EXHIBIT 4d
=================================================================
INDENTURE OF TRUST
BETWEEN
COCONINO COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
AND
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
-----------------
DATED AS OF APRIL 1, 1997
-----------------
AUTHORIZING
POLLUTION CONTROL REVENUE BONDS,
1997 SERIES A
(TUCSON ELECTRIC POWER COMPANY NAVAJO PROJECT)
=================================================================
(i)
TABLE OF CONTENTS*
Page
----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . 1
Granting Clause . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. . . . . . . . . . . . . . . . 2
ARTICLE II
THE BONDS
Section 2.01. Creation of Bonds. . . . . . . . . . . . . 9
Section 2.02. Form of Bonds. . . . . . . . . . . . . . . 9
Section 2.03. Execution of Bonds. . . . . . . . . . . . . 10
Section 2.04. Authentication of Bonds. . . . . . . . . . 11
Section 2.05. Bonds Not General Obligations. . . . . . . 11
Section 2.06. Prerequisites to Authentication of Bonds. . 11
Section 2.07. Lost or Destroyed Bonds or Bonds Canceled in
Error . . . . . . . . . . . . . . . . . . 12
Section 2.08. Transfer, Registration and
Exchange of Bonds . . . . . . . . . . . . . 12
Section 2.09. Other Obligations . . . . . . . . . . . . . 14
Section 2.10 Temporary Bonds. . . . . . . . . . . . . . 14
Section 2.11. Cancellation of Bonds . . . . . . . . . . . 14
Section 2.12. Payment of Principal and Interest . . . . . 14
Section 2.13. Applicability of Book-Entry Provisions . . 14
ARTICLE III
REDEMPTION OF BONDS
Section 3.01. Redemption Provisions . . . . . . . . . . 15
Section 3.02. Selection of Bonds to be Redeemed . . . . 16
Section 3.03. Procedure for Redemption . . . . . . . . 17
Section 3.04. Payment of Redemption Price . . . . . . . 17
Section 3.05. No Partial Redemption After Default . . . 17
---------------------
* This table of contents is not a 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.
(ii)
ARTICLE IV
THE BOND FUND
Section 4.01. Creation of Bond Fund . . . . . . . . . . 18
Section 4.02. Liens . . . . . . . . . . . . . . . . . . 18
Section 4.03. Deposits into Bond Fund . . . . . . . . . 18
Section 4.04. Use of Moneys in Bond Fund . . . . . . . 18
Section 4.05. Custody of Bond Fund; Withdrawal
of Moneys . . . . . . . . . . . . . . 19
Section 4.06. Bonds Not Presented for Payment . . . . . 19
Section 4.07. Moneys Held in Trust . . . . . . . . . . 20
ARTICLE V
THE CONSTRUCTION FUND
Section 5.01. Creation of, and Disbursements from,
Construction Fund . . . . . . . . . . 20
Section 5.02. Completion of Facilities; Termination of
Construction. . . . . . . . . . . . . . 21
Section 5.03. Redemption of All Outstanding Bonds . . . 22
Section 5.04. Acceleration of Bonds . . . . . . . . . . 22
Section 5.05. Refunding of Bonds . . . . . . . . . . . 22
Section 5.06. Moneys Held in Trust . . . . . . . . . . 23
ARTICLE VI
INVESTMENTS
Section 6.01. Investments . . . . . . . . . . . . . . . 23
ARTICLE VII
GENERAL COVENANTS
Section 7.01. No General Obligations . . . . . . . . . 23
Section 7.02. Performance of Covenants of the Pollution
Control Corporation; Representations. . 24
Section 7.03. Maintenance of Rights and Powers;
Compliance with Laws . . . . . . . . . 24
Section 7.04. Enforcement of Obligations of the Company;
Amendments . . . . . . . . . . . . . . 24
Section 7.05. Further Instruments. . . . . . . . . . . 24
Section 7.06. No Disposition of Trust Estate. . . . . . 25
Section 7.07. Financing Statements. . . . . . . . . . 25
Section 7.08. Tax Covenants; Rebate Fund. . . . . . . . 25
Section 7.09. Notices of Trustee. . . . . . . . . . . . 26
ARTICLE VIII
DEFEASANCE
Section 8.01. Defeasance. . . . . . . . . . . . . . . . 26
(iii)
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.01. Events of Default. . . . . . . . . . . . 27
Section 9.02. Remedies. . . . . . . . . . . . . . . . . 28
Section 9.03. Restoration to Former Position. . . . . . 29
Section 9.04. Owners' Right to Direct Proceedings. . . 29
Section 9.05. Limitation on Owners' Right to Institute
Proceedings. . . . . . . . . . . . . 29
Section 9.06. No Impairment of Right to
Enforce Payment. . . . . . . . . . . . 29
Section 9.07. Proceedings by Trustee without Possession
of Bonds. . . . . . . . . . . . . . . 29
Section 9.08. No Remedy Exclusive. . . . . . . . . . . 30
Section 9.09. No Waiver of Remedies. . . . . . . . . . 30
Section 9.10. Application of Moneys. . . . . . . . . . 30
Section 9.11. Severability of Remedies. . . . . . . . . 31
ARTICLE X
TRUSTEE; PAYING AGENT AND CO-PAYING AGENTS; REGISTRAR
Section 10.01. Acceptance of Trusts. . . . . . . . . . . 31
Section 10.02. No Responsibility for Recitals. . . . . . 31
Section 10.03. Limitations on Liability. . . . . . . . . 31
Section 10.04. Compensation, Expenses and Advances. . . 31
Section 10.05. Notice of Events of Default. . . . . . . 32
Section 10.06. Action by Trustee. . . . . . . . . . . . 32
Section 10.07. Good Faith Reliance. . . . . . . . . . . 32
Section 10.08. Dealings in Bonds and with the Pollution
Control Corporation and the Company. . 33
Section 10.09. Allowance of Interest. . . . . . . . . . 33
Section 10.10. Construction of Indenture. . . . . . . . 33
Section 10.11. Resignation of Trustee. . . . . . . . . . 33
Section 10.12. Removal of Trustee. . . . . . . . . . . . 33
Section 10.13. Appointment of Successor Trustee. . . . . 34
Section 10.14. Qualifications of Successor Trustee. . . 34
Section 10.15. Judicial Appointment of
Successor Trustee.. . . . . . . . . . . 34
Section 10.16. Acceptance of Trusts by Successor Trustee. 35
Section 10.17. Successor by Merger or Consolidation. . . 35
Section 10.18. Standard of Care. . . . . . . . . . . . . 35
Section 10.19. Notice to Owners of Bonds of Event of
Default. . . . . . . . . . . . . . . 35
Section 10.20. Intervention in Litigation of the
Pollution Control Corporation. . . . . 35
Section 10.21. Paying Agent; Co-Paying Agents. . . . . . 35
Section 10.22. Qualifications of Paying Agent and
Co-Paying Agents; Resignation; Removal. 36
Section 10.23. Registrar. . . . . . . . . . . . . . . . 36
Section 10.24. Qualifications of Registrar; Resignation;
Removal. . . . . . . . . . . . . . . . 37
Section 10.25. Several Capacities. . . . . . . . . . . . 37
(iv)
ARTICLE XI
EXECUTION OF INSTRUMENTS BY OWNERS OF BONDS AND
PROOF OF OWNERSHIP OF BONDS
Section 11.01. Execution of Instruments; Proof of
Ownership. . . . . . . . . . . . . . . 38
ARTICLE XII
MODIFICATION OF THIS INDENTURE AND THE LOAN AGREEMENT
Section 12.01. Limitations. . . . . . . . . . . . . . . 38
Section 12.02. Supplemental Indentures without Owner
Consent. . . . . . . . . . . . . . . . 38
Section 12.03. Supplemental Indentures with Consent of
Owners. . . . . . . . . . . . . . . . . 39
Section 12.04. Effect of Supplemental Indenture. . . . . 40
Section 12.05. Consent of the Company. . . . . . . . . . 40
Section 12.06. Amendment of Loan Agreement without
Consent of Owners. . . . . . . . . . . 40
Section 12.07. Amendment of Loan Agreement with Consent
of Owners. . . . . . . . . . . . . . .. 41
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Successors of the Pollution Control
Corporation. . . . . . . . . . . . . .. 41
Section 13.02. Parties in Interest. . . . . . . . . . . 41
Section 13.03. Severability. . . . . . . . . . . . . . . 42
Section 13.04. No Personal Liability of Pollution Control
Corporation Officials. . . . . . . . . 42
Section 13.05. Bonds Owned by the Pollution Control
Corporation or the Company. . . . . . . 42
Section 13.06. Counterparts. . . . . . . . . . . . . . . 42
Section 13.07. Governing Law. . . . . . . . . . . . . . 42
Section 13.08. Notices. . . . . . . . . . . . . . . . . 42
Section 13.09. Holidays. . . . . . . . . . . . . . . . . 43
Section 13.10. Statutory Notice Regarding Cancellation of
Contracts. . . . . . . . . . . . . . 43
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . 44
Signatures and Seals . . . . . . . . . . . . . . . . . . . 44
Exhibit A - Form of Bond . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Endorsement of Transfer . . . . . . . . . B-1
Exhibit C - Form of Certificate of Authentication . . . . . . C-1
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as of April 1, 1997 (this
"Indenture"), between COCONINO COUNTY, ARIZONA POLLUTION CONTROL
CORPORATION, an Arizona nonprofit corporation and a political
subdivision of the State of Arizona (hereinafter called the
"Pollution Control Corporation"), and First Trust of New York,
National Association, as trustee (hereinafter called the
"Trustee"),
W I T N E S S E T H :
WHEREAS, the Pollution Control Corporation is authorized and
empowered under Title 35, Chapter 6, Arizona Revised Statutes, as
amended (the "Act"), to issue its bonds in accordance with the
Act and to make secured or unsecured loans for the purpose of
financing or refinancing the acquisition, construction,
improvement or equipping of pollution control facilities
consisting of real and personal properties, including but not
limited to machinery and equipment whether or not now in
existence or under construction, which are used in whole or in
part to control, prevent, abate, alter, dispose or store, solid
waste, thermal, noise, atmospheric or water pollutants,
contaminants or products therefrom, whether such facilities serve
one or more purposes or functions in addition to controlling,
preventing, abating, altering, disposing or storing such
pollutants, contaminants or the products therefrom, and to charge
and collect interest on such loans and pledge the proceeds of
loan agreements as security for the payment of the principal of
and interest on bonds, or designated issues of bonds, issued by
the Pollution Control Corporation and any agreements made in
connection therewith, whenever the Board of Directors of the
Pollution Control Corporation finds such loans to be in
furtherance of the purposes of the Pollution Control Corporation;
WHEREAS, the Pollution Control Corporation has heretofore
issued and sold $16,700,000 aggregate principal amount of its
Pollution Control Revenue Bonds, 1996 Series A (Tucson Electric
Power Company Project), all of which remain outstanding (the
"1996 Bonds"), the proceeds of which were loaned to the Tucson
Electric Power Company, an Arizona corporation (the "Company"),
for the purpose of financing a portion of the costs of the
acquisition, construction, improvement and equipping of certain
of the pollution control facilities (the "Facilities") described
in Exhibit A to the Loan Agreement, dated as of April 1, 1997
(the "Loan Agreement"), between the Pollution Control Corporation
and Company; and
WHEREAS, the Pollution Control Corporation proposes to issue
and sell its revenue bonds as provided herein (the "Bonds") for
the purpose of financing a portion of the costs of the
acquisition, construction, improvement and equipping certain
additional items of the Facilities and for the purpose of
refinancing, by the payment or redemption of the 1996 Bonds, or
provision therefor, the portion of the costs of the acquisition,
construction, improvement and equipping of the Facilities
previously financed with the proceeds of the 1996 Bonds;
NOW, THEREFORE, for and in consideration of these premises and
the mutual covenants herein contained, of the acceptance by the
Trustee of the trusts hereby created, of the purchase and
acceptance of the Bonds by the Owners (as hereinafter defined)
thereof and of the sum of one dollar lawful money of the United
States of America, to it duly paid by the Trustee at or before
the execution and delivery of these presents, and for other good
and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, in order to secure the payment of the
principal of and premium, if any, and interest on the Bonds at
any time Outstanding (as hereinafter defined) under this
Indenture according to their tenor and effect and the performance
and observance by the Pollution Control Corporation of all the
covenants and conditions expressed or implied herein and
contained in the Bonds, the Pollution Control Corporation does
hereby grant, bargain, sell, convey, mortgage, pledge and assign,
and grant a security interest in, the Trust Estate (as
hereinafter defined) to the Trustee, its successors in trust and
their assigns forever;
TO HAVE AND TO HOLD all the same with all privileges and
appurtenances hereby conveyed and assigned, or agreed or intended
so to be, to the Trustee, its successors in trust and their
assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set
forth, first, for the equal and proportionate benefit and
security of all Owners of the Bonds issued under and secured by
this Indenture without preference, priority or distinction as to
the lien of any Bonds over any other Bonds;
PROVIDED, HOWEVER, that if, after the right, title and
interest of the Trustee in and to the Trust Estate shall have
ceased, terminated and become void in accordance with Article
VIII hereof, the principal of and premium, if any, and interest
on the Bonds shall have been paid to the Owners thereof, or shall
have been paid to the Company pursuant to Section 4.06 hereof,
then and in that case these presents and the estate and rights
hereby granted shall cease, terminate and be void, and thereupon
the Trustee shall cancel and discharge this Indenture and execute
and deliver to the Pollution Control Corporation and the Company
such instruments in writing as shall be requisite to evidence the
discharge hereof; otherwise this Indenture is to be and remain in
full force and effect.
THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is
expressly declared, that all Bonds issued and secured hereunder
are to be issued, authenticated and delivered, and the Trust
Estate and the other estate and rights hereby granted are to be
dealt with and disposed of, under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and
purposes as hereinafter expressed, and the Pollution Control
Corporation has agreed and covenanted, and does hereby agree and
covenant, with the Trustee and with the respective Owners, from
time to time, of the Bonds, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The terms defined in this
Article I shall, for all purposes of this Indenture, have the
meanings herein specified, unless the context clearly requires
otherwise:
Act:
"Act" shall mean Title 35, Chapter 6, Arizona Revised
Statutes, and all acts supplemental thereto or amendatory
thereof.
Administration Expenses:
"Administration Expenses" shall mean the reasonable expenses
incurred by the Pollution Control Corporation with respect to the
Loan Agreement, this Indenture and any transaction or event
contemplated by the Loan Agreement or this Indenture, including
the compensation and reimbursement of expenses and advances
payable to the Trustee, to the Paying Agent, any Co-Paying Agent
and the Registrar.
Authorized Company Representative:
"Authorized Company Representative" shall mean each person at
the time designated to act on behalf of the Company by written
certificate furnished to the Pollution Control Corporation and
the Trustee containing the specimen signature of such person and
signed on behalf of the Company by its President, any Vice
President or its Treasurer, together with its Secretary or any
Assistant Secretary.
Bond Counsel:
"Bond Counsel" shall mean any firm or firms of nationally
recognized bond counsel experienced in matters pertaining to the
validity of, and exclusion from gross income for federal tax
purposes of interest on bonds issued by states and political
subdivisions, selected by the Company and acceptable to the
Pollution Control Corporation.
Bond Fund:
"Bond Fund" shall mean the fund created by Section 4.01
hereof.
Bonds:
"Bond" or "Bonds" shall mean the bonds authorized to be issued
under this Indenture.
Capital Account:
"Capital Account" shall mean any of the accounts so named
established under Sections 4.01 and 5.01 hereof.
Code:
"Code" shall mean the Internal Revenue Code of 1986 or any
successor statute thereto. Each reference to a section of the
Code herein shall be deemed to include the United States Treasury
Regulations proposed or in effect thereunder and applicable to
the Bonds or the use of proceeds thereof, unless the context
clearly requires otherwise. References to any particular Code
section shall, in the event of a successor Code, be deemed to be
a reference to the successor to such Code section.
Company:
"Company" shall mean Tucson Electric Power Company, a
corporation organized and existing under the laws of the State of
Arizona, its successors and their assigns, including without
limitation, any successor obligor under Section 6.01 or 7.01 of
the Loan Agreement to the extent of the obligations assumed
thereunder.
Completion Date:
"Completion Date" shall mean the date specified in Section
3.04 of the Loan Agreement.
