EXHIBIT 4(b)
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INDENTURE OF TRUST
between
CITY OF COHASSET, MINNESOTA
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
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Dated as of August 1, 2004
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$111,000,000 Collateralized Pollution Control Refunding Revenue Bonds
(ALLETE, Inc. Project), Series 2004
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INDENTURE OF TRUST
TABLE OF CONTENTS
This table of contents is not part of the Indenture, and is for convenience
only. The captions herein are of no legal effect and do not vary the meaning or
legal effect of any part of the Indenture.
Page
PARTIES........................................................................1
RECITALS.......................................................................1
GRANTING CLAUSES...............................................................2
ARTICLE I DEFINITIONS, RULES OF CONSTRUCTION...................................3
Section 101 Definitions of Words and Terms............................3
Section 102 Rules of Construction....................................12
Section 103 Characteristics of Certificate or Opinion................12
ARTICLE II THE BONDS..........................................................13
Section 201 Authorization of Bonds; Terms of Series 2004 Bonds.......13
Section 202 Issuance of Additional Bonds.............................15
Section 203 Book-Entry System; Securities Depository.................16
Section 204 Method and Place of Payment..............................17
Section 205 Execution and Authentication.............................19
Section 206 Registration, Transfer and Exchange of Bonds.............19
Section 207 Temporary Bonds..........................................20
Section 208 Mutilated, Destroyed, Lost and Stolen Bonds..............21
Section 209 Cancellation of Bonds....................................21
ARTICLE III REDEMPTION AND PURCHASE OF BONDS..................................22
Section 301 Redemption of Bonds......................................22
Section 302 Election To Redeem; Notice to Trustee....................23
Section 303 Selection of Bonds To Be Redeemed; Bonds Redeemed in
Part.....................................................23
Section 304 Notice of Redemption.....................................24
Section 305 Deposit of Redemption Price; Bonds Payable on
Redemption Date..........................................25
ARTICLE IV FUNDS AND ACCOUNTS, APPLICATION OF BOND PROCEEDS AND OTHER MONEY...26
Section 401 Creation of Funds and Accounts...........................26
Section 402 Deposit of Bond Proceeds and Other Money.................26
Section 403 Redemption Fund..........................................27
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Section 404 Bond Fund................................................27
Section 405 Payments Due on Non-Business Days........................28
Section 406 Nonpresentment of Bonds..................................28
Section 407 Money To Be Held in Trust................................28
Section 408 Investment of Money......................................29
Section 409 Records and Reports of Trustee...........................29
ARTICLE V SATISFACTION AND DISCHARGE..........................................30
Section 501 Payment, Discharge and Defeasance of Bonds...............30
Section 502 Satisfaction and Discharge of Indenture..................31
Section 503 Rights Retained After Discharge..........................31
ARTICLE VI GENERAL AND PARTICULAR COVENANTS OF THE ISSUER.....................32
Section 601 Issuer To Issue Bonds and Execute Indenture..............32
Section 602 Limited Obligations......................................32
Section 603 Payment of Bonds.........................................33
Section 604 Performance of Covenants.................................33
Section 605 Inspection of Books......................................33
Section 606 Enforcement of Rights....................................33
Section 607 Tax Covenants............................................33
Section 608 Financing Statements.....................................34
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES....................................34
Section 701 Events of Default........................................34
Section 702 Acceleration of Maturity; Rescission and Annulment.......35
Section 703 Exercise of Remedies by the Trustee......................36
Section 704 Trustee May File Proofs of Claim.........................37
Section 705 Limitation on Suits by Bondowners........................38
Section 706 Control of Proceedings by Bondowners.....................39
Section 707 Application of Money Collected...........................39
Section 708 Rights and Remedies Cumulative...........................40
Section 709 Delay or Omission Not Waiver.............................40
Section 710 Waiver of Past Defaults..................................40
Section 711 Advances by Trustee......................................40
ARTICLE VIII THE TRUSTEE AND PAYING AGENTS....................................41
Section 801 Acceptance of Trusts; Certain Duties and
Responsibilities.........................................41
Section 802 Certain Rights of Trustee................................42
Section 803 Notice of Defaults.......................................43
Section 804 Compensation and Reimbursement...........................44
Section 805 Corporate Trustee Required; Eligibility..................44
Section 806 Resignation and Removal of Trustee.......................45
Section 807 Appointment of Successor Trustee.........................46
Section 808 Acceptance of Appointment by Successor...................46
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Section 809 Merger, Consolidation and Succession to Business.........47
Section 810 Co-Trustees and Separate Trustees........................47
Section 811 No Transfer of First Mortgage Bonds......................48
Section 812 Voting of First Mortgage Bonds...........................48
Section 813 Surrender of First Mortgage Bonds........................49
Section 814 Designation of Paying Agents.............................49
ARTICLE IX SUPPLEMENTAL INDENTURES............................................50
Section 901 Supplemental Indentures without Consent of Bondowners....50
Section 902 Supplemental Indentures with Consent of Bondowners.......50
Section 903 Execution of Supplemental Indentures.....................52
Section 904 Effect of Supplemental Indentures........................52
Section 905 Reference in Bonds to Supplemental Indentures............52
Section 906 Company's Consent to Supplemental Indentures.............52
ARTICLE X AMENDMENT OF LOAN AGREEMENT.........................................53
Section 1001 Amendment, etc., to Loan Agreement Not Requiring
Consent of Bondowners....................................53
Section 1002 Amendment, etc., to Loan Agreement Requiring Consent
of Bondowners............................................53
Section 1003 Trustee Authorized To Join in Amendments; Reliance on
Counsel..................................................53
ARTICLE XI MEETINGS OF BONDOWNERS.............................................54
Section 1101 Purposes for Which Bondowners' Meetings May Be Called....54
Section 1102 Place of Meetings of Bondowners..........................54
Section 1103 Call and Notice of Bondowners' Meetings..................54
Section 1104 Persons Entitled To Vote at Bondowners' Meetings.........54
Section 1105 Determination of Voting Rights; Conduct and
Adjournment of Meetings..................................55
Section 1106 Counting Votes and Recording Action of Meetings..........55
Section 1107 Revocation by Bondowners.................................56
ARTICLE XII NOTICES, CONSENTS AND ACTS OF BONDOWNERS..........................56
Section 1201 Notices..................................................56
Section 1202 Acts of Bondowners.......................................58
Section 1203 Form and Contents of Documents Delivered to Trustee......59
ARTICLE XIII MISCELLANEOUS PROVISIONS.........................................60
Section 1301 Further Assurances.......................................60
Section 1302 Immunity of Officers, Employees and Members of Issuer....60
Section 1303 Liability of Issuer Limited..............................60
Section 1304 Execution Counterparts...................................60
Section 1305 Governing Law............................................60
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Section 1306 Benefit of Indenture.....................................61
Section 1307 Severability.............................................61
EXHIBIT A--FORM OF SERIES 2004 BONDS ........................................A-1
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INDENTURE OF TRUST
This INDENTURE OF TRUST, dated as of August 1, 2004 (the "Indenture"),
between the CITY OF COHASSET, MINNESOTA, a municipal corporation organized and
existing under the laws of the State of Minnesota (the "Issuer"), and U.S. Bank
National Association, a national banking association duly organized and existing
and authorized to accept and execute trusts of the character herein set out
under the laws of the United States, and having its principal corporate trust
office located in St. Paul, Minnesota, as trustee (the "Trustee").
W I T N E S S E T H:
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WHEREAS, the Issuer is authorized and empowered under Minnesota Statutes,
Sections 469.152 to 469.165, as amended (as hereinafter defined, the "Act"), to
issue revenue bonds to finance, in whole or in part, the cost of the
acquisition, construction, reconstruction, improvement, betterment or extension
of, and to acquire, construct and hold, properties, real or personal, used or
useful in a revenue-producing enterprise or in the abatement or control of air
or water pollution in connection with a revenue-producing enterprise engaged in
business, and to refund revenue bonds previously issued under the Act; and
WHEREAS, under the provisions of the Act and at the request of ALLETE,
Inc., a Minnesota corporation (hereinafter called the "Company"), the City of
Bass Brook, Minnesota (the predecessor to the Issuer) previously issued
$111,000,000 aggregate principal amount of its 6% Collateralized Pollution
Control Revenue Bonds (Minnesota Power & Light Company Project), Series 1992
(hereinafter called the "Refunded Bonds"), the proceeds from the sale of which
were used for the purpose of refinancing a portion of the costs of the
acquisition, construction and equipping of certain pollution control facilities
at units 1, 2 and 4 of the Clay Boswell steam electric generating station owned
in part by the Company and located in the City of Cohasset, Minnesota; and
WHEREAS, under the provisions of the Act and at the request of the Company,
the Issuer has duly authorized the issuance and sale of its Collateralized
Pollution Control Refunding Revenue Bonds (ALLETE, Inc. Project), Series 2004
(the "Series 2004 Bonds"), issuable under and upon the terms of this Indenture,
the proceeds from the sale of which will be loaned by the Issuer to the Company
for the purpose of refunding the Refunded Bonds; and
WHEREAS, all things have been done that are necessary to make the Bonds,
when executed by the Issuer and authenticated and delivered hereunder, the valid
special, limited obligations of the Issuer, and to constitute this Indenture a
valid contract for the security of the Bonds, in accordance with their and its
terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
The Issuer, in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of the purchase and acceptance of the
Series 2004 Bonds and any Additional Bonds (as hereinafter defined)
(collectively, the "Bonds") by the Owners (as hereinafter defined) thereof, in
order to secure the payment of the principal of, premium, if any, and interest
on the Bonds according to their tenor and effect and the performance and
observance by the Issuer of all of its covenants expressed or implied herein and
in the Bonds, does hereby
pledge, and convey, assign and grant to the Trustee a security interest in, the
property described in paragraphs (a), (b) and (c) below (said property
referred to herein as the "Trust Estate"):
(a) all rights, title and interest of the Issuer (including, but not
limited to, the right to enforce any of the terms thereof) in, to and under
(1) the Loan Agreement, including all Receipts and Revenues of the Issuer
from the Loan Agreement and all other payments owing to the Issuer and paid
by the Company under the Loan Agreement (except the Issuer's rights to
payment of its fees and expenses and to indemnification as set forth in the
Loan Agreement and as otherwise expressly set forth therein), including
without limitation its rights to delivery of the First Mortgage Bonds
issued and delivered by the Company, and (2) all financing statements or
other instruments or documents evidencing, securing or otherwise relating
to the loan of the proceeds of the Bonds; and
(b) the money and investments from time to time held by or on behalf
of the Trustee in the funds and accounts under the terms of this Indenture
(provided that any moneys or obligations deposited with or paid to the
Trustee for the redemption or payment of Bonds which are deemed to have
been paid in accordance with Article V hereof shall not constitute a part
of the Trust Estate but will be held for and applied only to the payment of
such Bonds); and
(c) any and all other property (real, personal or mixed) of every kind
and nature from time to time, by delivery or by writing of any kind,
pledged, assigned or transferred as and for additional security under this
Indenture by the Issuer 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.
TO HAVE AND TO HOLD all the same to the Trustee and its successors and
assigns forever;
BUT IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth for
the equal and proportionate benefit, security and protection of all Owners of
the Bonds issued under and secured by this Indenture, without privilege,
priority or distinction as to lien or otherwise of any of the Bonds over any of
the others except as otherwise expressly provided herein.
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall
well and truly pay or cause to be paid the principal of the Bonds and the
premium, if any, and interest due or to become due thereon, at the times and in
the manner mentioned in the Bonds, according to the true intent and meaning
thereof, or shall provide, as permitted hereby, for the payment thereof by
depositing with the Trustee sums sufficient to pay the entire amount due or to
become due thereon, and shall well and truly keep, perform, and observe all the
covenants and conditions pursuant to the terms of this Indenture to be kept,
performed and observed by it and shall pay to the Trustee all sums of money due
or to become due to it in accordance with the terms and provisions hereof; then
upon such final payment this Indenture and the rights hereby granted shall
cease, terminate, and become null and void; otherwise this Indenture to be and
remain in full force and effect.
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ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION
SECTION 101 DEFINITIONS OF WORDS AND TERMS. All words and phrases defined
in the preambles of this Indenture shall have the same meaning in this
Indenture, except as otherwise appears in this Section. In addition, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Act" means Minnesota Statutes, Sections 469.152 to 469.165, as amended,
and all acts supplemental thereto or amendatory thereof.
"Additional Bonds" means any Bonds issued under this Indenture, other than
the Series 2004 Bonds.
"Affiliate" means any Person which "controls," or is "controlled" by, or is
under common "control" with, the Company. For purposes of this definition, a
Person "controls" another Person when the first Person possesses or exercises
directly, or indirectly through one or more other affiliates or related
entities, the power to direct the management and policies of the other Person,
whether through the ownership of voting rights, membership, the power to appoint
members, trustees or directors, by contract, or otherwise.
"Authorized Denominations" means, in respect of a series of Bonds,
denominations of $5,000 or any integral multiple thereof.
"Book-Entry System" means, in respect of a series of Bonds, the global
book-entry system used by a Securities Depository appointed pursuant to Section
203 hereof to effect the transfer of beneficial ownership interests in such
Bonds.
"Bond Counsel" means any legal counsel selected by the Company and
reasonably acceptable to the Issuer and the Trustee who shall be nationally
recognized as expert in matters pertaining to the validity of obligations of
governmental issuers and the exemption from federal income taxation of interest
on such obligations and experienced in the financing of pollution control
facilities.
"Bond Fund" means the fund by that name created by Section 401 of this
Indenture.
"Bondowner" means the Owner of a Bond.
"Bonds" means the Series 2004 Bonds and any Additional Bonds.
"Business Day" means a day other than (a) a Saturday, Sunday or legal
holiday, and (b) a day on which banks located in any city in which the principal
corporate trust office of the Trustee or the principal office of any Paying
Agent is located are required or authorized by law to remain closed.
"Cede & Co." means Cede & Co., as nominee of The Depository Trust Company,
New York, New York.
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"Code" means the Internal Revenue Code of 1986, as amended, and, when
appropriate, any statutory predecessor or successor thereto, and all applicable
regulations thereunder and any applicable official rulings, announcements,
notices, procedures and judicial determinations relating to the foregoing.
"Company" means ALLETE, Inc., a Minnesota corporation, and its permitted
successors and assigns under the Loan Agreement.
"Company Representative" means the President, any Vice President or the
Treasurer of the Company and such other person or persons at the time designated
to act on behalf of the Company in matters relating to this Indenture and the
Loan Agreement as evidenced by a written certificate furnished to the Issuer and
the Trustee containing the specimen signature of such person or persons and
signed on behalf of the Company by its President, any Vice President or its
Treasurer. Such certificate may designate an alternate or alternates each of
whom shall be entitled to perform all duties of the Company Representative.
"Costs of Issuance" means "issuance costs" with respect to Bonds described
in Section 147(g) of the Code and any regulations thereunder, including but not
limited to the following:
(a) underwriters' compensation (whether realized directly or derived
through purchase of Bonds at a discount below the price at which they are
expected to be sold to the public);
(b) counsel fees (including bond counsel, underwriters' counsel,
Issuer's counsel, as well as any other specialized counsel fees incurred in
connection with the borrowing);
(c) financial advisor fees of any financial advisor to the Issuer
incurred in connection with the issuance of such Bonds;
(d) rating agency fees;
(e) trustee, escrow agent and paying agent fees;
(f) accountant fees and other expenses related to issuance of such
Bonds;
(g) printing costs (for such Bonds and of the preliminary and final
Official Statement relating to such Bonds); and
(h) fees and expenses of the Issuer incurred in connection with the
issuance of such Bonds.
"Counsel" means an attorney designated by or acceptable to the Trustee,
duly admitted to practice law before the highest court of any state; an attorney
for the Company or the Issuer may be eligible for appointment as Counsel.
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"Defeasance Obligations" means:
(a) Government Obligations which are not subject to redemption prior
to maturity;
(b) obligations of any state or political subdivision of any state,
the interest on which is excluded from gross income for federal income tax
purposes and which meet the following conditions:
(1) the obligations (A) are not subject to redemption prior to
maturity or (B) the trustee for such obligations has been given
irrevocable instructions concerning their calling and redemption and
the issuer of such obligations has covenanted not to redeem such
obligations other than as set forth in such instructions;
(2) the obligations are secured by cash or noncallable Government
Obligations that may be applied only to payment of principal of,
premium, if any, and interest payments on such obligations;
(3) the sufficiency of such cash and noncallable Government
Obligations to pay in full all principal of, interest, and premium, if
any, on such obligations has been verified by the report of an
independent certified public accountant (a "Verification") and no
substitution of Government Obligations shall be permitted except with
cash or other Government Obligations and upon delivery of a new
Verification;
(4) such cash and Government Obligations serving as security for
the obligations are held in an irrevocable escrow by an escrow agent
or a trustee in trust for the owners of such obligations, at least one
year has passed since the establishment of such escrow and the issuer
of such obligations is not, and has not been since the establishment
of such escrow, a debtor in a proceeding commenced under the United
States Bankruptcy Code;
(5) the Trustee has received an Opinion of Counsel that such cash
and Government Obligations are not available to satisfy any other
claims, including those against the trustee or escrow agent;
(6) the Trustee has received an Opinion of Bond Counsel delivered
in connection with the original issuance of such obligations to the
effect that the interest on such obligations was exempt for purposes
of federal income taxation, and the Trustee has received an Opinion of
Bond Counsel delivered in connection with the establishment of the
irrevocable escrow to the effect that the establishment of the escrow
will not result in the loss of any exemption for purposes of federal
income taxation to which interest on such obligations would otherwise
be entitled;
(7) the Trustee has received an unqualified opinion of nationally
recognized bankruptcy counsel to the effect that the payment of
principal of and
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interest on such obligations made from such escrow would not be
avoidable as preferential payments and recoverable under the United
States Bankruptcy Code should the obligor or any other person liable
on such obligations become a debtor in a proceeding commenced under
the United States Bankruptcy Code; and
(8) the obligations are rated in the highest rating category by a
nationally recognized securities rating service; or
(c) obligations (including participation certificates) issued or
guaranteed by an agency of the United States of America or person
controlled or supervised by and acting as an instrumentality of the United
States of America pursuant to authority granted by the Congress, including
but not limited to those of the Federal Home Loan Mortgage Corporation,
Federal Home Loan Banks, the Farm Credit System and Federal National
Mortgage Association.
