Public
My Commission expires:
______________________
(SEAL)
<PAGE>
ACKNOWLEDGMENT
STATE OF __________ )
)
COUNTY OF _________ )
On this ____ day of _______, ____, before me, a Notary
Public duly commissioned, qualified and acting within and for the
State and County aforesaid, appeared in person the within named
________________ and _________________, ________________________
and _______________________________, respectively, of
_____________ _______________________, __________, ________, to
me personally well known, who stated that they were duly
authorized in their respective capacities to execute the
foregoing instrument for and in the name and behalf of the Bank,
and further stated and acknowledged that they had so signed,
executed and delivered the foregoing instrument for the
consideration, uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this ______ day of _______, ____.
________________________________
Notary Public
My Commission expires:
______________________
(SEAL)
<PAGE>
EXHIBIT A
Form of Series ____ Bond
No. ____ $_______
UNITED STATES OF AMERICA
STATE OF ARKANSAS
_________ COUNTY, ARKANSAS
POLLUTION CONTROL REVENUE REFUNDING BOND, SERIES ____
(ARKANSAS POWER & LIGHT COMPANY PROJECT)
Date of Bond: _________ Maturity Date: _______ 1, ____
Interest Rate: _% per annum CUSIP _________
Registered Owner: _________________________________________________
Principal Amount: _________________________________________ DOLLARS
KNOW ALL MEN BY THESE PRESENTS:
That _________ County, Arkansas, a political
subdivision under the Constitution and laws of the State of
Arkansas (the "County"), for value received, promises to pay to
the registered owner shown above, or registered assigns, but
solely from the source and in the manner hereinafter set forth,
on the maturity date shown above, the principal amount shown
above and in like manner to pay interest on said amount from the
date hereof shown above until such principal amount becomes due
and payable, at the rate per annum shown above, semiannually on
_______ 1 and ____ 1 of each year commencing on the _______ 1 or
____ 1 next succeeding the date of this Bond, and to pay interest
on overdue principal at the rate of ___ percent (_%) per annum
until paid, except as the provisions hereinafter set forth with
respect to redemption of this Bond prior to maturity may become
applicable hereto. The principal of and premium, if any, on this
Bond are payable in lawful money of the United States of America
upon the presentation and surrender hereof at the principal
corporate trust office of _____________
___________________________, __________, ________, or its
successor or successors, as Trustee (the "Trustee"), and interest
on this Bond is payable in like money to the registered owner
hereof by check drawn upon the Trustee and mailed to the person
in whose name this Bond is registered at the close of business on
the fifteenth day of the calendar month next preceding such
interest payment date, at his address as it appears on the bond
registration books of the County kept by the Trustee.
This Bond, designated "________ County, Arkansas
Pollution Control Revenue Refunding Bond, Series ____ (Arkansas
Power & Light Company Project)," is one of a series of Bonds in
the aggregate principal amount of ___________________ Dollars
($__________) (the "Bonds"), issued for the purpose of financing
the cost of acquiring, constructing and equipping an undivided
interest (the "Project") in certain pollution conterol
facilities(the "Facilities") at the electric generating plant of
Arkansas Power & Light Company, an Arkansas corporation (the
"Company"), located within the boundaries of the County and known
as Arkansas ___________ (the "Plant"), for sale to the Company,
and paying a portion of the expenses of issuing the Bonds. The
Bonds are all issued under and are all equally and ratably
secured and entitled to the protection given by a Trust Indenture
dated as of _______ _, ____ (the "Indenture"), duly executed and
delivered by the County to the Trustee. The Indenture provides
that the County may hereafter issue Additional Bonds from time to
time under certain terms and conditions contained in the
Indenture and, if issued, such Additional Bonds will be equally
and ratably secured by and entitled to the protection of the
Indenture. Reference is hereby made to the Indenture and all
indentures supplemental thereto for the provisions, among others,
with respect to the nature and extent of the security, the
rights, duties and obligations of the County, the Trustee and the
registered owners of the Bonds, and the terms upon which the
Bonds are issued and secured. The terms and conditions of the
acquisition, construction and equipment of the Facilities, the
use of the proceeds of the Bonds for such purpose, and the sale
of the Facilities by the County to the Company, are contained in
an Installment Sale Agreement dated as of _______ _, ____ (the
"Sale Agreement"), by and between the County and the Company.
The Bonds are issued pursuant to and in full compliance
with the Constitution and laws of the State of Arkansas,
particularly Title 14, Chapter 267 of the Arkansas Code of 1987
Annotated (the "Act"), and pursuant to Orders of the County Court
of the County, which Orders authorized the execution and delivery
of the Indenture. The Bonds do not constitute an indebtedness of
the County within the meaning of any constitutional or statutory
limitation.
REFERENCE IS HEREBY MADE TO THE ADDITIONAL PROVISIONS
OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF WHICH FOR ALL
PURPOSES SHALL HAVE THE SAME EFFECT AS IF SET FORTH HEREIN.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all
acts, conditions and things required to exist, happen and be
performed precedent to and in the issuance of the Bonds do exist,
have happened and have been performed in due time, form and
manner as required by law; that the indebtedness represented by
the Bonds, together with all obligations of the County, does not
exceed any constitutional or statutory limitation; and that the
above referred to revenues pledged to the payment of the
principal of and premium, if any, and interest on the Bonds as
the same become due and payable will be sufficient in amount for
that purpose.
This Bond shall not be valid or become obligatory for
any purpose or be entitled to any security or benefit under
theIndenture until the Certificate of Authentication hereon shall
have been signed by the Trustee.
IN WITNESS WHEREOF, _______ County, Arkansas, has
caused this Bond to be executed by its County Judge and County
Clerk, thereunto duly authorized (by their manual or facsimile
signatures), and its corporate seal to be affixed or imprinted,
all as of the date of this Bond shown above.
_________ COUNTY, ARKANSAS
By ____________________________
ATTEST: County Judge
______________________________
County Clerk
(SEAL)
(Form of Trustee's Certificate)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in
and issued under the provisions of the within mentioned
Indenture.
_______________________________
_______________________________
TRUSTEE
By_____________________________
Authorized Signature
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED, __________________________________
("Transferor"), hereby sells, assigns and transfers unto
_______________, the within Bond and all rights thereunder, and
hereby irrevocably constitutes and appoints ________________
("Transferee") as attorney to transfer the within Bond on the
books kept for registration thereof with full power of
substitution in the premises.
DATE: __________________
_________________________________
Transferor
GUARANTEED BY:
______________________
NOTICE: Signature(s) must be guaranteed by a member firm of
the New York Stock Exchange or a commercial bank or a trust
company.
(Reverse Side of Series ____ Bond)
ADDITIONAL PROVISIONS
The Bonds are not general obligations of the County but
are special obligations payable solely from revenues derived from
the Facilities (including particularly payments under the Sale
Agreement). The Sale Agreement provides for payments by the
Company, for the purchase of the Facilities on an installment
basis, in amounts sufficient to provide for the payment of the
principal of and premium, if any, and interest on the Bonds as
due and payable. Such payments will be made directly to the
Trustee and deposited in a special account of the County
designated "________ County, Arkansas Pollution Control Revenue
Refunding Bond Fund - Arkansas Power & Light Company Project,"
and such payments have been duly assigned to the Trustee for that
purpose. The obligation of the Company to make such payments is
evidenced in part by the Company's first mortgage bonds issued
and delivered to the Trustee an additional series under the
Mortgage and Deed of Trust dated as of October 1, 1944, between
the Company and Guaranty Trust Company of New York (now Morgan
Guaranty Trust Company of New York) and Henry A. Theis (John W.
Flaherty, successor), and, as to property, real and personal,
situated or being in Missouri, Marvin A. Mueller (The Boatmen's
National Bank of St. Louis, successor), as trustees, as amended
and supplemented. All the rights and interest of the County in
and to the Sale Agreement (except for certain rights specified in
the Indenture) have been assigned under the Indenture to the
Trustee to secure the payment of the principal of and premium, if
any, and interest on the Bonds.
The owner of this Bond shall have no right to enforce
the provisions of the Indenture or to institute action to enforce
the covenants therein, or to take any action with respect to any
event of default under the Indenture, or to institute, appear in
and defend any suit or other proceeding with respect thereto,
except as provided in the Indenture. In certain events, on the
conditions, in the manner and with the effect set forth in the
Indenture, the principal of all the Bonds and Additional Bonds
issued under the Indenture and then outstanding may be declared
and may become due and payable before the stated maturity
thereof, together with accrued interest thereon.
Modifications or alterations of the Indenture, or of
any indenture supplemental thereto, may be made only to the
extent and in the circumstances permitted by the Indenture.