Construction (and other forms of the word "construct"):
"Construction" (and other forms of the word "construct") shall
mean, when used with respect to the Facilities, the construction
of the Facilities and shall include, without limitation, the
acquisition, construction, improvement and equipping of the
Facilities, all as contemplated by the Act.
Construction Fund:
"Construction Fund" shall mean the fund created by Section
5.01 hereof.
Cost of Construction:
"Cost of Construction" shall embrace all costs paid or
incurred by the Company with respect to the Facilities and the
financing thereof for the payment of which the Pollution Control
Corporation is authorized to issue bonds under the Act, and shall
include without limitation (a) obligations paid or incurred by
the Company for labor, materials and other expenses and to
contractors, builders and materialmen in connection with the
construction of the Facilities; (b) the costs paid or incurred by
the Company for contract bonds and for insurance of all kinds
that may be deemed by the Company to be desirable or necessary
during the course of construction of the Facilities; (c) the
expenses paid or incurred by the Company for test borings,
surveys, estimates, plans and specifications, and preliminary
investigations therefor, with respect to the Facilities and for
supervising construction, as well as for the performance of all
other duties required by or reasonably necessary for the proper
construction, of the Facilities; (d) Administration Expenses paid
or incurred prior to the Completion Date and legal, accounting,
financial, underwriting, advertising, recording and printing
expenses and all other fees and expenses paid or incurred by the
Company in connection with the issuance and sale of the Bonds;
(e) amounts in respect of interest (exclusive of accrued interest
paid by the initial purchasers upon delivery thereof) accruing
upon the Bonds until the Completion Date; (f) all other costs
that the Company shall be required to pay under the terms of any
contract or contracts for the construction of the Facilities; (g)
any other costs or expenses paid or incurred by the Company, and
any sums required to reimburse the Company for work done by it,
with respect to the Facilities which are properly chargeable to
the capital account of the Company with respect to the Facilities
or would be so chargeable for federal income tax purposes either
with a proper election or but for a proper election to deduct the
same; and (h) amounts required to be paid to the United States by
the Company (on behalf of the Pollution Control Corporation) in
respect of the Bonds pursuant to Section 148 of the Code. For
purposes of the application of the proceeds of the Bonds, the
Cost of Construction shall be deemed to include the payment or
redemption, or provision therefor, of any obligations, other than
the Bonds, issued to finance or refinance any of the costs listed
above. The Cost of Construction shall also be deemed to include
all costs paid or incurred with respect to the Facilities by any
Person (as defined in the Loan Agreement) to whom the Facilities
have been leased or sold as a whole or in part, provided that
such costs, had they been paid or incurred by the Company, would
otherwise constitute a portion of the Cost of Construction.
Depositary:
"Depositary" shall mean The Depository Trust Company or any
successor thereto as a securities repository for the Bonds.
Facilities:
"Facilities" shall mean the real and personal properties,
machinery and equipment currently existing, under construction
and to be constructed which are described in Exhibit A to the
Loan Agreement, as revised from time to time to reflect any
changes therein, additions thereto, substitutions therefor and
deletions therefrom permitted by the terms of the Loan Agreement,
subject, however, to the provisions of Section 7.01 of the Loan
Agreement.
General Account:
"General Account" shall mean the account so named established
under Section 4.01 hereof.
Government Obligations:
"Government Obligations" shall mean:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by,
the United States of America entitled to the benefit of the
full faith and credit thereof; and
(b) certificates, depositary receipts or other
instruments which evidence a direct ownership interest in
obligations described in clause (a) above or in any specific
interest or principal payments due in respect thereof;
provided, however, that the custodian of such obligations or
specific interest or principal payments shall be a bank or
trust company organized under the laws of the United States of
America or of any state or territory thereof or of the
District of Columbia, with a combined capital stock surplus
and undivided profits of at least $50,000,000; and provided,
further, that except as may be otherwise required by law, such
custodian shall be obligated to pay to the holders of such
certificates, depositary receipts or other instruments the
full amount received by such custodian in respect of such
obligations or specific payments and shall not be permitted to
make any deduction therefrom.
Indenture:
"Indenture" shall mean this Indenture of Trust, dated as of
April 1, 1997, between the Pollution Control Corporation and the
Trustee, and any and all modifications, alterations, amendments
and supplements thereto.
Investment Account:
"Investment Account" shall mean any of the accounts so named
established under Sections 4.01 and 5.01 hereof.
Investment Securities:
"Investment Securities" shall mean any of the following
obligations or securities on which neither the Company nor any of
its subsidiaries is the obligor: (a) Government Obligations; (b)
interest bearing deposit accounts (which may be represented by
certificates of deposit) in national, state or foreign banks
having a combined capital and surplus of not less than
$10,000,000; (c) bankers' acceptances drawn on and accepted by
commercial banks having a combined capital and surplus of not
less than $10,000,000; (d) (i) direct obligations of, (ii)
obligations the principal of and interest on which are
unconditionally guaranteed by, and (iii) any other obligations
the interest on which is exempt from federal income taxation
issued by, any state of the United States of America, the
District of Columbia or the Commonwealth of Puerto Rico, or any
political subdivision, agency, authority or other instrumentality
of any of the foregoing, which, in any case, are rated by a
nationally recognized rating agency in any of its three highest
rating categories; (e) obligations of any agency or
instrumentality of the United States of America; (f) commercial
or finance company paper which is rated by a nationally
recognized rating agency in any of its three highest rating
categories; (g) corporate debt securities issued by corporations
having debt securities rated by a nationally recognized rating
agency in any of its three highest rating categories; (h)
repurchase agreements with banking or financial institutions
having a combined capital and surplus of not less than
$10,000,000 with respect to any of the foregoing obligations or
securities; (i) shares or interests in registered investment
companies whose assets consist of obligations or securities which
are described in any other clause of this sentence; and (j) any
other obligations which may lawfully be purchased by the Trustee.
The commercial banks and banking institutions referred to above
may include the entities acting as Trustee, Paying Agent,
Co-Paying Agent and Registrar, hereunder if such entities shall
otherwise satisfy the requirements set forth above.
Loan Agreement:
"Loan Agreement" shall mean the Loan Agreement, dated as of
April 1, 1997, between the Pollution Control Corporation and the
Company relating to the Bonds, and any and all modifications,
alterations, amendments and supplements thereto.
Loan Payments:
"Loan Payments" shall mean the payments required to be made by
the Company pursuant to Section 5.01 of the Loan Agreement.
1954 Code:
"1954 Code" shall mean the Internal Revenue Code of 1954, as
amended.
1996 Bonds:
"1996 Bonds" shall mean the $16,700,000 aggregate principal
amount of the Pollution Control Corporation's Pollution Control
Revenue Bonds, 1996 Series A (Tucson Electric Power Company
Project).
Notice by Mail:
"Notice by Mail" or "notice" of any action or condition "by
Mail" shall mean a written notice meeting the requirements of
this Indenture mailed by first-class mail to the Owners of
specified registered Bonds at the addresses shown in the
registration books maintained pursuant to Section 2.08 hereof;
provided, however, that if, because of the temporary or permanent
suspension of delivery of first-class mail or for any other
reason, it is impossible or impracticable to give such notice by
first-class mail, then such giving of notice in lieu thereof,
which may include publication, as shall be made with the approval
of the Trustee (or, if there be no trustee hereunder, the
Pollution Control Corporation) shall constitute a sufficient
giving of such notice.
Notice by Publication:
"Notice by Publication" or "notice" of any action or condition
"by Publication" shall mean publication of a notice meeting the
requirements of this Indenture in a newspaper or financial
journal of general circulation in The City of New York, New York,
which carries financial news, is printed in the English language
and is customarily published on each business day; provided,
however, that any successive weekly publication of notice
required hereunder may be made, unless otherwise expressly
provided herein, on the same or different days of the week and in
the same or different newspapers or financial journals; and
provided, further, that if, because of the temporary or permanent
suspension of the publication or general circulation of any
newspaper or financial journal or for any other reason, it is
impossible or impracticable to publish such notice in the manner
herein described, then such publication in lieu thereof as shall
be made with the approval of the Trustee (or, if there be no
trustee hereunder, the Pollution Control Corporation) shall
constitute a sufficient publication of such notice.
Outstanding:
"Outstanding", when used in reference to the Bonds, shall
mean, as at any particular date, the aggregate of all Bonds
authenticated and delivered under this Indenture except:
(a) those canceled by the Trustee at or prior to such
date or delivered to or acquired by the Trustee at or prior to
such date for cancellation;
(b) those deemed to be paid in accordance with Article
VIII hereof; and
(c) those in lieu of or in exchange or substitution for
which other Bonds shall have been authenticated and delivered
pursuant to this Indenture, unless proof satisfactory to the
Trustee and the Company is presented that such Bonds are held
by a bona fide holder in due course.
Owner:
"Owner" shall mean the person in whose name any Bond is
registered upon the registration books maintained pursuant to
Section 2.08 hereof. The Company may be an Owner.
Paying Agent; Co-Paying Agent; Principal Office thereof:
"Paying Agent" and "Co-Paying Agent" shall mean the paying
agent and any co-paying agent appointed in accordance with
Section 10.21 hereof. "Principal Office" of the Paying Agent or
any Co-Paying Agent shall mean the office thereof designated in
writing to the Trustee.
Plant:
"Plant" shall mean the Navajo Generating Station, an electric
power generating plant near Page, Arizona, in Coconino County,
Arizona, and any additions or improvements thereto or
replacements thereof.
Pollution Control Corporation:
"Pollution Control Corporation" shall mean Coconino County,
Arizona Pollution Control Corporation, an Arizona nonprofit
corporation and a political subdivision of the State of Arizona
incorporated for and with the approval of the County of Coconino,
Arizona, pursuant to the provisions of the Constitution of the
State of Arizona and the Act, its successors and their assigns.
Rebate Fund:
"Rebate Fund" shall mean the fund created by Section 7.08
hereof.
Receipts and Revenues of the Pollution Control Corporation from
the Loan Agreement:
"Receipts and Revenues of the Pollution Control Corporation
from the Loan Agreement" shall mean all moneys paid or payable to
the Trustee for the account of the Pollution Control Corporation
by the Company in respect of the Loan Payments and payments
pursuant to Section 9.01 of the Loan Agreement, and all receipts
of the Trustee which, under the provisions of this Indenture,
reduce the amount of such payments.
Record Date:
"Record Date" shall mean the close of business on the
fifteenth (15th) day of the calendar month immediately preceding
each regularly scheduled interest payment date.
Registrar; Principal Office thereof:
"Registrar" shall mean the registrar appointed in accordance
with Section 10.23 hereof. "Principal Office" of the Registrar
shall mean the office thereof designated in writing to the
Trustee.
Supplemental Indenture:
"Supplemental Indenture" shall mean any indenture of the
Pollution Control Corporation modifying, altering, amending,
supplementing or confirming this Indenture for any purpose, in
accordance with the terms hereof.
Supplemental Loan Agreement:
"Supplemental Loan Agreement" shall mean any agreement between
the Pollution Control Corporation and the Company modifying,
altering, amending or supplementing the Loan Agreement, in
accordance with the terms thereof and hereof.
Tax Agreement:
"Tax Agreement" shall mean that tax certificate and agreement,
dated the date of the initial authentication and delivery of the
Bonds, between the Pollution Control Corporation and the Company,
relating to the requirements of the Code and the 1954 Code, and
any and all modifications, alterations, amendments and
supplements thereto.
Trust Estate:
"Trust Estate" shall mean at any particular time all right,
title and interest of the Pollution Control Corporation in and to
the Loan Agreement (except its rights under Sections 5.03, 5.04,
6.03 and 8.05 thereof and any rights of the Pollution Control
Corporation to receive notices, certificates, requests,
requisitions and other communications thereunder), including
without limitation, the Receipts and Revenues of the Pollution
Control Corporation from the Loan Agreement, the Bond Fund and
the Construction Fund and all moneys and Investment Securities
from time to time on deposit therein (excluding, however, any
moneys or Investment Securities held in the Rebate Fund), any and
all other moneys and obligations (other than Bonds) which at such
time are deposited or are required to be deposited with, or are
held or are required to be held by or on behalf of, the Trustee,
the Paying Agent or any Co-Paying Agent in trust under any of the
provisions of this Indenture and all other rights, titles and
interests which at such time are subject to the lien of this
Indenture; provided, however, that in no event shall there be
included in the Trust Estate (a) moneys or obligations deposited
with or held by the Trustee in the Rebate Fund pursuant to
Section 7.08 hereof or (b) 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
VIII hereof or moneys held pursuant to Section 4.06 hereof.
Trustee; Principal Office thereof:
"Trustee" shall mean First Trust of New York, National
Association, as trustee under this Indenture, its successors in
trust and their assigns. "Principal Office" of the Trustee shall
mean the principal corporate trust office of the Trustee, which
office at the date of acceptance by the Trustee of the duties and
obligations imposed on the Trustee by this Indenture is located
at the address specified in Section 13.08 hereof.
ARTICLE II
THE BONDS
Section 2.01. Creation of Bonds. There is hereby
authorized and created under this Indenture, for the purpose of
providing moneys to pay a part of the Cost of Construction, an
issue of Bonds, entitled to the benefit, protection and security
of this Indenture, in the aggregate principal amount of Thirty-
six Million Seven Hundred Thousand Dollars ($36,700,000). Each
of the Bonds shall be designated by the title "Coconino County,
Arizona Pollution Control Corporation Pollution Control Revenue
Bond, 1997 Series A (Tucson Electric Power Company Navajo
Project)". The Bonds shall mature, subject to prior redemption
upon the terms and conditions hereinafter set forth, on October
1, 2032 and shall bear interest from the date thereof until
payment of the principal or redemption price thereof shall have
been made or provided for in accordance with the provisions
hereof, whether at maturity, upon redemption or otherwise, at the
rate of seven and one-eighth per centum (7 1/8%) per annum, with
interest thereon payable semi-annually on each October 1 and
April 1, commencing October 1, 1997. Interest shall be
calculated on the basis of a 360-day year consisting of twelve
30-day months.
Section 2.02. Form of Bonds. Bonds shall be authenticated
and delivered hereunder solely as fully registered bonds without
coupons in the denomination of $5,000 or integral multiples
thereof. Bonds shall be numbered as determined by the Trustee.
Bonds authenticated prior to the first interest payment date
shall be dated April 1, 1997. Bonds authenticated on or
subsequent to the first interest payment date shall be dated the
interest payment date next preceding the date of authentication
thereof, unless such date of authentication shall be an interest
payment date to which interest on the Bonds has been paid in full
or duly provided for, in which case they shall be dated such date
of authentication; provided, however, that if, as shown by the
records of the Trustee, interest on the Bonds shall be in
default, Bonds issued in exchange for Bonds surrendered for
transfer or exchange shall be dated the date to which interest
has been paid in full on the Bonds surrendered.
Principal of and premium, if any, on Bonds shall be payable to
the Owners of such Bonds upon presentation and surrender of such
Bonds at the Principal Office of the Paying Agent or any
Co-Paying Agent. Interest on the Bonds shall be paid by check
drawn upon the Paying Agent and mailed to the Owners of such
Bonds as of the close of business on the Record Date with respect
to each interest payment date at the registered addresses of such
Owners as they shall appear as of the close of business on such
Record Date on the registration books maintained pursuant to
Section 2.08 hereof notwithstanding the cancellation of any such
Bond upon any exchange or registration of transfer subsequent to
such Record Date, except that if and to the extent that there
should be a default on the payment of interest on any Bond, such
defaulted interest shall be paid to the Owners in whose name such
Bond (or any Bond or Bonds issued upon any exchange or
registration of transfer thereof) is registered as of the close
of business on a date selected by the Trustee in its discretion,
but not more than 15 days or less than 10 days prior to the date
of payment of such defaulted interest; notwithstanding the
foregoing, upon request to the Paying Agent by an Owner of not
less than $1,000,000 in aggregate principal amount of Bonds,
interest on such Bonds and, after presentation and surrender of
such Bonds, the principal thereof shall be paid to such Owner by
wire transfer to the account maintained within the continental
United States specified by such Owner or, if such Owner maintains
an account with the entity acting as Paying Agent, by deposit
into such account. Payment as aforesaid shall be made in such
coin or currency of the United States of America as, at the
respective times of payment, shall be legal tender for the
payment of public and private debts.