"Determination of Taxability," when used with respect to a series of Bonds,
means a final, nonappealable determination by the Internal Revenue Service or by
a court of competent jurisdiction in the United States that, as a result of
failure by the Company to observe or perform any covenant, condition or
agreement on its part to be observed or performed under the Loan Agreement or as
a result of the inaccuracy of any representation or agreement made by the
Company under the Loan Agreement, the interest payable on Bonds of the series is
includable for federal income tax purposes in the gross income of the owners
thereof (other than an owner who is a "substantial user" of the projects
refinanced thereby or a "related person" thereto within the meaning of Section
103(b)(13) of the 1954 Code), which final determination follows proceedings of
which the Company has been given written notice and in which the Company, at its
sole expense and to the extent deemed sufficient by the Company, has been given
an opportunity to participate, either directly or in the name of the owners of
Bonds of the series.
"Electronic Notice" means notice transmitted through a time-sharing
terminal or facsimile machine, if operative as between any two parties, or if
not operative, in writing or by telephone (promptly confirmed in writing).
"Event of Default" has the meaning given such term in Section 701 hereof.
"Facilities" means the Refinanced Pollution Control Facilities, as now
existing or hereafter improved, which are described generally in Exhibit A to
the Loan Agreement.
"First Mortgage" means the Mortgage and Deed of Trust, dated as of
September 1, 1945, from the Company to Irving Trust Company (now The Bank of New
York) and Richard H. West (Douglas J. MacInnes, Successor), as trustees, as
heretofore and hereafter amended and supplemented.
"First Mortgage Bonds" means the first mortgage bonds issued and delivered
under the First Mortgage as required by Section 3.02 of the Loan Agreement.
"First Mortgage Trustee" means the corporate trustee under the First
Mortgage, its successors in trust and their assigns.
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"Government Obligations" means the following:
(a) bonds, notes, certificates of indebtedness, treasury bills or
other securities constituting direct obligations of, or obligations the
principal of and interest on which are fully and unconditionally guaranteed
by, the United States of America; and
(b) evidences of direct ownership of a proportionate or individual
interest in future interest or principal payments on specified direct
obligations of, or obligations the payment of the principal of and interest
on which is unconditionally guaranteed by, the United States of America,
which obligations are held by a bank or trust company organized and
existing under the laws of the United States of America or any state
thereof in the capacity of custodian.
"Indenture" means this Indenture of Trust as originally executed by the
Issuer and the Trustee, as from time to time amended and supplemented by
Supplemental Indentures in accordance with the provisions of this Indenture.
"Interest Payment Date" means each January 1 and July 1.
"Issuer" means the City of Cohasset, Minnesota, and any successors to its
functions hereunder.
"Issuer Representative" means the Mayor of the Issuer, and such other
person or persons at the time designated to act on behalf of the Issuer in
matters relating to this Indenture and the Loan Agreement as evidenced by a
written certificate furnished to the Trustee containing the specimen signature
of such person or persons and signed on behalf of the Issuer by its Mayor. Such
certificate may designate an alternate or alternates, each of whom shall be
entitled to perform all duties of the Issuer Representative.
"Loan" means the loan of the proceeds of the Bonds made by the Issuer to
the Company pursuant to the Loan Agreement.
"Loan Agreement" means the Loan Agreement, of even date herewith, between
the Issuer and the Company, as from time to time amended or supplemented by
Supplemental Loan Agreements in accordance with the provisions of Article X
hereof.
"Loan Payments" means the payments of principal of and interest on the Loan
referred to in Section 3.02 of the Loan Agreement.
"1954 Code" means the Internal Revenue Code of 1954, as amended, and, when
appropriate, any statutory predecessor thereto, and all applicable regulations
thereunder and any applicable official rulings, announcements, notices,
procedures and judicial determinations relating to the foregoing.
"Opinion of Bond Counsel" means a written opinion of Bond Counsel.
"Opinion of Counsel" means a written opinion of Counsel.
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"Original Purchaser" means, in respect of a series of Bonds, the Person who
purchases Bonds of the series from the Issuer.
"Outstanding" means with respect to Bonds, as of the date of determination,
all Bonds theretofore authenticated and delivered under this Indenture, except:
(a) Bonds theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation as provided in Section 209 of this Indenture;
(b) Bonds for whose payment or redemption money or Defeasance
Obligations in the necessary amount have been deposited with the Trustee or
any Paying Agent in trust for the owners of such Bonds as provided in
Section 501 of this Indenture, provided that, if such Bonds are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(c) Bonds in exchange for or in lieu of which other Bonds have been
authenticated and delivered under this Indenture; and
(d) Bonds alleged to have been destroyed, lost or stolen which have
been paid as provided in Section 208 of this Indenture;
provided, however, that, in determining whether the Owners of the requisite
principal amount of Outstanding Bonds have given any request, demand,
authorization, direction, notice, consent or waiver under this Indenture, Bonds
owned by the Issuer or by the Company or any Related Party thereto or Affiliate
thereof shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Bonds
which the Trustee knows to be so owned shall be disregarded.
"Owner" means, in respect of a Bond, the Person or Persons in whose name
the Bond is registered on the bond registration books maintained by the Trustee
pursuant to Section 206 hereof.
"Participants" means those financial institutions for whom the Securities
Depository effects book-entry transfers and pledges of securities deposited with
the Securities Depository, as such listing of Participants exists at the time of
such reference.
"Paying Agent" means the Trustee and any other commercial bank or trust
institution organized under the laws of any state of the United States of
America or any national banking association designated pursuant to this
Indenture or any Supplemental Indenture as paying agent for any Bonds at which
the principal of, redemption premium, if any, and interest on such Bonds shall
be payable.
"Permitted Investments" means, if and to the extent the same are at the
time legal for investment of funds held under this Indenture:
(a) Government Obligations;
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(b) bonds, notes or other obligations of any state of the United
States or any political subdivision of any state, which at the time of
their purchase are rated in either of the two highest rating categories by
a Rating Service;
(c) certificates of deposit or time or demand deposits constituting
direct obligations of any bank, bank holding company, savings and loan
association, trust company or other financial institution, except that
investments may be made only in certificates of deposit or time or demand
deposits which are:
(1) Insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation, or any
other similar United States Government deposit insurance program then
in existence; or
(2) Continuously and fully secured by securities described in
paragraph (a) above, which have a market value, exclusive of accrued
interest, at all times at least equal to the principal amount of such
certificates of deposit or time or demand deposits; or
(3) Issued by a bank, bank holding company, savings and loan
association, trust company or other financial institution whose
outstanding unsecured long-term debt is rated at the time of issuance
in either of the two highest rating categories by a Rating Service;
(d) repurchase agreements with any bank, bank holding company, savings
and loan association, trust company or other financial institution
organized under the laws of the United States or any state, that are
continuously and fully secured by any one or more of the securities
described in paragraph (a) above and which have a market value, exclusive
of accrued interest, at all times at least equal to the principal amount of
such repurchase agreements, provided that each such repurchase agreement
conforms to current industry standards as to form and time, is in
commercially reasonable form, is for a commercially reasonable period,
results in transfer of legal title to identified Government Obligations
which are segregated in a custodial or trust account for the benefit of the
Trustee, and further provided that Government Obligations acquired pursuant
to such repurchase agreements shall be valued at the lower of the then
current market value thereof or the repurchase price thereof set forth in
the applicable repurchase agreement;
(e) investment agreements constituting an obligation of a bank, bank
holding company, savings and loan association, trust company, insurance
company, financial institution or other credit provider whose outstanding
unsecured long-term debt is rated at the time of such agreement in either
of the two highest rating categories by a Rating Service;
(f) short term discount obligations of the Federal National Mortgage
Association and the Government National Mortgage Association; and
(g) money market mutual funds that are registered with the federal
Securities and Exchange Commission, meeting the requirements of Rule 2a-7
under the Investment
9
Company Act of 1940 and that are rated in either of the two highest
categories by a Rating Service, including mutual funds from which the
Trustee or its affiliates receive fees for investment advisory or other
services to the fund.
"Person" means any natural person, firm, association, corporation,
partnership, limited liability company, limited liability partnership, joint
stock company, joint venture, trust, unincorporated organization or firm, or a
government or any agency or political subdivision thereof or other public body.
"Plant" means the Clay Boswell steam electric generating station located in
the City of Cohasset, Minnesota, and owned in part by the Company.
"Rating Service" means each of Standard & Poor's Ratings Service, a
division of The McGraw-Hill Companies, Inc., and Moody's Investor's Service,
Inc., if a series of Bonds is rated by such rating service at the time, or any
other nationally recognized securities rating service acceptable to the Company
that maintains a rating on any of the Bonds.
"Receipts and Revenues of the Issuer from the Loan Agreement" means all
moneys paid or payable to the Trustee for the account of the Issuer by the
Company in respect of the principal of and interest on the First Mortgage Bonds,
or pursuant to Section 3.02(e) or 8.01 of the Loan Agreement, and all receipts
of the Trustee credited under the provisions of this Indenture against such
payments.
"Redemption Fund" means the fund by that name created by Section 401
hereof.
"Refunded Bonds" means the 6% Collateralized Pollution Control Refunding
Revenue Bonds (Minnesota Power & Light Company Project), Series 1992, issued by
the City of Bass Brook, Minnesota (the predecessor in interest to the Issuer) in
the original principal amount of $111,000,000.
"Regular Record Date" means the close of business on the 15th day (whether
or not a Business Day) of the calendar month immediately preceding the Interest
Payment Date.
"Related Party" means any Person which is a member of the same controlled
group with, or a related person to, the Issuer, within the meaning of Section
1.150-1 of the Treasury Regulations.
"Replacement Bonds" means Bonds issued to the beneficial owners of such
Bonds in accordance with Section 203 hereof.
"Securities Depository" means for any series of Bonds, The Depository Trust
Company, New York, New York, and its successors and assigns, or any successor
securities depository appointed pursuant to Section 203 hereof.
"Series 2004 Bonds" means any bond or bonds of the series of Collateralized
Pollution Control Refunding Revenue Bonds (ALLETE, Inc. Project), Series 2004,
aggregating the principal amount of $111,000,000, to be issued, authenticated
and delivered under and pursuant to this Indenture.
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"Sinking Fund Payment Date" means one of the dates set forth in any
applicable provision of a Supplemental Indenture for the making of mandatory
principal redemptions with respect to the Bonds.
"Special Record Date" means, with respect to any Bond, the date established
by the Trustee in connection with the payment of overdue interest on such Bond
pursuant to Section 204 hereof.
"State" means the State of Minnesota.
"Stated Maturity" when used with respect to any Bond or any installment of
interest thereon means the date specified in such Bond as the fixed date on
which the principal of such Bond or such installment of interest is due and
payable.
"Supplemental Indenture" means any indenture supplemental or amendatory to
this Indenture entered into by the Issuer and the Trustee pursuant to Article IX
of this Indenture.
"Supplemental Loan Agreement" means any agreement supplemental or
amendatory to the Loan Agreement entered into by the Issuer and the Company
pursuant to Article X hereof.
"Tax Compliance Certificate" means a No Arbitrage Certificate of the
Company, executed upon the issuance of a series of Bonds hereunder, as such may
be amended or supplemented from time to time in accordance with the provisions
thereof.
"Transaction Documents" means this Indenture, the Bonds, the Loan
Agreement, the Tax Compliance Certificate, the First Mortgage Bonds and those
certificates given by the Issuer, the Company and the Trustee in connection with
the issuance of the Bonds, including any and all amendments or supplements to
any of the foregoing; provided, however, that when the words "Transaction
Documents" are used in the context of the authorization, execution, delivery,
approval or performance of Transaction Documents by a particular party, the same
shall mean only those Transaction Documents that provide for or contemplate
authorization, execution, delivery, approval or performance by such party.
"Trustee" means U.S. Bank National Association, and its successor or
successors and any other corporation or association which at any time may be
substituted in its place pursuant to and at the time serving as trustee under
this Indenture.
"Trust Estate" means the revenues, money, investments, contract rights,
general intangibles, and instruments and proceeds, products and accessions
thereof as set forth in the Granting Clauses of this Indenture, and such other
collateral, security and guarantees as shall from time to time be pledged to the
Trustee by the Issuer as security for its obligations under the Bonds.
"United States Bankruptcy Code" means the United States Bankruptcy Reform
Act of 1978, as amended from time to time, or any substitute or replacement
legislation.
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SECTION 102 RULES OF CONSTRUCTION. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires,
the following rules of construction apply in construing the provisions of this
Indenture:
(a) The terms defined in this Article include the plural as well as the
singular.
(b) All accounting terms not otherwise defined herein shall have the
meanings assigned to them, and all computations herein provided for
shall be made, in accordance with generally accepted accounting
principles to the extent applicable. The term "generally accepted
accounting principles" refers to such principles in effect on the date
of the determination, certification, computation or other action to be
taken hereunder using or involving such terms provided, as applied to
any entity that operates a utility or other discrete enterprise of a
type with respect to which particular accounting principles from time
to time shall have been generally adapted or modified, the term
"generally accepted accounting principles" shall include the
adaptations or modifications.
(c) All references in this instrument to designated "Articles," "Sections"
and other subdivisions are to be the designated Articles, Sections and
other subdivisions of this instrument as originally executed.
(d) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision hereof.
(e) The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
(f) Whenever an item or items are listed after the word "including," such
listing is not intended to be a listing that excludes items not
listed.
(g) "Or" is not intended to be exclusive, but is intended to permit or
encompass one, more or all of the alternatives conjoined.
(h) Any terms not defined herein but defined in the Loan Agreement shall
have the meanings herein unless the context clearly requires
otherwise.
SECTION 103 CHARACTERISTICS OF CERTIFICATE OR OPINION. Every certificate or
Opinion of Counsel with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (i) a statement that the person or
persons making such certificate or opinion have read such covenant or condition
and the definitions herein relating thereto; (ii) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate are based; (iii) a statement that, in
the opinion of the signers, they have made or caused to be made such examination
or investigation as is necessary to enable them to express an informed opinion
as to whether or not such covenant or condition has been complied with; and (iv)
a statement whether, in the opinion of the signers, such condition or covenant
has been complied with.
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Any such certificate made or given by an officer of the Issuer may be
based, insofar as it relates to legal matters, upon an Opinion of Counsel. Any
such Opinion of Counsel may be based, insofar as it relates to factual matters
information with respect to which is in the possession of the Issuer or the
Company, upon the certificate of an officer or officers of the Issuer or the
Company.
ARTICLE II
THE BONDS
SECTION 201 AUTHORIZATION OF BONDS; TERMS OF SERIES 2004 BONDS. (a) No
Bonds may be issued under this Indenture except in accordance with the
provisions of this Article. The total principal amount of Series 2004 Bonds that
may be issued under this Indenture is limited as provided in this Section.
Additional Bonds may be issued as provided in Section 202 hereof.
(b) There shall be issued under and secured by this Indenture a series of
Bonds designated "Collateralized Pollution Control Refunding Revenue Bonds
(ALLETE, Inc. Project), Series 2004," in the aggregate principal amount of
$111,000,000, for the purpose of providing funds to make a loan to the Company
to be used, with other available funds, to refund the Refunded Bonds.
The aggregate principal amount of the Series 2004 Bonds that may be
authenticated and delivered and Outstanding under this Indenture is limited to
and shall not exceed $111,000,000.
The Series 2004 Bonds shall be dated the date of their original issuance
and delivery, and shall have a Stated Maturity of July 1, 2022, subject to prior
redemption as provided in Article III hereof.
(c) The Series 2004 Bonds shall bear interest from their date or from the
most recent date to which interest has been paid or duly provided for, at a rate
per annum equal to 4.95%, payable on each Interest Payment Date as herein
provided, commencing on January 1, 2005, until payment of the principal or
redemption price thereof is made or provided for, whether at Stated Maturity,
upon redemption, acceleration or otherwise.
The Series 2004 Bonds shall be issuable as fully registered bonds without
coupons, in Authorized Denominations, in substantially the form set forth in
Exhibit A attached to this Indenture, with such necessary or appropriate
variations, omissions and insertions as are permitted or required by this
Indenture. The Series 2004 Bonds may have endorsed thereon such legends or text
as may be necessary or appropriate to conform to any applicable rules and
regulations of any governmental authority or any custom, usage or requirement of
law with respect thereto.
The Series 2004 Bonds shall be numbered from R-1 consecutively upward in
order of issuance or in such other manner as the Trustee shall designate.
(d) The Series 2004 Bonds may forthwith upon the execution and delivery of
this Indenture, or from time to time thereafter, be executed by the proper
officers of the Issuer and
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delivered to the Trustee for authentication, and shall thereupon be
authenticated and delivered by the Trustee, but only upon receipt by the Trustee
of the following:
(1) A copy, certified by the City Clerk-Treasurer of the Issuer, of
the resolution adopted by the Issuer authorizing the issuance of
the Series 2004 Bonds and the execution of this Indenture, the
Loan Agreement and the other Transaction Documents to which it is
a party.
(2) A copy, certified by the Secretary or an Assistant Secretary of
the Company, of the resolutions adopted by the Company
authorizing the execution and delivery of the Loan Agreement and
the other Transaction Documents to which it is a party, and
approving this Indenture and the issuance and sale of the Series
2004 Bonds.
(3) An original executed counterpart of this Indenture, the Loan
Agreement and the other Transaction Documents.
(4) A request and authorization to the Trustee on behalf of the
Issuer, executed by an Issuer Representative, to authenticate and
thereafter deliver the Series 2004 Bonds to the Original
Purchasers thereof upon payment to the Trustee, for the account
of the Issuer, of the purchase price thereof, and directing the
Trustee as to the disposition of the proceeds of the Series 2004
Bonds. The Trustee shall be entitled to rely conclusively upon
such request and authorization as to the names of the Original
Purchasers and the amounts of such purchase price.
(5) An Opinion of Bond Counsel stating in effect and subject to
customary assumptions and qualifications, that: (1) all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Series 2004 Bonds have been
complied with; and (2) the Series 2004 Bonds, when issued and
executed by the Issuer and authenticated and delivered by the
Trustee, will be the valid and binding special, limited
obligations of the Issuer in accordance with their terms and
entitled to the benefits of and secured by the lien of this
Indenture equally and ratably with all Outstanding Bonds, and
will bear interest not includable in gross income for federal
income tax purposes of the owners thereof except by reason of
Section 103(b)(13) of the 1954 Code.
(6) An original duly executed counterpart or a duly certified copy of
the supplemental indenture to the First Mortgage creating the
First Mortgage Bonds.
(7) The First Mortgage Bonds.
When the documents specified above have been filed with the Trustee, and
when the Series 2004 Bonds shall have been executed and authenticated as
required by this Indenture, the Trustee shall deliver such Series 2004 Bonds to
or upon the order of the Original Purchasers thereof, but only upon payment to
the Trustee of the purchase price of the Series 2004 Bonds.
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The proceeds of the sale of the Series 2004 Bonds, including accrued interest
and premium thereon, if any, shall be immediately paid over to the Trustee, and
the Trustee shall deposit and apply such proceeds as provided in Article IV
hereof.