The Bonds are subject to redemption prior to maturity
as follows:
(a) The Bonds shall be subject to optional redemption
by the County, at the direction of the Company, in whole but not
in part, at any time, at a redemption price equal to the
principalamount being redeemed plus accrued interest to the
redemption date, if:
(i) the Company shall have determined that the
continued operation of the Plant is impracticable,
uneconomical or undesirable for any reason;
(ii) the Company shall have determined that the
continued construction or operation of the Facilities
is impracticable, uneconomical or undesirable due to
(A) the imposition of taxes, other than ad valorem
taxes currently levied upon privately owned property
used for the same general purpose as the Facilities, or
other liabilities or burdens with respect to the
Facilities or the construction or operation thereof,
(B) changes in technology, in environmental standards
or legal re-quirements or in the economic availability
of materials, supplies, equipment or labor or (C)
destruction of or damage to all or part of the
Facilities;
(iii) all or substantially all of the Facilities
or the Plant shall have been condemned or taken by
eminent domain; or
(iv) the construction or operation of the
Facilities or the Plant shall have been enjoined or
shall have otherwise been prohibited by any order,
decree, rule or regulation of any court or of any
federal, state or local regulatory body, administrative
agency or other governmental body.
(b) The Bonds shall be subject to mandatory
redemption, at a redemption price equal to the principal amount
being redeemed plus accrued interest to the redemption date, on
the one hundred eightieth day (or such earlier date as may be
designated by the Company) after a final determination by a court
of competent jurisdiction or an administrative agency, to the
effect that as a result of a failure by the Company to perform or
observe any covenant, agreement or representation contained in
the Sale Agreement, the interest payable on the Bonds is included
for federal income tax purposes in the gross income of the
bondholders thereof, other than any bondholder who is a
"substantial user" of the Facilities or a "related person" within
the meaning of Section 147(a) of the Internal Revenue Code of
1986, as amended (the "Code"). No determination by any court or
administrative agency will be considered final unless the Company
has participated in the proceeding which resulted in such
determination, either directly or through a bondholder, to a
degree it reasonably deems sufficient and until the conclusion of
any appellate review sought by any party to such proceeding or
the expiration of the time for seeking such review. The Bonds
shall be redeemed either in whole or in part in such principal
amount that the interest payable on theBonds remaining
outstanding after such redemption would not be included in the
gross income of any bondholder thereof, other than a bondholder
who is a "substantial user" of the Facilities or a "related
person" within the meaning of Section 147(a) of the Code.
(c) The Bonds shall be subject to optional redemption
by the County, at the direction of the Company, on and after
_______ 1, ____, in whole at any time or in part from time to
time, by lot or in such other manner as may be determined by the
Trustee to be fair and equitable, at the redemption prices
(expressed as percentages of principal amount) set forth below,
plus accrued interest to the redemption date:
Redemption
Redemption Period Price
_________, ____ through ___________, ____ ___%
_________, ____ through ___________, ____ ___%
_________, ____ through ___________, ____ ___%
_________, ____ through ___________, ____ ___%
_________, ____ and thereafter 100
The Bonds shall also be subject to optional redemption by the
County, at the direction of the Company, in whole but not in
part, at any time prior to _________, ____, at a redemption price
equal to ___% of the principal amount being redeemed plus accrued
interest to the redemption date, if the Company shall have
consolidated with or merged with or into another corporation, or
sold or otherwise transferred all or substantially all of its
assets.
In the event any of the Bonds or portions thereof
(which shall be $_____ or any integral multiple thereof) are
called for redemption, notice thereof shall be given by the
Trustee by first class mail, postage prepaid, to the registered
owner of each such Bond addressed to such registered owner at his
registered address and placed in the mails not less than thirty
(30) days nor more than sixty (60) days prior to the date fixed
for redemption; provided, however, that failure to give such
notice by mailing, or any defect therein, shall not affect the
validity of any proceeding for the redemption of any Bond with
respect to which no such failure or defect has occurred. Each
notice shall identify the Bonds or portions thereof being called,
and the date on which they shall be presented for payment. After
the date specified in such call, the Bond or Bonds so called will
cease to bear interest provided funds sufficient for their
redemption have been deposited with the Trustee, and, except for
the purpose of payment, shall no longer be protected by the
Indenture and shall not be deemed to be outstanding under the
provisions of the Indenture.
With respect to notice of redemption of Bonds at the
option of the County (at the direction of the Company), unless
moneys sufficient to pay the principal of and premium, if any,
andinterest on the Bonds to be redeemed shall have been received
by the Trustee prior to the giving of such notice, such notice
shall state that said redemption shall be conditional upon the
receipt of such moneys by the Trustee on or prior to the date
fixed for such redemption. If such moneys shall not have been so
received, such notice shall be of no force and effect, the County
shall not redeem such Bonds and the Trustee shall give notice, in
the manner in which the notice of redemption was given, that such
moneys were not so received.
This Bond may be transferred on the books of
registration kept by the Trustee by the registered owner or by
his duly authorized attorney upon surrender hereof, together with
a written instrument of transfer duly executed by the registered
owner or his duly authorized attorney.
The Bonds are issuable as registered Bonds without
coupons in denominations of $_____ and any integral multiple
thereof. Subject to the limitations and upon payment of the
charges provided in the Indenture, Bonds may be exchanged for a
like aggregate principal amount of Bonds of other authorized
denominations.
This Bond is issued with the intent that the laws of
the State of Arkansas will govern its construction.
Exhibit D-1(a)
BEFORE THE
ARKANSAS PUBLIC SERVICE COMMISSION
IN THE MATTER OF APPLICATION OF )
ARKANSAS POWER & LIGHT COMPANY )
FOR AUTHORITY TO ENTER INTO )
TRANSACTIONS FOR THE ISSUANCE )
AND SALE OF TAX-EXEMPT BONDS AND COL- )
LATERAL FIRST MORTGAGE BONDS, TO ISSUE)
AND SELL NOT MORE THAN 8,000,000 ) DOCKET NO. 94-126-U
SHARES OF ITS COMMON STOCK, $0.01 )
PAR VALUE PER SHARE, FOR AN )
AGGREGATE MAXIMUM CONSIDERATION )
OF $100,000,000, AND TO ISSUE )
AND SELL NOT MORE THAN $100,000,000 )
AGGREGATE PAR VALUE OR LIQUIDATION )
VALUE OF ITS PREFERRED STOCK )
A P P L I C A T I O N
Arkansas Power & Light Company, Little Rock, Arkansas ("Applicant"),
respectfully states:
1. Applicant is a corporation organized under the laws of the State
of Arkansas and a public utility as defined by Act 324 of the Acts of
Arkansas of 1935, as amended ("Act 324"). Applicant's property consists of
facilities for the generation, transmission, and distribution of electric
power and energy to the public and of other property necessary to repair,
maintain, and operate those facilities. These facilities are located
principally in the State of Arkansas. Certain distribution and
transmission facilities for wholesale customers are located in the State of
Missouri and distribution lines are located in a small portion in the State
of Tennessee for retail customers situated wholly on the west side of the
main channel of the Mississippi River.
2. The Arkansas Public Service Commission ("APSC" or "Commission")
has jurisdiction over this Application pursuant to Sections 58 and 59 of
Act 324. Applicant is subject to the jurisdiction of the Securities and
Exchange Commission ("SEC") under the Public Utility Holding Company Act of
1935, as amended, as an electric utility subsidiary of Entergy Corporation,
a registered public utility holding company ("Entergy"). It is, therefore,
necessary for Applicant to comply with the rules and regulations
promulgated by the SEC under such Act and, in certain instances, to secure
the approval of the SEC in connection with the transactions proposed
herein.
3. Applicant proposes to enter into arrangements for the issuance
and sale, by one or more governmental authorities (each an "Issuer"), of
one or more series of tax-exempt bonds in an aggregate principal amount not
to exceed $200 Million ("Tax-Exempt Bonds") at one time or from time to
time through December 31, 1995. Applicant would enter into one or more
installment sale agreements or loan agreements and/or one or more
supplements or amendments thereto (collectively, the "Agreement")
contemplating the issuance and sale by the Issuer(s) of one or more series
of Tax-Exempt Bonds pursuant to one or more trust indentures and/or one or
more supplements thereto (collectively, the "Indenture") between the Issuer
and one or more trustees (collectively, the "Trustee"). The proceeds of
the sale of Tax-Exempt Bonds, net of any underwriters' discounts or other
expenses payable from proceeds, will be applied to acquire and construct
certain pollution control or sewage and solid waste disposal facilities at
Applicant's generating plants ("Facilities") or to refinance outstanding
tax-exempt bonds issued for that purpose.