The Bonds and the form for registration of transfer and the
form of certificate of authentication to be printed on the Bonds
are to be in substantially the forms thereof set forth in
Exhibits A, B and C hereto, respectively, with necessary or
appropriate variations, omissions and insertions as permitted or
required by this Indenture.
Section 2.03. Execution of Bonds. The Bonds shall be
executed on behalf of the Pollution Control Corporation by the
President or a Vice President of the Pollution Control
Corporation and shall have affixed, impressed or reproduced
thereon the official seal of the Pollution Control Corporation
which shall be attested by the Secretary or an Assistant
Secretary of the Pollution Control Corporation. Each of the
foregoing officers may execute or cause to be executed with a
facsimile signature in lieu of his manual signature the Bonds,
provided the signature of either the President or a Vice
President of the Pollution Control Corporation or the Secretary
or Assistant Secretary of the Pollution Control Corporation
shall, if required by applicable laws, be manually subscribed.
In case any officer of the Pollution Control Corporation whose
signature or a facsimile of whose signature shall appear on the
Bonds shall cease to be such officer before the authentication by
the Trustee and delivery of such Bonds, such signature or such
facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such officer had remained in office
until delivery; and any Bond may be signed on behalf of the
Pollution Control Corporation by such persons as, at the time of
execution of such Bond, shall be the proper officers of the
Pollution Control Corporation, even though at the date of such
Bond or of the execution and delivery of this Indenture any such
person was not such officer.
Section 2.04. Authentication of Bonds. Only such Bonds as
shall have endorsed thereon a certificate of authentication
substantially in the form set forth in Exhibit C hereto duly
executed by the Trustee shall be entitled to any right or benefit
under this Indenture. No Bond shall be valid or obligatory for
any purpose unless and until such certificate of authentication
shall have been duly executed by the Trustee, and such executed
certificate of authentication of the Trustee upon any such Bonds
shall be conclusive evidence that such Bond has been
authenticated and delivered under this Indenture. The Trustee's
certificate of authentication on any Bond shall be deemed to have
been executed by it if signed with an authorized signature of the
Trustee, but it shall not be necessary that the same person sign
the certificate of authentication on all of the Bonds issued
hereunder. This Section 2.04 is subject to the provisions of
Section 10.17 hereof.
Section 2.05. Bonds Not General Obligations. Neither the
County of Coconino, Arizona nor the State of Arizona shall in any
event be liable for the payment of the principal of or premium,
if any, or interest on the Bonds, and neither the Bonds nor the
premium, if any, or the interest thereon, shall be construed to
constitute an indebtedness of County of Coconino, Arizona or the
State of Arizona within the meaning of any constitutional or
statutory provisions whatsoever. The Bonds and the premium, if
any, and the interest thereon shall be limited obligations of the
Pollution Control Corporation payable solely from the Receipts
and Revenues of the Pollution Control Corporation from the Loan
Agreement and the other moneys pledged therefor under this
Indenture, and such fact shall be plainly stated on the face of
each Bond.
Section 2.06. Prerequisites to Authentication of Bonds.
The Pollution Control Corporation shall execute and deliver to
the Trustee and the Trustee shall authenticate the Bonds and
deliver said Bonds to the initial purchasers thereof as may be
directed hereinafter in this Section 2.06.
Prior to the delivery on original issuance by the Trustee of
any authenticated Bonds there shall be or have been delivered to
the Trustee:
(a) a duly certified copy of a resolution of the Board
of Directors of the Pollution Control Corporation authorizing
the execution and delivery of this Indenture and the Loan
Agreement and the issuance of the Bonds;
(b) an original duly executed counterpart or a duly
certified copy of the Loan Agreement;
(c) a request and authorization to the Trustee on
behalf of the Pollution Control Corporation, signed by its
President or a Vice President, to authenticate and deliver the
Bonds in the aggregate principal amount determined by this
Indenture to the purchaser or purchasers therein identified
upon payment to the Trustee, but for the account of the
Pollution Control Corporation, of a sum specified in such
request and authorization plus any accrued interest on such
Bonds to the date of delivery; and
(d) a written statement on behalf of the Company,
executed by the President, any Vice President or the
Treasurer, (i) approving the issuance and delivery of the
Bonds and (ii) consenting to each and every provision of this
Indenture.
Section 2.07. Lost or Destroyed Bonds or Bonds Canceled in
Error. If any Bond, whether in temporary or definitive form, is
lost (whether by reason of theft or otherwise), destroyed
(whether by mutilation, damage, in whole or in part, or
otherwise) or canceled in error, the Pollution Control
Corporation may execute and the Trustee may authenticate a new
Bond of like date and denomination and bearing a number not
contemporaneously outstanding; provided that (a) in the case of
any mutilated Bond, such mutilated Bond shall first be
surrendered to the Trustee and (b) in the case of any lost Bond
or Bond destroyed in whole, there shall be first furnished to the
Pollution Control Corporation, the Trustee and the Company
evidence of such loss or destruction. In every case, the
applicant for a substitute Bond shall furnish the Pollution
Control Corporation, the Trustee and the Company such security or
indemnity as may be required by any of them. In the event any
lost or destroyed Bond or a Bond canceled in error shall have
matured or is about to mature, or has been called for redemption,
instead of issuing a substitute Bond the Trustee may, in its
discretion, pay the same without surrender thereof if there shall
be first furnished to the Pollution Control Corporation, the
Trustee and the Company evidence of such loss, destruction or
cancellation, together with indemnity, satisfactory to them.
Upon the issuance of any substitute Bond, the Pollution Control
Corporation 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. The Trustee may charge the Owner
of any such Bond with the Trustee's reasonable fees and expenses
in connection with any transaction described in this Section
2.07.
Every substitute Bond issued pursuant to the provisions of
this Section 2.07 by virtue of the fact that any Bond is lost,
destroyed or canceled in error shall constitute an additional
contractual obligation of the Pollution Control Corporation,
whether or not the Bond so lost, destroyed or canceled shall be
at any time enforceable, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any
and all other Bonds duly issued hereunder. All Bonds shall be
held and owned upon the express condition that, to the extent
permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of lost, destroyed or
improperly canceled Bonds, notwithstanding any law or statute now
existing or hereafter enacted.
Section 2.08. Transfer, Registration and Exchange of Bonds.
The Registrar shall maintain and keep, at its Principal Office,
books for the registration and registration of transfer of Bonds,
which, at all reasonable times, shall be open for inspection by
the Pollution Control Corporation, the Trustee and the Company;
and, upon presentation for such purpose of any Bond entitled to
registration or registration of transfer at the Principal Office
of the Registrar, the Registrar shall register or register the
transfer in such books, under such reasonable regulations as the
Registrar may prescribe. The Registrar shall make all necessary
provisions to permit the exchange or registration of transfer of
Bonds at its Principal Office.
The transfer of any Bond shall be registered upon the
registration books of the Registrar at the written request of the
Owner thereof or his attorney duly authorized in writing, upon
surrender thereof at the Principal Office of the Registrar,
together with a written instrument of transfer satisfactory to
the Registrar duly executed by the Owner or his duly authorized
attorney. Upon the registration of transfer of any such Bond or
Bonds, the Pollution Control Corporation shall issue in the name
of the transferee, in authorized denominations, a new Bond or
Bonds in the same aggregate principal amount as the surrendered
Bond or Bonds.
The Pollution Control Corporation, the Trustee, the Paying
Agent, any Co-Paying Agent and the Registrar may deem and treat
the Owner of any Bond as the absolute owner of such Bond, whether
such Bond shall be overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and premium, if
any, and, except as provided in Section 2.02 hereof, interest on
such Bond and for all other purposes, and neither the Pollution
Control Corporation, the Trustee, the Paying Agent, any Co-Paying
Agent nor the Registrar shall be affected by any notice to the
contrary. All such payments so made to any such Owner or upon
his order shall be valid and effective to satisfy and discharge
the liability upon such Bond to the extent of the sum or sums so
paid.
Bonds, upon surrender thereof at the Principal Office of the
Registrar may, at the option of the Owner thereof, be exchanged
for an equal aggregate principal amount of Bonds of any
authorized denomination.
In all cases in which the privilege of exchanging Bonds or
registering the transfer of Bonds is exercised, the Pollution
Control Corporation shall execute and the Trustee shall
authenticate and deliver Bonds in accordance with the provisions
of this Indenture. For every such exchange or registration of
transfer of Bonds, whether temporary or definitive, the Pollution
Control Corporation, the Registrar, or the Trustee may make a
charge sufficient to reimburse it for any tax or other
governmental charge required to be paid with respect to such
exchange or registration of transfer, which sum or sums shall be
paid by the person requesting such exchange or registration of
transfer as a condition precedent to the exercise of the
privilege of making such exchange or registration of transfer.
The Registrar shall not be obligated (a) to make any such
exchange or registration of transfer of Bonds during the fifteen
(15) days next preceding the date on which notice of any proposed
redemption of Bonds is given or (b) to make any exchange or
registration of transfer of any Bonds called for redemption.
The Bonds are to be initially registered in the name of Cede &
Co., as nominee for the Depositary. Such Bonds shall not be
transferable or exchangeable, nor shall any purported transfer be
registered, except as follows:
(a) such Bonds may be transferred in whole, and
appropriate registration of transfer effected, if such
transfer is by such nominee to the Depositary, or by the
Depositary to another nominee thereof, or by any nominee of
the Depositary to any other nominee thereof, or by the
Depositary or any nominee thereof to any successor securities
depositary or any nominee thereof; and
(b) such Bond may be exchanged for definitive Bonds
registered in the respective names of the beneficial holders
thereof, and thereafter shall be transferable without
restriction, if:
(i) the Depositary shall have notified the Company and
the Trustee that it is unwilling or unable to continue to act
as securities depositary with respect to such Bonds and the
Trustee shall not have been notified by the Company within
ninety (90) days of the identity of a successor securities
depositary with respect to such Bonds;
(ii) the Company shall have delivered to the Trustee a
written instrument to the effect that such Bonds shall be so
exchangeable on and after a date specified therein; or
(iii) (1) an Event of Default shall have occurred and
be continuing, (2) the Trustee shall have given notice of such
Event of Default pursuant to Section 10.19 hereof and (3)
there shall have been delivered to the Pollution Control
Corporation, the Company and the Trustee an opinion of counsel
to the effect that the interests of the beneficial owners of
such Bonds in respect thereof will be materially impaired
unless such owners become owners of definitive Bonds.
The Bonds delivered to the Depositary may contain a legend
reflecting the foregoing restrictions on registration of transfer
and exchange.
Section 2.09. Other Obligations. The Pollution Control
Corporation expressly reserves the right to issue, to the extent
permitted by law, but shall not be obligated to issue,
obligations under another indenture or indentures to provide
additional funds to pay the Cost of Construction of the
Facilities or to refund all or any principal amount of the Bonds,
or any combination thereof.
Section 2.10 Temporary Bonds. Pending the preparation of
definitive Bonds, the Pollution Control Corporation may execute
and the Trustee shall authenticate and deliver temporary Bonds.
Temporary Bonds shall be issuable as registered Bonds without
coupons, of any authorized denomination, and substantially in the
form of the definitive Bonds but with such omissions, insertions
and variations as may be appropriate for temporary Bonds, all as
may be determined by the Pollution Control Corporation.
Temporary Bonds may contain such reference to any provisions of
this Indenture as may be appropriate. Every temporary Bond shall
be executed by the Pollution Control Corporation and be
authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the
definitive Bonds. As promptly as practicable the Pollution
Control Corporation shall execute and shall furnish definitive
Bonds and thereupon temporary Bonds may be surrendered in
exchange therefor without charge at the Principal Office of the
Trustee, and the Trustee shall authenticate and deliver in
exchange for such temporary Bonds a like aggregate principal
amount of definitive Bonds of authorized denominations. Until so
exchanged the temporary Bonds shall be entitled to the same
benefits under this Indenture as definitive Bonds.
Section 2.11. Cancellation of Bonds. All Bonds which shall
have been surrendered to the Paying Agent or any Co-Paying Agent
for payment or redemption, and all Bonds which shall have been
surrendered to the Registrar for exchange or registration of
transfer, shall be delivered to the Trustee for cancellation.
All Bonds delivered to or acquired by the Trustee for
cancellation shall be canceled and destroyed by the Trustee. The
Trustee shall furnish to the Pollution Control Corporation, the
Paying Agent, the Registrar and the Company counterparts of
certificates evidencing such cancellation and destruction and
specifying such Bonds by number.
Section 2.12. Payment of Principal and Interest. For the
payment of interest on the Bonds, the Pollution Control
Corporation shall cause to be deposited in the Bond Fund, on each
interest payment date, solely out of the Receipts and Revenues of
the Pollution Control Corporation from the Loan Agreement and
other moneys pledged therefor, an amount sufficient to pay the
interest to become due on such interest payment date. The
obligation of the Pollution Control Corporation to cause any such
deposit to be made hereunder shall be reduced by the amount of
moneys in the Bond Fund available on such interest payment date
for the payment of interest on the Bonds.
For the payment of the principal of the Bonds upon maturity,
the Pollution Control Corporation shall cause to be deposited in
the Bond Fund, on the stated or accelerated date of maturity,
solely out of the Receipts and Revenues of the Pollution Control
Corporation from the Loan Agreement and other moneys pledged
therefor, an amount sufficient to pay the principal of the Bonds.
The obligation of the Pollution Control Corporation to cause any
such deposit to be made hereunder shall be reduced by the amount
of moneys in the Bond Fund available on the maturity date for the
payment of the principal of the Bonds.
Section 2.13. Applicability of Book-Entry Provisions.
Anything in this Indenture to the contrary notwithstanding, (a)
the provisions of the Blanket Issuer Letter of Representations,
dated October 12, 1995, between the Pollution Control Corporation
and The Depository Trust Company relating to the manner of and
procedures for payment and redemption of Bonds and related
matters shall apply so long as such Depositary shall be the Owner
of all Outstanding Bonds and (b) the Pollution Control
Corporation, the Trustee or the Paying Agent, as applicable, may
enter into a similar agreement, on terms satisfactory to the
Company, with any subsequent Depositary and the provisions
thereof shall apply so long as such Depositary shall be the Owner
of all Outstanding Bonds.
ARTICLE III
REDEMPTION OF BONDS
Section 3.01. Redemption Provisions. (a) The Bonds shall
be subject to redemption by the Pollution Control Corporation, at
the direction of the Company, on any date on or after October 1,
2007 in whole at any time or in part from time to time, at the
applicable redemption price (expressed as a percentage of
principal amount) set forth below, plus accrued interest to the
redemption date:
Redemption Period Redemption Price
----------------- ----------------
October 1, 2007 through
September 30, 2008 102%
October 1, 2008 through
September 30, 2009 101%
October 1, 2009 and thereafter 100%
(b) The Bonds shall be subject to redemption by the Pollution
Control Corporation, at the direction of the Company, in whole at
any time at the principal amount thereof plus accrued interest to
the redemption date, if:
(i) the Company shall have determined that the
continued operation of the Plant is impracticable,
uneconomical or undesirable for any reason;
(ii) the Company shall have determined that the
continued operation of the Facilities is impracticable,
uneconomical or undesirable due to (A) the imposition of
taxes, other than ad valorem taxes currently levied upon
privately owned property used for the same general purpose as
the Facilities, or other liabilities or burdens with respect
to the Facilities or operation thereof, (B) changes in
technology, in environmental standards or legal requirements
or in the economic availability of materials, supplies,
equipment or labor or (C) destruction of or damage to all or
part of the Facilities;
(iii) all or substantially all of the Facilities or
the Plant shall have been condemned or taken by eminent
domain; or
(iv) the operation of the Facilities or the Plant
shall have been enjoined or shall have otherwise been
prohibited by, or shall conflict with, any order, decree, rule
or regulation of any court or of any federal, state or local
regulatory body, administrative agency or other governmental
body.
(c) The Bonds shall be subject to mandatory redemption by the
Pollution Control Corporation, at the principal amount thereof
plus accrued interest to the redemption date, on the 180th day
(or such earlier date as may be designated by the Company) after
a final determination by a court of competent jurisdiction or an
administrative agency, to the effect that, as a result of a
failure by the Company to perform or observe any covenant,
agreement or representation contained in the Loan Agreement, the
interest payable on the Bonds is included for federal income tax
purposes in the gross income of the owners thereof, other than
any owner of a Bond who is a "substantial user" of the Facilities
or a "related person" within the meaning of Section 103(b)(13) of
the 1954 Code. No determination by any court or administrative
agency shall be considered final for the purposes of this Section
3.01 (c) unless the Company shall have been given timely notice
of the proceeding which resulted in such determination and an
opportunity to participate in such proceeding, either directly or
through an owner of a Bond, and until the conclusion of any
appellate review sought by any party to such proceeding or the
expiration of the time for seeking such review. The Bonds shall
be redeemed either in whole or in part in such principal amount
that the interest payable on the Bonds remaining outstanding
after such redemption would not be included in the gross income
of any owner thereof, other than an owner of a Bond who is a
"substantial user" of the Facilities or a "related person" within
the meaning of Section 103(b)(13) of the 1954 Code.