SECTION 202 ISSUANCE OF ADDITIONAL BONDS. Additional Bonds (in addition to
the Series 2004 Bonds) may be authenticated and delivered from time to time for
one or more of the following purposes: (i) refunding and prepaying any
Outstanding Bonds; (ii) refinancing any Outstanding Bonds as provided for in
Section 5.04 of the Loan Agreement; (iii) financing the acquisition,
construction, equipping or improvement of any property of the Company, including
funds to capitalize interest during construction, (iv) refinancing the
acquisition, construction, equipping or improvement of any property of the
Company through the refunding of outstanding revenue bonds issued by a state or
political subdivision or other indebtedness incurred by the Company, and (v) to
pay expenses of the issuance of such Additional Bonds.
Additional Bonds may at any time and from time to time be executed by the
Issuer and delivered to the Trustee for authentication, but only upon receipt by
the Trustee of the following:
(1) A copy, certified by the City Clerk-Treasurer of the Issuer, of the
resolution adopted by the Issuer authorizing the issuance of such
Additional Bonds and the execution and delivery of the Supplemental
Loan Agreement relating to the Additional Bonds and the Supplemental
Indenture establishing the terms thereof.
(2) A copy, certified by the Secretary or an Assistant Secretary of the
Company, of the resolutions adopted by the Company authorizing the
execution and delivery of the Supplemental Loan Agreement relating to
the Additional Bonds and approving the Supplemental Indenture and the
issuance and sale of such Additional Bonds.
(3) A certificate of a Company Representative approving the issuance and
delivery of the Additional Bonds.
(4) An executed counterpart of the Supplemental Indenture creating such
Additional Bonds and of the Supplemental Loan Agreement providing for
the expenditure of proceeds of the Additional Bonds.
(5) A request and authorization to the Trustee on behalf of the Issuer,
executed by an Issuer Representative, to authenticate such Additional
Bonds and deliver such Additional Bonds to the Original Purchaser
thereof upon payment to the Trustee, for the account of the Issuer, of
the purchase price thereof, and directing the Trustee as to the
disposition of the proceeds of such Additional Bonds. The Trustee
shall be entitled to rely conclusively upon such request and
authorization as to the names of the Original Purchaser and the
amounts of such purchase price.
(6) A certificate of an Issuer Representative stating that to the best of
his or her knowledge no Event of Default is then subsisting and no
event or condition which with the lapsing of time or the giving of
notice, or both, would become an Event of Default has occurred, and
that all conditions precedent provided for in this
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Indenture relating to the authentication and delivery of such
Additional Bonds have been complied with;
(7) A certificate of a Company Representative stating that to the best of
his or her knowledge no "Event of Default" under the Loan Agreement is
then subsisting and no event or condition which with the lapsing of
time or the giving of notice, or both, would become such an "Event of
Default" has occurred;
(8) An Opinion of Bond Counsel stating in effect, and subject to customary
assumptions and qualifications: (a) that all conditions precedent
provided in this Indenture relating to the authentication and delivery
of such Additional Bonds have been complied with; (b) that the
Additional Bonds whose authentication and delivery are then applied
for, when issued and executed by the Issuer and authenticated and
delivered by the Trustee, will be the valid and binding special,
limited obligations of the Issuer in accordance with their terms and
entitled to the benefits of and secured by the lien of this Indenture
equally and ratably with all Outstanding Bonds and will bear interest
not includable in gross income for federal income tax purposes of the
owners thereof except by reason of Section 103(b)(13) of the 1954 Code
or Section 147(a) of the Code; and (c) stating that the issuance of
such Additional Bonds will not affect the tax-exempt nature for
federal income tax purposes of any Bonds then outstanding.
(9) Written evidence, satisfactory to the Trustee, that each Rating
Service will not reduce or withdraw its rating then assigned to the
Outstanding Bonds as a result of the issuance of the Additional Bonds.
Any Additional Bonds shall be dated the date of original authentication and
delivery thereof, shall bear interest at the rate or rates established pursuant
to Section 202 hereof, and shall have Stated Maturities (provided that such
Stated Maturities shall be on January 1 or July 1) and may be subject to
redemption prior to their Stated Maturities at such times and prices and on such
terms and conditions as may be provided by the Supplemental Indenture
authorizing their issuance (provided that any mandatory sinking fund redemption
dates shall be on a January 1 or July 1). Except to the extent expressly
provided otherwise in a Supplemental Indenture creating the Additional Bonds,
all Additional Bonds shall be payable and secured equally and ratably and on a
parity with all Bonds theretofore issued and then Outstanding, entitled to the
same benefits and security of this Indenture.
SECTION 203 BOOK-ENTRY SYSTEM; SECURITIES DEPOSITORY. The Bonds of each
series shall initially be registered to Cede & Co., the nominee for the initial
Securities Depository, and no beneficial owner will receive certificates
representing their respective interests in the Bonds, except in the event the
Trustee issues Replacement Bonds as provided in this Section. It is anticipated
that during the term of each series of Bonds, the Securities Depository will
make book-entry transfers among its Participants and receive and transmit
payment of principal of, premium, if any, and interest on, such Bonds to the
Participants until and unless the Trustee authenticates and delivers Replacement
Bonds to the beneficial owners as described in the following paragraph.
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If (1) the Company determines (A) that the Securities Depository is unable
to properly discharge its responsibilities, or (B) that the Securities
Depository is no longer qualified to act as a securities depository and
registered clearing agency under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or (C) that the continuation of a Book-Entry System to the
exclusion of the Bonds of any or all series being issued to any Bondowner other
than the Securities Depository or its nominee is no longer in the best interests
of the beneficial owners of such Bonds, or (2) the Trustee receives written
notice from Participants having interests in not less than 50% of the principal
amount of the Bonds Outstanding, as shown on the records of the Securities
Depository (and certified to such effect by the Securities Depository), that the
Participants have determined that the continuation of a Book-Entry System to the
exclusion of any Bonds being issued to any Bondowner other than the Securities
Depository or its nominee is no longer in the best interests of the beneficial
owners of the Bonds, then the Trustee shall notify the Bondowners of such
determination or such notice and of the availability of bond certificates to
owners requesting the same, and the Trustee shall register in the name of and
authenticate and deliver Replacement Bonds to the beneficial owners or their
nominees in principal amounts representing the interest of each, making such
adjustments as it may find necessary or appropriate as to accrued interest and
previous calls for redemption; provided, that in the case of a determination
under (1)(A) or (1)(B) of this paragraph, the Company, with the consent of the
Trustee, may select a successor securities depository in accordance with the
following paragraph to effect book-entry transfers. In such event, all
references to the Securities Depository herein shall relate to the period of
time when the Securities Depository has possession of at least one Bond which is
held in its Book-Entry System. Upon the issuance of Replacement Bonds, all
references herein to obligations imposed upon or to be performed by the
Securities Depository shall be deemed to be imposed upon and performed by the
Trustee, to the extent applicable with respect to such Replacement Bonds. If the
Securities Depository resigns and the Company, the Trustee or Bondowners are
unable to locate a qualified successor of the Securities Depository in
accordance with the following paragraph, then the Trustee shall authenticate and
cause delivery of Replacement Bonds to Bondowners, as provided herein. The
Trustee may rely on information from the Securities Depository and its
Participants as to the names of the beneficial owners of the Bonds. The cost of
printing, registration, authentication, and delivery of Replacement Bonds shall
be paid by the Company.
In the event the Securities Depository resigns, is unable to properly
discharge its responsibilities, or is no longer qualified to act as a securities
depository and registered clearing agency under the 1934 Act, the Company may
appoint a successor Securities Depository provided the Trustee receives written
evidence satisfactory to the Trustee with respect to the ability of the
successor Securities Depository to discharge its responsibilities. Any such
successor Securities Depository shall be a securities depository which is a
registered clearing agency under the 1934 Act, or other applicable statute or
regulation that operates a securities depository upon reasonable and customary
terms. The Trustee upon its receipt of a Bond or Bonds for cancellation shall
cause the delivery of Bonds to the successor Securities Depository in
appropriate denominations and form as provided herein.
SECTION 204 METHOD AND PLACE OF PAYMENT. The principal of, redemption
premium, if any, and interest on the Bonds shall be payable in any coin or
currency of the United States of America which on the respective dates of
payment thereof is legal tender for the payment of public and private debts.
17
The principal of and the redemption premium, if any, on all Bonds shall be
payable by check or draft at maturity or upon earlier redemption to the Persons
in whose names such Bonds are registered on the bond register maintained by the
Trustee at the maturity or redemption date thereof, upon the presentation and
surrender of such Bonds at the principal corporate trust office of the Trustee
or the principal office of any Paying Agent named in the Bonds.
The interest payable on each Bond on any Interest Payment Date shall be
paid by the Trustee to the registered owner of such Bond as shown on the bond
register at the close of business on the Regular Record Date for such interest,
(1) by check or draft mailed to such Owner at his address as it appears on the
bond register or at such other address as is furnished to the Trustee in writing
by such Owner, or (2) with respect to Bonds held by a Securities Depository, or
at the written request addressed to the Trustee by any Owner of Bonds in the
aggregate principal amount of at least $1,000,000 (or, if the principal amount
of the Outstanding Bonds of any series is less than $1,000,000, the Owner of all
Outstanding Bonds of such series), by electronic wire transfer in immediately
available funds to the bank for credit to the ABA routing number and account
number filed with the Trustee no later than five Business Days before a payment
date, but no later than a Regular Record Date for any interest payment, that all
such payments be made by wire transfer.
Interest on any Bond that is due and payable but not paid on the date due
("Defaulted Interest") shall cease to be payable to the Owner of such Bond on
the relevant Regular Record Date and shall be payable to the Owner in whose name
such Bond is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest, which Special
Record Date shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Bond and the date of the proposed payment (which date shall be such as will
enable the Trustee to comply with the next sentence hereof), and shall deposit
with the Trustee at the time of such notice an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment; money deposited with the Trustee shall be held
in trust for the benefit of the Owners of the Bonds entitled to such Defaulted
Interest as provided in this Section. Following receipt of such funds the
Trustee shall fix the Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 nor less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Owner of a Bond entitled to such notice at the address of such
Owner as it appears on the bond register not less than 10 days prior to such
Special Record Date.
Subject to the foregoing provisions of this Section, each Bond delivered
under this Indenture upon transfer of or in exchange for or in lieu of any other
Bond shall carry all the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Bond and each such Bond shall bear interest
from such date, that neither gain nor loss in interest shall result from such
transfer, exchange or substitution.
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SECTION 205 EXECUTION AND AUTHENTICATION. The Bonds shall be executed on
behalf of the Issuer by the manual or facsimile signatures of the Mayor and the
City Clerk-Treasurer of the Issuer and said signatures shall be authenticated by
the Trustee. It shall not be necessary for the seal of the Issuer to be affixed
to or imprinted upon any Bond. If any officer whose manual or facsimile
signature appears on any Bonds shall cease to hold such office before the
authentication and delivery of such Bonds, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if such person had remained
in office until delivery. Any Bond may be signed by such persons as at the
actual time of the execution of such Bond shall be the proper officers to sign
such Bond although at the date of such Bond such persons may not have been such
officers.
No Bond shall be secured by, or be entitled to any lien, right or benefit
under, this Indenture or be valid or obligatory for any purpose, unless there
appears on such Bond a certificate of authentication substantially in the form
provided for in Exhibit A hereto, executed by the Trustee by the manual
signature of an authorized representative of the Trustee, and such certificate
upon any Bond shall be conclusive evidence, and the only evidence, that such
Bond has been duly authenticated and delivered hereunder. At any time and from
time to time after the execution and delivery of this Indenture, the Issuer may
deliver Bonds executed by the Issuer to the Trustee for authentication and the
Trustee shall authenticate and deliver such Bonds as in this Indenture provided
and not otherwise.
SECTION 206 REGISTRATION, TRANSFER AND EXCHANGE OF BONDS. The Trustee shall
cause to be kept at its principal corporate trust office a register (referred to
herein as the "bond register") in which, subject to such reasonable regulations
as it may prescribe, the Trustee shall provide for the registration, transfer
and exchange of Bonds as herein provided. The Trustee is hereby appointed "bond
registrar" for the purpose of registering Bonds and transfers of Bonds as herein
provided.
Bonds may be transferred or exchanged only upon the bond register
maintained by the Trustee as provided in this Section. Upon surrender for
transfer or exchange of any Bond at the principal corporate trust office of the
Trustee, the Issuer shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Bonds of the same series, Stated Maturity, of any Authorized Denominations
and of a like aggregate principal amount.
Every Bond presented or surrendered for transfer or exchange shall (if so
required by the Issuer or the Trustee, as bond registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Trustee, as bond registrar, duly executed by the Owner thereof or his attorney
or legal representative duly authorized in writing.
All Bonds issued upon any transfer or exchange of Bonds shall be the valid
special, limited obligations of the Issuer, evidencing the same debt, and
entitled to the same security and benefits under this Indenture, as the Bonds
surrendered upon such transfer or exchange.
No service charge shall be made for any registration, transfer or exchange
of Bonds, but the Trustee or Securities Depository may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of
19
Bonds, and such charge shall be paid before any such new Bond shall be
delivered. The fees and charges of the Trustee for making any transfer or
exchange and the expense of any bond printing necessary to effect any such
transfer or exchange shall be paid by the Company. In the event any Owner fails
to provide a correct taxpayer identification number to the Trustee, the Trustee
may impose a charge against such Owner sufficient to pay any governmental charge
required to be paid as a result of such failure. In compliance with Section 3406
of the Code, such amount may be deducted by the Trustee from amounts otherwise
payable to such Owner hereunder or under the Bonds.
The Trustee shall not be required, (i) to transfer or exchange any Bond
during a period beginning at the opening of business 15 days before the day of
the first mailing of a notice of redemption of such Bond and ending at the close
of business on the day of such mailing, or (ii) to transfer or exchange any Bond
so selected for redemption in whole or in part, during a period beginning at the
opening of business on any Regular Record Date for such Bonds and ending at the
close of business on the relevant Interest Payment Date therefor.
The Issuer, the Company, the Trustee and any agent of the Issuer, the
Company or the Trustee may treat the Person in whose name any Bond is registered
as the owner of such Bond for the purpose of receiving payment of principal of,
and premium, if any, and interest on, such Bond and for all other purposes
whatsoever, except as otherwise provided in this Indenture, whether or not such
Bond is overdue, and, to the extent permitted by law, neither the Issuer, the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Person in whose name any Bond shall be registered on the bond register
shall be deemed and regarded as the absolute owner thereof for all purposes,
except as otherwise provided in this Indenture, and payment of or on account of
the principal of and premium, if any, and interest on any such Bond shall be
made only to or upon the order of the Owner thereof or his legal representative,
but such registration may be changed as herein provided. All such 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.
At reasonable times and under reasonable regulations established by the
Trustee, the bond register maintained by the Trustee may be inspected and copied
by the Issuer, the Company or the Owners of 10% in principal amount of Bonds
Outstanding or the authorized representative thereof, provided that the
ownership of such Owner and the authority of any such designated representative
shall be evidenced to the satisfaction of the Trustee.
SECTION 207 TEMPORARY BONDS. Pending the preparation of definitive Bonds,
the Issuer may execute, and upon request of the Issuer the Trustee shall
authenticate and deliver, temporary Bonds which are printed, lithographed,
typewritten, or otherwise produced, in any denomination, substantially of the
tenor of the definitive Bonds in lieu of which they are issued, with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Bonds may determine, as evidenced by their execution of
such Bonds. If temporary Bonds are issued, the Issuer will cause definitive
Bonds to be prepared without unreasonable delay. After the preparation of
definitive Bonds, the temporary Bonds shall be exchangeable for definitive Bonds
upon surrender of the temporary Bonds at the principal corporate trust office of
the Trustee, without charge to the Owner. Upon surrender for
20
cancellation of any one or more temporary Bonds, the Trustee shall authenticate
and deliver in exchange therefor a like principal amount of definitive Bonds of
Authorized Denominations. Until so exchanged, temporary Outstanding Bonds shall
in all respects be entitled to the security and benefits of this Indenture.
SECTION 208 MUTILATED, DESTROYED, LOST AND STOLEN BONDS. If (i) any
mutilated Bond is surrendered to the Trustee, or the Issuer and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Issuer and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Issuer or the Trustee that such Bond has been acquired
by a bona fide purchaser, the Issuer shall execute and upon its request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Bond, a new Bond of the same series and
Stated Maturity and of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Bond has become or is
about to become due and payable, the Issuer in its discretion may, instead of
issuing a new Bond, pay such Bond.
Upon the issuance of any new Bond under this Section, the Issuer and the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.
Every new Bond issued pursuant to this Section in lieu of any destroyed,
lost or stolen Bond, shall constitute an original additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Bond
shall be at any time enforceable by anyone, and shall be entitled to all the
security and benefits of this Indenture equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 209 CANCELLATION OF BONDS. All Bonds surrendered for payment,
redemption, transfer, exchange or replacement, if surrendered to the Trustee,
shall be promptly cancelled by the Trustee, and, if surrendered to any Paying
Agent other than the Trustee, shall be delivered to the Trustee and, if not
already cancelled, shall be promptly cancelled by the Trustee. The Issuer or the
Company may at any time deliver to the Trustee for cancellation any Bonds
previously authenticated and delivered hereunder, which the Issuer or the
Company may have acquired in any manner whatsoever, and all Bonds so delivered
shall be promptly cancelled by the Trustee. No Bond shall be authenticated in
lieu of or in exchange for any Bond cancelled as provided in this Section,
except as expressly provided by this Indenture. All cancelled Bonds held by the
Trustee shall be destroyed and disposed of by the Trustee in accordance with
applicable record retention requirements. The Trustee shall execute and deliver
to the Issuer and the Company a certificate describing the Bonds so cancelled
and destroyed.
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ARTICLE III
REDEMPTION AND PURCHASE OF BONDS
SECTION 301 REDEMPTION OF BONDS. Additional Bonds shall be subject to
redemption as provided in the Supplemental Indenture providing for the issuance
thereof. The Series 2004 Bonds are subject to optional and mandatory redemption
prior to Stated Maturity as follows:
(a) OPTIONAL REDEMPTION. Series 2004 Bonds are subject to redemption by the
Issuer, in whole or in part, in an amount evenly divisible by minimum Authorized
Denominations, solely at the option of the Company, which shall be exercised
upon the written direction of the Company, on July 1, 2014, and on any date
thereafter, at a redemption price equal to 100% of the principal amount thereof,
without premium, plus accrued interest thereon to the redemption date.