4. If the Agreement is an installment sale agreement, Applicant
would sell Facilities to the Issuer for cash and simultaneously repurchase
such Facilities from the Issuer for a purchase price payable on an
installment basis over a period of years. If the Agreement is a loan
agreement, the Issuer will loan the proceeds of the sale of Tax-Exempt
Bonds to Applicant, and Applicant will agree to repay the loan on an
installment payment basis over a period of years. Such installment
payments or loan repayments will be in amounts sufficient (together with
any other moneys held by the Trustee under the Indenture and available for
such purpose) to pay the principal or purchase price of, the premium, if
any, and the interest on the related series of Tax-Exempt Bonds as the same
become due and payable, and will be made directly to the Trustee pursuant
to an assignment and pledge thereof by the Issuer to the Trustee as set
forth in the Indenture. Under the Agreement, Applicant also will be
obligated to pay (i) the fees and charges of the Trustee and any registrar
or paying agent under the Indenture, (ii) all expenses necessarily incurred
by the Issuer in connection with its rights and obligations under the
Agreement, (iii) all expenses necessarily incurred by the Issuer or the
Trustee under the Indenture in connection with the transfer or exchange of
Tax-Exempt Bonds, and (iv) all other payments which Applicant agrees to pay
under the Agreement.
5. The Indenture may provide that, upon the occurrence of certain
events relating to the operation of all or a portion of the Facilities
financed, the Tax-Exempt Bonds will be redeemable by the Issuer, at the
direction of Applicant. Any series of Tax-Exempt Bonds may be made subject
to a mandatory cash sinking fund under which stated portions of the Tax-
Exempt Bonds of such series are to be retired at stated times. The Tax-
Exempt Bonds may be subject to mandatory redemption in other cases. The
payments by Applicant under the Agreement in such circumstances shall be
sufficient (together with any other moneys held by the Trustee under the
Indenture and available therefor) to pay the principal of all the Tax-
Exempt Bonds to be redeemed or retired and the premium, if any, thereon
together with interest accrued or to accrue to the redemption date on such
Tax-Exempt Bonds.
6. It is proposed that the Tax-Exempt Bonds mature not less than
five years from the first day of the month of issuance nor later than 40
years from the date of issuance. Tax-Exempt Bonds will be subject to
optional redemption, at the direction of Applicant, in whole or in part, at
the redemption prices (expressed as percentages of principal amount) plus
accrued interest to the redemption date, and at the times, set forth in the
Indenture.
7. The Agreement and the Indenture may provide for a fixed interest
rate or for an adjustable interest rate for each series of Tax-Exempt Bonds
as hereinafter described. No series of Tax-Exempt Bonds will be sold if
the fixed interest rate or initial adjustable rate thereon would exceed
applicable interest rate maximums. If the series of Tax-Exempt Bonds has
an adjustable interest rate, the interest rate during the first Rate Period
(hereinafter referred to) would be determined in discussions between
Applicant and the purchasers thereof from the Issuer and be based on the
current tax-exempt market rate for comparable bonds having a maturity
comparable to the length of the initial Rate Period. Thereafter, for each
Rate Period, the interest rate on such Tax-Exempt Bonds would be that rate
(subject to a specified maximum rate) which will be sufficient to remarket
Tax-Exempt Bonds of such series at their principal amount. Such interest
rates would be determined based on the market rates for bonds of comparable
maturity and quality. The following subparagraphs (a) through (d) relate
to Tax-Exempt Bonds having an adjustable interest rate:
(a) The term "Rate Period," as used herein, means a period
during which the interest rate on such Tax-Exempt Bonds bearing an
adjustable rate (or method of determination of such interest rate) is
fixed. The initial Rate Period would commence on the date as of which
interest begins to accrue on such Tax-Exempt Bonds. The length of
each Rate Period would be not less than one day nor more than five
years.
(b) The Agreement and Indenture would provide that holders of
Tax-Exempt Bonds would have the right to tender or be required to
tender their Tax-Exempt Bonds and have them purchased at a price equal
to the principal amount thereof, plus any accrued and unpaid interest
thereon, on dates specified in, or established in accordance with, the
Indenture. A Tender Agent may be appointed to facilitate the tender
of any Tax-Exempt Bonds by holders. Any holders of Tax-Exempt Bonds
wishing to have their Tax-Exempt Bonds purchased may be required to
deliver their Tax-Exempt Bonds during a specified period of time
preceding such purchase date to the Tender Agent, if one shall be
appointed, or to the Remarketing Agent appointed to offer such
tendered Tax-Exempt Bonds for sale.
(c) Under the Agreement, Applicant would be obligated to pay
amounts equal to the amounts to be paid by the Remarketing Agent or
the Tender Agent pursuant to the Indentures for the purchase of Tax-
Exempt Bonds so tendered, such amounts to be paid by Applicant on the
dates such payments by the Remarketing Agent or the Tender Agent are
to be made; provided, however, that the obligation of Applicant to
make any such payment under the Agreement would be reduced by the
amount of any other moneys available therefor, including the proceeds
of the sale of such tendered Tax-Exempt Bonds by the Remarketing
Agent.
(d) Upon the delivery of such Tax-Exempt Bonds by holders to the
Remarketing Agent or the Tender Agent for purchase, the Remarketing
Agent would use its best efforts to sell such Tax-Exempt Bonds at a
price equal to the stated principal amount of such Tax-Exempt Bonds.
8. In order to obtain a more favorable rating on one or more series
of the Tax-Exempt Bonds and, thereby, improve the marketability thereof,
Applicant may arrange for an irrevocable letter of credit from a bank (the
"Bank") in favor of the Trustee. In such event, payments with respect to
principal, premium, if any, interest, and purchase obligations in
connection with any such Tax-Exempt Bonds coming due during the term of
such letter of credit would be secured by, and payable from funds drawn
under, the letter of credit. In order to induce the Bank to issue such
letter of credit, Applicant would enter into a Letter of Credit and
Reimbursement Agreement ("Reimbursement Agreement") with the Bank pursuant
to which Applicant would agree to reimburse the Bank for all amounts drawn
under such letter of credit within a specified period after the date of the
draw and with interest thereon. The terms of the Reimbursement Agreement
would correspond to the terms of the Letter of Credit.
9. It is anticipated that the Reimbursement Agreement would require
the payment by Applicant to the Bank of annual letter of credit fees and
perhaps an up-front fee. Any such letter of credit may expire or be
terminated prior to the maturity date of any such Tax-Exempt Bonds, and, in
connection with such expiration or termination, such Tax-Exempt Bonds may
be made subject to mandatory redemption or purchase on or prior to the date
of expiration or termination of such letter of credit, possibly subject to
the right of owners of such Tax-Exempt Bonds not to have their Tax-Exempt
Bonds redeemed or purchased. Provision may be made for extension of the
term of such letter of credit or for the replacement thereof, upon its
expiration or termination, by another letter of credit from the Bank or a
different bank.
10. In addition or as an alternative to the security provided by a
letter of credit, in order to obtain a more favorable rating on one or more
series of Tax-Exempt Bonds and consequently improve the marketability
thereof, Applicant may determine (a) to provide an insurance policy for the
payment of the principal of and/or interest and/or premium on such Tax-
Exempt Bonds, and/or (b) to provide security for holders of such Tax-Exempt
Bonds and/or the Bank equivalent to the security afforded to holders of
first mortgage bonds outstanding under Applicant's Mortgage and Deed of
Trust dated as of October 1, 1944, as supplemented ("Mortgage") by
obtaining the authentication of and pledging one or more new series of
Applicant's First Mortgage Bonds ("Collateral Bonds") under the Mortgage as
it may be supplemented. Collateral Bonds would be issued on the basis of
unfunded net property additions and/or previously-retired First Mortgage
Bonds and delivered to the Trustee under the Indenture and/or the Bank to
evidence and secure Applicant's obligation to pay the purchase price of the
related Facilities or repay the loan made by the Issuer under the Agreement
and Applicant's obligation to reimburse the Bank under the Reimbursement
Agreement. Collateral Bonds could be issued in several ways. First, if
the Tax-Exempt Bonds bear a fixed interest rate, Collateral Bonds could be
issued in a principal amount equal to the principal amount of such Tax-
Exempt Bonds and bear interest at a rate equal to the rate of interest on
such Tax-Exempt Bonds. Secondly, they could be issued in a principal
amount equivalent to the principal amount of such Tax-Exempt Bonds plus an
amount equal to interest thereon for a specified period. In such a case,
such Collateral Bonds would bear no interest. Thirdly, Collateral Bonds
could be issued in a principal amount equivalent to the principal amount of
such Tax-Exempt Bonds or in such amount plus an amount equal to interest
thereon for a specified period, but carry a fixed interest rate that would
be lower than the fixed rate of such Tax-Exempt Bonds. Fourthly,
Collateral Bonds could be issued in a principal amount equivalent to the
principal amount of such Tax-Exempt Bonds at an adjustable rate of
interest, varying with such Tax-Exempt Bonds but having a "cap" above which
the interest on Collateral Bonds could not rise. The terms of any
Collateral Bonds relating to maturity, interest payment dates, if any,
redemption provisions, and acceleration will correspond to the terms of the
related Tax-Exempt Bonds. Upon issuance, the terms of any Collateral Bonds
will not vary during the life of such series except for the interest rate
in the event such Collateral Bonds bear interest at an adjustable rate. The
maximum aggregate principal amount of Collateral Bonds would be $226
million.