(d) In the event that the aggregate of the amounts deposited
pursuant to Section 5.02 hereof into the Capital Account and the
Investment Account maintained within the Bond Fund, together with
any income or other gain from the investment thereof, shall at
any time, or from time to time, be equal to or greater than
$5,000, but only to the extent that such amounts are required
under Section 4.04(b) hereof to be applied to the redemption of
Bonds, the Pollution Control Corporation shall redeem Bonds, at
the principal amount thereof plus accrued interest to the
redemption date, in the largest aggregate principal amount which
does not exceed the amount of such deposit or deposits, together
with such income or gain, on the next interest payment date on
which a redemption may be made in accordance with the provisions
of Section 3.03(a) or (b) hereof and on which Bonds, in such
amount, are otherwise redeemable at the principal amount thereof
under subsection (a) or (b) of this Section 3.01.
Section 3.02. Selection of Bonds to be Redeemed. If less
than all the Bonds shall be called for redemption under any
provision of this Indenture permitting such partial redemption,
the particular Bonds or portions of Bonds to be redeemed shall be
selected by the Trustee, in such manner as the Trustee in its
discretion may deem proper, in the aggregate principal amount
designated to the Trustee by the Company or otherwise as required
by this Indenture; provided, however, that if, as indicated in a
certificate of an Authorized Company Representative delivered to
the Trustee, the Company shall have offered to purchase all Bonds
then Outstanding and less than all such Bonds have been tendered
to the Company for such purchase, the Trustee, at the direction
of an Authorized Company Representative, shall select for
redemption all such Bonds which shall not have been so tendered;
and provided, further, that the portion of any Bond to be
redeemed shall be in the principal amount of $5,000 or some
integral multiple thereof and that, in selecting Bonds for
redemption, the Trustee shall treat each Bond as representing
that number of Bonds which is obtained by dividing the principal
amount of such Bond by $5,000. If it is determined that one or
more, but not all, of the $5,000 units of principal amount
represented by any such Bond is to be called for redemption,
then, upon notice of intention to redeem such $5,000 unit or
units, the Owner of such Bond shall forthwith surrender such Bond
to the Paying Agent or any Co-Paying Agent for (y) payment to
such Owner of the redemption price (including the redemption
premium, if any, and accrued interest to the date fixed for
redemption) of the $5,000 unit or units of principal amount
called for redemption and (z) delivery to such Owner of a new
Bond or Bonds in the aggregate principal amount of the unredeemed
balance of the principal amount of any such Bond. Bonds
representing the unredeemed balance of the principal amount of
any such Bond shall be delivered to the Owner thereof, without
charge therefor. If the Owner of any such Bond of a denomination
greater than $5,000 shall fail to present such Bond to the Paying
Agent or any Co-Paying Agent for payment and exchange as
aforesaid, such Bond shall, nevertheless, become due and payable
on the date fixed for redemption to the extent of the $5,000 unit
or units of principal amount called for redemption (and to that
extent only).
Section 3.03. Procedure for Redemption. (a) In the event
any of the Bonds are called for redemption, the Trustee shall
give notice, in the name of the Pollution Control Corporation, of
the redemption of such Bonds, which notice shall (i) specify the
Bonds to be redeemed, the redemption date, the redemption price,
and the place or places where amounts due upon such redemption
will be payable (which shall be the Principal Office of the
Paying Agent or any Co-Paying Agent) and, if less than all of the
Bonds are to be redeemed, the numbers of the Bonds to be
redeemed, and the portion of the principal amount of any Bond to
be redeemed in part, (ii) state any condition to such redemption
and (iii) state that on the redemption date, and upon the
satisfaction of any such condition, the Bonds or portions thereof
to be redeemed shall cease to bear interest. Such notice may set
forth any additional information relating to such redemption.
Such notice shall be given by Mail at least thirty (30) days
prior to the date fixed for redemption to the Owners of the Bonds
to be redeemed; provided, however, that failure duly to give such
Notice by Mail, or any defect therein, shall not affect the
validity of any proceedings for the redemption of Bonds as to
which there shall have been no such failure or defect. If a
notice of redemption shall be unconditional, or if the conditions
of a conditional notice or redemption shall have been satisfied,
then upon presentation and surrender of Bonds so called for
redemption at the place or places of payment, such Bonds shall be
redeemed. The Trustee shall promptly deliver to the Company a
copy of each such notice of redemption.
(b) With respect to any notice of redemption of Bonds in
accordance with subsection (a) or (b) of Section 3.01 hereof,
unless, upon the giving of such notice, such Bonds shall be
deemed to have been paid within the meaning of Article VIII
hereof, such notice shall state that such redemption shall be
conditional upon the receipt, by the Trustee at or prior to the
opening of business on the date fixed for such redemption, of
moneys sufficient to pay the principal of and premium, if any,
and interest on such Bonds to be redeemed, and that if such
moneys shall not have been so received said notice shall be of no
force and effect and the Pollution Control Corporation shall not
be required to redeem such Bonds. In the event that such notice
of redemption contains such a condition and such moneys are not
so received, the redemption shall not be made and the Trustee
shall within a reasonable time thereafter give notice, in the
manner in which the notice of redemption was given, that such
moneys were not so received.
(c) Any Bonds and portions of Bonds which have been duly
selected for redemption shall cease to bear interest on the
specified redemption date provided that moneys sufficient to pay
the principal of, premium, if any, and interest on such Bonds
shall be on deposit with the Trustee on the date fixed for
redemption so that such Bonds will be deemed to be paid in
accordance with Article VIII hereof.
Section 3.04. Payment of Redemption Price. For the
redemption of any of the Bonds, the Pollution Control Corporation
shall cause to be deposited in the Bond Fund, on the redemption
date, solely out of the Receipts and Revenues of the Pollution
Control Corporation from the Loan Agreement, an amount sufficient
to pay the principal of and premium, if any, and interest to
become due on such redemption date. The obligation of the
Pollution Control Corporation to cause any such deposit to be
made hereunder shall be reduced by the amount of moneys in the
Bond Fund available on such redemption date for payment of the
principal of and premium, if any, and accrued interest on the
Bonds to be redeemed.
Section 3.05. No Partial Redemption After Default.
Anything in this Indenture to the contrary notwithstanding, if
there shall have occurred and be continuing an Event of Default
defined in clause (a) or (b) of the first paragraph of Section
9.01 hereof, there shall be no redemption of less than all of the
Bonds at the time Outstanding other than a partial redemption in
connection with an offer by the Company to purchase all Bonds
Outstanding as contemplated in the first proviso to the first
sentence of Section 3.02 hereof.
ARTICLE IV
THE BOND FUND
Section 4.01. Creation of Bond Fund. There is hereby
created and established with the Trustee a trust fund in the name
of the Pollution Control Corporation to be designated "Coconino
County, Arizona Pollution Control Corporation Pollution Control
Revenue Bonds, 1997 Series A (Tucson Electric Power Company
Navajo Project) Bond Fund". The Trustee shall establish and
maintain within the Bond Fund a "Capital Account", an "Investment
Account" and a "General Account". In addition, the Trustee shall
establish and maintain such segregated subaccounts within the
Capital Account or the Investment Account and such other
segregated subaccounts within the Bond Fund as may be requested
by an Authorized Company Representative. The Bond Fund, and all
moneys and certificated securities therein, shall be kept in the
possession of the Trustee.
Section 4.02. Liens. The Pollution Control Corporation
shall not create any lien upon the Bond Fund or upon the Receipts
and Revenues of the Pollution Control Corporation from the Loan
Agreement other than the lien hereby created.
Section 4.03. Deposits into Bond Fund. (a) There shall be
deposited into the Bond Fund:
(i) the accrued interest, if any, on the Bonds accrued
to the date of delivery thereof and paid by the initial
purchasers thereof, such accrued interest to be deposited into
the General Account;
(ii) all amounts required to be deposited into the Bond
Fund by Section 5.02 hereof, such amounts to be deposited into
the Capital Account or the Investment Account;
(iii) all amounts required to be deposited into the
Bond Fund by Sections 5.03 and 5.04 hereof, such amounts to be
deposited into the General Account;
(iv) all Loan Payments, such payments and moneys to be
deposited into the General Account; and
(v) all other moneys received by the Trustee under and
pursuant to any provision of the Loan Agreement, other than
Sections 5.03, 5.04 and 8.05 thereof, or from any other source
when accompanied by directions by the Company that such moneys
are to be paid into the Bond Fund, such moneys to be deposited
into the account specified by such provision of the Loan
Agreement or by such directions, or, if no specification is
made, into the General Account.
(b) All income or other gain from the investment of moneys in
the Capital Account or the Investment Account shall be deposited
into the Investment Account. All income or other gain from the
investment of moneys in the General Account shall be deposited
into the General Account.
Section 4.04. Use of Moneys in Bond Fund. (a) Moneys, if
any, paid into the Bond Fund pursuant to clause (i) of Section
4.03(a) hereof shall be applied to the payment of interest on the
Bonds. Except as otherwise provided in Sections 4.06, 9.01 and
10.04 hereof, all other moneys in the Bond Fund constituting part
of the Trust Estate shall be used solely for the payment of the
principal of and premium, if any, and interest on the Bonds as
the same shall become due and payable at maturity, upon
redemption or otherwise.
(b) Moneys deposited pursuant to Section 5.02 hereof into the
Capital Account or the Investment Account maintained within the
Bond Fund, and any income or other gain from the investment
thereof, shall be applied by the Trustee (i) in whole or in part
(A) to the purchase of Bonds in such amounts, at such prices, at
such times and otherwise as directed by an Authorized Company
Representative, or to the redemption, at the direction of the
Company, of Bonds pursuant to subsection (b) or, if applicable,
(a) of Section 3.01 hereof or (B) in any other manner directed by
an Authorized Company Representative which, as indicated in an
opinion of Bond Counsel furnished by the Company to the Pollution
Control Corporation and the Trustee, will not, in and of itself,
impair the validity under the Act of the Bonds or the exclusion
of the interest on the Bonds from gross income for federal income
tax purposes, or, in the absence of any such purchase, redemption
or direction on or prior to the forty-fifth (45th) day prior to
the first interest payment date specified in Section 3.01(d)
hereof, (ii) to the payment of principal upon the redemption,
from time to time, of Bonds pursuant to Section 3.01(d) hereof,
any moneys which are not so applied to be retained in the
accounts into which they were deposited and applied by the
Trustee to the payment of principal of Bonds either at maturity
or upon the redemption of all or any portion of the Bonds,
whichever occurs first. Pending the application of moneys
deposited into the Bond Fund pursuant to Section 5.02 hereof,
such moneys may be invested in Investment Securities in the
manner permitted by Section 6.01 hereof, provided that such
investment shall not produce a yield greater than the yield on
the Bonds unless, as indicated in an opinion of Bond Counsel
furnished by the Company to the Pollution Control Corporation and
the Trustee, investments producing a greater yield would not, in
and of itself, impair the exclusion from gross income for federal
tax purposes of the interest on the Bonds.
(c) In the event that all of the Bonds cease to be
Outstanding, any moneys remaining in the Capital Account or the
Investment Account shall be deposited into the General Account.
Section 4.05. Custody of Bond Fund; Withdrawal of Moneys.
The Bond Fund shall be in the custody of the Trustee but in the
name of the Pollution Control Corporation and the Pollution
Control Corporation hereby authorizes and directs the Trustee to
withdraw from the Bond Fund and furnish to the Paying Agent funds
constituting part of the Trust Estate sufficient to pay the
principal of and premium, if any, and interest on the Bonds as
the same shall become due and payable, and to withdraw from the
Bond Fund funds sufficient to pay any other amounts payable
therefrom as the same shall become due and payable.
Section 4.06. Bonds Not Presented for Payment. In the
event any Bonds shall not be presented for payment when the
principal thereof and premium, if any, thereon become due, either
at maturity or at the date fixed for redemption thereof or
otherwise, if moneys sufficient to pay such Bonds are held by the
Paying Agent or any Co-Paying Agent for the benefit of the Owners
thereof, the Paying Agent shall segregate and hold such moneys in
trust, without liability for interest thereon, for the benefit of
the Owners of such Bonds, who shall, except as provided in the
following paragraph, thereafter be restricted exclusively to such
fund or funds for the satisfaction of any claim of whatever
nature on their part under this Indenture or relating to said
Bonds.
Any moneys which the Paying Agent shall segregate and hold in
trust for the payment of the principal of and premium, if any, or
interest on any Bond and remaining unclaimed for one year after
such principal, premium, if any, or interest has become due and
payable shall, upon the Company's written request to the Paying
Agent, be paid to the Company, with notice to the Trustee of such
action; provided, however, that before the Paying Agent shall be
required to make any such repayment, the Paying Agent may, and at
the request of the Trustee shall, at the expense of the Company
cause notice to be given once by Publication to the effect that
such money remains unclaimed and that, after a date specified
therein, which shall not be less than thirty (30) days from the
date of such notice by Publication, any unclaimed balance of such
moneys then remaining will be paid to the Company. After the
payment of such unclaimed moneys to the Company, the Owner of
such Bond shall thereafter look only to the Company for the
payment thereof, and all liability of the Pollution Control
Corporation, the Trustee and the Paying Agent with respect to
such moneys shall thereupon cease.
Section 4.07. Moneys Held in Trust. All moneys and
Investment Securities held by the Trustee in the Bond Fund, and
all moneys required to be deposited with or paid to the Trustee
for deposit into the Bond Fund, and all moneys withdrawn from the
Bond Fund and held by the Trustee, the Paying Agent, any
Co-Paying Agent, shall be held by the Trustee, the Paying Agent
or any Co-Paying Agent, as the case may be, in trust, and such
moneys and Investment Securities (other than moneys held pursuant
to Section 4.06 hereof and moneys or Investment Securities held
in the Rebate Fund established in furtherance of the obligations
of the Company under clause (b) of Section 6.04 of the Loan
Agreement), while so held or so required to be deposited or paid,
shall constitute part of the Trust Estate and be subject to the
lien and security interest created hereby in favor of the Trustee
for the benefit of the Owners from time to time of the Bonds.
The Company shall have no right, title or interest in the Bond
Fund, except such rights as may arise after the right, title and
interest of the Trustee in and to the Trust Estate and all
covenants, agreements and other obligations of the Pollution
Control Corporation under this Indenture shall have ceased,
terminated and become void and shall have been satisfied and
discharged in accordance with Article VIII hereof.
ARTICLE V
THE CONSTRUCTION FUND
Section 5.01. Creation of, and Disbursements from,
Construction Fund. (a) There is hereby created and established
with the Trustee a trust fund in the name of the Pollution
Control Corporation to be designated "Coconino County, Arizona
Pollution Control Corporation Pollution Control Revenue Bonds,
1997 Series A (Tucson Electric Power Company Navajo Project)
Construction Fund". The Trustee shall establish and maintain
within the Construction Fund a "Capital Account" and an
"Investment Account". The Trustee shall establish and maintain
any subaccount within the Capital Account or the Investment
Account which may be requested by an Authorized Company
Representative. The Construction Fund, and all moneys and
certificated securities therein, shall be kept in the possession
of the Trustee. The Pollution Control Corporation shall not
create any lien upon the Construction Fund other than the lien
hereby created.
(b) The proceeds from the issuance and sale of the Bonds,
other than the $16,700,000 deposited in escrow with the trustee
for the 1996 Bonds as provided in Section 4.03 of the Loan
Agreement and accrued interest, if any, on such Bonds to the date
of delivery thereof paid by the initial purchasers thereof, shall
be deposited into the Capital Account. All income or other gain
from the investment of moneys in the Capital Account or the
Investment Account shall be deposited into the Investment
Account. In the event that all or a portion of the proceeds of
the Bonds shall have been applied to the payment or redemption,
or provision therefor, of any obligations issued by the Pollution
Control Corporation other than Bonds, any balance remaining in
the construction, acquisition or other similar fund maintained in
respect of such obligations, which balance shall have been
delivered to the Trustee accompanied by a direction of the
Company that such balance be deposited into the Construction
Fund, shall be deposited into the Capital Account and the
Investment Account in accordance with such direction.