(b) EXTRAORDINARY OPTIONAL REDEMPTION. The Series 2004 Bonds are subject to
redemption and payment prior to the Stated Maturity thereof by the Issuer,
solely at the option of the Company, which shall be exercised upon the written
direction of the Company, in whole or in part on any Business Day, at a
redemption price equal to 100% of the principal amount thereof, without premium,
plus accrued interest thereon to the redemption date, if the Company shall
declare, within 180 days following the occurrence of one of the following
events, that it will cease to operate any element or unit of the Facilities by
reason of the occurrence of such event: (a) the damage or destruction of all or
substantially all of any element or unit of the Facilities or the Plant to which
such Facilities relate to such extent that, in the reasonable opinion of the
Company, the repair and restoration thereof would not be economical; (b) the
condemnation of all or substantially all of any element or unit of the
Facilities or such Plant or the taking by condemnation of such part, use or
control of such element or unit of the Facilities or Plant as to render them or
it unsatisfactory to the Company for their or its intended use; (c) if the
Company has abandoned and removed from service all or a portion of the
Facilities or all of its ownership interest in the Plant; (d) in the Company's
reasonable opinion, unreasonable burdens or excessive liabilities shall have
been imposed upon the Company with respect to the Facilities or the Plant or the
operation thereof, including, but without being limited to, federal, state or
other ad valorem, property, income or other taxes not being imposed on the date
of this Indenture, other than ad valorem taxes levied on the date of this
Indenture upon privately owned property used for the same general purpose as the
Facilities or the Plant; (e) as a result of any changes in the Constitution of
the State or the Constitution of the United States of America or of legislative
or administrative action (whether state or federal) or by final direction,
judgment or order of any court or administrative body (whether state or federal)
entered after the contest thereof by the Company in good faith, this Indenture
or the Loan Agreement becomes void or unenforceable or impossible of
performance; or (f) if (1) the Company sells, leases or otherwise disposes of
the Facilities or a substantial part thereof to a Person who is not an Affiliate
of the Company, or changes or allows a change in the use of, such Facilities, or
any substantial part thereof, and (2) there is delivered to the Issuer and the
Trustee an Opinion of Bond Counsel to the effect that, unless the Series 2004
Bonds or a specified part thereof are redeemed and retired either prior to or
concurrently with such sale, lease or other disposition, or change in use, or on
a subsequent date prior to maturity, Bond Counsel is unable to render an
unqualified opinion that such sale, lease or other disposition, or change in
use, of all or such substantial part of such Facilities will not adversely
affect the excludability from gross income, for federal income tax
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purposes, of the interest on the series of Bonds that financed such
Facilities and will not adversely affect the Company's ability to deduct
interest payments made pursuant to the Agreement under Section 150(b) of the
Code or a successor provision thereto.
(c) MANDATORY REDEMPTION UPON A DETERMINATION OF TAXABILITY. The Series
2004 Bonds shall be redeemed, at a redemption price equal to 100% of the
principal amount thereof, without premium, on the earliest practicable Interest
Payment Date, upon written notice to the Company by the Trustee of the
occurrence of a Determination of Taxability with respect to the Series 2004
Bonds. The Trustee shall give prompt written notice to the Company of the
occurrence of any event of which the Trustee has knowledge which could
reasonably be expected to give rise to a Determination of Taxability. The Series
2004 Bonds shall be redeemed, either in whole or in part, in such principal
amount that, upon such redemption, the interest payable on the Series 2004 Bonds
remaining outstanding after such redemption would not be so includable for
federal income tax purposes in the gross income of the owners thereof.
SECTION 302 ELECTION TO REDEEM; NOTICE TO TRUSTEE. The Issuer shall elect
to redeem Bonds subject to optional redemption upon receipt of a written
direction of the Company. In case of any redemption at the election of the
Issuer, the Company shall, in the name and on behalf of the Issuer, at least 40
days prior to the redemption date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee) give written notice to the Trustee
directing the Trustee to call Bonds for redemption and give notice of redemption
and specifying the redemption date, the principal amount, and maturities of
Bonds to be called for redemption, the applicable redemption price or prices and
the provision or provisions of this Indenture pursuant to which such Bonds are
to be called for redemption.
The foregoing provisions of this Section shall not apply in the case of any
mandatory redemption of Bonds under this Indenture, and the Trustee shall call
Bonds for redemption and shall give notice of redemption pursuant to such
mandatory redemption requirements without the necessity of any action by the
Issuer or the Company and whether or not the Trustee shall hold in the Bond Fund
money available and sufficient to effect the required redemption.
SECTION 303 SELECTION OF BONDS TO BE REDEEMED; BONDS REDEEMED IN PART.
Bonds may be redeemed only in the principal amount of minimum Authorized
Denominations. If less than all Bonds are to be redeemed pursuant to Section
301(a) or 301(b) hereof (or the comparable provisions of a Supplemental
Indenture), such Bonds shall be redeemed from the series and Stated Maturity or
Maturities selected by the Company. If less than all Bonds of any series and
Stated Maturity are to be redeemed, the particular Bonds to be redeemed shall be
selected by the Trustee from the Bonds of such series and Stated Maturity which
have not previously been called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions equal to minimum Authorized Denominations of Bonds of a
denomination larger than such minimum Authorized Denominations.
Any Bond which is to be redeemed only in part shall be surrendered at the
place of payment therefor (with, if the Issuer or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Owner thereof or his attorney or
legal representative duly authorized in writing) and the Issuer
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shall execute and the Trustee shall authenticate and deliver to the Owner of
such Bond, without service charge, a new Bond or Bonds of the same series and
Stated Maturity of any Authorized Denomination as requested by such Owner in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Bond so surrendered. If the Owner of any such Bond shall
fail to present such Bond to the Trustee for payment and exchange as aforesaid,
said Bond shall, nevertheless, become due and payable on the redemption date to
the extent of the unit or units of principal amount in minimum Authorized
Denominations called for redemption (and to that extent only).
In lieu of surrender under the preceding paragraph, payment of the
redemption price of a portion of any Bond may be made directly to the Owner
thereof without surrender thereof, if there shall have been filed with the
Trustee a written agreement of such Owner and, if such Owner is a nominee, the
Person for whom such Owner is a nominee, that payment shall be so made and that
such Owner will not sell, transfer or otherwise dispose of such Bond unless
prior to delivery thereof such Owner shall present such Bond to the Trustee for
notation thereon of the portion of the principal thereof redeemed or shall
surrender such Bond in exchange for a new Bond or Bonds for the unredeemed
balance of the principal of the surrendered Bond.
The Trustee shall promptly notify the Issuer and the Company in writing of
the Bonds selected for redemption and, in the case of any Bond selected for
partial redemption, the principal amount thereof to be redeemed.
SECTION 304 NOTICE OF REDEMPTION. Unless waived by any Owner of Bonds to be
redeemed, official notice of any such redemption shall be given by the Trustee
on behalf of the Issuer by mailing a copy of an official notice of such
redemption by first class mail, at least 30 days prior to the redemption date,
to each Owner of Bonds to be redeemed at the address shown on the bond register
or at such other address as is furnished in writing by such Owner to the
Trustee; provided that no defect in or failure to give any such redemption
notice shall affect the validity of proceedings for the redemption of any Bond
not affected by such defect or failure.
All official notices of redemption shall be dated and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the principal amount of Bonds to be redeemed and, if less than all
Bonds are to be redeemed, the identification by reference to serial
numbers (and, in the case of partial redemption, the respective
principal amounts) of the Bonds to be redeemed;
(d) that on the redemption date the redemption price will become due and
payable upon each such Bond or portion thereof called for redemption,
and that interest thereon shall cease to accrue from and after said
date (unless sufficient moneys are not available to the Trustee to pay
the redemption price);
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(e) the place where the Bonds to be redeemed are to be surrendered for
payment of the redemption price, which place of payment shall be the
principal corporate trust office of the Trustee or the principal
office of a Paying Agent; and
(f) as to any Bonds to be redeemed pursuant to Section 301(a) or (b), such
notice is conditional upon moneys or Government Obligations, or a
combination thereof, being on deposit with the Trustee in an amount
sufficient to pay the redemption price on the redemption date;
otherwise such redemption shall not be effective.
The failure of any Owner of Bonds to receive notice given as provided in
this Section shall not affect the validity of any proceedings for the redemption
of any Bonds. Any notice mailed as provided in this Section shall be
conclusively presumed to have been duly given and shall become effective upon
mailing, whether or not any Owner receives such notice.
In addition to the foregoing notice, further notice shall be given by the
Trustee on behalf of the Issuer at least 35 days before the redemption date by
certified mail or overnight delivery service to all registered securities
depositories then in the business of holding substantial amounts of obligations
of types comprising the Bonds and to one or more national information services
that disseminate notices of redemption of obligations such as the Bonds. Each
further notice of redemption given shall contain the information required above
for an official notice of redemption plus (i) the CUSIP numbers of all Bonds
being redeemed; (ii) the date of issue of the Bonds of the series as originally
issued; (iii) the rate of interest borne by each Bond being redeemed; (iv) the
series and the Stated Maturity of each Bond being redeemed; and (v) any other
descriptive information needed to identify accurately the Bonds being redeemed.
No defect in said further notice nor any failure to give all or any portion of
such further notice shall in any manner defeat the effectiveness of a call for
redemption if notice thereof is given as above prescribed.
So long as the Securities Depository is effecting book-entry transfers of
the Bonds, the Trustee shall provide the notices specified in this Section to
the Securities Depository. It is expected that the Securities Depository shall,
in turn, notify its Participants and that the Participants, in turn, will notify
or cause to be notified the beneficial owners. Any failure on the part of the
Securities Depository or a Participant, or failure on the part of a nominee of a
beneficial owner of a Bond (having been mailed notice from the Trustee, the
Securities Depository, a Participant or otherwise) to notify the beneficial
owner of the Bond so affected, shall not affect the validity of the redemption
of such Bond.
SECTION 305 DEPOSIT OF REDEMPTION PRICE; BONDS PAYABLE ON REDEMPTION DATE.
On or before any redemption date, the Issuer shall deposit with the Trustee or
with a Paying Agent, moneys or Government Obligations, or a combination thereof,
provided by the Company, in an amount sufficient to pay the redemption price of
all the Bonds which are to be redeemed on that date. Such moneys and Government
Obligations shall be held in trust for the benefit of the Persons entitled to
such redemption price and shall not be deemed to be part of the Trust Estate.
With respect to notice of any redemption of the Bonds pursuant to Section
301(a) or (b), unless moneys or Government Obligations, or a combination
thereof, shall be received by the Trustee prior to the giving of said notice
sufficient to pay the principal of and premium, if any,
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and interest on the Bonds to be so redeemed, said notice shall state that said
redemption shall be conditional upon the receipt of such moneys or Government
Obligations by the Trustee on or prior to the date fixed for such redemption.
If such moneys or Government Obligations shall not have been so received on
or prior to the redemption date, said notice shall be of no force and effect,
the Issuer 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 or
Government Obligations were not so received.
Notice of redemption having been given in accordance with Section 304
hereof and the deposit of funds for redemption having been made, (i) the Bonds
or portions thereof so to be redeemed (together with accrued interest thereon to
the redemption date) shall be due and payable on the redemption date and at the
redemption price specified in the notice of redemption, and on and after such
date such Bonds shall cease to bear interest, (ii) such Bonds or portions
thereof shall cease to be entitled to any lien, benefit or security under this
Indenture, and (iii) the Owners of such Bonds or portions thereof shall have no
rights in respect thereof except to receive payment of the redemption price
thereof and accrued interest thereon to the redemption date. Upon surrender of
any such Bond so called for redemption, such Bond (or portion thereof) shall be
paid at the redemption price specified in the notice of redemption. Installments
of interest with a due date on or prior to the redemption date shall be payable
to the Owners of the Bonds registered as such on the relevant Regular Record
Dates according to the terms of such Bonds and the provisions of Section 204. If
any Bond called for redemption shall not be paid upon surrender thereof for
redemption, the Bond shall continue to bear interest until paid at the rate
specified in the Bond.
ARTICLE IV
FUNDS AND ACCOUNTS,
APPLICATION OF BOND PROCEEDS
AND OTHER MONEY
SECTION 401 CREATION OF FUNDS AND ACCOUNTS. There are hereby created and
ordered to be established in the custody of the Trustee the following special
trust funds in the name of the Issuer to be designated as follows:
(a) "City of Cohasset--ALLETE, Inc. Refunded Bonds Redemption Fund" (the
"Redemption Fund").
(b) "City of Cohasset--ALLETE, Inc. Bond Fund" (the "Bond Fund").
The Trustee is authorized to establish separate accounts within such funds
or otherwise segregate money within such funds, on a book-entry basis or in such
other manner as the Trustee may deem necessary or convenient, or as the Trustee
shall be instructed by the Issuer.
SECTION 402 DEPOSIT OF BOND PROCEEDS AND OTHER MONEY. The Issuer, for and
on behalf of the Company, shall deposit with the Trustee all of the net proceeds
of the Series 2004 Bonds, and the Trustee shall deposit and transfer or credit
such proceeds, together with any other
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money deposited with the Trustee to the Persons, Funds or Accounts specified in
the request and authorization of the Issuer described in Section 201(d)(5)
hereof.
SECTION 403 REDEMPTION FUND. Money in the Redemption Fund shall be used to
pay the principal of and a portion of the interest on (to the extent of
investment income) the Refunded Bonds on August 23, 2004, or to reimburse the
Company for the advance of its own funds for such purpose. Any payments of
proceeds of the Series 2004 Bonds to be made to reimburse the Company shall be
promptly made by wire transfer to the account designated by the Company upon
delivery to the Trustee by the Company of a certificate of the trustee for the
Refunded Bonds to be refunded by the Series 2004 Bonds that it has received
funds sufficient to pay the redemption price of such Refunded Bonds in full.
SECTION 404 BOND FUND. The Trustee shall deposit and credit to the
applicable account in the Bond Fund, as and when received, the following:
(a) That portion of the purchase price of Bonds paid by the Original
Purchaser thereof equal to the accrued interest, if any, on the Bonds
from the date thereof to the date of issuance and delivery thereof.
(b) All Loan Payments made by the Company pursuant to Section 3.02 of the
Loan Agreement.
(c) Each of the payments made by the Company on the First Mortgage Bonds.
(d) Interest earnings and other income on Permitted Investments required to
be deposited in the Bond Fund pursuant to Section 408 hereof.
(e) All other moneys received by the Trustee under and pursuant to any of
the provisions of this Indenture or the Loan Agreement, when
accompanied by directions from the Person depositing such moneys that
such moneys are to be paid into the Bond Fund.
The money in the Bond Fund shall be held in trust and shall be applied
solely in accordance with the provisions of this Indenture to pay the principal
of and redemption premium, if any, and interest on the Bonds as the same become
due and payable at maturity, upon redemption, by acceleration or otherwise.
The Trustee is to receive from the Company pursuant to Section 3.02 of the
Loan Agreement the full amount of principal of, and premium, if any, and
interest due on, the Bonds on each Interest Payment Date, Stated Maturity,
redemption date, or acceleration date, as the case may be. If there is not
sufficient money in the Bond Fund by 12:00 noon, New York City time, on any
Interest Payment Date, Stated Maturity, redemption date, or acceleration date,
as the case may be, to pay all principal of, premium, if any, and interest on
the Bonds due on such date, the Trustee shall promptly give Electronic Notice to
the Company of the amount of any such deficiency.
The Trustee is authorized and directed to withdraw sufficient funds from
the Bond Fund to pay principal of, redemption premium, if any, and interest on
the Bonds as the same become
27
due and payable at maturity or upon redemption and to make said funds so
withdrawn available to any Paying Agent for the purpose of paying said
principal, redemption premium, if any, and interest.
The Trustee, upon the written instructions from the Issuer given pursuant
to written direction of the Company, shall use excess moneys in the Bond Fund to
redeem all or part of the Bonds Outstanding and to pay interest to accrue
thereon prior to such redemption and redemption premium, if any, on the next
succeeding redemption date for which the required redemption notice may be given
or on such later redemption date as may be specified by the Company, in
accordance with the provisions of Article III hereof, so long as the Company is
not in default with respect to any payments under the Loan Agreement and to the
extent said moneys are in excess of the amount required for payment of Bonds
theretofore matured or called for redemption. The Company may cause such excess
money in the Bond Fund or such part thereof or other money of the Company, as
the Company may direct, to be applied by the Trustee on a best efforts basis for
the purchase of Bonds in the open market for the purpose of cancellation at
prices not exceeding the principal amount thereof plus accrued interest thereon
to the date of such purchase.
Upon satisfaction and discharge of this Indenture in accordance with
Article V hereof, all amounts remaining in the Bond Fund shall be paid to the
Company.
SECTION 405 PAYMENTS DUE ON NON-BUSINESS DAYS. In any case where the date
of maturity of principal of, redemption premium, if any, or interest on the
Bonds or the date fixed for redemption of any Bonds shall be a day other than a
Business Day, then payment of principal, redemption premium, if any, or interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of maturity or the
date fixed for redemption, and no interest shall accrue for the period after
such date.
SECTION 406 NONPRESENTMENT OF BONDS. In the event any Bond 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 funds sufficient
to pay such Bond shall have been made available to the Trustee, all liability of
the Issuer to the Owner thereof for the payment of such Bond, shall forthwith
cease, terminate and be completely discharged, and thereupon it shall be the
duty of the Trustee to hold such funds in trust in a separate trust account,
without liability for interest thereon, for the benefit of the Owner of such
Bond, who shall thereafter be restricted exclusively to such funds for any claim
of whatever nature on his part under this Indenture or on or with respect to
said Bond. If any Bond shall not be presented for payment within three years
following the date when such Bond becomes due, whether by maturity or otherwise,
the Trustee shall repay to the Company the funds theretofore held by it for
payment of such Bond, and such Bond shall, subject to the defense of any
applicable statute of limitation, thereafter be an unsecured obligation of the
Company, and the Owner thereof shall be entitled to look only to the Company for
payment, and then only to the extent of the amount so repaid, and the Company
shall not be liable for any interest thereon and shall not be regarded as a
trustee of such money.
SECTION 407 MONEY TO BE HELD IN TRUST. All money deposited with or paid to
the Trustee for the funds and accounts held under this Indenture, and all money
deposited with or
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paid to any Paying Agent under any provision of this Indenture shall be held by
the Trustee or Paying Agent in trust and shall be applied only in accordance
with the provisions of this Indenture and the Loan Agreement, and, until used or
applied as herein provided, shall constitute part of the Trust Estate and be
subject to the lien, terms and provisions hereof and shall not be commingled
with any other funds of the Issuer or the Company except as provided under
Section 408 hereof for investment purposes. Neither the Trustee nor any Paying
Agent shall be under any liability for interest on any money received hereunder
except such as may be agreed upon.