11. It is contemplated that the Tax-Exempt Bonds will be sold by
the Issuer pursuant to arrangements with an underwriter or a group of
underwriters or by private placement in a negotiated sale or sales.
Applicant will not be party to the underwriting or placement arrangements;
however, the Agreement will provide that the terms of the Tax-Exempt Bonds,
and their sale by the Issuer, shall be satisfactory to Applicant.
Applicant understands that interest payable on the Tax-Exempt Bonds will
not be included in the gross income of the holders thereof for Federal
income tax purposes under the provisions of Section 103 of the Internal
Revenue Code of 1986, as amended to the date of issuance of Tax-Exempt
Bonds (except for interest on any Tax-Exempt Bond during a period in which
it is held by a person who is a "substantial user" of the Facilities or a
"related person" within the meaning of Section 147(a) of such Code).
12. Also pursuant to Section 59 of Act 324, Applicant hereby further
applies to the Commission for an order authorizing it to issue and sell to
Entergy, an aggregate amount of its common stock, $0.01 par value per share
("Common Stock") not exceeding 8,000,000 shares, at a minimum price of
$12.50 per share, in one or more separate transactions occurring at such
times as Applicant deems appropriate, but not later than December 31, 1995,
for an aggregate maximum consideration of $100 million. Applicant will
enter into such agreements with Entergy for the sale and purchase of the
Common Stock to occur in such installments and at such times before
December 31, 1995, as Applicant and Entergy shall determine.
13. The Common Stock will be issued in accordance with Applicant's
Articles which currently authorize the issuance of 325,000,000 shares of
its Common Stock of which 46,980,196 shares are issued and outstanding as
of December 31, 1993.
14. Also pursuant to Section 59 of Act 324, Applicant hereby applies
to the Commission for an order authorizing it to create and to issue and
sell, from time to time not later than December 31, 1995, one or more
series of its $100 Par Value, $25 Par Value or Class A Preferred Stock,
cumulative, or any combination thereof (the "Preferred Stock"), each of
such series consisting of such number of shares of the Preferred Stock as
Applicant shall elect, but the total number of such shares of such
Preferred Stock shall not exceed the number of shares authorized by
Applicant's Articles, and such shares shall not have an aggregate par value
or involuntary liquidation value, as the case may be, in excess of $100
Million. Each new series of the Preferred Stock shall have the same rank
and relative rights as, and shall otherwise be identical to, each series of
the Applicant's preferred stock presently issued and outstanding, except
with respect to par value and/or involuntary liquidation value and except
that the resolutions authorizing the creation of each such new series of
the Preferred Stock may provide for different dividend rates, dates from
which dividends shall commence to accumulate, redemption rates, and
redemption restrictions, if any.
15. Applicant presently intends to solicit competitive proposals as
to the dividend rate, the compensation to be paid to underwriters, if any,
and the price to be paid to Applicant for the purchase of each series of
the Preferred Stock under rules promulgated by the SEC. However, Applicant
intends to offer the Preferred Stock from time to time over a period of
years and Applicant cannot predict whether competitive bidding would
produce the most advantageous terms for each issuance and sale. In the
event that changes in Applicant's financial condition or regulatory
situation, or changes in the market for the Preferred Stock, make it
advisable, in order to achieve the best possible terms, to offer one or
more series of the Preferred Stock by means of a negotiated public offering
or private placement, Applicant wishes to have the flexibility to forego
the solicitation of competitive proposals. Because the market for the
Preferred Stock is constantly fluctuating, Applicant cannot forecast the
precise dividend rate for any series of the Preferred Stock at this time.
16. The Preferred Stock will be issued in accordance with Applicant's
Articles which currently authorize the issuance of 3,730,000 shares of its
$100 Par Value Preferred Stock, 9,000,000 shares of its $25 Par Value
Preferred Stock, and 15,000,000 shares of its Class A Preferred Stock, of
which 1,433,500 shares, 1,521,085 shares, and 2,600,000 shares,
respectively, are issued and outstanding as of December 31, 1993.
17. The issuance and sale of the Preferred Stock and the Common
Stock have been approved by Applicant's Board of Directors at the meeting
of the Board of Directors held on July 30, 1993. Minute excerpts setting
forth the resolutions approving the issuance and sale of the Preferred
Stock and the Common Stock are attached hereto as AP&L Exhibit A.
18. The net proceeds which Applicant will receive from the issuance
and sale of the Preferred Stock and the Common Stock will be used to pay
all or a portion of Applicant's short-term indebtedness outstanding from
time to time, to provide funds for the retirement of a portion of
Applicant's outstanding securities at or prior to maturity, and for other
corporate purposes.
19. Applicant estimates its aggregate expenses in connection with the
issuance and sale of the initial series and any subsequent series of the
Tax-Exempt Bonds, the Preferred Stock, and the Common Stock will be as
reflected in AP&L Exhibit B attached hereto.
20. Applicant states that after the issuance of the Tax-Exempt Bonds,
the Preferred Stock, and the Common Stock, the aggregate amount of all of
its outstanding stock, bonds, notes, and other evidences of indebtedness
will not exceed the fair value of Applicant's properties and the reasonable
cost of the issuance and sale of the Tax-Exempt Bonds, the Preferred Stock,
and the Common Stock.
21. Attached hereto is AP&L Exhibit C, consisting of four parts:
(1) Balance Sheet per books as of December 31, 1993, and Pro
Forma after giving effect to the proposed transactions.
(2) Earnings Statement for the 12 months ended December 31,
1993, per books and Pro Forma after giving effect to the proposed
transactions.
(3) Analysis of Capital Structure as to plant reserve, debt
ratios, and earnings ratios, per books as of December 31, 1993,
and Pro Forma after giving effect to the proposed transactions.
(4) Proposed book entries giving effect to the proposed
transactions.
22. Due to the volatile nature of the national financial
markets, it is essential that Applicant be able to proceed with the
proposed transactions to permit the issuance by the Issuer of the Tax-
Exempt Bonds quickly when appropriate market conditions exist. Therefore,
it is necessary that the Commission consider and act on this Application
expeditiously, before May 20, 1994.
23. Pursuant to Rule 2.03 of the Commission's Rules of Practice and
Procedure, Applicant requests the following individuals be shown on the
Official Service List:
James P. Herden
Arkansas Power & Light Company
425 West Capitol Avenue
P.O. Box 551
Little Rock, Arkansas 72203
Telephone: 377-4475
Paul B. Benham III
Allison Graves Bazzel
Friday, Eldredge & Clark
2000 First Commercial Building
400 West Capitol Avenue
Little Rock, Arkansas 72201-3493
Telephone: 376-2011
WHEREFORE, Applicant, Arkansas Power & Light Company, respectfully
requests that the Commission enter its order on or before May 20, 1994,
authorizing it (a) to issue and sell in one or more series, from time to
time not later than December 31, 1995, as requested herein, (i) the Tax-
Exempt Bonds in an aggregate principal amount not to exceed $200 million
and, in connection therewith, to enter into the Agreement related thereto
as contemplated hereby, (ii) the Preferred Stock, in an aggregate par value
or involuntary liquidation value, as the case may be, not to exceed $100
million, and (iii) the Common Stock, not to exceed 8,000,000 shares, at a
minimum price of $12.50 per share, for an aggregate maximum consideration
of $100 Million; (b) to apply the proceeds from the sale of the Tax-Exempt
Bonds, the Preferred Stock, and the Common Stock for the purposes set
forth herein; (c) to take all other action and to enter into all other
agreements necessary therefor, including the issuance of one or more new
series of Collateral Bonds as described herein [Such authorization for
Collateral Bonds is separate and apart from the authorization granted
by this Commission by Orders 2 and 3 of Docket No. 93-217-U.]; and (d)
to be granted all other proper relief.
DATED this 26th day of April, 1994.
ARKANSAS POWER & LIGHT COMPANY
By: FRIDAY, ELDREDGE & CLARK
2000 First Commercial Building
400 West Capitol
Little Rock, Arkansas 72201-3493<PAGE>
Attorneys for Applicant
By: /s/ Paul B. Benham, III
PAUL B. BENHAM III, #71007
<PAGE>
VERIFICATION
STATE OF ARKANSAS )
) ss.
COUNTY OF PULASKI )
I, Paul B. Benham III, one of the attorneys for the Applicant, on oath
state that I have read the foregoing Application and that the statements
set forth therein are true and correct to the best of my knowledge and
belief.
/s/ Paul B. Benham, III
Paul B. Benham III
SUBSCRIBED AND SWORN to before me, a Notary Public, on this 26th day
of April, 1994.