(c) The Trustee is hereby authorized and directed to disburse
moneys in the Construction Fund to or upon the order of the
Company from time to time upon receipt by the Trustee of
requisitions executed by, or communications by telegram, telex or
facsimile transmission from, an Authorized Company
Representative, which requisitions or communications shall state
with respect to each payment to be made: (i) the requisition
number, (ii) the name and address of the person, firm or
corporation to whom payment is due or has been made (or, in the
case of payments to the Bond Fund, instructions to make such
payments thereto), (iii) the amount paid or to be paid, (iv) the
account or accounts within the Construction Fund from which
payment of such requisition, or any portion thereof, shall be
made, (v)(A) that each obligation, item of cost or expense with
respect to which such requisition is being made has been properly
incurred and has been paid or is then due and payable as an item
of the Cost of Construction, is a proper charge against the
Construction Fund, and has not been the basis of any previous
final payment therefrom or from the proceeds of any other
obligations issued by the Pollution Control Corporation or (B) in
the event that a portion of the Bonds shall have been paid,
redeemed or deemed to have been paid within the meaning of
Article VIII hereof by reason of the application of the proceeds
of the sale of any obligations issued under an indenture other
than this Indenture and if the payment of such requisition is to
be made into the construction, acquisition or other similar fund
created under such other indenture, that upon disbursement from
such construction, acquisition or other similar fund, each
obligation, item of cost or expense mentioned in the requisition
for such disbursement shall have been properly incurred and shall
have been paid or will then be due and payable as an item of the
Cost of Construction, (vi) that the payment of such requisition
will not result in a breach of any of the covenants of the
Company contained in Section 4.04 (c) or (d) of the Loan
Agreement and (vii) that, to the best of the knowledge of such
Authorized Company Representative, there shall not have occurred
and be continuing any event of default under the Loan Agreement.
In Section 4.04 of the Loan Agreement the Company has agreed that
any such communication by telegram, telex or facsimile
transmission shall be promptly confirmed by a requisition
executed by an Authorized Company Representative.
(d) In paying any requisition under this Section 5.01, the
Trustee shall be entitled to rely as to the completeness and
accuracy of all statements in such requisition upon the approval
of such requisition by an Authorized Company Representative,
execution thereof to be conclusive evidence of such approval, and
the Company has by the provisions of the Loan Agreement
covenanted and agreed to indemnify and save harmless the Trustee
from any liability incurred in connection with the payment of any
requisition so executed by an Authorized Company Representative.
The Trustee shall keep and maintain adequate records
pertaining to each account within the Construction Fund and all
disbursements therefrom and, upon receipt of a certificate
furnished pursuant to Section 3.04 or Section 3.08(b) of the Loan
Agreement, the Trustee shall, if requested by the Pollution
Control Corporation or the Company, file an accounting thereof
with the Pollution Control Corporation and with the Company.
Section 5.02. Completion of Facilities; Termination of
Construction. Upon receipt by the Trustee of a certificate
furnished pursuant to Section 3.04 or Section 3.08(b) of the Loan
Agreement, any balance remaining in the Capital Account or the
Investment Account maintained within the Construction Fund (other
than amounts retained by the Trustee at the direction of the
Company pursuant to Section 3.04 or 3.08 of the Loan Agreement or
in furtherance of the covenant of the Company contained in clause
(b) of Section 6.04 of the Loan Agreement) shall (a) be applied
in whole or in part (i) to the purchase of Bonds in such amounts,
at such prices, at such times and otherwise as directed by an
Authorized Company Representative, or (ii) in any other manner
directed by the Company which, as indicated in an opinion of Bond
Counsel furnished by the Company to the Pollution Control
Corporation and the Trustee, will not impair the validity under
the Act of the Bonds or the exclusion of the interest on the
Bonds from gross income for federal income tax purposes or (b) in
the absence of any such purchase or direction within sixty (60)
days of the receipt by the Trustee of such certificate (or such
shorter period as the Company shall direct), be deposited by the
Trustee into the corresponding account maintained within the Bond
Fund. From time to time as the proper disposition of the amounts
retained by the Trustee in the Construction Fund as aforesaid
shall be determined, to the extent that such amounts are not paid
out in full by the Trustee pursuant to Section 5.01 or 6.01
hereof, the Company shall so notify the Trustee and the Pollution
Control Corporation by one or more certificates as aforesaid and
any amounts from time to time no longer to be so retained by the
Trustee shall be applied as aforesaid. Pending the application
of any moneys remaining in the Construction Fund following the
receipt of the aforesaid certificate, such moneys may be invested
in Investment Securities in the manner permitted by Section 6.01
hereof, provided that such investments (other than investments
made with the moneys retained by the Trustee at the direction of
the Company pursuant to Section 3.04 or 3.08 of the Loan
Agreement) shall not produce a yield greater than the yield on
the Bonds unless, as indicated in an opinion of Bond Counsel
furnished by the Company to the Pollution Control Corporation and
the Trustee, investments producing a greater yield would not, in
and of itself, impair the exclusion from gross income for federal
tax purposes of the interest on the Bonds.
Section 5.03. Redemption of All Outstanding Bonds. Except
as set forth in Section 5.05 hereof, in the event that all
Outstanding Bonds are to be redeemed, the Trustee shall, without
further authorization, deposit into the General Account within
the Bond Fund all amounts remaining in the Construction Fund
constituting part of the Trust Estate, with advice to the
Pollution Control Corporation and the Company of such action,
such deposit to be made on the date fixed for such redemption.
Section 5.04. Acceleration of Bonds. In the event that the
principal of the Bonds shall have become due and payable pursuant
to Section 9.01 hereof, the Trustee shall, without further
authorization, deposit into the General Account within the Bond
Fund all amounts constituting part of the Trust Estate remaining
in the Construction Fund, with advice to the Pollution Control
Corporation and the Company of such action, such deposit to be
made on the date fixed for such acceleration.
Section 5.05. Refunding of Bonds. In the event that all
Outstanding Bonds are paid, redeemed or deemed to have been paid
within the meaning of Article VIII hereof by reason of the
application of the proceeds of the sale of any obligations the
interest on which is exempt from federal income taxation, under
an indenture other than this Indenture, the Trustee shall,
without further authorization, withdraw all amounts constituting
part of the Trust Estate remaining in the Capital Account and the
Investment Account maintained within the Construction Fund and
deposit such amounts into corresponding accounts in the
construction, acquisition or other similar fund created under the
indenture under which such obligations are issued, with advice to
the Pollution Control Corporation and the Company of such action,
such withdrawals and deposits to be made, in accordance with the
provisions of such indenture, on the date on which such Bonds are
so paid, redeemed or deemed to have been paid; provided, however,
that if Bonds shall have been paid, redeemed or deemed to have
been paid within the meaning of Article VIII hereof by reason of
the application of the proceeds of the sale of more than one
issue of obligations the interest on which is excluded from gross
income for federal income tax purposes under indentures other
than this Indenture, the Trustee shall, if directed by an
Authorized Company Representative, withdraw all amounts remaining
in the Capital Account and the Investment Account maintained
within the Construction Fund and such amounts shall be allocated
among, and deposited into, as directed by such Authorized Company
Representative, corresponding accounts in the construction,
acquisition or other similar funds created under the indentures
under which such obligations are issued, with advice to the
Pollution Control Corporation and the Company of such action,
such withdrawals and deposits to be made, in accordance with the
provisions of such indentures, on the date on which all Bonds are
so paid, redeemed or deemed to have been paid.
Section 5.06. Moneys Held in Trust. All moneys and
Investment Securities held by the Trustee in the Construction
Fund, shall be held by the Trustee, in trust and such moneys and
Investment Securities (other than any moneys or Investment
Securities held in any subaccount within the Construction Fund
established in furtherance of the obligations of the Company
under Section 6.04(b) of the Loan Agreement) while so held or so
required to be deposited or paid, shall constitute part of the
Trust Estate and be subject to the lien and security interest
created hereby in favor of the Trustee for the benefit of the
Owners from time to time of the Bonds. The Company shall have no
right, title or interest in the Construction Fund, except that,
to the extent not required to be applied in another manner by any
provision hereof, moneys held by the Trustee in the Construction
Fund shall be disbursed by the Trustee to the Company upon and to
the extent of, but solely upon and to the extent of, satisfaction
of the conditions set forth in Section 5.01(c) hereof.
ARTICLE VI
INVESTMENTS
Section 6.01. Investments. The moneys in the Construction
Fund and in the Bond Fund shall, at the direction of the Company,
be invested and reinvested in Investment Securities. Any
Investment Securities may be purchased subject to options or
other rights in third parties to acquire the same. In addition,
except with respect to moneys or Investment Securities held
within the General Account of the Bond Fund, the Trustee shall,
at the direction of the Company, enter into (i) reverse
repurchase agreements, option agreements and agreements to lend
securities with respect to any Investment Securities held by it
and (ii) transactions for the purchase or sale of financial
futures contracts in obligations which constitute Investment
Securities or options on financial futures contracts in
obligations which constitute Investment Securities. Subject to
the further provisions of this Section 6.01, such investments
shall be made by the Trustee as directed and designated by the
Company in a certificate of, or telephonic advice promptly
confirmed by a certificate of, an Authorized Company
Representative. As and when any amounts thus invested may be
needed for disbursements from the Construction Fund or the Bond
Fund, the Trustee shall request the Company to designate such
investments to be sold or otherwise converted into cash to the
credit of such fund as shall be sufficient to meet such
disbursement requirements and shall then follow any directions in
respect thereto of an Authorized Company Representative. As long
as no Event of Default (as defined in Section 9.01 hereof) shall
have occurred and be continuing, the Company shall have the right
to designate the investments to be sold and to otherwise direct
the Trustee in the sale or conversion to cash of the investments
made with the moneys in the Construction Fund and in the Bond
Fund, provided that the Trustee shall be entitled to conclusively
assume the absence of any such Event of Default unless it has
notice thereof within the meaning of Section 10.05 hereof.
ARTICLE VII
GENERAL COVENANTS
Section 7.01. No General Obligations. Each and every
covenant herein made, including all covenants made in the various
sections of this Article VII, is predicated upon the condition
that neither the County of Coconino, Arizona nor the State of
Arizona shall in any event be liable for the payment of the
principal of, or premium, if any, or interest on the Bonds or for
the performance of any pledge, mortgage, obligation or agreement
created by or arising out of this Indenture or the issuance of
the Bonds, and further that neither the Bonds, nor the premium,
if any, or interest thereon, nor any such obligation or agreement
of the Pollution Control Corporation shall be construed to
constitute an indebtedness of the County of Coconino, Arizona or
the State of Arizona within the meaning of any constitutional or
statutory provisions whatsoever. The Bonds and the interest and
premium, if any, thereon shall be limited obligations of the
Pollution Control Corporation payable solely from the Receipts
and Revenues of the Pollution Control Corporation from the Loan
Agreement and the other moneys pledged therefor.
The Pollution Control Corporation shall promptly cause to be
paid, solely from the sources stated herein, the principal of and
premium, if any, and interest on every Bond issued under this
Indenture at the place, on the dates and in the manner provided
herein and in said Bonds according to the true intent and meaning
thereof.
Section 7.02. Performance of Covenants of the Pollution
Control Corporation; Representations. The Pollution Control
Corporation shall faithfully perform at all times any and all
covenants, undertakings, stipulations and provisions contained in
this Indenture, in any and every Bond executed, authenticated and
delivered hereunder, and in all proceedings pertaining thereto.
The Pollution Control Corporation represents that it is duly
authorized under the Constitution and laws of the State of
Arizona to issue the Bonds authorized hereby, to enter into the
Loan Agreement and this Indenture, and to pledge and assign to
the Trustee the Trust Estate, and that the Bonds in the hands of
the Owners thereof are and will be valid and binding limited
obligations of the Pollution Control Corporation.
Section 7.03. Maintenance of Rights and Powers; Compliance
with Laws. The Pollution Control Corporation shall at all times
use its best efforts to maintain its corporate existence or
assure the assumption of its obligations under this Indenture by
any public body succeeding to its powers under the Act; and it
shall at all times use its best efforts to comply with all valid
acts, rules, regulations, orders and directions of any
legislative, executive, administrative or judicial body known to
it to be applicable to the Loan Agreement and this Indenture.
Section 7.04. Enforcement of Obligations of the Company;
Amendments. Upon receipt of written notification from the
Trustee, the Pollution Control Corporation shall cooperate with
the Trustee in enforcing the obligation of the Company to pay or
cause to be paid all the payments and other costs and charges
payable by the Company under the Loan Agreement. The Pollution
Control Corporation shall not enter into any agreement with the
Company amending the Loan Agreement without the prior written
consent of the Trustee and compliance with Sections 12.06 and
12.07 of this Indenture (a revision to Exhibit A to the Loan
Agreement not being deemed an amendment for purposes of this
Section).
Section 7.05. Further Instruments. The Pollution Control
Corporation shall, upon the reasonable request of the Trustee,
from time to time execute and deliver such further instruments
and take such further action as may be reasonable and as may be
required to carry out the purposes of this Indenture; provided,
however, that no such instruments or actions shall pledge the
credit or taxing power of the State of Arizona, the County of
Coconino, the Pollution Control Corporation or any other
political subdivision of said State.
Section 7.06. No Disposition of Trust Estate. Except as
permitted by this Indenture, the Pollution Control Corporation
shall not sell, lease, pledge, assign or otherwise dispose of or
encumber its interest in the Trust Estate and will promptly pay
or cause to be discharged or make adequate provision to discharge
any lien or charge on any part thereof not permitted hereby.
Section 7.07. Financing Statements. The Pollution Control
Corporation and the Trustee shall cooperate with the Company in
causing appropriate financing statements and continuation
statements, naming the Trustee as pledgee of the Receipts and
Revenues of the Pollution Control Corporation from the Loan
Agreement and of the other moneys pledged under the Indenture for
the payment of the principal of and premium, if any, and interest
on the Bonds, and as pledgee and assignee of the balance of the
Trust Estate, and the Pollution Control Corporation shall
cooperate with the Trustee and the Company in causing appropriate
continuation statements 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 of Arizona and any other applicable
jurisdiction, as from time to time amended, in order to perfect
and maintain the security interests created by this Indenture.
Section 7.08. Tax Covenants; Rebate Fund. (a) The
Pollution Control Corporation covenants for the benefit of all
Owners from time to time of the Bonds that it will not directly
or indirectly use or (to the extent within its control), permit
the use of, the proceeds of any of the Bonds or any other funds
of the Pollution Control Corporation, or take or omit to take any
other action, if and to the extent that such use, or the taking
or omission to take such action, would cause any of the Bonds to
be "arbitrage bonds" within the meaning of Section 148 of the
Code or otherwise subject to federal income taxation by reason of
Sections 103 and 141 through 150 of the Code or Section 103 of
the 1954 Code, as applicable, and any applicable regulations
promulgated thereunder. To that end the Pollution Control
Corporation covenants to comply with all covenants set forth in
the Tax Agreement, which is hereby incorporated herein by
reference as though fully set forth herein.
(b) The Trustee shall establish and maintain a fund separate
from any other fund established and maintained hereunder
designated the "Coconino County, Arizona Pollution Control
Corporation Pollution Control Revenue Bonds, 1997 Series A
(Tucson Electric Power Company Navajo Project) Rebate Fund"
(herein called the "Rebate Fund") in accordance with the
provisions of the Tax Agreement. Within the Rebate Fund, the
Trustee shall maintain such accounts as shall be directed by the
Company in order for the Pollution Control Corporation and the
Company to comply with the provisions of the Tax Agreement.
Subject to the transfer provisions provided in paragraph (c)
below, all money at any time deposited in the Rebate Fund shall
be held by the Trustee in trust, to the extent required to
satisfy the Rebate Requirement (as defined in the Tax Agreement),
for payment to the United States of America, and neither the
Company, the Pollution Control Corporation or the Owners shall
have any rights in or claim to such moneys. All amounts
deposited into or on deposit in the Rebate Fund shall be governed
by this Section 7.08, by Section 6.04 of the Loan Agreement and
by the Tax Agreement. The Trustee shall conclusively be deemed
to have complied with such provisions if it follows the
directions of the Company, including supplying all necessary
information in the manner set forth in the Tax Agreement, and
shall not be required to take any actions thereunder in the
absence of written directions from the Company.