SECTION 408 INVESTMENT OF MONEY. Money held in each of the funds and
accounts under this Indenture shall, pursuant to written directions of the
Company Representative, be invested and reinvested by the Trustee in accordance
with the provisions of this Indenture and the Tax Compliance Certificate in
Permitted Investments which mature or are subject to redemption by the owner
thereof prior to the date such funds are expected to be needed; provided,
however, that if a Company Representative fails to provide such written
directions to the Trustee and this Indenture and the Tax Compliance Certificate
do not otherwise direct or limit such investment, money as to which no written
directions have been received shall be invested in investments described in
paragraph (g) of the definition of "Permitted Investments." The Trustee hereby
agrees to comply with all provisions with respect to the investment of moneys in
the funds and accounts under this Indenture specified in the Tax Compliance
Certificate. The Trustee may make any investments permitted by the provisions of
this Section through its own bond department or short-term investment department
and may pool money for investment purposes, except money held in any fund or
account that are required to be yield restricted in accordance with the Tax
Compliance Certificate, which shall be invested separately. Any such Permitted
Investments shall be held by or under the control of the Trustee and shall be
deemed at all times a part of the fund or account in which such money are
originally held. The interest accruing on each fund or account and any profit
realized from such Permitted Investments shall be credited to such fund or
account, and any loss resulting from such Permitted Investments shall be charged
to such fund or account. The Trustee shall sell or present for redemption and
reduce to cash a sufficient amount of such Permitted Investments whenever it
shall be necessary to provide money in any fund or account for the purposes of
such fund or account and the Trustee shall not be liable for any loss resulting
from such investments. Any money that are to be used to pay principal of or
interest on or redemption price of Bonds shall be invested only in Government
Obligations or shares of money market mutual funds that are registered with the
federal Securities and Exchange Commission, meeting the requirements of Rule
2a-7 under the Investment Company Act of 1940 and that are rated in the highest
rating category by Standard & Poor's Ratings Services and Moody's Investor's
Service, Inc., such investments to mature or be subject to redemption at the
option of the holder not later than (i) 30 days from the date of the investment,
or (ii) the date the Trustee anticipates such funds are to be applied.
SECTION 409 RECORDS AND REPORTS OF TRUSTEE. The Trustee agrees to maintain
such records with respect to any and all money or investments held by the
Trustee pursuant to the provisions of this Indenture as are reasonably requested
by the Issuer or the Company. The Trustee shall furnish to the Issuer and the
Company a monthly report on the status of each of the funds and accounts
established under this Article which are held by the Trustee, showing the
balance in each such fund or account as of the first day of the preceding month,
the total of
29
deposits to and the total of disbursements from each such fund or account, the
dates of such deposits and disbursements, and the balance in each such fund or
account on the last day of the preceding month. The Trustee shall render an
annual accounting for each calendar year ending December 31 to the Issuer, the
Company and any Bondowner requesting the same, showing in reasonable detail all
financial transactions relating to the Trust Estate during the accounting
period, including investment earnings and the balance in any funds or accounts
created by this Indenture as of the beginning and close of such accounting
period. Each of the Issuer and (by entering into the Loan Agreement) the Company
acknowledges that regulations of the Comptroller of the Currency grant the
Issuer and the Company the right to receive brokerage confirmations of security
transactions as they occur. Each of the Issuer and (by entering into the Loan
Agreement) the Company specifically waives such notification to the extent
permitted by law and acknowledges that it will receive monthly and annual cash
transaction statements, which will detail all investment transactions.
ARTICLE V
SATISFACTION AND DISCHARGE
SECTION 501 PAYMENT, DISCHARGE AND DEFEASANCE OF BONDS. Bonds will be
deemed to be paid and discharged and no longer Outstanding under this Indenture
and will cease to be entitled to any lien, benefit or security of this Indenture
if the Issuer shall pay or provide for the payment of such Bonds in any one or
more of the following ways:
(a) by paying or causing to be paid the principal of (including redemption
premium, if any) and interest on such Bonds, as and when the same
become due and payable;
(b) by delivering such Bonds to the Trustee for cancellation; or
(c) by depositing in trust with the Trustee or other Paying Agent moneys
and Defeasance Obligations in an amount, together with the income or
increment to accrue thereon, without consideration of any reinvestment
thereof, sufficient to pay or redeem (when redeemable) and discharge
the indebtedness on such Bonds at or before their respective maturity
or redemption dates (including the payment of the principal of,
premium, if any, and interest payable on such Bonds to the maturity or
redemption date thereof); provided that, if any such Bonds are to be
redeemed prior to the maturity thereof, notice of such redemption is
given in accordance with the requirements of this Indenture or
provision satisfactory to the Trustee is made for the giving of such
notice.
In any case, if the Bonds are rated by a Rating Service, the Bonds shall
not be deemed to have been paid or discharged by reason of any deposit pursuant
to paragraphs (a) and/or (c) above unless such Rating Service shall have
confirmed in writing to the Trustee that its rating will not be withdrawn or
lowered as the result of any such deposit.
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The foregoing notwithstanding, the liability of the Issuer in respect of
such Bonds shall continue, but the Owners thereof shall thereafter be entitled
to payment only out of the money and Defeasance Obligations deposited with the
Trustee as aforesaid.
Moneys and Defeasance Obligations so deposited with the Trustee pursuant to
this Section shall not be a part of the Trust Estate but shall constitute a
separate trust fund for the benefit of the Persons entitled thereto. Such moneys
and Defeasance Obligations shall be applied by the Trustee to the payment
(either directly or through any Paying Agent, as the Trustee may determine) to
the Persons entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money and Defeasance Obligations have been
deposited with the Trustee.
SECTION 502 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture and the
lien, rights and interests created by this Indenture shall cease, terminate and
become null and void (except as to any surviving rights of transfer or exchange
of Bonds herein provided for) if the following conditions are met:
(a) the principal of, premium, if any, and interest on all Bonds has been
paid or the Bonds have otherwise been deemed to be paid and discharged
by meeting the conditions of Section 501;
(b) all other sums payable under this Indenture with respect to the Bonds
are paid or provision satisfactory to the Trustee is made for such
payment;
(c) the Trustee receives an Opinion of Bond Counsel (which may be based
upon a ruling or rulings of the Internal Revenue Service) addressed and
delivered to the Trustee and the Issuer to the effect that so providing
for the payment of any Bonds will not cause the interest on the Bonds
to be included in gross income for federal income tax purposes,
notwithstanding the satisfaction and discharge of this Indenture; and
(d) the Trustee receives an Opinion of Counsel to the effect that all
conditions precedent in this Section to the satisfaction and discharge
of this Indenture have been complied with.
Thereupon, the Trustee shall execute and deliver to the Issuer a
termination statement and such instruments of satisfaction and discharge of this
Indenture as may be necessary and shall pay, assign, transfer and deliver to the
Issuer, or other Persons entitled thereto, all money, securities and other
property then held by it under this Indenture as a part of the Trust Estate,
other than money or Defeasance Obligations held in trust by the Trustee as
herein provided for the payment of the principal of, premium, if any, and
interest on the Bonds.
SECTION 503 RIGHTS RETAINED AFTER DISCHARGE. Notwithstanding the
satisfaction and discharge of this Indenture, the rights of the Trustee under
Section 804 shall survive, and the Trustee shall retain such rights, powers and
duties under this Indenture as may be necessary and convenient for the payment
of amounts due or to become due on the Bonds and the registration, transfer and
exchange of Bonds as provided herein. Nevertheless, any money held by the
Trustee or any Paying Agent for the payment of the principal of, redemption
premium, if any, or
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interest on any Bond remaining unclaimed for three years after the principal of
all Bonds has become due and payable, whether at maturity or upon proceedings
for redemption or by declaration as provided herein, shall then be paid to the
Company, and the Owners of any Bonds not theretofore presented for payment shall
thereafter be entitled to look only to the Company for payment thereof and all
liability of the Trustee or any Paying Agent or the Issuer with respect to such
moneys shall thereupon cease.
ARTICLE VI
GENERAL AND PARTICULAR COVENANTS OF THE ISSUER
SECTION 601 ISSUER TO ISSUE BONDS AND EXECUTE INDENTURE. The Issuer
covenants that it is duly authorized under the Constitution and laws of the
State to execute this Indenture, to issue the Bonds and to pledge and assign the
Trust Estate in the manner and to the extent herein set forth; that all action
on its part for the execution and delivery of this Indenture and the issuance of
the Bonds has been duly and effectively taken; and that the Bonds in the hands
of the Owners thereof are and will be valid and enforceable special, limited
obligations of the Issuer according to the import thereof, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights to the extent applicable and their enforcement may
be subject to the exercise of judicial discretion in appropriate cases.
SECTION 602 LIMITED OBLIGATIONS. Under the provisions of the Act, the Bonds
may not be payable from nor charged upon any fund other than the revenue pledged
to the payment thereof, nor shall the Issuer be subject to any liability
thereon. No Owner of the Bonds shall ever have the right to compel any exercise
of the taxing power of the Issuer to pay the Bonds or the interest thereon, nor
to enforce payment thereof against any property of the Issuer except as provided
herein. The Bonds shall not constitute a charge, lien or encumbrance, legal or
equitable, upon any property of the Issuer except as provided herein. No Bond
shall constitute a debt of the Issuer within the meaning of any constitutional
or statutory limitation.
The Bonds and the interest thereon shall be special, limited obligations of
the Issuer payable (except to the extent paid out of Bond proceeds or the income
from the temporary investment thereof and under certain circumstances from
insurance proceeds and condemnation awards) solely out of the Loan Payments and
other payments derived by the Issuer under the Loan Agreement (except for fees
and expenses payable to the Issuer, the Issuer's right to indemnification as set
forth in the Loan Agreement and as otherwise expressly set forth therein), and
are secured by a transfer, pledge and assignment of and a grant of a security
interest in the Trust Estate to the Trustee and in favor of the Owners of the
Bonds, as provided in this Indenture. The Bonds and interest thereon shall not
be deemed to constitute a debt or liability of the Issuer, the State or of any
political subdivision thereof within the meaning of any State constitutional
provision or statutory or charter limitation and shall not constitute a pledge
of the full faith and credit of the Issuer, the State or of any political
subdivision thereof, but shall be payable solely from the funds provided for in
the Loan Agreement and in this Indenture. The issuance of Bonds shall not,
directly, indirectly or contingently, obligate the Issuer, the State or any
political subdivision thereof to levy any form of taxation therefor or to make
any appropriation for their payment.
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SECTION 603 PAYMENT OF BONDS. The Issuer shall duly and punctually pay or
cause to be paid, but solely from the sources specified in this Indenture, the
principal of, premium, if any, and interest on the Bonds in accordance with the
terms of the Bonds and this Indenture.
SECTION 604 PERFORMANCE OF COVENANTS. The Issuer shall (to the extent
within its control) faithfully perform or cause to be performed at all times any
and all covenants, undertakings, stipulations and provisions which are to be
performed by the Issuer contained in this Indenture, in the Bonds and in all
proceedings pertaining thereto.
SECTION 605 INSPECTION OF BOOKS. The Issuer covenants and agrees that all
books and documents in its possession relating to the Bonds, this Indenture and
the Loan Agreement, and the transactions relating thereto shall at all
reasonable times be open to inspection by such accountants or other agencies as
the Trustee may from time to time designate. The Trustee covenants and agrees
that all books and documents in its possession relating to the Bonds, this
Indenture and the Loan Agreement, and the transactions relating thereto, shall
be open to inspection by the Issuer during business hours upon reasonable
notice. Section 606 Enforcement of Rights. The Issuer agrees that the Trustee,
as assignee, transferee, pledgee, and owner of a security interest under this
Indenture in its name or in the name of the Issuer may enforce all rights of the
Issuer and the Trustee and all obligations of the Company under and pursuant to
the Loan Agreement and any other Transaction Documents for and on behalf of the
Bondowners, whether or not the Issuer is in default hereunder. The Loan
Agreement and all other documents, instruments or policies of insurance shall be
delivered to and held by the Trustee.
SECTION 607 TAX COVENANTS. The Issuer (to the extent within its power or
direction) covenants for the benefit of the Owners of the Bonds, with respect to
the proceeds of the Bonds, including the earnings thereon, that no use of such
proceeds or any other moneys of the Company or the Issuer will be made which
would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148
of the Code on the date of such use and applicable to obligations issued on the
date of issuance of the Bonds.
The Issuer agrees that so long as any of the Bonds remain Outstanding, it
will (to the extent within its power or direction) comply with the provisions of
the Tax Compliance Certificate applicable to the Issuer.
The Trustee agrees to comply with the provisions of the Tax Compliance
Certificate, and upon receipt of the Tax Compliance Certificate and any other
written letter or Opinion of Bond Counsel which sets forth such requirements, to
comply with any statute, regulation or ruling that may apply to it as Trustee
hereunder and relating to reporting requirements or other requirements necessary
to preserve the exclusion from federal gross income of the interest on the
Bonds. The Trustee from time to time may cause a firm of attorneys, consultants
or independent accountants or an investment banking firm to supply the Trustee,
on behalf of the Issuer, with such information as the Trustee, on behalf of the
Issuer, may request in order to determine in a manner reasonably satisfactory to
the Trustee, on behalf of the Issuer, all matters relating to (a) the actuarial
yields on the Bonds as the same may relate to any data or conclusions necessary
to verify that the Bonds are not "arbitrage bonds" within the meaning of Section
148 of the Code,
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and (b) compliance with rebate requirements of Section 148(f) of the Code.
Payment for costs and expenses incurred in connection with supplying the
foregoing information shall be paid by the Company.
The foregoing covenants of this Section shall remain in full force and
effect notwithstanding the defeasance of the Bonds pursuant to Article V of this
Indenture or any other provision of this Indenture, until the final Stated
Maturity of all Bonds Outstanding and payment thereof.
SECTION 608 FINANCING STATEMENTS. The Trustee will cause (and the Issuer
will cooperate with the Trustee in causing) appropriate continuation statements
with respect to financing statements filed in connection with the issuance of
the initial series of Bonds, naming the Trustee as secured party with respect to
the Trust Estate, to be duly filed and recorded in the appropriate state and
county offices as required by the provisions of the Uniform Commercial Code or
other similar law as adopted in the State and any other applicable jurisdiction,
as from time to time amended, in order to perfect and maintain the security
interests created by this Indenture, provided that the Trustee shall not be
liable for any cost or expense in connection with any such filing or the
preparation thereof, which cost or expense shall be paid, or reimbursed to the
Trustee, by the Company in accordance with Section 6.04 of the Loan Agreement.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 701 EVENTS OF DEFAULT. The term "Event of Default," wherever used
in this Indenture, means any one of the following events (whatever the reason
for such event and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Bond for a period of 60
days after such interest has become due and payable; or
(b) default in the payment of the principal of (or premium, if any, on) any
Bond when the same becomes due and payable (whether at maturity, upon
proceedings for redemption, by acceleration or otherwise); or
(c) default in the performance, or breach, of any covenant or agreement of
the Issuer in the Bonds or in this Indenture (other than as specified
in clauses (a) and (b) above), and continuance of such default or
breach for a period of 90 days after there has been given to the Issuer
and the Company by the Trustee or to the Issuer, the Company and the
Trustee by the Owners of at least 25% in principal amount of the Bonds
Outstanding, a written notice specifying such default or breach and
requiring it to be remedied; provided, that if such default cannot be
fully remedied within such 90-day period, but can reasonably be
expected to be fully remedied, such default shall not constitute an
Event of Default if the Issuer shall immediately upon receipt of such
notice commence the curing of such
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default and shall thereafter prosecute and complete the same with due
diligence and dispatch; or
(d) any Event of Default under the Loan Agreement shall occur and is
continuing and has not been waived.
With regard to any alleged default concerning which notice is given to the
Company under the provisions of this Section, the Issuer hereby grants the
Company full authority for the account of the Issuer to perform any covenant or
obligation, the nonperformance of which is alleged in said notice to constitute
a default, in the name and stead of the Issuer, with full power to do any and
all things and acts to the same extent that the Issuer could do and perform any
such things and acts in order to remedy such default.
SECTION 702 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event
of Default described in clause (a), (b) or (d) of Section 701 occurs and is
continuing, and further upon the condition that, in accordance with the terms of
the First Mortgage, the First Mortgage Bonds shall have become immediately due
and payable pursuant to any provision of the First Mortgage, the principal of
all Bonds Outstanding and the interest accrued thereon shall, without further
action, become and be immediately due and payable.
The provisions of the preceding paragraph, however, are subject to the
condition that any waiver of any "Default" under the First Mortgage and a
rescission and annulment of its consequences shall constitute a waiver of the
corresponding Event or Events of Default under this Indenture and a rescission
and annulment of the consequences thereof, and the Trustee shall promptly give
written notice of such waiver, rescission or annulment to the Issuer and the
Company, and shall give notice thereof to all Owners of Bonds in the same manner
as a notice of redemption; 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.
At any time after such a declaration of acceleration has been made, but
before any judgment or decree for payment of money due on any Bonds has been
obtained by the Trustee as provided in this Article, the Owners of a majority in
principal amount of the Bonds Outstanding may, by written notice to the Issuer,
the Company and the Trustee, rescind and annul such declaration and its
consequences if
(a) there is deposited with the Trustee moneys sufficient to pay
(1) all overdue installments of interest on all Bonds,
(2) the principal of (and premium, if any, on) any Bonds which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Bonds,
(3) interest upon overdue installments of interest at the rate or rates
prescribed therefor in the Bonds, and
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(4) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(b) all Events of Default, other than the non-payment of the principal of
Bonds which have become due solely by such declaration of acceleration,
have been cured or have been waived as provided in Section 710 of this
Indenture.
No such rescission and annulment shall affect any subsequent default or
impair any right consequent thereon.
SECTION 703 EXERCISE OF REMEDIES BY THE TRUSTEE. Upon the occurrence and
continuance of any Event of Default under this Indenture, unless the same is
waived as provided in this Indenture, the Trustee shall have the following
rights and remedies, in addition to any other rights and remedies provided under
this Indenture or by law:
(a) RIGHT TO BRING SUIT, ETC. The Trustee may pursue any available remedy
at law or in equity by suit, action, mandamus or other proceeding to enforce the
payment of the principal of, premium, if any, and interest on the Bonds
Outstanding, including interest on overdue principal (and premium, if any) and
on overdue installments of interest, and any other sums due under this
Indenture, to realize on or to foreclose any of its interests or liens under
this Indenture or any other Transaction Document, to enforce and compel the
performance of the duties and obligations of the Issuer as set forth in this
Indenture and to enforce or preserve any other rights or interests of the
Trustee under this Indenture with respect to any of the Trust Estate or
otherwise existing at law or in equity.