/s/ Brenda Bennett
Notary Public
My Commission Expires:
9/1/2001
Exhibit D-1(b)
ARKANSAS PUBLIC SERVICE COMMISSION
IN THE MATTER OF APPLICATION OF )
ARKANSAS POWER & LIGHT COMPANY )
FOR AUTHORITY TO ENTER INTO )
TRANSACTIONS FOR THE ISSUANCE )
AND SALE OF TAX-EXEMPT BONDS AND COL- )
LATERAL FIRST MORTGAGE BONDS, TO ISSUE )
AND SELL NOT MORE THAN 8,000,000 ) DOCKET NO. 94-126-U
SHARES OF ITS COMMON STOCK, $0.01 ) ORDER NO. 2
PAR VALUE PER SHARE, FOR AN )
AGGREGATE MAXIMUM CONSIDERATION )
OF $100,000,000, AND TO ISSUE )
AND SELL NOT MORE THAN $100,000,000 )
AGGREGATE PAR VALUE OR LIQUIDATION )
VALUE OF ITS PREFERRED STOCK )
O R D E R
On April 27, 1994, Arkansas Power & Light Company (AP&L)
filed an application in this Docket requesting an order from the
Arkansas Public Service Commission (Commission) authorizing (1)
the entrance by AP&L into arrangements for the issuance and sale
by one or more governmental authorities in one or more series
from time to time not later than December 31, 1995, of up to
$200,000,000 in tax-exempt solid waste disposal bonds; (2) the
issuance and sale of not more than $100,000,000 aggregate par
value or liquidation value of its preferred stock; and (3) the
issuance and sale of not more than 8,000,000 shares of its common
stock, $0.01 par value per share, for an aggregate maximum
consideration not to exceed $100,000,000.
AP&L states that it is a corporation organized and existing
under the laws of the State of Arkansas and a public utility
within the meaning of Act 324 of the Acts of Arkansas of 1935, as
amended, ("Act 324") in that its properties consist of facilities
for the generation, transmission, and distribution of electric
power and energy for the furnishing of electricity to the public.
The Commission has jurisdiction over this Application pursuant to
Sections 58 and 59 of Act 324, codified as Ark. Code Ann. 23-3-
103 and 23-3-104.
AP&L states that it intends to use the net proceeds
from the proposed issuance and sale of the tax-exempt bonds to
acquire and construct certain pollution control or sewage and
solid waste disposal facilities at AP&L's generating plants or to
refinance outstanding tax-exempt bonds issued for that purpose.
The proceeds from the sale of the preferred stock and the common
stock will be used to pay all or a portion of short-term
indebtedness outstanding from time to time, to provide funds for
the retirement of a portion of its outstanding securities at or
prior to maturity, and for other corporate purposes.
AP&L proposes to enter into arrangements for the issuance
and sale by one or more governmental authorities of tax-exempt
bonds in one or more series from time to time through December
31, 1995. AP&L would enter into one or more installment sale
agreements or loan agreements with the governmental authorities
contemplating the issuance and sale by the governmental
authority(ies) of one or more series of tax-exempt bonds pursuant
to one or more trust indentures between it and one or more
trustees.
AP&L is also seeking authority to issue and sell not more
than $100,000,000 aggregate par value or liquidation value of
either its $100 par value, $25 par value, or Class A $0.01 par
value cumulative preferred stock. The Company has requested
authority to issue the preferred stock in one or more series,
from time to time, and not later than December 31, 1995. AP&L
states that it intends to solicit competitive bids as to the
dividend rate, the compensation paid to underwriters, if any, and
the price to be paid to AP&L for the purchase of each series of
preferred stock. AP&L states, however, that it cannot predict
whether competitive bidding would produce the most advantageous
terms for each issuance and sale. Therefore, in order to achieve
the best possible terms, AP&L is seeking flexibility to forego
the solicitation of competitive proposals in the event that
circumstances occur which would make it more beneficial to offer
a series by means of a negotiated public offering or private
placement.
Finally, AP&L, a wholly owned subsidiary, is seeking
authorization to sell to its parent, Entergy Corporation, an
aggregate amount of its common stock not exceeding 8,000,000
shares, at a minimum price of $12.50 per share for total proceeds
not in excess of $100,000,000. AP&L will enter into an agreement
with Entergy for the sale and purchase of the shares to occur in
such installments and at such times before December 31, 1995.
On May 13, 1994, the Staff of the Arkansas Public Service
Commission (Staff) filed the prepared testimony of Donna Gray,
Director, Financial Analysis. Staff Witness Gray stated that she
evaluated AP&L's capital structure after giving effect to the
proposed transactions. She noted that Exhibit C of the Company's
Application, on page 8, quantified the external sources of
capital as of December 31, 1993, and the pro forma capital
structure that would result from the proposed transactions. With
the proposed issuance, AP&L's capital proportions, considering
only external sources of capital, would be 47% long-term debt,
12% preferred stock, and 40% common equity. Staff Witness Gray
further stated that AP&L's pro forma capital structure is
generally consistent with bond rating agency industry-specific
financial benchmarks. She further stated that, on the basis of
her analysis, AP&L's proposal appeared reasonable, when
considering the relative mix of capital components, and that she
found no reason that the Application should not be approved.
Staff Witness Gray noted that her testimony did not constitute a
recommendation of value for ratemaking purposes, and she
recommended that AP&L be required to report to the Commission,
within 30 days after the completion of each transaction, the
terms of the issuance, including all fees, premiums, or
discounts, and all other relevant facts, along with detailed
accounting entries to record the transactions. She further
recommended that such report should include (i) the information
of each class and series issued or retired/refinanced by AP&L and
(ii) detailed calculations comparing the effective cost of any
issuance(s) retired to the effective cost of any new issuance(s),
and that the report should be filed in Docket No. 86-033-A
referencing the docket number in this case. Based upon the
Staff's analysis and investigation of the proposed transaction,
Ms. Gray recommended that the Commission approve the
transactions.
Findings/Conclusions of Law
The Administrative Law Judge, being well and sufficiently
advised as to all matters of facts and law, finds as follows:
1. That the Commission has jurisdiction over AP&L's
application for an order authorizing and approving (1) the
entrance by AP&L into arrangements for the issuance and sale by
one or more governmental authorities in one or more series from
time to time not later than December 31, 1995, of up to
$200,000,000 in tax-exempt solid waste disposal bonds; (2) the
issuance and sale of not more than $100,000,000 aggregate par
value or liquidation value of its preferred stock; and (3) the
issuance and sale of not more than 8,000,000 shares of its common
stock, $0.01 par value per share, for an aggregate maximum
consideration not to exceed $100,000,000.
2. It is in the public interest for the Commission to
approve AP&L's Application, and it is, therefore, hereby
approved.
3. Nothing that is cited or stated in this order shall be
construed as a finding of value for ratemaking purposes nor is it
a determination of legitimate expenses for ratemaking purposes.
The Commission expressly reserves judgment on those issues.
4. AP&L is hereby ordered to comply with Staff's
recommended reporting requirements as set out in Staff Witness
Gray's testimony on page 10.
BY ORDER OF THE ADMINISTRATIVE LAW JUDGE PURSUANT TO
DELEGATION.
This 18th day of May, 1994.
/s/ Burl C. Rotenberry
Burl C. Rotenberry
Administrative Law Judge
/s/ Glenna Hooks (acting)
Jan Sanders
Secretary of the Commission
<PAGE>
CERTIFICATE
This is to certify that the foregoing is a true, correct,
and compared copy of Order No. 2 issued by the Arkansas Public
Service Commission as of the 18th day of May, 1994, in Docket No.
94-126-U.
WITNESS my hand as Secretary under the official seal of the
Arkansas Public Service Commission, this 18th day of May, 1994.
/s/ Jan Sanders
Secretary of the Commission
Exhibit D-2(a)
BEFORE THE
TENNESSEE PUBLIC SERVICE COMMISSION
IN THE MATTER OF APPLICATION OF )
ARKANSAS POWER & LIGHT COMPANY )
FOR AUTHORITY TO ENTER INTO )
TRANSACTIONS FOR THE ISSUANCE )
AND SALE OF TAX-EXEMPT BONDS AND COL- )
LATERAL FIRST MORTGAGE BONDS, TO ISSUE )
AND SELL NOT MORE THAN 8,000,000 ) DOCKET NO. 94-01045-U
SHARES OF ITS COMMON STOCK, $0.01 )
PAR VALUE PER SHARE, FOR AN )
AGGREGATE MAXIMUM CONSIDERATION )
OF $100,000,000, AND TO ISSUE )
AND SELL NOT MORE THAN $100,000,000 )
AGGREGATE PAR VALUE OR LIQUIDATION )
VALUE OF ITS PREFERRED STOCK )
A P P L I C A T I O N
Arkansas Power & Light Company, Little Rock, Arkansas
("Applicant"), respectfully states:
1. Applicant is a corporation organized under the laws of
the State of Arkansas and a public utility as defined by Act 324
of the Acts of Arkansas of 1935, as amended. Applicant's
property consists of facilities for the generation, transmission,
and distribution of electric power and energy to the public and
of other property necessary to repair, maintain, and operate
those facilities. These facilities are located principally in
the State of Arkansas. Certain distribution and transmission
facilities for wholesale customers are located in the State of
Missouri and distribution lines are located in a small portion in
the State of Tennessee for retail customers situated wholly on
the west side of the main channel of the Mississippi River.