(c) Upon receipt of the Company's written instructions, the
Trustee shall remit part or all of the balances in the Rebate
Fund to the United States of America, as so directed. In
addition, if the Company so directs, the Trustee shall deposit
moneys into or transfer moneys out of the Rebate Fund from or
into such accounts or funds as directed by the Company's written
directions. Any funds remaining in the Rebate Fund after all of
the Bonds shall have been paid and any Rebate Requirement shall
have been satisfied, or provision therefor reasonably
satisfactory to the Trustee shall have been made, shall be
withdrawn and remitted to the Company.
(d) Notwithstanding any provision of this Indenture, the
obligation to remit the Rebate Requirement to the United States
of America and to comply with all other requirements of this
Section 7.08, Section 6.04 of the Loan Agreement and the Tax
Agreement shall survive the payment of the Bonds and the
satisfaction and discharge of this Indenture.
Section 7.09. Notices of Trustee. The Trustee shall give
notice to both the Pollution Control Corporation and the Company
whenever it is required hereby to give notice to either and,
additionally, shall furnish to the Pollution Control Corporation
and the Company copies of any Notice by Mail or Publication given
by it pursuant to any provision hereof.
ARTICLE VIII
DEFEASANCE
Section 8.01. Defeasance. If the Pollution Control
Corporation shall pay or cause to be paid to the Owner of any
Bond secured hereby the principal of and premium, if any, and
interest due and payable, and thereafter to become due and
payable, upon such Bond or any portion of such Bond in the
principal amount of $5,000 or any integral multiple thereof, such
Bond or portion thereof shall cease to be entitled to any lien,
benefit or security under this Indenture. If the Pollution
Control Corporation shall pay or cause to be paid to the Owners
of all the Bonds secured hereby the principal of and premium, if
any, and interest due and payable, and thereafter to become due
and payable, thereon, and shall pay or cause to be paid all other
sums payable hereunder including, without limitation, amounts
payable pursuant to Section 10.04 hereof, then, and in that case,
the right, title and interest of the Trustee in and to the Trust
Estate shall thereupon cease, terminate and become void. In such
event, the Trustee shall assign, transfer and turn over to the
Company the Trust Estate, including, without limitation, any
surplus in the Bond Fund and any balance remaining in any other
fund created under this Indenture.
All or any portion of Outstanding Bonds or portions of Bonds
in principal amounts of $5,000 or any integral multiple thereof,
shall prior to the maturity or redemption date thereof be deemed
to have been paid within the meaning and with the effect
expressed in this Article VIII, and the entire indebtedness of
the Pollution Control Corporation with respect thereof shall be
satisfied and discharged, when
(a) in the event said Bonds or portions thereof have
been selected for redemption in accordance with Section 3.02
hereof, the Trustee shall have given, or the Company shall
have given to the Trustee in form satisfactory to it
irrevocable instructions to give, on a date in accordance with
the provisions of Section 3.03 hereof, notice of redemption of
such Bonds or portions thereof,
(b) there shall have been deposited with the Trustee
either moneys in an amount which shall be sufficient, or
Government Obligations which shall not contain provisions
permitting the redemption thereof at the option of the issuer,
the principal of and the interest on which, when due, and
without regard to any reinvestment thereof, will provide
moneys which, together with the moneys, if any, deposited with
or held by the Trustee, shall be sufficient, to pay when due
the principal of and premium, if any, and interest due and to
become due on said Bonds or portions thereof on and prior to
the redemption date or maturity date thereof, as the case may
be, and
(c) in the event said Bonds or portions thereof do not
mature and are not to be redeemed within the next succeeding
sixty (60) days, the Company shall have given the Trustee in
form satisfactory to it irrevocable instructions to give, as
soon as practicable in the same manner as a notice of
redemption is given pursuant to Section 3.03 hereof, a notice
to the Owners of said Bonds or portions thereof that the
deposit required by clause (b) above has been made with the
Trustee and that said Bonds or portions thereof are deemed to
have been paid in accordance with this Article VIII and
stating the maturity or redemption date upon which moneys are
to be available for the payment of the principal of and
premium, if any, and interest on said Bonds or portions
thereof.
Neither the Government Obligations nor moneys deposited with
the Trustee pursuant to this Article VIII nor principal or
interest payments on any such Government Obligations shall be
withdrawn or used for any purpose other than, and such Government
Obligations, moneys and principal or interest payments shall be
held in trust for, the payment of the principal of and premium,
if any, and interest on said Bonds or portions thereof; provided,
that any cash received from such principal or interest payments
on such Government Obligations deposited with the Trustee, if not
then needed for such purposes, shall, to the extent practicable,
be invested in Government Obligations of the type described in
clause (b) of the preceding paragraph maturing at times and in
amounts sufficient to pay when due the principal of and premium,
if any, and interest to become due on said Bonds or portions
thereof on and prior to such redemption date or maturity date
thereof, as the case may be, and interest earned from such
reinvestments shall be paid over to the Company, as received by
the Trustee, free and clear of any trust, lien or pledge
hereunder. If payment of less than all the Bonds is to be
provided for in the manner and with the effect provided in this
Article VIII, the Trustee shall select such Bonds or portions of
Bonds in the manner specified by Section 3.02 hereof for
selection for redemption of less than all Bonds in the principal
amount designated to the Trustee by the Company. At or prior to
the time of the deposit of any Government Obligations with the
Trustee pursuant to this Section 8.01, the Company shall provide
the Trustee with a certificate of an accountant or an accounting
firm as to the sufficiency of such Government Obligations to pay
when due the principal of and premium, if any, and interest due
and to become due as set forth in clause (b) of the preceding
paragraph.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.01. Events of Default. Each of the following
events shall constitute and is referred to in this Indenture as
an "Event of Default":
(a) a failure to pay the principal of or premium, if
any, on any of the Bonds when the same shall become due and
payable at maturity, upon redemption or otherwise;
(b) a failure to pay an installment of interest on any
of the Bonds after such interest shall have become due and
payable for a period of thirty (30) days;
(c) a failure by the Pollution Control Corporation to
observe and perform any covenant, condition, agreement or
provision (other than as specified in clauses (a) and (b) of
this Section 9.01) contained in the Bonds or in this Indenture
on the part of the Pollution Control Corporation to be
observed or performed, which failure shall continue for a
period of sixty (60) days after written notice, specifying
such failure and requesting that it be remedied, shall have
been given to the Pollution Control Corporation and the
Company by the Trustee, which may give such notice in its
discretion and which shall give such notice at the written
request of Owners of not less than 33% in principal amount of
the Bonds then Outstanding, unless the Trustee, or the Trustee
and Owners of a principal amount of Bonds not less than the
principal amount of Bonds the Owners of which requested that
such notice be given, as the case may be, shall agree in
writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the
Trustee and the Owners of such principal amount of Bonds, as
the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by
the Pollution Control Corporation, or the Company on behalf of
the Pollution Control Corporation, within such period and is
being diligently pursued.
Upon the occurrence and continuance of any Event of Default
described in clause (a) and (b) of the preceding paragraph, the
Trustee may, and at the written request of Owners of not less
than 33% in principal amount of Bonds then Outstanding shall, by
written notice to the Pollution Control Corporation and the
Company, declare the Bonds to be immediately due and payable,
whereupon they shall, without further action, become and be
immediately due and payable, anything in this Indenture or in the
Bonds to the contrary notwithstanding, and the Trustee shall give
notice thereof by Mail to all Owners of Outstanding Bonds.
The provisions of the preceding paragraph, however, are
subject to the condition that if, after the principal of the
Bonds shall have been so declared to be due and payable, and
before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the
Pollution Control Corporation shall cause to be deposited with
the Trustee a sum sufficient to pay all matured installments of
interest upon all Bonds and the principal of any and all Bonds
which shall have become due otherwise than by reason of such
declaration (with interest upon such principal and, to the extent
permissible by law, on overdue installments of interest, at the
rate per annum borne by the Bonds) and such amounts as shall be
sufficient to cover reasonable compensation and reimbursement of
expenses payable to the Trustee and any predecessor Trustee, and
all Events of Default hereunder other than nonpayment of the
principal of Bonds which shall have become due by said
declaration shall have been remedied, then, in every such case,
such Event of Default shall be deemed waived and such declaration
and its consequences rescinded and annulled, and the Trustee
shall promptly give written notice of such waiver, rescission and
annulment to the Pollution Control Corporation and the Company,
and, if notice of the acceleration of the Bonds shall have been
given to the Owners of the Bonds, shall give notice thereof by
Mail to all Owners of Outstanding Bonds; 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.
Section 9.02. Remedies. Upon the occurrence and
continuance of any Event of Default, then and in every such case
the Trustee in its discretion may, and upon the written request
of Owners of not less than a majority in principal amount of the
Bonds then Outstanding and receipt of indemnity to its
satisfaction shall, in its own name and as the Trustee of an
express trust:
(a) by mandamus, or other suit, action or proceeding at
law or in equity, enforce all rights of the Owners of the
Bonds, and require the Pollution Control Corporation or the
Company to carry out any agreements with or for the benefit of
such Owners and to perform its or their duties under the Act,
the Loan Agreement and this Indenture;
(b) bring suit upon the Bonds; or
(c) by action or suit in equity enjoin any acts or
things which may be unlawful or in violation of the rights of
the Owners of the Bonds.
Section 9.03. Restoration to Former Position. In the event
that any proceeding taken by the Trustee to enforce any right
under this Indenture shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the
Trustee, then the Pollution Control Corporation, the Trustee and
the Owners shall be restored, subject to any determination in
such proceeding, to their former positions and rights hereunder,
respectively, and all rights, remedies and powers of the Trustee
shall continue as though no such proceeding had been taken.
Section 9.04. Owners' Right to Direct Proceedings.
Anything in this Indenture to the contrary notwithstanding,
Owners of a majority in principal amount of the Bonds then
Outstanding hereunder shall have the right, by an instrument in
writing executed and delivered to the Trustee, to direct the
time, method and place of conducting all remedial proceedings
available to the Trustee under this Indenture or exercising any
trust or power conferred on the Trustee by this Indenture;
provided, however, that such direction shall not be otherwise
than in accordance with law and the provisions of this Indenture
and that the Trustee shall have the right (but not the
obligation) to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the
action or proceeding so directed may not lawfully be taken, or if
the Trustee in good faith shall determine that the action or
proceedings so directed would involve the Trustee in personal
liability or if the Trustee in good faith shall so determine that
the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Owners
not joining in the giving of said direction, it being understood
that the Trustee shall have no duty to ascertain whether or not
such actions or forbearances are unduly prejudicial to such
Owners.
Section 9.05. Limitation on Owners' Right to Institute
Proceedings. No Owner of Bonds shall have any right to institute
any suit, action or proceeding in equity or at law for the
execution of any trust or power hereunder, or any other remedy
hereunder or on said Bonds, unless such Owner previously shall
have given to the Trustee written notice of an Event of Default
as hereinabove provided and unless the Owners of not less than a
majority in principal amount of the Bonds then Outstanding shall
have made written request of the Trustee so to do, after the
right to institute said suit, action or proceeding shall have
accrued, and shall have afforded the Trustee a reasonable
opportunity to proceed to institute the same in either its or
their name, and unless there also shall have been offered to the
Trustee security and indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee shall not have complied with such
request within a reasonable time; and such notification, request
and offer of indemnity are hereby declared in every such case, at
the option of the Trustee, to be conditions precedent to the
institution of said suit, action or proceeding; it being
understood and intended that no one or more of the Owners of the
Bonds shall have any right in any manner whatever by his or their
action to affect, disturb or prejudice the security of this
Indenture, or to enforce any right hereunder or under the Bonds,
except in the manner herein provided, and that all suits, actions
and proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the equal
benefit of all Owners of the Bonds.
Section 9.06. No Impairment of Right to Enforce Payment.
Notwithstanding any other provision in this Indenture, the right
of any Owner of a Bond to receive payment of the principal of and
premium, if any, and interest on such Bond, on or after the
respective due dates expressed therein, or to institute suit for
the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of
such Owner.
Section 9.07. Proceedings by Trustee without Possession of
Bonds. All rights of action under this Indenture or under any of
the Bonds secured hereby which are enforceable by the Trustee may
be enforced by it without the possession of any of the Bonds, or
the production thereof on the trial or other proceedings relative
thereto, and any such suit, action or proceeding instituted by
the Trustee shall be brought in its name for the equal and
ratable benefit of the Owners of the Bonds, subject to the
provisions of this Indenture.
Section 9.08. No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Trustee or to the Owners of the
Bonds is intended to be exclusive of any other remedy or
remedies, and each and every such remedy shall be cumulative, and
shall be in addition to every other remedy given hereunder or
under the Loan Agreement, now or hereafter existing at law or in
equity or by statute.
Section 9.09. No Waiver of Remedies. No delay or omission
of the Trustee or of any Owner of a Bond to exercise any right or
power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver of any such default,
or an acquiescence therein; and every power and remedy given by
this Article IX to the Trustee and to the Owners of the Bonds,
respectively, may be exercised from time to time and as often as
may be deemed expedient.
Section 9.10. Application of Moneys. Any moneys received
by the Trustee, by any receiver or by any Owner of a Bond
pursuant to any right given or action taken under the provisions
of this Article IX, after payment of the costs and expenses of
the proceedings resulting in the collection of such moneys and of
all amounts due to the Trustee and any predecessor Trustee under
Section 10.04 hereof, shall be deposited in the Bond Fund and all
moneys so deposited in the Bond Fund during the continuance of an
Event of Default (other than moneys for the payment of Bonds
which had matured or otherwise become payable prior to such Event
of Default or for the payment of interest due prior to such Event
of Default) shall be applied as follows:
(a) Unless the principal of all the Bonds shall have
become due and payable, all such moneys shall be applied (i)
first, to the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, with interest
on overdue installments, if lawful, at the rate per annum
borne by the Bonds, in the order of maturity of the
installments of such interest and, if the amount available
shall not be sufficient to pay in full any particular
installment of interest, then to the payment ratably,
according to the amounts due on such installment, and (ii)
second, to the payment to the persons entitled thereto of the
unpaid principal of any of the Bonds which shall have become
due (other than Bonds called for redemption for the payment of
which money is held pursuant to the provisions of this
Indenture), with interest on such Bonds at their rate from the
respective dates upon which they became due and, if the amount
available shall not be sufficient to pay in full Bonds due on
any particular date, together with such interest, then to the
payment ratably, according to the amount of principal and
interest due on such date, in each case to the persons
entitled thereto, without any discrimination or privilege.
(b) If the principal of all the Bonds shall have become
due and payable, all such moneys shall be applied to the
payment of the principal and interest then due and unpaid upon
the Bonds, with interest on overdue interest and principal, as
aforesaid, without preference or priority of principal over
interest or of interest over principal, or of any installment
of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts
due respectively for principal and interest, to the persons
entitled thereto without any discrimination or privilege.
(c) If the principal of all the Bonds shall have become
due and payable, and if acceleration of the maturity of the
Bonds by reason of such Event of Default shall thereafter have
been rescinded and annulled under the provisions of this
Article IX, then, subject to the provisions of clause (b) of
this Section 9.10 which shall be applicable in the event that
the principal of all the Bonds shall later become due and
payable, the moneys shall be applied in accordance with the
provisions of clause (a) of this Section 9.10.
Section 9.11. Severability of Remedies. It is the purpose
and intention of this Article IX to provide rights and remedies
to the Trustee and the Owners which may be lawfully granted under
the provisions of the Act, but should any right or remedy herein
granted be held to be unlawful, the Trustee and the Owners shall
be entitled, as above set forth, to every other right and remedy
provided in this Indenture and by law.
ARTICLE X
TRUSTEE; PAYING AGENT AND CO-PAYING AGENTS; REGISTRAR
Section 10.01. Acceptance of Trusts. The Trustee hereby
accepts and agrees to execute the trusts hereby created, but only
upon the additional terms set forth in this Article X, to all of
which the Pollution Control Corporation agrees and the respective
Owners agree by their acceptance of delivery of any of the Bonds.