(b) EXERCISE OF REMEDIES AT DIRECTION OF BONDOWNERS. If requested in
writing to do so by the Owners of not less than 25% in principal amount of Bonds
Outstanding and if indemnified as provided in Section 802(e) of this Indenture,
the Trustee shall exercise such one or more of the rights and powers conferred
by this Section as the Trustee, being advised by Counsel, shall deem most
expedient in the interests of the Owners of the Bonds; provided, however, that
the Trustee shall have the right to decline to comply with any such request if
the Trustee shall be advised by Counsel that the action so requested may not
lawfully be taken or if the Trustee in good faith shall determine that such
action would be unjustly prejudicial to the Owners of Bonds that are not parties
to such request.
(c) APPOINTMENT OF RECEIVER. Upon the filing of a suit or other
commencement of judicial proceedings to enforce the rights of the Trustee and of
the Bondowners 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,
pending such proceedings, with such powers as the court making such appointment
shall confer.
(d) SUITS TO PROTECT THE TRUST ESTATE. The Trustee shall have power to
institute and to maintain such proceedings as it may deem expedient to prevent
any impairment of the Trust Estate by any acts which may be unlawful or in
violation of this Indenture and to protect its interests and the interests of
the Bondowners in the Trust Estate, including power to institute and maintain
proceedings to restrain the enforcement of or compliance with any governmental
36
enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such enactment, rule or order would impair
the security under this Indenture or be prejudicial to the interests of the
Bondowners or the Trustee, or to intervene (subject to the approval of a court
of competent jurisdiction) on behalf of the Bondowners in any judicial
proceeding to which the Issuer or the Company is a party and which in the
judgment of the Trustee has a substantial bearing on the interests of the
Bondowners.
(e) ENFORCEMENT WITHOUT POSSESSION OF BONDS. All rights of action under
this Indenture or any of the Bonds may be enforced and prosecuted by the Trustee
without the possession of any of the Bonds or the production thereof in any suit
or other proceeding relating thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust.
Any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and subject to the provisions of Section 707 hereof, be
for the equal and ratable benefit of the Owners of the Bonds in respect of which
such judgment has been obtained.
(f) RESTORATION OF POSITIONS. If the Trustee or any Bondowner has
instituted any proceeding to enforce any right or remedy under this Indenture by
suit, foreclosure, the appointment of a receiver, or otherwise, and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Bondowner, then and in every case
the Issuer, the Trustee and the Bondowners shall, subject to any final
determination in such proceeding, be restored to their former positions and
rights under this Indenture, and thereafter all rights and remedies of the
Trustee and the Bondowners shall continue as though no such proceeding had been
instituted.
SECTION 704 TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer or any other obligor upon the Bonds or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Bonds shall
then be due and payable, as therein expressed or by declaration or otherwise,
and irrespective of whether the Trustee shall have made any demand on the Issuer
for the payment of overdue principal, premium or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the
Outstanding Bonds and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Bondowners allowed in such judicial proceeding, and
(b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Bondowner to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments
37
directly to the Bondowners, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 804.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondowner any plan
of reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any Owner thereof, or to authorize the Trustee to vote in respect
of the claim of any Bondowner in any such proceeding.
SECTION 705 LIMITATION ON SUITS BY BONDOWNERS. No Owner of any Bond shall
have any right to institute any proceeding, judicial or otherwise, under or with
respect to this Indenture, or for the appointment of a receiver or trustee or
for any other remedy under this Indenture, unless
(a) such Owner has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Owners of not less than 25% in principal amount of the Bonds
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as
Trustee under this Indenture;
(c) such Owner or Owners have offered to the Trustee indemnity as provided
in Section 804 of this Indenture against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Owners of a majority in
principal amount of the Outstanding Bonds;
it being understood and intended that no one or more Owners of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the lien of this Indenture or
the rights of any other Owners of Bonds, or to obtain or to seek to obtain
priority or preference over any other Owners or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Outstanding Bonds.
Notwithstanding the foregoing or any other provision in this Indenture,
however, the Owner of any Bond shall have the right which is absolute and
unconditional to receive payment of the principal of (and premium, if any) and
interest on such Bond on the respective stated maturities expressed in such Bond
(or, in the case of redemption, on the redemption date) and nothing contained in
this Indenture shall affect or impair the right of any Owner to institute suit
for the enforcement of any such payment.
38
SECTION 706 CONTROL OF PROCEEDINGS BY BONDOWNERS. The Owners of a majority
in principal amount of the Bonds Outstanding shall have the right, during the
continuance of an Event of Default,
(a) to require the Trustee to proceed to enforce this Indenture, either by
judicial proceedings for the enforcement of the payment of the Bonds
and the foreclosure of this Indenture, or otherwise; and
(b) to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture, provided that
(1) such direction shall not be in conflict with any rule of law or
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Owners not taking part in such
direction.
SECTION 707 APPLICATION OF MONEY COLLECTED. Any money collected by the
Trustee pursuant to this Article together with any other sums then held by the
Trustee as part of the Trust Estate, shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Bonds and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 804
of this Indenture;
SECOND: To the payment of the whole amount then due and unpaid upon the
Outstanding Bonds for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
with interest (to the extent that such interest has been collected by the
Trustee or a sum sufficient therefor has been so collected and payment
thereof is legally enforceable at the respective rate or rates prescribed
therefor in the Bonds) on overdue principal (and premium, if any) and on
overdue installments of interest; and in case such proceeds shall be
insufficient to pay in full the whole amount so due and unpaid upon such
Bonds, then to the payment of such principal and interest, without any
preference or priority, ratably according to the aggregate amount so due;
and
THIRD: The remainder, if any, to the Company or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
Whenever money is to be applied by the Trustee pursuant to the provisions
of this Section, such money shall be applied by it at such times, and from time
to time, as the Trustee shall determine, having due regard for the amount of
such money available for application and
39
the likelihood of additional money becoming available for such application in
the future. Whenever the Trustee shall apply such money, 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 date shall cease to accrue. The
Trustee shall give such notice as it may deem appropriate of the deposit with it
of any such money and of the fixing of any such date, and shall not be required
to make payment to the Owner of any unpaid Bond until such Bond shall be
presented to the Trustee for appropriate endorsement or for cancellation if
fully paid.
SECTION 708 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Trustee or to the Bondowners is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 709 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Owner of any Bond to exercise any right or remedy accruing
upon an Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Bondowners may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Bondowners, as the case may be.
SECTION 710 WAIVER OF PAST DEFAULTS. Before any judgment or decree for
payment of money due has been obtained by the Trustee as provided in this
Article, the Owners of a majority in principal amount of the Bonds Outstanding
may, by written notice delivered to the Trustee and the Issuer, on behalf of the
Owners of all the Bonds waive any past default hereunder and its consequences,
except a default
(a) in the payment of the principal of (or premium, if any) or interest on
any Bond, or
(b) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Owner of each
Outstanding Bond affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to or affect any subsequent
or other default or impair any right or remedy consequent thereon.
SECTION 711 ADVANCES BY TRUSTEE. If the Company shall fail to make any
payment or perform any of its covenants in the Loan Agreement, the Trustee may,
at any time and from time to time, use and apply any moneys held by it under
this Indenture, or make advances, to effect payment or performance of any such
covenant on behalf of the Company. All moneys so used or advanced by the
Trustee, together with interest at the Trustee's announced prime rate per annum,
shall be repaid by the Company upon demand and such advances shall be secured
under this
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Indenture prior to the Bonds. For the repayment of all such advances the Trustee
shall have the right to use and apply any moneys at any time held by it under
this Indenture but no such use of moneys or advance shall relieve the Company
from any default under the Loan Agreement.
ARTICLE VIII
THE TRUSTEE AND PAYING AGENTS
SECTION 801 ACCEPTANCE OF TRUSTS; CERTAIN DUTIES AND RESPONSIBILITIES. The
Trustee accepts and agrees to execute the trusts imposed upon it by this
Indenture, but only upon the following terms and conditions:
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by an authorized officer of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Owners of a majority in principal amount of the
Outstanding Bonds relating to the time, method and place of
conducting any proceeding for
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any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 802 CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in
Section 801 of this Indenture:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) The Trustee shall be entitled to rely upon a certificate of an Issuer
Representative as to the sufficiency of any request or direction of the Issuer
mentioned herein, the existence or non-existence of any fact or the sufficiency
or validity of any instrument, paper or proceeding, or that a resolution in the
form therein set forth has been adopted by the governing body of the Issuer has
been duly adopted, and is in full force and effect. The Trustee shall be
entitled to rely upon an Officer's Certificate as to the sufficiency of any
request or direction of the Company mentioned herein, the existence or
non-existence of any fact or the sufficiency or validity of any instrument,
paper or proceeding, or that a resolution in the form therein set forth has been
adopted by the governing board of the Company has been duly adopted, and is in
full force and effect.
(c) Whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
a certificate of an Issuer Representative.
(d) The Trustee may consult with counsel, and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by the Trustee
hereunder in good faith and in reliance thereon.
(e) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Bondowners pursuant to this Indenture, unless such Bondowners shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities (except as may result from the Trustee's own negligence
or willful misconduct) which might be incurred by it in compliance with such
request or direction.
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(f) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, personally or by agent or attorney.
(g) The Trustee assumes no responsibility for the correctness of the
recitals contained in this Indenture and in the Bonds, except the certificate of
authentication on the Bonds. The Trustee makes no representations to the value
or condition of the Trust Estate or any part thereof, or as to the title thereto
or as to the security afforded thereby or hereby, or as to the validity or
sufficiency of this Indenture or of the Bonds. The Trustee shall not be
accountable for the use or application by the Issuer or the Company of any of
the Bonds or the proceeds thereof or of any money paid to or upon the order of
the Issuer or the Company under any provision of this Indenture.
(h) The Trustee, in its individual or any other capacity, may become the
owner or pledgee of Bonds and may otherwise deal with the Issuer or the Company
with the same rights it would have if it were not Trustee.
(i) All money received by the Trustee shall, until used or applied or
invested as herein provided, be held in trust for the purposes for which they
were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law or by this
Indenture. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Issuer or the
Company.
(j) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 803 NOTICE OF DEFAULTS. The Trustee shall not be required to take
notice or be deemed to have notice of any default hereunder except failure by
the Issuer to cause to be made any of the payments to the Trustee required to be
made by Article IV of this Indenture, unless the Trustee shall be specifically
notified in writing of such default by the Issuer, the Company or the Owners of
at least 10% in principal amount of all Bonds Outstanding, and in the absence of
such notice so delivered, the Trustee may conclusively assume there is no
default except as aforesaid. Within 30 days after the occurrence of any default
hereunder of which the Trustee is required to take notice or has received notice
as provided in this Section, the Trustee shall give written notice of such
default by mail to all Owners of Bonds as shown on the bond register maintained
by the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Bond, the Trustee shall be protected
in withholding such notice if and so long as the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Bondowners. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
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SECTION 804 COMPENSATION AND REIMBURSEMENT. The Trustee shall be entitled
to payment or reimbursement
(a) from time to time for reasonable compensation for all reasonable and
necessary services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of
a trustee of an express trust);
(b) except as otherwise expressly provided herein, upon its request, for
all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's
negligence, willful misconduct or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
All such payments and reimbursements shall be made by the Company as
provided in Section 6.04 of the Loan Agreement.
The Trustee shall promptly notify the Company in writing of any claim or
action brought against the Trustee in respect of which indemnity may be sought
against the Company, setting forth the particulars of such claim or action, and
the Company will assume the defense thereof, including the employment of counsel
satisfactory to the Trustee and the payment of all expenses. The Trustee may
employ separate counsel in any such action and participate in the defense
thereof, and the reasonable fees and expenses of such counsel shall not be
payable by the Company unless such employment has been specifically authorized
by the Company.
Pursuant to the provisions of the Loan Agreement, the Company has agreed to
pay to the Trustee all reasonable fees, charges, advances and expenses of the
Trustee, and the Trustee agrees to look only to the Company for the payment of
all reasonable fees, charges, advances and expenses of the Trustee and any
Paying Agent as provided in the Loan Agreement. The Trustee agrees that the
Issuer shall have no liability for any fees, charges and expenses of the
Trustee.
As security for the payment of such compensation, expenses, reimbursements
and indemnity under this Section, the Trustee shall be secured under this
Indenture by a lien prior to the Bonds and otherwise as provided in Section 707
hereof, and shall have the right to use and apply any trust moneys held by it
under Article IV hereof.
SECTION 805 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee hereunder which shall be a bank or trust company organized
and doing business under the laws of the United States of America or of any
state thereof, authorized under such laws to exercise corporate trust powers,
subject to supervision or examination by federal or state authority, and having
a combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of such
44
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect specified in this Article.
SECTION 806 RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by giving 30 days' written notice
thereof to the Issuer, the Company and each Owner of Bonds Outstanding as shown
by the list of Bondowners required by this Indenture to be kept at the office of
the Trustee. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) If the Trustee has or shall acquire any conflicting interest, it shall,
within 90 days after ascertaining that it has a conflicting interest, or within
30 days after receiving written notice from the Issuer, the Company (so long as
the Company is not in default under the Loan Agreement) or any Bondowner that it
has a conflicting interest, either eliminate such conflicting interest or resign
in the manner and with the effect specified in Subsection (a).
(c) The Trustee may be removed at any time by an instrument or concurrent
instruments in writing delivered to the Company, the Issuer and the Trustee
signed by the Owners of a majority in principal amount of the Outstanding Bonds.
The Issuer, the Company or any Bondowner may at any time petition any court of
competent jurisdiction for the removal for cause of the Trustee.
(d) The Trustee may be removed at any time (so long as no Event of Default
has occurred and is continuing under this Indenture) by an instrument in writing
signed by the Company and delivered to the Trustee. The foregoing
notwithstanding, the Trustee may not be removed by the Company unless written
notice of the delivery of such instrument signed by a Company Representative is
mailed to the Owners of all Bonds Outstanding under this Indenture, which notice
indicates the Trustee will be removed and replaced by the successor trustee
named in such notice, such removal and replacement to become effective not less
than 60 days from the date of such notice, unless the Owners of not less than
25% in aggregate principal amount of such Bonds Outstanding shall object in
writing to such removal and replacement.
(e) If at any time:
(1) the Trustee shall fail to comply with subsection (b) after written
request therefor by the Issuer, the Company or by any Bondowner, or
(2) the Trustee shall cease to be eligible under Section 805 and shall
fail to resign after written request therefor by the Issuer, the
Company or any Bondowner, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its
property shall be
45
appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (a) the Issuer or the Company may remove the Trustee, or
(b) any Bondowner may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) The Trustee shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Owners of
Bonds as their names and addresses appear in the bond register maintained by the
Trustee. Each notice shall include the name of the successor Trustee and the
address of its principal corporate trust office.
(g) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 807.
SECTION 807 APPOINTMENT OF SUCCESSOR TRUSTEE. If the Trustee shall resign,
be removed or become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, the Issuer, with the written consent of the
Company (which consent shall not be unreasonably withheld) so long as no Event
of Default under Section 701(f) or under the Loan Agreement has occurred and is
continuing, or the Owners of a majority in principal amount of Bonds Outstanding
(if an Event of Default hereunder or under the Loan Agreement has occurred and
is continuing), by an instrument or concurrent instruments in writing delivered
to the Issuer and the retiring Trustee, shall promptly appoint a successor
Trustee. In case all or substantially all of the Trust Estate shall be in the
possession of a receiver or trustee lawfully appointed, such receiver or
trustee, by written instrument, may similarly appoint a temporary successor to
fill such vacancy until a new Trustee shall be so appointed by the Issuer or the
Bondowners. If, within 30 days after such resignation, removal or incapability
or the occurrence of such vacancy, a successor Trustee shall be appointed in the
manner herein provided, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor Trustee and supersede
the retiring Trustee and any temporary successor Trustee appointed by such
receiver or trustee. If no successor Trustee shall have been so appointed and
accepted appointment in the manner herein provided, any Bondowner may petition
any court of competent jurisdiction for the appointment of a successor Trustee,
until a successor shall have been appointed as above provided. The successor so
appointed by such court shall immediately and without further act be superseded
by any successor appointed as above provided. Every such successor Trustee
appointed pursuant to the provisions of this Section shall be a bank with trust
powers or trust company in good standing under the law of the jurisdiction in
which it was created and by which it exists, meeting the eligibility
requirements of this Article.
SECTION 808 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to the Issuer, the
Company and the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the estates, properties, rights,
46
powers, trusts and duties of the retiring Trustee; but, on request of the Issuer
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument conveying and transferring to such
successor Trustee upon the trusts herein expressed all the estates, properties,
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 804. Upon request of any such successor Trustee, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such estates,
properties, rights, powers and trusts. The resignation of any Trustee and the
instrument or instruments removing any Trustee and appointing a successor
hereunder, together with all other instruments provided for in this Article
VIII, shall be forthwith filed and/or recorded by the successor trustee in each
recording office, if any, where the Indenture shall have been filed and/or
recorded.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 809 MERGER, CONSOLIDATION AND SUCCESSION TO BUSINESS. Any
corporation or association into which the Trustee may be merged or with which it
may be consolidated, or any corporation or association resulting from any merger
or consolidation to which the Trustee shall be a party, or any corporation or
association succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be otherwise qualified and
eligible under this Article, and shall be 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 paper or any further act on the part of any of the
parties hereto. In case any Bonds shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Bonds so authenticated with the same effect as if such successor
Trustee had itself authenticated such Bonds.
SECTION 810 CO-TRUSTEES AND SEPARATE TRUSTEES. At any time or times, for
the purpose of meeting the legal requirements of any jurisdiction in which any
of the Trust Estate may at the time be located, or in the enforcement of any
default or the exercise any of the powers, rights or remedies herein granted to
the Trustee, or any other action which may be desirable or necessary in
connection therewith, the Trustee shall have power to appoint, and, upon the
written request of the Trustee or of the Owners of at least 25% in principal
amount of the Bonds Outstanding, the Issuer shall for such purpose join with the
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by the
Trustee either to act as co-trustee, jointly with the Trustee, of all or any
part of the Trust Estate, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section. If the Issuer does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default has occurred and is continuing, the Trustee alone shall
have power to make such appointment.
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Should any written instrument from the Issuer be required by any co-trustee
or separate trustee so appointed for more fully confirming to such co-trustee or
separate trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and delivered by the
Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Bonds shall be authenticated and delivered, and all rights, powers,
duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee.
(b) The rights, powers, duties and obligations hereby conferred or imposed
upon the Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the
Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law
of any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such co-trustee or separate trustee.
(c) The Trustee at any time, by an instrument in writing executed by it,
with the concurrence of the Issuer evidenced by a resolution, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case an Event of Default has
occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Issuer. Upon the written request of the
Trustee, the Issuer shall join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed
in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Trustee, or any other such
trustee hereunder.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other act of Bondowners delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 811 NO TRANSFER OF FIRST MORTGAGE BONDS. The Trustee covenants that
it will not sell, assign or transfer the First Mortgage Bonds, except as
required to effect transfer to any successor trustee under this Indenture.