2. Applicant is a public utility under Arkansas law, and
as such is subject to the jurisdiction of the Arkansas Public
Service Commission ("APSC"). Applicant has applied to the APSC
for approval of and authorization for issuance and sale of the
securities hereinafter described. A copy of the Application to
the APSC is attached hereto as AP&L Exhibit 1. Applicant is also
subject to the jurisdiction of the Securities and Exchange
Commission ("SEC") under the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act"), as an electric utility
subsidiary of Entergy Corporation, a registered holding company
("Entergy"). It is, therefore, necessary for Applicant to comply
with the rules and regulations promulgated by the SEC under the
1935 Act and, in certain instances, to secure the approval of the
SEC in connection with the transactions proposed herein.
3. Applicant proposes to enter into arrangements for the
issuance and sale, by one or more governmental authorities (each
an "Issuer"), of one or more series of tax-exempt bonds in an
aggregate principal amount not to exceed $200 million ("Tax-
Exempt Bonds") at one time or from time to time through December
31, 1995. Applicant would enter into one or more installment sale
agreements or loan agreements and/or one or more supplements or
amendments thereto (collectively, the "Agreement") contemplating
the issuance and sale by the Issuer(s) of one or more series of
Tax-Exempt Bonds pursuant to one or more trust indentures and/or
one or more supplements thereto (collectively, the "Indenture")
between the Issuer and one or more trustees (collectively, the
"Trustee"). The proceeds of the sale of Tax-Exempt Bonds, net of
any underwriters' discounts or other expenses payable from
proceeds, will be applied to acquire and construct certain
pollution control or sewage and solid waste disposal facilities
at Applicant's generating plants ("Facilities") or to refinance
outstanding tax-exempt bonds issued for that purpose.
4. If the Agreement is an installment sale agreement,
Applicant would sell Facilities to the Issuer for cash and
simultaneously repurchase such Facilities from the Issuer for a
purchase price payable on an installment basis over a period of
years. If the Agreement is a loan agreement, the Issuer will
loan the proceeds of the sale of Tax-Exempt Bonds to Applicant,
and Applicant will agree to repay the loan on an installment
payment basis over a period of years. Such installment payments
or loan repayments will be in amounts sufficient (together with
any other moneys held by the Trustee under the Indenture and
available for such purpose) to pay the principal or purchase
price of, the premium, if any, and the interest on the related
series of Tax-Exempt Bonds as the same become due and payable,
and will be made directly to the Trustee pursuant to an
assignment and pledge thereof by the Issuer to the Trustee as set
forth in the Indenture. Under the Agreement, Applicant will also
be obligated to pay (i) the fees and charges of the Trustee and
any registrar or paying agent under the Indenture, (ii) all
expenses necessarily incurred by the Issuer in connection with
its rights and obligations under the Agreement, (iii) all
expenses necessarily incurred by the Issuer or the Trustee under
the Indenture in connection with the transfer or exchange of Tax-
Exempt Bonds, and (iv) all other payments which Applicant agrees
to pay under the Agreement.
5. The Indenture may provide that, upon the occurrence of
certain events relating to the operation of all or a portion of
the Facilities financed, the Tax-Exempt Bonds will be redeemable
by the Issuer, at the direction of Applicant. Any series of Tax-
Exempt Bonds may be made subject to a mandatory cash sinking fund
under which stated portions of the Tax-Exempt Bonds of such
series are to be retired at stated times. The Tax-Exempt Bonds
may be subject to mandatory redemption in other cases. The
payments by Applicant under the Agreement in such circumstances
shall be sufficient (together with any other moneys held by the
Trustee under the Indenture and available therefor) to pay the
principal of all the Tax-Exempt Bonds to be redeemed or retired
and the premium, if any, thereon together with interest accrued
or to accrue to the redemption date on such Tax-Exempt Bonds.
6. It is proposed that the Tax-Exempt Bonds mature not less
than five years from the first day of the month of issuance nor
later than 40 years from the date of issuance. Tax-Exempt Bonds
will be subject to optional redemption, at the direction of
Applicant, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) plus accrued
interest to the redemption date, and at the times, set forth in
the Indenture.
7. The Agreement and the Indenture may provide for a fixed
interest rate or for an adjustable interest rate for each series
of Tax-Exempt Bonds as hereinafter described. No series of Tax-
Exempt Bonds will be sold if the fixed interest rate or initial
adjustable rate thereon would exceed applicable interest rate
maximums. If the series of Tax-Exempt Bonds has an adjustable
interest rate, the interest rate during the first Rate Period
(hereinafter referred to) would be determined in discussions
between Applicant and the purchasers thereof from the Issuer and
be based on the current tax-exempt market rate for comparable
bonds having a maturity comparable to the length of the initial
Rate Period. Thereafter, for each Rate Period, the interest rate
on such Tax-Exempt Bonds would be that rate (subject to a
specified maximum rate) which will be sufficient to remarket Tax-
Exempt Bonds of such series at their principal amount. Such
interest rates would be determined based on the market rates for
bonds of comparable maturity and quality. The following
subparagraphs (a) through (d) relate to Tax-Exempt Bonds having
an adjustable interest rate:
(a) The term "Rate Period," as used herein, means a
period during which the interest rate on such Tax-Exempt
Bonds bearing an adjustable rate (or method of determination
of such interest rate) is fixed. The initial Rate Period
would commence on the date as of which interest begins to
accrue on such Tax-Exempt Bonds. The length of each Rate
Period would be not less than one day nor more than five
years.
(b) The Agreement and Indenture would provide that
holders of Tax-Exempt Bonds would have the right to tender
or be required to tender their Tax-Exempt Bonds and have
them purchased at a price equal to the principal amount
thereof, plus any accrued and unpaid interest thereon, on
dates specified in, or established in accordance with, the
Indenture. A Tender Agent may be appointed to facilitate
the tender of any Tax-Exempt Bonds by holders. Any holders
of Tax-Exempt Bonds wishing to have their Tax-Exempt Bonds
purchased may be required to deliver their Tax-Exempt Bonds
during a specified period of time preceding such purchase
date to the Tender Agent, if one shall be appointed, or to
the Remarketing Agent appointed to offer such tendered Tax-
Exempt Bonds for sale.
(c) Under the Agreement, Applicant would be obligated
to pay amounts equal to the amounts to be paid by the
Remarketing Agent or the Tender Agent pursuant to the
Indentures for the purchase of Tax-Exempt Bonds so tendered,
such amounts to be paid by Applicant on the dates such
payments by the Remarketing Agent or the Tender Agent are to
be made; provided, however, that the obligation of Applicant
to make any such payment under the Agreement would be
reduced by the amount of any other moneys available
therefor, including the proceeds of the sale of such
tendered Tax-Exempt Bonds by the Remarketing Agent.
(d) Upon the delivery of such Tax-Exempt Bonds by
holders to the Remarketing Agent or the Tender Agent for
purchase, the Remarketing Agent would use its best efforts
to sell such Tax-Exempt Bonds at a price equal to the stated
principal amount of such Tax-Exempt Bonds.
8. In order to obtain a more favorable rating on one or
more series of the Tax-Exempt Bonds and, thereby, improve the
marketability thereof, Applicant may arrange for an irrevocable
letter of credit from a bank (the "Bank") in favor of the
Trustee. In such event, payments with respect to principal,
premium, if any, interest, and purchase obligations in connection
with any such Tax-Exempt Bonds coming due during the term of such
letter of credit would be secured by, and payable from funds
drawn under, the letter of credit. In order to induce the Bank
to issue such letter of credit, Applicant would enter into a
Letter of Credit and Reimbursement Agreement ("Reimbursement
Agreement") with the Bank pursuant to which Applicant would agree
to reimburse the Bank for all amounts drawn under such letter of
credit within a specified period after the date of the draw and
with interest thereon. The terms of the Reimbursement Agreement
would correspond to the terms of the Letter of Credit.
9. It is anticipated that the Reimbursement Agreement
would require the payment by Applicant to the Bank of annual
letter of credit fees and perhaps an up-front fee. Any such
letter of credit may expire or be terminated prior to the
maturity date of any such Tax-Exempt Bonds, and, in connection
with such expiration or termination, such Tax-Exempt Bonds may be
made subject to mandatory redemption or purchase on or prior to
the date of expiration or termination of such letter of credit,
possibly subject to the right of owners of such Tax-Exempt Bonds
not to have their Tax-Exempt Bonds redeemed or purchased.