Section 10.02. No Responsibility for Recitals. The
recitals, statements and representations contained in this
Indenture or in the Bonds, save only the Trustee's authentication
upon the Bonds, are not made by the Trustee, and the Trustee does
not assume, and shall not have, any responsibility or obligation
for the correctness of any thereof. The Trustee makes no
representation as to the validity or sufficiency of this
Indenture or the Bonds.
Section 10.03. Limitations on Liability. The Trustee may
execute any of the trusts or powers hereof and perform the duties
required of it hereunder by or through attorneys, agents,
receivers, or employees, and shall be entitled to advice of
counsel concerning all matters of trust and its duty hereunder,
and the Trustee shall not be answerable for the default or
misconduct of any such attorney, agent, receiver, or employee
selected by it with reasonable care. The Trustee shall not be
answerable for the exercise of any discretion or power under this
Indenture or for anything whatsoever in connection with the trust
created hereby, except only for its own negligence or bad faith.
Anything in this Indenture to the contrary notwithstanding,
the Trustee shall in no event be required to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for
believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
Section 10.04. Compensation, Expenses and Advances. The
Trustee, the Paying Agent and any Co-Paying Agent and the
Registrar under this Indenture shall be entitled to reasonable
compensation for their services rendered hereunder (not limited
by any provision of law regarding the compensation of the trustee
of an express trust) and to reimbursement for their actual
out-of-pocket expenses (including counsel fees) reasonably
incurred in connection therewith except as a result of their
negligence or bad faith, including, without limitation,
compensation for any services rendered, and reimbursement for any
expenses incurred, at and subsequent to the time the Bonds are
deemed to have been paid in accordance with Article VIII hereof.
If the Pollution Control Corporation shall fail to perform any of
the covenants or agreements contained in this Indenture, other
than the covenants or agreements in respect of the payment of the
principal of and premium, if any, and interest on the Bonds, the
Trustee may, in its uncontrolled discretion and without notice to
the Owners of the Bonds, at any time and from time to time, make
advances to effect performance of the same on behalf of the
Pollution Control Corporation, but the Trustee shall be under no
obligation so to do; and any and all such advances may bear
interest at a rate per annum not exceeding the base rate then in
effect for 90-day commercial loans by the Trustee or a commercial
banking affiliate of the Trustee designated as such by the
Trustee in the city in which is located the Principal Office of
the Trustee (or such affiliate, as the case may be) to borrowers
of the highest credit standing; but no such advance shall operate
to relieve the Pollution Control Corporation from any default
hereunder. In Section 5.03 of the Loan Agreement, the Company
has agreed that it will pay to the Trustee (including any
predecessor Trustee), the Paying Agent and any Co-Paying Agent
and the Registrar such compensation and reimbursement of expenses
and advances, but the Company may, without creating a default
hereunder, contest in good faith the reasonableness of any such
services, expenses and advances. If the Company shall have
failed to make any payment to the Trustee or any predecessor
Trustee under Section 5.03 of the Loan Agreement and such failure
shall have resulted in an Event of Default under the Loan
Agreement, the Trustee, and any predecessor Trustee, shall have,
in addition to any other rights hereunder, a claim, prior to the
claim of the Owners, for the payment of its compensation and the
reimbursement of its expenses and any advances made by it, as
provided in this Section 10.04, upon the moneys and obligations
in the Bond Fund; provided, however, that neither the Trustee nor
any predecessor Trustee shall have any such claim upon 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 VIII hereof.
In Section 5.04 of the Loan Agreement, the Company has agreed
to indemnify the Trustee and any predecessor Trustee to the
extent provided therein.
Section 10.05. Notice of Events of Default. The Trustee
shall not be required to take notice, or be deemed to have
notice, of any default or Event of Default under this Indenture
other than an Event of Default under clause (a) or (b) of the
first paragraph of Section 9.01 hereof, unless an officer
assigned by the Trustee to administer its corporate trust
business has been specifically notified in writing of such
default or Event of Default by Owners of at least 33% in
principal amount of the Bonds then Outstanding. The Trustee may,
however, at any time, in its discretion, require of the Pollution
Control Corporation and the Company full information and advice
as to the performance of any of the covenants, conditions and
agreements contained herein.
Section 10.06. Action by Trustee. The Trustee shall be
under no obligation to take any action in respect of any default
or Event of Default hereunder or toward the execution or
enforcement of any of the trusts hereby created, or to institute,
appear in or defend any suit or other proceeding in connection
therewith, unless requested in writing so to do by Owners of at
least a majority in principal amount of the Bonds then
Outstanding, and, if in its opinion such action may tend to
involve it in expense or liability, unless furnished, from time
to time as often as it may require, with security and indemnity
satisfactory to it. The foregoing provisions are intended only
for the protection of the Trustee, and shall not affect any
discretion or power given by any provisions of this Indenture to
the Trustee to take action in respect of any default or Event of
Default without such notice or request from the Owners of the
Bonds, or without such security or indemnity.
Section 10.07. Good Faith Reliance. The Trustee shall be
protected and shall incur no liability in acting or proceeding in
good faith upon any resolution, notice, telegram, telex,
facsimile transmission, request, consent, waiver, certificate,
statement, affidavit, voucher, bond, requisition or other paper
or document which it shall in good faith believe to be genuine
and to have been passed or signed by the proper board, body or
person or to have been prepared and furnished pursuant to any of
the provisions of this Indenture or the Loan Agreement, or upon
the written opinion of any attorney, engineer, accountant or
other expert believed by the Trustee to be qualified in relation
to the subject matter, and the Trustee shall be under no duty to
make any investigation or inquiry as to any statements contained
or matters referred to in any such instrument, but may accept and
rely upon the same as conclusive evidence of the truth and
accuracy of such statements. Neither the Trustee, the Paying
Agent, any Co-Paying Agent nor the Registrar shall be bound to
recognize any person as an Owner of a Bond or to take any action
at his request unless the ownership of such Bond is proved as
contemplated in Section 11.01 hereof.
Section 10.08. Dealings in Bonds and with the Pollution
Control Corporation and the Company. The Trustee, the Paying
Agent, any Co-Paying Agent or the Registrar, in its individual or
any other capacity, may in good faith buy, sell, own, hold and
deal in any of the Bonds issued hereunder, and may join in any
action which any Owner of a Bond may be entitled to take with
like effect as if it did not act in any capacity hereunder. The
Trustee, the Paying Agent, any Co-Paying Agent or the Registrar,
in its individual or any other capacity, either as principal or
agent, may also engage in or be interested in any financial or
other transaction with the Pollution Control Corporation or the
Company, and may act as depositary, trustee, or agent for any
committee or body of Owners of Bonds secured hereby or other
obligations of the Pollution Control Corporation as freely as if
it did not act in any capacity hereunder.
Section 10.09. Allowance of Interest. The Trustee may, but
shall not be obligated to, allow and credit interest upon any
moneys which it may at any time receive under any of the
provisions of this Indenture, at such rate, if any, as it
customarily allows upon similar funds of similar size and under
similar conditions. All interest allowed on any such moneys
shall be credited as provided in Articles IV and V with respect
to interest on investments.
Section 10.10. Construction of Indenture. The Trustee may
construe any of the provisions of this Indenture insofar as the
same may appear to be ambiguous or inconsistent with any other
provision hereof, and any construction of any such provisions
hereof by the Trustee in good faith shall be binding upon the
Owners of the Bonds.
Section 10.11. Resignation of Trustee. The Trustee may
resign and be discharged of the trusts created by this Indenture
by executing an instrument in writing resigning such trust and
specifying the date when such resignation shall take effect, and
filing the same with the President of the Pollution Control
Corporation and with the Company, not less than forty-five (45)
days before the date specified in such instrument when such
resignation shall take effect, and by giving notice of such
resignation by Mail to all Owners of Bonds. Such resignation
shall take effect on the later to occur of (i) the day specified
in such instrument and notice, unless previously a successor
Trustee shall have been appointed as hereinafter provided, in
which event such resignation shall take effect immediately upon
the appointment of such successor Trustee and (ii) the
appointment of a successor Trustee.
So long as no event which is, or after notice or lapse of
time, or both, would become, an Event of Default shall have
occurred and be continuing, if the Pollution Control Corporation
shall have delivered to the Trustee (i) an instrument appointing
a successor Trustee, effective as of a date specified therein and
(ii) an instrument of acceptance of such appointment, effective
as of such date, by such successor Trustee in accordance with
Section 10.16, the Trustee shall be deemed to have resigned as
contemplated in this Section, the successor Trustee shall be
deemed to have been appointed pursuant to subsection (b) of
Section 10.13 and such appointment shall be deemed to have been
accepted as contemplated in Section 10.16, all as of such date,
and all other provisions of this Article X shall be applicable to
such resignation, appointment and acceptance except to the extent
inconsistent with this paragraph. The Pollution Control
Corporation shall deliver any such instrument of appointment at
the direction of the Company.
Section 10.12. Removal of Trustee. The Trustee may be
removed at any time by filing with the Trustee so removed, and
with the Pollution Control Corporation and the Company, an
instrument or instruments in writing, appointing a successor, or
an instrument or instruments in writing, consenting to the
appointment by the Pollution Control Corporation (at the
direction of the Company) of a successor and accompanied by an
instrument of appointment by the Pollution Control Corporation
(at the direction of the Company) of such successor, and in any
event executed by Owners of not less than a majority in principal
amount of the Bonds then Outstanding, such filing to be made by
any Owner of a Bond or his duly authorized attorney.
Section 10.13. Appointment of Successor Trustee. (a) In
case at any time the Trustee shall be removed, or be dissolved,
or if its property or affairs shall be taken under the control of
any state or federal court or administrative body because of
insolvency or bankruptcy, or for any other reason, then a vacancy
shall forthwith and ipso facto exist and a successor may be
appointed, and in case at any time the Trustee shall resign or be
deemed to have resigned, then a successor may be appointed, by
filing with the Pollution Control Corporation and the Company an
instrument in writing appointing such successor Trustee executed
by Owners of not less than a majority in principal amount of
Bonds then Outstanding. Copies of such instrument shall be
promptly delivered by the Pollution Control Corporation to the
predecessor Trustee, to the Trustee so appointed and the Company.
(b) Until a successor Trustee shall be appointed by the
Owners of the Bonds as herein authorized, the Pollution Control
Corporation, shall appoint a successor Trustee as directed by the
Company. After any appointment by the Pollution Control
Corporation, it shall cause notice of such appointment to be
given by Mail to all Owners of Bonds. Any new Trustee so
appointed by the Pollution Control Corporation shall immediately
and without further act be superseded by a Trustee appointed by
the Owners of the Bonds in the manner above provided.
(c) 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.
Section 10.14. Qualifications of Successor Trustee. Every
successor Trustee (a) shall be a bank or trust company duly
organized under the laws of the United States or any state or
territory thereof authorized by law to perform all the duties
imposed upon it by this Indenture and (b) shall have (or the
parent holding company of which shall have) a combined capital
stock, surplus and undivided profits of at least $100,000,000 if
there can be located, with reasonable effort, such an institution
willing and able to accept the trust on reasonable and customary
terms.
Section 10.15. Judicial Appointment of Successor Trustee.
In case at any time the Trustee shall resign and no appointment
of a successor Trustee shall be made pursuant to the foregoing
provisions of this Article X prior to the date specified in the
notice of resignation as the date when such resignation is to
take effect, the retiring Trustee may forthwith apply to a court
of competent jurisdiction for the appointment of a successor
Trustee. If no appointment of a successor Trustee shall be made
pursuant to the foregoing provisions of this Article X within six
months after a vacancy shall have occurred in the office of
Trustee, any Owner of a Bond may apply to any court of competent
jurisdiction to appoint a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Trustee.
Section 10.16. Acceptance of Trusts by Successor Trustee.
Any successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Pollution Control Corporation an
instrument accepting such appointment hereunder, and thereupon
such successor Trustee, without any further act, deed or
conveyance, shall become duly vested with all the estates,
property, rights, powers, trusts, duties and obligations of its
predecessor in the trust hereunder, with like effect as if
originally named Trustee herein. Upon request of such Trustee,
such predecessor Trustee and the Pollution Control Corporation
shall execute and deliver an instrument transferring to such
successor Trustee all the estates, property, rights, powers and
trusts hereunder of such predecessor Trustee and, subject to the
provisions of Section 10.04 hereof, such predecessor Trustee
shall pay over to the successor Trustee all moneys and other
assets at the time held by it hereunder.
Section 10.17. Successor by Merger or Consolidation. Any
corporation or association into which any Trustee hereunder may
be merged or converted or with which it may be consolidated, or
any corporation or association resulting from any merger or
consolidation to which any Trustee hereunder shall be a party or
any corporation or association succeeding to the corporate trust
business of the Trustee, shall be the successor Trustee under
this Indenture, without the execution or filing of any paper or
any further act on the part of the parties hereto, anything in
this Indenture to the contrary notwithstanding.
If, at the time any such successor to the Trustee shall
succeed to the trusts created by this Indenture, any of the Bonds
shall have been authenticated but not delivered, such successor
Trustee may adopt the certificate of authentication of any
predecessor Trustee and deliver such Bonds so authenticated; and
if at that time, any of the Bonds shall not have been
authenticated, such successor Trustee may authenticate such Bonds
either in the name of any such predecessor hereunder or in the
name of such successor; and, in all such cases, such certificate
of authentication shall have the full force which it is anywhere
in the Bonds or in this Indenture provided that the certificate
of authentication of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Bonds in the name of any
predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 10.18. Standard of Care. Notwithstanding any other
provisions of this Article X, the Trustee shall, during the
existence of an Event of Default of which the Trustee has actual
notice, exercise such of the rights and powers vested in it by
this Indenture and use the same degree of skill and care in their
exercise as a prudent man would use and exercise under the
circumstances in the conduct of his own affairs.
Section 10.19. Notice to Owners of Bonds of Event of
Default. If an Event of Default occurs of which the Trustee by
Section 10.05 hereof is required to take notice and deemed to
have notice, or any other Event of Default occurs of which the
Trustee has been specifically notified in accordance with Section
10.05 hereof, and any such Event of Default shall continue for at
least two days after the Trustee acquires actual notice thereof,
unless the Trustee shall have theretofore given a notice of
acceleration pursuant to Section 9.01 hereof, the Trustee shall
give Notice by Mail to all Owners of Outstanding Bonds.
Section 10.20. Intervention in Litigation of the Pollution
Control Corporation. In any judicial proceeding to which the
Pollution Control Corporation is a party and which in the opinion
of the Trustee and its counsel has a substantial bearing on the
interests of the Owners of Bonds, the Trustee may intervene on
behalf of the Owners of the Bonds and shall, upon receipt of
indemnity satisfactory to it, do so if requested in writing by
Owners of at least a majority in principal amount of the Bonds
then Outstanding if permitted by the court having jurisdiction in
the premises.
Section 10.21. Paying Agent; Co-Paying Agents. The
Pollution Control Corporation shall, with the approval of the
Company, appoint the Paying Agent for the Bonds and may at any
time or from time to time, with the approval of the Company,
appoint one or more Co-Paying Agents for the Bonds, subject to
the conditions set forth in Section 10.22 hereof. The Paying
Agent and each Co-Paying Agent shall designate to the Trustee its
Principal Office and signify its acceptance of the duties and
obligations imposed upon it hereunder by a written instrument of
acceptance delivered to the Pollution Control Corporation and the
Trustee in which such Paying Agent or Co-Paying Agent will agree,
particularly:
(a) to hold all sums held by it for the payment of the
principal of and premium, if any, or interest on Bonds in
trust for the benefit of the Owners of the Bonds until such
sums shall be paid to such Owners or otherwise disposed of as
herein provided;
(b) to keep such books and records as shall be
consistent with prudent industry practice, to make such books
and records available for inspection by the Pollution Control
Corporation, the Trustee and the Company at all reasonable
times and, in the case of a Co-Paying Agent, to promptly
furnish copies of such books and records to the Paying Agent;
and
(c) in the case of a Co-Paying Agent, upon the request
of the Paying Agent, to forthwith deliver to the Paying Agent
all sums so held in trust by such Co-Paying Agent.
The Pollution Control Corporation shall cooperate with the
Trustee and the Company to cause the necessary arrangements to be
made and to be thereafter continued whereby funds derived from
the sources specified in Sections 4.03 and 4.04 hereof will be
made available to the Paying Agent and each Co-Paying Agent for
the payment when due of the principal of, premium, if any, and
interest on the Bonds.