SECTION 812 VOTING OF FIRST MORTGAGE BONDS. The Trustee covenants and
agrees, as the holder of the First Mortgage Bonds, to attend such meeting or
meetings of bondholders under the First Mortgage or, at its option, to deliver
its proxy in connection therewith, as relate to
48
matters with respect to which it is entitled to vote or consent. The Trustee
shall vote the First Mortgage Bonds, or shall consent with respect thereto, in
favor of amendments and modifications of the Mortgage of substantially the same
effect as any or all of the following: (1) to make available as property
additions nuclear fuel (and similar or analogous devices or substances) and to
establish other provisions as to such fuel, devices or substances; (2) to allow
property additions to be located anywhere in the United States of America or its
coastal waters; (3) in addition, to make available as property additions any
form of space satellites (including solar power satellites), space stations and
other analogous facilities; and (4) to change "$5,000,000 or more" in the
special provision for retirement of Company Bonds referred to under the caption
"Special Provisions for Retirement of Company Bonds" to "a dollar amount greater
than 20% of Company's net utility plant as shown by its audited financial
statements for its most recent fiscal year ending prior to the commencement of
such 12 month period." 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 First Mortgage is sought without a meeting, with respect to any amendments
or modifications of the First Mortgage, the Trustee shall vote all First
Mortgage Bonds then held by it, or 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 First 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 First Mortgage
which is correlative to any amendment or modification of this Indenture referred
to in Section 902 hereof without the prior consent and approval, obtained in the
manner prescribed in said Section 902, of Owners of Bonds which would be
required under said Section 902 for such correlative amendment or modification
of this Indenture.
SECTION 813 SURRENDER OF FIRST MORTGAGE BONDS. The Trustee covenants that
it will surrender First Mortgage Bonds to the corporate trustee under the First
Mortgage in accordance with the provisions of Section 3.02(c) of the Loan
Agreement.
SECTION 814 DESIGNATION OF PAYING AGENTS. The Trustee is hereby designated
and agrees to act as principal Paying Agent for and in respect to the Bonds. The
Issuer may, with the consent of the Company, cause the necessary arrangements to
be made through the Trustee and to be thereafter continued for the designation
of alternate Paying Agents, if any, and for the making available of funds
hereunder for the payment of the principal of, premium, if any, and interest on
the Bonds, or at the principal corporate trust office of said alternate Paying
Agents. In the event of a change in the office of Trustee, the predecessor
Trustee which has resigned or been removed shall cease to be trustee of any
funds provided hereunder and Paying Agent for principal of, premium, if any, and
interest on the Bonds, and the successor Trustee shall become such Trustee and
Paying Agent unless a separate Paying Agent or Agents are appointed by the
Issuer in connection with the appointment pursuant to Section 807 of any
successor Trustee; provided that if such appointment of such successor Trustee
required the Company's consent, the appointment of any separate Paying Agent in
connection therewith may not be made without the Company's consent. Any
alternate or separate Paying Agent appointed pursuant to this Section may be
removed by the Issuer with the Company's consent.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDOWNERS. Without
the consent of, or notice to, the Owners of any Bonds, the Issuer and the
Trustee may from time to time, and when required by this Indenture shall, enter
into one or more Supplemental Indentures for any of the following purposes:
(a) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(b) to add to the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and
delivery of the Bonds, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(c) to provide for the issuance of Additional Bonds pursuant to Section 202
hereof;
(d) to evidence the appointment of a separate trustee or the succession of
a new trustee under this Indenture;
(e) to add to the covenants of the Issuer or to the rights, powers and
remedies of the Trustee for the benefit of the Owners of the Bonds or
to surrender any right or power herein conferred upon the Issuer;
(f) to cure any ambiguity, to correct or supplement any provision in this
Indenture which may be inconsistent with any other provision herein or
to make any other change, with respect to matters or questions arising
under this Indenture, which shall not be inconsistent with the
provisions of this Indenture, provided such action shall not materially
adversely affect the interests of the Owners of the Bonds; or
(g) to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act of 1939, as amended, or under
any similar federal statute hereafter enacted, or to permit the
qualification of the Bonds for sale under the securities laws of the
United States or any state of the United States.
SECTION 902 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDOWNERS. With the
consent of the Owners of not less than a majority in principal amount of the
Bonds then Outstanding affected by such Supplemental Indenture, the Issuer and
the Trustee may enter into one or more Supplemental Indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Owners of the Bonds under this Indenture; provided, however, that no such
Supplemental Indenture shall, without the consent of the Owner of each
Outstanding Bond affected thereby,
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(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Bond, or reduce the principal amount thereof or the
interest thereon or any premium payable upon the redemption thereof, or
change any place of payment where, or the coin or currency in which,
any Bond, or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
stated maturity thereof (or, in the case of redemption, on or after the
redemption date); or
(b) reduce the percentage in principal amount of the Outstanding Bonds, the
consent of whose Owners is required for any such Supplemental
Indenture, or the consent of whose Owners is required for any waiver
provided for in this Indenture of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences; or
(c) modify the obligation of the Issuer to make payment on or provide funds
for the payment of any Bond; or
(d) modify or alter the provisions of the proviso to the definition of the
term "Outstanding"; or
(e) modify any of the provisions of this Section or Section 710 or 1002,
except, with respect to any modification of this Section or Section
710, to increase any percentage provided thereby or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Owner of each Bond affected thereby; or
(f) permit the creation of any lien ranking prior to or on a parity with
the lien of this Indenture with respect to any of the Trust Estate or
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Owner of any Bond of the security
afforded by the lien of this Indenture.
The Trustee may in its discretion determine whether or not any Bonds would
be affected by any Supplemental Indenture and any such determination shall be
conclusive upon the Owners of all Bonds, whether theretofore or thereafter
authenticated and delivered hereunder. The Trustee shall not be liable for any
such determination made in good faith.
If at any time the Issuer shall request the Trustee to enter into any such
Supplemental Indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such Supplemental Indenture to be mailed to
each Owner of Bonds then Outstanding at the addresses appearing in the bond
register. 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 all
Bondowners. The Trustee shall not, however, be subject to any liability to any
Bondowner 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 required percentage of Owners
shall have consented to and approved the execution thereof as herein provided,
no Owner of any Bond shall have any
51
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 Issuer from executing the
same or from taking any action pursuant to the provision thereof. It shall not
be necessary for the required percentage of Owners of Bonds under this Section
to approve the particular form of any proposed Supplemental Indenture, but it
shall be sufficient if such act shall approve the substance thereof. Upon the
execution of any such Supplemental Indenture as in this Section permitted and
provided, this Indenture shall be and be deemed to be modified and amended in
accordance therewith.
SECTION 903 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any Supplemental Indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall receive, and, subject to Section 801, shall be
fully protected in relying upon, an Opinion of Bond Counsel addressed and
delivered to the Trustee and the Issuer stating that the execution of such
Supplemental Indenture is authorized or permitted by this Indenture, and that
the execution and delivery thereof will not adversely affect the exclusion from
federal gross income of interest on the Bonds. The Trustee may, but shall not,
except to the extent required in the case of any Supplemental Indenture entered
into under Section 901(g), be obligated to, enter into any such Supplemental
Indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
Supplemental Indenture under this Article, this Indenture shall be modified in
accordance therewith and such Supplemental Indenture shall form a part of this
Indenture for all purposes; and every Owner of Bonds theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 905 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES. Bonds
authenticated and delivered after the execution of any Supplemental Indenture
pursuant to this Article may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
Supplemental Indenture. If the Issuer shall so determine, new Bonds so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
Supplemental Indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Bonds.
SECTION 906 COMPANY'S CONSENT TO SUPPLEMENTAL INDENTURES. So long as the
Company is not in default under the Loan Agreement, a Supplemental Indenture
under this Article which affects any rights, powers, agreements or obligations
of the Company, including, without limitation, rights, powers, agreements or
obligations of the Company under the Loan Agreement, the First Mortgage Bonds
and the Mortgage, or requires any revision of the Loan Agreement, the First
Mortgage Bonds and the Mortgage, will not become effective unless and until the
Company consents in writing to the execution and delivery of such Supplemental
Indenture.
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ARTICLE X
AMENDMENT OF LOAN AGREEMENT
SECTION 1001 AMENDMENT, ETC., TO LOAN AGREEMENT NOT REQUIRING CONSENT OF
BONDOWNERS. The Trustee shall, without the consent of, or notice to, the
Bondowners, consent to any amendment, change or modification of the Loan
Agreement as may be required:
(a) by the provisions of the Loan Agreement or hereby;
(b) in connection with the issuance of any Additional Bonds;
(c) for the purpose of curing any ambiguity or formal defect or omission in
the Loan Agreement; or
(d) to effect any other amendment to the Loan Agreement which, in the
judgment of the Trustee, will not adversely affect the interests of the
Bondowners.
SECTION 1002 AMENDMENT, ETC., TO LOAN AGREEMENT REQUIRING CONSENT OF
BONDOWNERS. Except for the amendments, changes or modifications as provided in
Section 1001, the Trustee shall not consent to any other amendment, change or
modification of the Loan Agreement without the giving of notice and the written
approval or consent of the Owners of not less than a majority in principal
amount of the Bonds then Outstanding given and procured in accordance with the
procedure provided in this Section. If at any time the Issuer and the Company
shall request the consent of the Trustee to any such proposed amendment, change
or modification of the Loan Agreement, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of such
proposed amendment, change or modification of the Loan Agreement to be given in
the same manner as provided by Section 902 with respect to proposed 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 at the principal corporate trust office of the
Trustee for inspection by all Owners of the Bonds. The Trustee shall not,
however, be subject to any liability to any Owner of a Bond by reason of its
failure to give such notice, and any such failure shall not affect the validity
of such amendment, change or modification when consented to and approved as
provided in this Section. If the Owners of not less than a majority in aggregate
principal amount of the Bonds Outstanding at the time of the execution of any
such amendment, change or modification shall have consented thereto, then no
Owner of any Bond shall have any right to object to any of the terms and
provisions contained therein, or the operation thereof, or in any manner to
question the propriety of the execution thereof, or to enjoin or restrain the
Trustee or the Issuer from executing the same or from taking any action pursuant
to the provisions thereof.
SECTION 1003 TRUSTEE AUTHORIZED TO JOIN IN AMENDMENTS; RELIANCE ON COUNSEL.
The Trustee is authorized to join with the Issuer and the Company in the
execution and delivery of any amendment permitted by this Article and, in so
doing, shall be fully protected by an opinion of Counsel that such amendment is
so permitted and has been duly authorized by the Issuer and that all things
necessary to make it a valid and binding agreement have been done.
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ARTICLE XI
MEETINGS OF BONDOWNERS
SECTION 1101 PURPOSES FOR WHICH BONDOWNERS' MEETINGS MAY BE CALLED. A
meeting of Bondowners may be called at any time and from time to time for any of
the following purposes:
(a) to give any notice to the Issuer, the Company or the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any
Default or Event of Default hereunder and its consequences, or to take
any other action authorized to be taken by Bondowners pursuant to
Section 705 or 706;
(b) to remove the Trustee pursuant to Section 806 or to appoint a successor
trustee pursuant to Section 807;
(c) to consent to the execution of a supplemental indenture pursuant to
Section 902, or to consent to the execution of an amendment, change or
modification of the Loan Agreement pursuant to Section 1002; or
(d) to take any other action authorized to be taken by or on behalf of the
Owners of any specified principal amount of the Bonds under any other
provision hereof or under applicable law.
SECTION 1102 PLACE OF MEETINGS OF BONDOWNERS. Meetings of Bondowners may be
held at such place or places as the Trustee or, in the case of its failure to
act, the Bondowners calling the meeting shall from time to time determine.
SECTION 1103 CALL AND NOTICE OF BONDOWNERS' MEETINGS.
(a) The Trustee may at any time call a meeting of Bondowners to be held at
such time and at such place as the Trustee shall determine. Notice of every
meeting of Bondowners, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall be given
by first class mail postage prepaid, to the Bondowners at the addresses shown on
the registration books.
(b) In case at any time the Owners of at least 20% in aggregate principal
amount of the Bonds outstanding shall have requested the Trustee to call a
meeting of the Bondowners by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 20 days after receipt of such request,
then such Bondowners may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 1101 by giving
notice thereof as provided in subsection (a) of this Section.
SECTION 1104 PERSONS ENTITLED TO VOTE AT BONDOWNERS' MEETINGS. To be
entitled to vote at any meeting of Bondowners, a person shall be an Owner of one
or more Outstanding Bonds, or a person appointed by an instrument in writing as
proxy for a Bondowner by such a Bondowner. The only persons who shall be
entitled to be present or to speak at any meeting of
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Bondowners shall be the persons entitled to vote at such meeting and their
Counsel, any representatives of the Trustee and its Counsel, any representatives
of the Company and its Counsel and any representatives of the Issuer and its
Counsel.
SECTION 1105 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions hereof, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting of Bondowners in
regard to proof of the holding of Bonds and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Bonds shall be proved in the manner specified in Section 1202 and
the appointment of any proxy shall be proved in the manner specified in Section
1202 or by having the signature of the person executing the proxy witnessed or
guaranteed by any bank, banker or trust company authorized by Section 1202 to
certify to the holding of Bonds. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 1202 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by Bondowners
as provided in subsection (b) of Section 1103, in which case the Bondowners
calling the meeting shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Owners of a majority of the Bonds represented at the meeting and
entitled to vote.
(c) At any meeting each Bondowner or proxy shall be entitled to one vote
for each $5,000 principal amount of Outstanding Bonds held or represented by
him; provided, however, that no vote shall be cast or counted at any meeting in
respect of any Bond challenged as not Outstanding and ruled by the chairman of
the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote, except as a Bondowner or proxy.
(d) At any meeting of Bondowners, the presence of persons holding or
representing Bonds in an aggregate principal amount sufficient under the
appropriate provision hereof to take action upon the business for the
transaction of which such meeting was called shall constitute a quorum. Any
meeting of Bondowners called pursuant to Section 1103 may be adjourned from time
to time by vote of the Owners (or proxies for the Owners) of a majority of the
Bonds represented at the meeting and entitled to vote, whether or not a quorum
shall be present; and the meeting may be held as so adjourned without further
notice.
SECTION 1106 COUNTING VOTES AND RECORDING ACTION OF MEETINGS. The vote upon
any resolution submitted to any meeting of Bondowners shall be by written
ballots on which shall be subscribed the signatures of the Bondowners or of
their representatives by proxy and the number or numbers of the Outstanding
Bonds held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their
55
verified written reports in duplicate of all votes cast at the meeting. A
record, at least in triplicate, of the proceedings of each meeting of Bondowners
shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
said notice was mailed as provided in Section 1103. Each copy shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and copies shall be delivered to the Issuer and the Trustee. The
Trustee's copy shall have attached thereto the ballots voted at the meeting and
shall be preserved by the Trustee. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
SECTION 1107 REVOCATION BY BONDOWNERS. At any time prior to (but not after)
the evidencing to the Trustee, in the manner provided in Section 1106, of the
taking of any action by the Owners of the percentage in aggregate principal
amount of the Bonds specified herein in connection with such action, any Owner
of a Bond the number of which is included in the Bonds the Owners of which have
consented to such action may, by filing written notice with the Trustee at its
principal office and upon proof of holding as provided in Section 1202, revoke
such consent so far as concerns such Bond. Except as aforesaid any such consent
given by the Owner of any Bond shall be conclusive and binding upon such Owner
and upon all future Owners of such Bond and of any Bond issued in exchange
therefor or in lieu thereof, irrespective of whether or not any notation in
regard thereto is made upon such Bonds. Any action taken by the Owners of the
percentage in principal amount of the Bonds specified herein in connection with
such action shall be conclusively binding upon the Issuer, the Company, the
Trustee and the Owners of all the Bonds; provided that such action is authorized
by this Indenture.
ARTICLE XII
NOTICES, CONSENTS AND ACTS
OF BONDOWNERS
SECTION 1201 NOTICES. Except as otherwise provided herein, it shall be
sufficient service of any notice, request, demand, authorization, direction,
consent, waiver or other paper required or permitted by this Indenture to be
made, given or furnished to or filed with the following Persons, if the same
shall be delivered in person or duly mailed by first class mail, postage
prepaid, at the following addresses:
(a) To the Issuer at:
City of Cohasset
305 Northwest 1st Avenue
Cohasset, Minnesota 55721
Attention: City Clerk-Treasurer
(b) To the Trustee at:
U.S. Bank National Association
Mail code EP-MN-WS3C
56
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Corporate Trust
(c) To the Company at:
ALLETE, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Attention: Chief Financial Officer
(d) To the Bondowners:
At the addresses of the Bondowners as shown on the bond register
maintained by the Trustee under this Indenture.
(e) To Standard & Poor's at:
Standard & Poor's Ratings Service
25 Broadway
New York, New York 10004
Attention: Structured Finance Group
(f) To Moody's at:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Structured Finance--Monitoring Group
If, because of the temporary or permanent suspension of mail service or for
any other reason, it is impossible or impractical to mail any notice in the
manner herein provided, then such delivery of notice in lieu thereof as shall be
made with the approval of the Trustee shall constitute a sufficient notice.
If notice to Bondowners is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Bondowner
shall affect the sufficiency of such notice with respect to other Bondowners.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Bondowners shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
The Trustee shall, prior to the execution and delivery of any Supplemental
Indenture or consenting to any amendment to the Loan Agreement, cause notice of
the proposed execution and delivery of such Supplemental Indenture or
Supplemental Loan Agreement together with a copy of the proposed Supplemental
Indenture or Supplemental Loan Agreement to be mailed to any rating agency then
maintaining a rating on the Bonds at least 15 days prior to the proposed
57
date of execution and delivery of such Supplemental Indenture or Supplemental
Loan Agreement. The Trustee shall also give notice to each Rating Service then
maintaining a rating on the Bonds if:
(a) the Trustee resigns or is removed, or a new Trustee or Co-Trustee is
appointed;
(b) there is a call for the redemption of all Bonds;
(c) all of the Bonds are paid or defeased in accordance with the provisions
of this Indenture;
(d) an Event of Default or acceleration occurs or the Trustee waives any
Event of Default or acceleration under this Indenture;
(e) any amendment is made to any of the other Transaction Documents;
(f) the giving of notice of a mandatory redemption of Bonds in whole or in
part, or a payment of all principal, interest and premium, if any, on
the Bonds; or
(g) appointment of a successor Paying Agent.