Provision may be made for extension of the term of such letter of
credit or for the replacement thereof, upon its expiration or
termination, by another letter of credit from the Bank or a
different bank.
10. In addition or as an alternative to the security
provided by a letter of credit, in order to obtain a more
favorable rating on one or more series of Tax-Exempt Bonds and
consequently improve the marketability thereof, Applicant may
determine (a) to provide an insurance policy for the payment of
the principal of and/or interest and/or premium on such Tax-
Exempt Bonds, and/or (b) to provide security for holders of such
Tax-Exempt Bonds and/or the Bank equivalent to the security
afforded to holders of first mortgage bonds outstanding under
Applicant's Mortgage and Deed of Trust dated as of October 1,
1944, as supplemented ("Mortgage") by obtaining the
authentication of and pledging one or more new series of
Applicant's First Mortgage Bonds ("Collateral Bonds") under the
Mortgage as it may be supplemented. Collateral Bonds would be
issued on the basis of unfunded net property additions and/or
previously-retired First Mortgage Bonds and delivered to the
Trustee under the Indenture and/or the Bank to evidence and
secure Applicant's obligation to pay the purchase price of the
related Facilities or repay the loan made by the Issuer under the
Agreement and Applicant's obligation to reimburse the Bank under
the Reimbursement Agreement. Collateral Bonds could be issued in
several ways. First, if the Tax-Exempt Bonds bear a fixed
interest rate, Collateral Bonds could be issued in a principal
amount equal to the principal amount of such Tax-Exempt Bonds and
bear interest at a rate equal to the rate of interest on such Tax-
Exempt Bonds. Secondly, they could be issued in a principal
amount equivalent to the principal amount of such Tax-Exempt
Bonds plus an amount equal to interest thereon for a specified
period. In such a case, such Collateral Bonds would bear no
interest. Thirdly, Collateral Bonds could be issued in a
principal amount equivalent to the principal amount of such Tax-
Exempt Bonds or in such amount plus an amount equal to interest
thereon for a specified period, but carry a fixed interest rate
that would be lower than the fixed rate of such Tax-Exempt Bonds.
Fourthly, Collateral Bonds could be issued in a principal amount
equivalent to the principal amount of such Tax-Exempt Bonds at an
adjustable rate of interest, varying with such Tax-Exempt Bonds
but having a "cap" above which the interest on Collateral Bonds
could not rise. The terms of any Collateral Bonds relating to
maturity, interest payment dates, if any, redemption provisions,
and acceleration will correspond to the terms of the related Tax-
Exempt Bonds. Upon issuance, the terms of any Collateral Bonds
will not vary during the life of such series except for the
interest rate in the event such Collateral Bonds bear interest at
an adjustable rate. The maximum aggregate principal amount of
Collateral Bonds would be $226 million.
11. It is contemplated that the Tax-Exempt Bonds will be
sold by the Issuer pursuant to arrangements with an underwriter
or a group of underwriters or by private placement in a
negotiated sale or sales. Applicant will not be party to the
underwriting or placement arrangements; however, the Agreement
will provide that the terms of the Tax-Exempt Bonds, and their
sale by the Issuer, shall be satisfactory to Applicant.
Applicant understands that interest payable on the Tax-Exempt
Bonds will not be included in the gross income of the holders
thereof for Federal income tax purposes under the provisions of
Section 103 of the Internal Revenue Code of 1986, as amended to
the date of issuance of Tax-Exempt Bonds (except for interest on
any Tax-Exempt Bond during a period in which it is held by a
person who is a "substantial user" of the Facilities or a
"related person" within the meaning of Section 147(a) of such
Code).
12. Applicant hereby further applies to the Commission for
an order authorizing it to issue and sell to Entergy an aggregate
amount of its common stock, $0.01 par value per share ("Common
Stock"), not exceeding 8,000,000 shares, at a minimum price of
$12.50 per share, in one or more separate transactions occurring
at such times as Applicant deems appropriate, but not later than
December 31, 1995, for an aggregate maximum consideration of $100
million. Applicant will enter into such agreements with Entergy
for the sale and purchase of the Common Stock to occur in such
installments and at such times before December 31, 1995, as
Applicant and Entergy shall determine.
13. The Common Stock will be issued in accordance with
Applicant's Articles which currently authorize the issuance of
325,000,000 shares of its Common Stock of which 46,980,196 shares
are issued and outstanding as of December 31, 1993.
14. Applicant hereby applies to the Commission for an order
authorizing it to create and to issue and sell, from time to time
not later than December 31, 1995, one or more series of its $100
Par Value, $25 Par Value or Class A Preferred Stock, cumulative,
or any combination thereof (the "Preferred Stock"), each of such
series consisting of such number of shares of the Preferred Stock
as Applicant shall elect, but the total number of such shares of
such Preferred Stock shall not exceed the number of shares
authorized by Applicant's Articles, and such shares shall not
have an aggregate par value or involuntary liquidation value, as
the case may be, in excess of $100 million. Each new series of
the Preferred Stock shall have the same rank and relative rights
as, and shall otherwise be identical to, each series of the
Applicant's preferred stock presently issued and outstanding,
except with respect to par value and/or involuntary liquidation
value and except that the resolutions authorizing the creation of
each such new series of the Preferred Stock may provide for
different dividend rates, dates from which dividends shall
commence to accumulate, redemption rates, and redemption
restrictions, if any.
15. Applicant presently intends to solicit competitive
proposals as to the dividend rate, the compensation to be paid to
underwriters, if any, and the price to be paid to Applicant for
the purchase of each series of the Preferred Stock under rules
promulgated by the SEC. However, Applicant intends to offer the
Preferred Stock from time to time over a period of years and
Applicant cannot predict whether competitive bidding would
produce the most advantageous terms for each issuance and sale.
In the event that changes in Applicant's financial condition or
regulatory situation, or changes in the market for the Preferred
Stock, make it advisable, in order to achieve the best possible
terms, to offer one or more series of the Preferred Stock by
means of a negotiated public offering or private placement,
Applicant wishes to have the flexibility to forego the
solicitation of competitive proposals. Because the market for
the Preferred Stock is constantly fluctuating, Applicant cannot
forecast the precise dividend rate for any series of the
Preferred Stock at this time.
16. The Preferred Stock will be issued in accordance with
Applicant's Articles which currently authorize the issuance of
3,730,000 shares of its $100 Par Value Preferred Stock, 9,000,000
shares of its $25 Par Value Preferred Stock, and 15,000,000
shares of its Class A Preferred Stock, of which 1,433,500 shares,
1,521,085 shares, and 2,600,000 shares, respectively, are issued
and outstanding as of December 31, 1993.
17. The issuance and sale of the Preferred Stock and the
Common Stock have been approved by Applicant's Board of Directors
at the Meeting of the Board of Directors held on July 30, 1993.
Minute excerpts setting forth the resolutions approving the
issuance and sale of the Preferred Stock and the Common Stock are
attached hereto as AP&L Exhibit A to AP&L Exhibit 1.
18. The net proceeds which Applicant will receive from the
issuance and sale of the Preferred Stock and the Common Stock
will be used to pay all or a portion of Applicant's short-term
indebtedness outstanding from time to time, to provide funds for
the retirement of a portion of Applicant's outstanding securities
at or prior to maturity, and for other corporate purposes.
19. Applicant estimates its aggregate expenses in
connection with the issuance and sale of the initial series and
any subsequent series of the Tax-Exempt Bonds, the Preferred
Stock, and the Common Stock will be as reflected in AP&L Exhibit
B to AP&L Exhibit 1 attached hereto.
20. Applicant states that after the issuance of the Tax-
Exempt Bonds, the Preferred Stock, and the Common Stock, the
aggregate amount of all of its outstanding stock, bonds, notes,
and other evidences of indebtedness will not exceed the fair
value of Applicant's properties and the reasonable cost of the
issuance and sale of the Tax-Exempt Bonds, the Preferred Stock,
and the Common Stock.
21. Attached hereto is Exhibit C to Exhibit 1, consisting
of four parts:
(1) Balance Sheet per books as of
December 31, 1993, and Pro Forma after giving
effect to the proposed transactions.
(2) Earnings Statement for the 12 months
ended December 31, 1993, per books and Pro
Forma after giving effect to the proposed
transactions.
(3) Analysis of Capital Structure as to
plant reserve, debt ratios, and earnings
ratios, per books as of December 31, 1993,
and Pro Forma after giving effect to the
proposed transactions.
(4) Proposed book entries giving effect
to the proposed transactions.
22. Due to the volatile nature of the national financial
markets, it is essential that Applicant be able to proceed with
the proposed transactions to permit the issuance by the Issuer of
the Tax-Exempt Bonds quickly when appropriate market conditions
exist. Therefore, it is necessary that the Commission consider
and act on this Application expeditiously, before May 20, 1994.
23. The names and addresses of the representatives and
attorneys for Applicant are:
James P. Herden
Arkansas Power & Light Company
425 West Capitol Avenue
P.O. Box 551
Little Rock, Arkansas 72203
Telephone: 377-4475
Paul B. Benham III
Allison Graves Bazzel
Friday, Eldredge & Clark
2000 First Commercial Building
400 West Capitol Avenue
Little Rock, Arkansas 72201-3493
Telephone: 376-2011
WHEREFORE, Applicant, Arkansas Power & Light Company,
respectfully requests that the Commission enter its order on or
before May 20, 1994, authorizing it (a) to issue and sell in one
or more series, from time to time not later than December 31,
1995, as requested herein, (i) the Tax-Exempt Bonds in an
aggregate principal amount not to exceed $200 Million and, in
connection therewith, to enter into the Agreement related thereto
as contemplated hereby, (ii) the Preferred Stock, in an aggregate
par value or involuntary liquidation value, as the case may be,
not to exceed $100 Million, and (iii) the Common Stock, not to
exceed 8,000,000 shares, at a minimum price of $12.50 per share,
for an aggregate maximum consideration of $100 Million; (b) to
apply the proceeds from the sale of the Tax-Exempt Bonds, the
Preferred Stock, and the Common Stock for the purposes set forth
herein; (c) to take all other action and to enter into all other
agreements necessary therefor, including the issuance of one or
more new series of Collateral Bonds as described herein [Such
authorization for Collateral Bonds is separate and apart from the
authorization granted by this Commission by Orders [2 and 3 of
Docket No. 93-217-U.]; and (d) to be granted all other proper
relief.
DATED this 26th day of April, 1994.
ARKANSAS POWER & LIGHT COMPANY
By: FRIDAY, ELDREDGE & CLARK
2000 First Commercial Building
400 West Capitol
Little Rock, Arkansas 72201-3493
Attorneys for Applicant
By: /s/ Paul B. Benham, III
PAUL B. BENHAM III, #71007
<PAGE>
VERIFICATION
STATE OF ARKANSAS )
) ss.
COUNTY OF PULASKI )
I, Paul B. Benham III, one of the attorneys for the
Applicant, on oath state that I have read the foregoing
Application and that the statements set forth therein are true
and correct to the best of my knowledge and belief.
/s/ Paul B. Benham, III
Paul B. Benham III
SUBSCRIBED AND SWORN to before me, a Notary Public, on this
26th day of April, 1994.
/s/ Brenda Bennett
Notary Public
My Commission Expires:
9/1/2001
Exhibit D-2(b)
BEFORE THE TENNESSEE PUBLIC SERVICE COMMISSION
Nashville, Tennessee
May 27, 1994
IN RE: APPLICATION OF ARKANSAS POWER & LIGHT COMPANY FOR
AUTHORITY TO ENTER INTO TRANSACTIONS FOR THE ISSUANCE
AND SALE OF TAX-EXEMPT BONDS AND COLLATERAL FIRST
MORTGAGE BONDS, AND TO ISSUE AND SELL NOT MORE THAN 8
MILLION SHARES OF ITS COMMON STOCK, $0.01 PAR VALUE PER
SHARE, FOR AN AGGREGATE MAXIMUM CONSIDERATION OF
$100,000,000 AND TO ISSUE AND SELL NOT MORE THAN
$100,000,000 AGGREGATE PAR VALUE OR LIQUIDATION VALUE
OF ITS PREFERRED STOCK.
DOCKET NO. 94-01045
O R D E R
This matter is before the Tennesses Public Service
Commission upon the application of Arkansas Power & Light Company
to issue and sell up to $200 million of tax-exempt "pollution
control" bonds, up to $100 million of preferred stock, and up to
$100 million of common stock. The proceeds from the sale of the
bonds will be used to retire existing tax-exempt bonds and to
construct certain pollution control or sewage and solid waste
disposal facilities. Proceeds from the sale of the preferred and
common stock will be used to repay short term loans, retire long
term debt, or construct facilities. The Staff has prepared a
report recommending approval of the application.
IT IS THEREFORE ORDERED:
1. That Arkansas Power & Light Company is authorized to
enter into transactions for the issuance and sale of tax-exempt
bonds and collateral first mortgage bonds, and to issue and sell
not more than 8 million shares of its common stock, $0.01 par
value per share, for an aggregate maximum consideration of
$100,000,000 and to issue and sell not more than $100,000,000
aggregate par value or liquidation value of its preferred stock.
2. That any party aggrieved with the Commission's decision
in this matter may file a Petition for Reconsideration with the
Commission within ten (10) days from and after the date of this
Order; and
3. That any party aggrieved with the Commission's decision
in this matter has the right of judicial review by filing a
Petition for Review in the Tennessee Court of Appeals, Middle
Section, within sixty (60) days from and after the date of this
Order.
CHAIRMAN
COMMISSIONER
COMMISSIONER
ATTEST:
EXECUTIVE DIRECTOR
Exhibit F-1
[Letterhead of Reid & Priest]
June 1, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
With reference to the Application-Declaration on
Form U-1, as amended ("Application-Declaration") filed by
Arkansas Power & Light Company ("Company") (File No. 70-8405)
under the Public Utility Holding Company Act of 1935
contemplating the Company's entering into one or more loan
agreements and/or supplements thereto ("Loan Agreement") with one
or more governmental authorities ("Issuer"), and/or the
disposition and reacquisition of certain pollution control or
sewage and solid waste disposal facilities ("Facilities")
pursuant to one or more installment sale agreements and/or
supplements thereto with one or more Issuers, and the related
issuance by the Issuer of one or more series of tax-exempt
revenue bonds, all as more fully described in the Application-
Declaration, we are of the opinion that:
1. The Company is a corporation duly organized and
validly existing under the laws of the State of Arkansas.
2. In the event that the proposed transactions are
consummated in accordance with the Application-Declaration and
the order of the Securities and Exchange Commission with respect
thereto:
(a) all state laws applicable to the proposed
transactions (other than so-called "blue-sky" laws or
similar laws, upon which we do not pass herein) will have
been complied with;
(b) any Loan Agreement entered into by the Company
will be a valid and binding obligation of the Company in
accordance with its terms, except as limited by bankruptcy,
insolvency or other laws affecting enforcement of creditors'
rights;
(c) the Company will have legally acquired any
Facilities to be reacquired by it; and
(d) the consummation of the proposed transactions will
not violate the legal rights of the holders of any
securities issued by the Company or any associate company
thereof.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of any other state. In
giving this opinion, we have relied, as to all matters governed
by the laws of any other state, upon the opinion of Friday,
Eldredge & Clark, of Little Rock, Arkansas, General Counsel for
the Company, which is to be filed as an exhibit to the
Application-Declaration.
We hereby consent to the use of this opinion as an
exhibit to the Application-Declaration.
Very truly yours,
/s/ Reid & Priest
REID & PRIEST
Exhibit F-2
[Letterhead of Friday, Eldredge & Clark]
June 1, 1994
Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Ladies and Gentlemen:
With reference to the Application-Declaration on Form U-1,
as amended ("Application-Declaration"), filed by Arkansas Power &
Light Company ("Company") (File No. 70-8405) under the Public
Utility Holding Company Act of 1935 contemplating the Company's
entering into one or more loan agreements and/or supplements
thereto ("Loan Agreement") with one or more governmental
authorities ("Issuer"), and/or the disposition and reacquisition
of certain pollution control or sewage and solid waste disposal
facilities ("Facilities") pursuant to one or more installment
sale agreements and/or supplements thereto with one or more
Issuers, and the related issuance by the Issuer of one or more
series of tax-exempt revenue bonds, all as more fully described
in the Application-Declaration, we are of the opinion that:
1. The Company is a corporation duly organized and validly
existing under the laws of the State of Arkansas.
2. In the event that the proposed transactions are
consummated in accordance with the Application-Declaration and
the order of the Securities and Exchange Commission with respect
thereto:
(a) all state laws applicable to the proposed
transactions (other than so-called "blue-sky" laws or similar
laws, upon which we do not pass herein) will have been complied
with;
(b) any Loan Agreement entered into by the Company
will be a valid and binding obligation of the Company in
accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws affecting enforcement of creditors'
rights;
(c) the Company will have legally acquired any
Facilities to be reacquired by it; and
(d) the consummation of the proposed transactions will
not violate the legal rights of the holders of any securities
issued by the Company.
In giving this opinion, we have relied, as to all matters
governed by the laws of the State of New York, upon the opinion
of Reid & Priest, of New York, New York, which is to be filed as
an exhibit to the Application-Declaration.
We consent to the use of this opinion as an exhibit to the
Application-Declaration.
Very truly yours,
/s/ Friday, Eldredge & Clark
FRIDAY, ELDREDGE & CLARK