SECTION 1202 ACTS OF BONDOWNERS. Any notice, request, demand,
authorization, direction, consent, waiver or other action provided by this
Indenture to be given or taken by Bondowners may be embodied in and evidenced by
one or more substantially concurrent instruments of similar tenor signed by such
Bondowners in person or by an agent duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is hereby
expressly required, to the Issuer or the Company. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the ownership of
Bonds, shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Issuer and the Trustee, if made in the following manner:
(a) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof, or by the affidavit of a witness of such execution. Whenever such
execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(b) The fact and date of execution of any such instrument or writing and
the authority of any Person executing the same may also be proved in any other
manner which the Trustee deems sufficient; and the Trustee may in any instance
require further proof with respect to any of the matters referred to in this
Section.
(c) The 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 bond register maintained by the Trustee.
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In determining whether the Owners of the requisite principal amount of
Bonds Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Bonds owned by the Issuer or any Related
Party to the Issuer or the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds which the
Trustee knows to be so owned shall be so disregarded.
Any notice, request, demand, authorization, direction, consent, waiver or
other action by the Owner of any Bond shall bind every future owner of the same
Bond and the owner of every Bond issued upon the transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done or suffered to be done
by the Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Bond.
SECTION 1203 FORM AND CONTENTS OF DOCUMENTS DELIVERED TO TRUSTEE. Whenever
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
the other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Issuer stating that the information with respect to such factual
matters is in the possession of the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Whenever any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 1301 FURTHER ASSURANCES. The Issuer shall do, execute, acknowledge
and deliver such Supplemental Indentures and such further acts, instruments,
financing statements and assurances as the Trustee may reasonably require for
accomplishing the purposes of this Indenture.
SECTION 1302 IMMUNITY OF OFFICERS, EMPLOYEES AND MEMBERS OF ISSUER. No
recourse shall be had for the payment of the principal of or redemption premium,
if any, or interest on any of the Bonds or for any claim based thereon or upon
any obligation, covenant or agreement contained in this Indenture against any
past, present or future officer, director, member, employee or agent of the
Issuer, or of any successor public corporation, either directly or through the
Issuer or any successor public corporation, under any rule of law or equity,
statute or constitution, or by the enforcement of any assessment or penalty or
otherwise, and all such liability of any such officers, directors, members,
employees or agents as such is hereby expressly waived and released as a
condition of and consideration for the execution of this Indenture and the
issuance of Bonds.
SECTION 1303 LIABILITY OF ISSUER LIMITED. It is understood and agreed by
the Company and the Owners from time to time of the Bonds that no Bonds or any
other document executed by the Issuer in connection with the issuance, sale, and
delivery of the Bonds, or any obligation herein or therein imposed upon the
Issuer or breach thereof, shall give rise to a pecuniary liability of the Issuer
or a charge against its general credit or taxing powers or shall obligate the
Issuer financially in any way except with respect to the Loan Agreement and the
application of revenues therefrom and the proceeds of the Bonds. No failure of
the Issuer to comply with any term, condition, covenant, or agreement herein
shall subject the Issuer to liability for any claim for damages, costs or other
financial or pecuniary charges except to the extent that the same can be paid or
recovered from the Loan Agreement or revenues therefrom or proceeds of the
Bonds. No execution on any claim, demand, cause of action, or judgment shall be
levied upon or collected from the general credit, general funds, or taxing
powers of the Issuer. In making the agreements, provisions and covenants set
forth herein, the Issuer has not obligated itself except with respect to the
Loan Agreement and the application of revenues thereunder as hereinabove
provided. The Bonds constitute special obligations of the Issuer, payable solely
from the revenues pledged to the payment thereof pursuant to this Indenture, and
do not now and never shall constitute an indebtedness or a loan of the credit of
the Issuer, the State or any political subdivision thereof or a charge against
the general taxing powers of any of them within the meaning of any
constitutional or statutory provision whatsoever.
SECTION 1304 EXECUTION COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 1305 GOVERNING LAW. This Indenture shall be governed by and
construed in accordance with the laws of the State without giving effect to the
conflicts-of-laws principles thereof.
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SECTION 1306 BENEFIT OF INDENTURE. This Indenture shall inure to the
benefit of and shall be binding upon the Issuer and the Trustee and their
respective successors and assigns, subject, however, to the limitations
contained herein. With the exception of rights expressly conferred in this
Indenture, nothing in this Indenture or in the Bonds, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns hereunder, any separate trustee or co-trustee appointed under Section
810 and the Owners of Outstanding Bonds, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1307 SEVERABILITY. If any provision in this Indenture or in the
Bonds shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture
of Trust to be duly executed by their duly authorized officers, all as of the
day and year first above written.
CITY OF COHASSET, MINNESOTA
By: /s/ Marian Barcus
-------------------------------------
Mayor
[SEAL]
Attest:
/s/ Debra Sakrison
- ----------------------------------------
City Clerk-Treasurer
U.S. BANK NATIONAL
ASSOCIATION, as Trustee
By: /s/ Joel Geist
--------------------------------
Title: Vice President
-----------------------------
[Signature Page to Trust Indenture]
EXHIBIT A
TO THE
INDENTURE OF TRUST
FORM OF SERIES 2004 BONDS
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ITASCA
CITY OF COHASSET
COLLATERALIZED POLLUTION CONTROL REFUNDING REVENUE BOND
(ALLETE, INC. PROJECT),
SERIES 2004
No. R-1 $111,000,000
Date of Original Interest Maturity
Issue Rate Date CUSIP
----- ---- ---- -----
August 19, 2004 4.95% July 1, 2022 192472 BE7
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: ONE HUNDRED ELEVEN MILLION DOLLARS
($111,000,000)*********************************
The City of Cohasset, in the County of Itasca and State of Minnesota
(hereinafter called the "Municipality"), for value received, promises to pay to
the registered holder named above, or registered assigns, on the Maturity Date
specified above, from the source and in the manner hereinafter provided, and
upon presentation and surrender hereof at the principal corporate trust office
of the Trustee hereinafter referred to, the principal amount specified above,
and to pay, from the source and in the manner hereinafter provided, interest on
said principal amount from the date of original issue hereof until said
principal amount is paid or payment thereof is duly provided for, at the rate
per annum specified above, except as the provisions below with respect to
redemption of this Bond may become applicable hereto. Interest is computed on
the basis of a 360 day year composed of twelve 30-day months and is payable
semiannually on each January 1
A-1
and July 1 (hereinafter called an "Interest Payment Date"), commencing January
1, 2005, to the person in whose name this Bond is registered in the bond
register maintained by the Trustee (herein called the "Owner") as of the close
of business on the fifteenth day (whether or not a Business Day) of the calendar
month next preceding such Interest Payment Date by check or draft mailed to such
Owner at his address as it appears on the bond register or, at the written
direction of any Owner of at least $1,000,000 in aggregate principal amount of
the Bonds, by wire transfer in immediately available funds to an account
designated by such Owner. The principal of and premium, if any, and interest on
this Bond are payable in lawful money of the United States of America.
This Bond is one of an authorized issue of bonds of the Municipality
(herein called the "Bonds") issued under, and all equally and ratably secured
and entitled to the protection given by, an Indenture of Trust, dated as of
August 1, 2004 (as it may be amended and supplemented, herein called the
"Indenture"), duly executed and delivered by the Municipality to U.S. Bank
National Association, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture). Reference is made to the
Indenture, copies of which are on file in the offices of the Municipality and
the Trustee, including all indentures supplemental thereto, for a statement of
the nature and extent of the security for the Bonds, the rights, duties and
obligations of the Municipality and the Trustee, the rights of the Owners of the
Bonds, the manner in which the Indenture can be amended, and terms upon which
the Bonds are issued and secured. All terms capitalized but not defined herein
shall have the meanings assigned to them in the Indenture.
The Bonds are issued by the Municipality in the aggregate principal amount
of $111,000,000 for the purpose of providing funds to be loaned by the
Municipality to ALLETE, Inc., a Minnesota corporation (herein called the
"Company"), pursuant to a Loan Agreement, dated as of August 1, 2004 (as it may
be amended or supplemented, herein called the "Agreement"), for the purpose of
refunding revenue bonds previously issued to refinance a portion of the costs of
acquisition, construction and equipping of certain air and water pollution
control facilities (the "Facilities") used by the Company in the operation of
the Clay Boswell steam electric generating station owned in part by the Company
and located in the Municipality (the "Plant"), thereby assisting activities in
the public interest and for the public welfare of the State of Minnesota. To
evidence its obligation to repay such loan, the Company will deliver to the
Trustee its first mortgage bonds (the "First Mortgage Bonds") issued as an
additional series under the Mortgage and Deed of Trust, dated as of September 1,
1945, from the Company to Irving Trust Company (now The Bank of New York) and
Richard H. West (Douglas J. MacInnes, Successor), as trustees, as supplemented
and to be supplemented (collectively referred to as the "First Mortgage").
All Bonds Outstanding are subject to redemption by the Municipality, solely
at the option of the Company, in whole or in part, on any Business Day, at a
redemption price equal to 100% of the principal amount thereof, without premium,
plus accrued interest thereon to the redemption date, if the Company shall
declare, within 180 days following the occurrence of one of the following
events, that it will cease to operate any element or unit of the Facilities by
reason of the occurrence of such event: (a) the damage or destruction of all or
substantially all of any element or unit of the Facilities or the Plant to which
such Facilities relate to such extent that, in the reasonable opinion of the
Company, the repair and restoration thereof would not be
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economical; (b) the condemnation of all or substantially all of any element or
unit of the Facilities or such Plant or the taking by condemnation of such part,
use or control of such element or unit of the Facilities or Plant as to render
them or it unsatisfactory to the Company for their or its intended use; (c) if
the Company has abandoned and removed from service all or a portion of the
Facilities or all of its ownership interest in the Plant, (d) in the Company's
reasonable opinion, unreasonable burdens or excessive liabilities shall have
been imposed upon the Company with respect to the Facilities or the Plant or the
operation thereof, including, but without being limited to, federal, state or
other ad valorem, property, income or other taxes not being imposed on the date
of the Indenture, other than ad valorem taxes levied on the date of the
Indenture upon privately owned property used for the same general purpose as the
Facilities or the Plant; (e) as a result of any changes in the Constitution of
the State of Minnesota or the Constitution of the United States of America or of
legislative or administrative action (whether state or federal) or by final
direction, judgment or order of any court or administrative body (whether state
or federal) entered after the contest thereof by the Company in good faith, the
Indenture or the Loan Agreement becomes void or unenforceable or impossible of
performance; or (f) if (1) the Company sells, leases or otherwise disposes of
the Facilities or a substantial part thereof to a Person who is not an Affiliate
of the Company, or changes or allows a change in the use of, such Facilities or
any substantial part thereof, and (2) there is delivered to the Municipality and
the Trustee an Opinion of Bond Counsel to the effect that, unless the Bonds or a
specified part thereof are redeemed and retired either prior to or concurrently
with such sale, lease or other disposition, or change in use, or on a subsequent
date prior to maturity, Bond Counsel is unable to render an unqualified opinion
that such sale, lease or other disposition, or change in use, of all or such
substantial part of such Facilities will not adversely affect the excludability
from gross income, for federal income tax purposes, of the interest on the
series of Bonds that financed such Facilities and will not adversely affect the
Company's ability to deduct interest payments made pursuant to the Agreement
under Section 150(b) of the Internal Revenue Code of 1986, as amended, or a
successor provision thereto.
All of the Bonds shall be subject to mandatory redemption, at a redemption
price equal to 100% of the principal amount thereof, without premium, on the
earliest practicable Interest Payment Date, upon written notice to the Company
by the Trustee of the occurrence of a final, nonappealable determination by the
Internal Revenue Service or a court of competent jurisdiction in the United
States, that, as a result of the failure by the Company to observe or perform
any covenant, condition or agreement on its part to be observed or performed
under the Agreement or as a result of the inaccuracy of any representation made
by the Company under the Agreement, the interest payable on the Bonds is
includable for federal income tax purposes in the gross income of the owners
thereof (other than an owner who is a "substantial user" of the projects
refinanced thereby or a "related person" thereto within the meaning of Section
103(b)(13) of the Internal Revenue Code of 1954, as amended), which final
determination follows proceedings of which the Company has been given written
notice and in which the Company, at its sole expense and to the extent deemed
sufficient by the Company, has been given an opportunity to participate, either
directly or in the name of the owners of the Bonds. The Bonds shall be redeemed,
either in whole or in part, in such principal amount that, upon such redemption,
the interest payable on the Bonds remaining outstanding after such redemption
would not be so includable for federal tax purposes in the gross income of the
owners thereof.
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The Bonds also are subject to redemption in whole or in part in an amount
evenly divisible by minimum Authorized Denominations, solely at the option of
the Company, which shall be exercised upon the written direction of the Company,
on July 1, 2014, and on any date thereafter, at a redemption price equal to 100%
of the principal amount thereof, without premium, plus interest accrued on the
principal amount so redeemed to the redemption date.
Notice of redemption shall be mailed (unless waived, as set forth in the
Indenture) at least 30 days before the redemption date to each Owner of a Bond
to be redeemed at the address shown on the bond register or at such other
address as is furnished in writing by such owner to the Trustee; provided that
no defect in or failure to give such notice of redemption by mail shall affect
the validity of proceedings for redemption of any Bond not affected by such
defect or failure. With respect to notice of any optional or extraordinary
optional redemption of the Bonds, as described above, unless moneys or
Government Obligations or a combination thereof, provided by the Company shall
be received by the Trustee prior to the giving of said notice sufficient to pay
the redemption price on the Bonds to be redeemed, said notice shall state that
said redemption shall be conditional upon the receipt of such moneys or
Governmental Obligations by the Trustee on or prior to the date fixed for such
redemption. If such moneys or Governmental Obligations shall not have been so
received on or prior to the redemption date, said notice shall be of no force
and effect, the Municipality 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. All Bonds so called for redemption will cease
to bear interest on the specified redemption date, provided funds for their
redemption have been duly deposited, and, except for the purpose of payment,
shall no longer be protected by the Indenture and shall not be deemed
Outstanding under the provisions of the Indenture.
This Bond and the series of which it forms a part are issued pursuant to
and in full compliance with the Constitution and laws of the State of Minnesota,
particularly Minnesota Statutes Sections 469.152 to 469.165, as amended, and
pursuant to resolutions adopted by the governing body of the Municipality, which
resolutions authorize the execution and delivery of the Agreement, the Indenture
and the Bonds, and are limited obligations payable solely from amounts to be
received by the Municipality from the Company on the First Mortgage Bonds and
otherwise pursuant to the Agreement, which amounts, if paid when due, will be
sufficient to pay the principal of and premium, if any, and interest on the
Bonds. Such payments are to be made to the Trustee for the account of the
Municipality and credited to the Bond Fund provided for in the Indenture as a
special trust fund account created by the Municipality and have been pledged for
that purpose. The Bonds do not constitute an indebtedness of the Municipality
within the meaning of any constitutional or statutory limitation and do not
constitute or give rise to a pecuniary liability of the Municipality or a charge
against its general credit or taxing powers. No Owner of any Bond shall ever
have the right to compel any exercise of the taxing power of the Municipality to
pay the principal of or premium, if any, or interest on the Bonds or to enforce
payment thereof against any property of the Municipality other than the Trust
Estate.
If provision is made for the payment of the principal of and premium, if
any, and interest on this Bond in accordance with the Indenture, this Bond shall
no longer be deemed Outstanding under the Indenture, shall cease to be entitled
to the benefits of the Indenture, and shall thereafter be payable solely from
the funds provided for the payment thereof.
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If an Event of Default occurs, the principal of all Outstanding Bonds may
become due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Municipality and the Owners of the Bonds at any time with the consent of the
Owners of a majority in aggregate principal amount of the Bonds at the time
Outstanding. The Trustee may not vote the First Mortgage Bonds, or consent with
respect thereto, in favor of a correlative modification or amendment of the
First Mortgage without like consent, provided that the Trustee is required to
vote or consent in favor of certain modifications and amendments enumerated in
the Indenture that may be adopted without any consent of the Owners of the Bonds
Outstanding under the Indenture. The Indenture also contains provisions
permitting Owners of a majority in aggregate principal amount of the Bonds at
the time Outstanding, on behalf of the Owners of all the Bonds, to waive
compliance with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Owner of this Bond shall be conclusive and binding upon such Owner and of any
Bond issued in lieu hereof whether or not notation of such consent or waiver is
made upon this Bond or such Bond.
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 or defend any suit or other proceedings 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 Outstanding Bonds may become due and payable before the stated
maturity thereof, together with interest accrued thereon.
The Bonds are issuable only as fully registered bonds without coupons in
the denominations of $5,000 and any integral multiple of $5,000 in excess of
$5,000. The Bonds are exchangeable for other Bonds in the form of fully
registered bonds of the same aggregate principal amount and in authorized
denominations, upon surrender thereof by the Owner thereof at the principal
corporate trust office of the Trustee, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Trustee and executed
by the Owner thereof or his attorney duly authorized in writing, in the manner
and upon payment of the charges as provided in the Indenture.
This Bond is transferable by the Owner hereof upon surrender of this Bond
for transfer at the principal corporate trust office of the Trustee, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and executed by, the Owner hereof or his attorney
duly authorized in writing, in the manner and upon payment of the charges as
provided in the Indenture. Thereupon the Municipality shall execute and the
Trustee shall authenticate and deliver, in exchange for this Bond, one or more
new Bonds in the name of the transferee, of an authorized denomination, in
aggregate principal amount equal to the principal amount of this Bond.
The Municipality, the Trustee and the Company may treat the person in whose
name this Bond is registered as the absolute holder hereof for all purposes
whether or not this Bond is overdue, and shall not be affected by any notice to
the contrary.
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IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required
by law, and that the issuance of this Bond and the series of which it forms a
part does not exceed or violate any constitutional or statutory limitation of
indebtedness.
This Bond shall not be valid or obligatory for any purpose or be entitled
to any security or benefit under the Indenture unless the Certificate of
Authentication hereon has been signed by the Trustee.
IN WITNESS WHEREOF, the City of Cohasset, Minnesota, by its governing body,
has caused this Bond to be executed in its name by the facsimile signatures of
the Mayor and the City Clerk-Treasurer and sealed with a facsimile of its
official seal printed hereon.
Dated: August 19, 2004
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Mayor
(SEAL)
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City Clerk-Treasurer
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the series designated therein and referred
to in the within-mentioned Indenture.
U.S. Bank National Association,
as Trustee
By:
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Authorized Signature
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
_________________________________, the within Bond and does hereby irrevocably
constitute and appoint ________________________________________, attorney, to
transfer the within Bond on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:
----------------------
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PLEASE INSERT SOCIAL SECURITY NOTICE: The signature to this assignment
OR OTHER IDENTIFYING NUMBER must correspond with the name as it
OF ASSIGNEE appears upon the face of the within Bond
in every particular, without alteration
or any be guaranteed by a commercial
bank or trust company or by a brokerage
firm having a membership in one of the
major stock exchanges.
SIGNATURE GUARANTEED:
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