Section 10.22. Qualifications of Paying Agent and Co-Paying
Agents; Resignation; Removal. The Paying Agent and any Co-Paying
Agent shall be a corporation or association duly organized under
the laws of the United States of America or any state or
territory thereof, having a combined capital stock, surplus and
undivided profits of at least $15,000,000 and authorized by law
to perform all the duties imposed upon it by this Indenture. The
Paying Agent and any Co-Paying Agent may at any time resign and
be discharged of the duties and obligations created by this
Indenture by giving at least sixty (60) days' notice to the
Pollution Control Corporation, the Company and the Trustee. The
Paying Agent and any Co-Paying Agent may be removed at any time,
at the direction of the Company, by an instrument, signed by the
Pollution Control Corporation, filed with the Paying Agent or
such Co-Paying Agent, as the case may be, and with the Trustee.
In the event of the resignation or removal of the Paying Agent
or any Co-Paying Agent, the Paying Agent or such Co-Paying Agent,
as the case may be, shall pay over, assign and deliver any moneys
held by it in such capacity to its successor or, if there be no
successor, to the Trustee.
In the event that the Pollution Control Corporation shall fail
to appoint a Paying Agent hereunder, or in the event that the
Paying Agent shall resign or be removed, or be dissolved, or if
the property or affairs of the Paying Agent shall be taken under
the control of any state or federal court or administrative body
because of bankruptcy or insolvency, or for any other reason, and
the Pollution Control Corporation shall not have appointed its
successor as Paying Agent, the Trustee shall ipso facto be deemed
to be the Paying Agent for all purposes of this Indenture until
the appointment by the Pollution Control Corporation of the
Paying Agent or successor Paying Agent, as the case may be.
Upon the appointment of a successor Paying Agent, the Trustee
shall give notice thereof by Mail to all Owners of Bonds.
Section 10.23. Registrar. The Pollution Control Corporation
shall, with the approval of the Company, appoint the Registrar
for the Bonds, subject to the conditions set forth in Section
10.24 hereof. The Registrar shall designate to the Trustee its
Principal Office and signify its acceptance of the duties imposed
upon it hereunder by a written instrument of acceptance delivered
to the Pollution Control Corporation and the Trustee in which
such Registrar will agree, particularly, to keep such books and
records as shall be consistent with prudent industry practice and
to make such books and records available for inspection by the
Pollution Control Corporation, the Trustee and the Company at all
reasonable times.
The Pollution Control Corporation shall cooperate with the
Trustee and the Company to cause the necessary arrangements to be
made and to be thereafter continued whereby Bonds, executed by
the Pollution Control Corporation and authenticated by the
Trustee, shall be made available for exchange, registration and
registration of transfer at the Principal Office of the
Registrar. The Pollution Control Corporation shall cooperate
with the Trustee, the Registrar and the Company to cause the
necessary arrangements to be made and thereafter continued
whereby the Paying Agent and any Co-Paying Agent shall be
furnished such records and other information, at such times, as
shall be required to enable the Paying Agent and such Co-Paying
Agent to perform the duties and obligations imposed upon them
hereunder.
Section 10.24. Qualifications of Registrar; Resignation;
Removal. The Registrar shall be a corporation or association
duly organized under the laws of the United States of America or
any state or territory thereof, having a combined capital stock,
surplus and undivided profits of at least $15,000,000 and
authorized by law to perform all the duties imposed upon it by
this Indenture. The Registrar may at any time resign and be
discharged of the duties and obligations created by this
Indenture by giving at least sixty (60) days' notice to the
Pollution Control Corporation, the Trustee and the Company. The
Registrar may be removed at any time, at the direction of the
Company, by an instrument signed by the Pollution Control
Corporation filed with the Registrar and the Trustee.
In the event of the resignation or removal of the Registrar,
the Registrar shall deliver any Bonds held by it in such capacity
to its successor or, if there be no successor, to the Trustee.
In the event that the Pollution Control Corporation shall fail
to appoint a Registrar hereunder, or in the event that the
Registrar shall resign or be removed, or be dissolved, or if the
property or affairs of the Registrar shall be taken under the
control of any state or federal court or administrative body
because of bankruptcy or insolvency, or for any other reason, and
the Pollution Control Corporation shall not have appointed its
successor as Registrar, the Trustee shall ipso facto be deemed to
be the Registrar for all purposes of this Indenture until the
appointment by the Pollution Control Corporation of the Registrar
or successor Registrar, as the case may be.
Upon the appointment of a successor Registrar, the Trustee
shall give notice thereof by Mail to all Owners of Bonds.
Section 10.25. Several Capacities. Anything herein to the
contrary notwithstanding, the same entity may serve hereunder as
the Trustee, the Paying Agent or a Co-Paying Agent and the
Registrar, and in any combination of such capacities to the
extent permitted by law.
ARTICLE XI
EXECUTION OF INSTRUMENTS BY OWNERS OF BONDS AND
PROOF OF OWNERSHIP OF BONDS
Section 11.01. Execution of Instruments; Proof of Ownership.
Any request, direction, consent or other instrument in writing,
whether or not required or permitted by this Indenture to be
signed or executed by Owners of the Bonds, may be in any number
of concurrent instruments of similar tenor and may be signed or
executed by Owners of the Bonds or by an agent appointed by an
instrument in writing. Proof of the execution of any such
instrument and of the ownership of Bonds shall be sufficient for
any purpose of this Indenture and shall be conclusive in favor of
the Trustee with regard to any action taken by it under such
instrument if made in the following manner:
(a) The fact and date of the execution by any person of
any such instrument may be proved by the certificate of any
officer in any jurisdiction who, by the laws thereof, has
power to take acknowledgments within such jurisdiction, to the
effect that the person signing such instrument acknowledged
before him the execution thereof, or by an affidavit of a
witness to such execution.
(b) The ownership or former ownership of Bonds shall be
proved by the registration books kept under the provisions of
Section 2.08 hereof.
Nothing contained in this Article XI shall be construed as
limiting the Trustee to such proof, it being intended that the
Trustee may accept any other evidence of matters herein stated
which it may deem sufficient. Any request or consent of any
Owner of a Bond shall bind every future Owner of the same Bond or
any Bond or Bonds issued in lieu thereof in respect of anything
done by the Trustee or the Pollution Control Corporation in
pursuance of such request or consent.
ARTICLE XII
MODIFICATION OF THIS INDENTURE AND THE LOAN AGREEMENT
Section 12.01. Limitations. Neither this Indenture nor the
Loan Agreement shall be modified or amended in any respect
subsequent to the original issuance of the Bonds except as
provided in and in accordance with and subject to the provisions
of this Article XII and Section 7.04 hereof.
The Trustee may, but shall not be obligated to, enter into any
Supplemental Indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Section 12.02. Supplemental Indentures without Owner
Consent. The Pollution Control Corporation and the Trustee may,
from time to time and at any time, without the consent of or
notice to the Owners of the Bonds, enter into Supplemental
Indentures as follows:
(a) to cure any formal defect, omission, inconsistency
or ambiguity in this Indenture, provided, however, that such
cure shall not materially and adversely affect the interests
of the Owners of the Bonds;
(b) to grant to or confer or impose upon the Trustee
for the benefit of the Owners of the Bonds any additional
rights, remedies, powers, authority, security, liabilities or
duties which may lawfully be granted, conferred or imposed;
(c) to add to the covenants and agreements of, and
limitations and restrictions upon, the Pollution Control
Corporation in this Indenture other covenants, agreements,
limitations and restrictions to be observed by the Pollution
Control Corporation;
(d) to confirm, as further assurance, any pledge under,
and the subjection to any claim, lien or pledge created or to
be created by, this Indenture, of the Receipts and Revenues of
the Pollution Control Corporation from the Loan Agreement or
of any other moneys, securities or funds;
(e) to authorize a different denomination or
denominations of the Bonds and to make correlative amendments
and modifications to this Indenture regarding exchange ability
of Bonds of different denominations, redemptions of portions
of Bonds of particular denominations and similar amendments
and modifications of a technical nature;
(f) to modify, alter, supplement or amend this
Indenture in such manner as shall permit the qualification
hereof under the Trust Indenture Act of 1939, as from time to
time amended;
(g) to modify, alter, supplement or amend this
Indenture in such manner as shall be necessary, desirable or
appropriate in order to provide for or eliminate the
registration and registration of transfer of the Bonds through
a book-entry or similar method, whether or not the Bonds are
evidenced by certificates;
(h) to modify, alter, amend or supplement this
Indenture in any other respect which is not materially adverse
to the Owners and which does not involve a change described in
clause (i), (ii), (iii) or (iv) of Section 12.03(a) hereof;
and
(i) to provide any additional procedures, covenants or
agreements necessary or desirable to maintain the tax-exempt
status of interest on the Bonds.
Before the Pollution Control Corporation and the Trustee shall
enter into any Supplemental Indenture pursuant to this Section
12.02, there shall have been delivered to the Trustee an opinion
of Bond Counsel stating that such Supplemental Indenture is
authorized or permitted by this Indenture and the Act, complies
with their respective terms, will, upon the execution and
delivery thereof, be valid and binding upon the Pollution Control
Corporation in accordance with its terms and will not, in and of
itself, adversely affect the exclusion from gross income for
federal tax purposes of the interest on the Bonds.
Section 12.03. Supplemental Indentures with Consent of
Owners. (a) Except for any Supplemental Indenture entered into
pursuant to Section 12.02 hereof, subject to the terms and
provisions contained in this Section 12.03 and Section 12.05 and
not otherwise, Owners of not less than a majority in aggregate
principal amount of the Bonds then Outstanding which would be
adversely affected thereby shall have the right from time to time
to consent to and approve the execution and delivery by the
Pollution Control Corporation and the Trustee of any Supplemental
Indenture deemed necessary or desirable by the Pollution Control
Corporation for the purposes of modifying, altering, amending,
supplementing or rescinding, in any particular, any of the terms
or provisions contained in this Indenture; provided, however,
that, unless approved in writing by the Owners of all the Bonds
then Outstanding which would be adversely affected thereby,
nothing herein contained shall permit, or be construed as
permitting, (i) a change in the times, amounts or currency of
payment of the principal of or premium, if any, or interest on
any Outstanding Bond, a reduction in the principal amount or
redemption price of any Outstanding Bond or a change in the rate
of interest thereon, or any impairment of the right of any Owner
to institute suit for the payment of any Bond owned by it, or
(ii) the creation of a claim or lien upon, or a pledge of, the
Receipts and Revenues of the Pollution Control Corporation from
the Loan Agreement ranking prior to or on a parity with the
claim, lien or pledge created by this Indenture (except as
referred to in Section 10.04 hereof), or (iii) a preference or
priority of any Bond or Bonds over any other Bond or Bonds, or
(iv) a reduction in the aggregate principal amount of Bonds the
consent of the Owners of which is required for any such
Supplemental Indenture or which is required, under Section 12.07
hereof, for any modification, alteration, amendment or supplement
to the Loan Agreement.
(b) If at any time the Pollution Control Corporation shall
request the Trustee to enter into any Supplemental Indenture for
any of the purposes of this Section 12.03, the Trustee shall
cause notice of the proposed Supplemental Indenture to be given
by Mail to all Owners of Outstanding Bonds. Such notice shall
briefly set forth the nature of the proposed Supplemental
Indenture and shall state that a copy thereof is on file at the
Principal Office of the Trustee for inspection by all Owners of
Bonds.
(c) Within two years after the date of the first mailing of
such notice, the Pollution Control Corporation and the Trustee
may enter into such Supplemental Indenture in substantially the
form described in such notice only if there shall have first been
delivered to the Trustee (i) the required consents, in writing,
of Owners of Bonds and (ii) an opinion of Bond Counsel stating
that such Supplemental Indenture is authorized or permitted by
this Indenture and the Act, complies with their respective terms
and, upon the execution and delivery thereof, will be valid and
binding upon the Pollution Control Corporation in accordance with
its terms and will not, in and of itself, adversely affect the
exclusion from gross income for federal tax purposes of the
interest on the Bonds.
(d) If Owners of not less than the percentage of Bonds
required by this Section 12.03 shall have consented to and
approved the execution and delivery thereof as herein provided,
no Owner shall have any right to object to the execution and
delivery of such Supplemental Indenture, or 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 and delivery thereof, or to enjoin or restrain the
Pollution Control Corporation or the Trustee from executing and
delivering the same or from taking any action pursuant to the
provisions thereof.
Section 12.04. Effect of Supplemental Indenture. Upon the
execution and delivery of any Supplemental Indenture pursuant to
the provisions of this Article XII, this Indenture shall be, and
be deemed to be, modified, altered, amended or supplemented in
accordance therewith, and the respective rights, duties and
obligations under this Indenture of the Pollution Control
Corporation, the Trustee and Owners of all Bonds then Outstanding
shall thereafter be determined, exercised and enforced under this
Indenture subject in all respects to such modifications,
alterations, amendments and supplements.
Section 12.05. Consent of the Company. Anything herein to
the contrary notwithstanding, any Supplemental Indenture under
this Article XII which affects any rights, powers, agreements or
obligations of the Company under the Loan Agreement or requires a
revision of the Loan Agreement shall not become effective unless
and until the Company shall have consented to such Supplemental
Indenture.
Section 12.06. Amendment of Loan Agreement without Consent
of Owners. Without the consent of or notice to the Owners of the
Bonds, the Pollution Control Corporation may enter into any
Supplemental Loan Agreement, and the Trustee may consent thereto,
as may be required (a) by the provisions of the Loan Agreement
and this Indenture, (b) for the purpose of curing any formal
defect, omission, inconsistency or ambiguity therein, (c) to
provide any additional procedures, covenants or agreements
necessary or desirable to maintain the tax-exempt status of
interest on the Bonds, or (d) in connection with any other change
therein which is not materially adverse to the Owners of the
Bonds. A revision of Exhibit A to the Loan Agreement pursuant to
Section 3.03 thereof, shall not be deemed a Supplemental Loan
Agreement for purposes of this Indenture.
Before the Pollution Control Corporation shall enter into, and
the Trustee shall consent to, any Supplemental Loan Agreement
pursuant to this Section 12.06, there shall have been delivered
to the Trustee an opinion of Bond Counsel stating that such
Supplemental Loan Agreement is authorized or permitted by this
Indenture and the Act, complies with their respective terms,
will, upon the execution and delivery thereof, be valid and
binding upon the Pollution Control Corporation and the Company in
accordance with its terms and will not, in and of itself,
adversely affect the exclusion from gross income for federal tax
purposes of interest on the Bonds.
Section 12.07. Amendment of Loan Agreement with Consent of
Owners. Except in the case of Supplemental Loan Agreements
referred to in Section 12.06 hereof, the Pollution Control
Corporation shall not enter into, and the Trustee shall not
consent to, any Supplemental Loan Agreement without the written
approval or consent of the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding which
would be adversely affected thereby, given and procured as
provided in Section 12.03 hereof; provided, however, that, unless
approved in writing by the Owners of all Bonds then Outstanding
which would be adversely affected thereby, nothing herein
contained shall permit, or be construed as permitting, a change
in the obligations of the Company under Section 5.01 of the Loan
Agreement. If at any time the Pollution Control Corporation or
the Company shall request the consent of the Trustee to any such
proposed Supplemental Loan Agreement, the Trustee shall cause
notice of such proposed Supplemental Loan Agreement to be given
in the same manner as provided by Section 12.03 hereof with
respect to Supplemental Indentures. Such notice shall briefly
set forth the nature of such proposed Supplemental Loan Agreement
and shall state that copies of the instrument embodying the same
are on file at the Principal Office of the Trustee for inspection
by all Owners of the Bonds. The Pollution Control Corporation
may enter into, and the Trustee may consent to, any such proposed
Supplemental Loan Agreement subject to the same conditions, and
with the same effect, as provided by Section 12.03 hereof with
respect to Supplemental Indentures.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Successors of the Pollution Control
Corporation. In the event of the dissolution of the Pollution
Control Corporation, all the covenants, stipulations, promises
and agreements in this Indenture contained, by or on behalf of,
or for the benefit of, the Pollution Control Corporation, shall
bind or inure to the benefit of the successors of the Pollution
Control Corporation from time to time and any entity, officer,
board, commission, agency or instrumentality to whom or to which
any power or duty of the Pollution Control Corporation shall be
transferred.
Section 13.02. Parties in Interest. Except as herein
otherwise specifically provided, nothing in this Indenture
expressed or implied is intended or shall be construed to confer
upon any person, firm or corporation other than the Pollution
Control Corporation, the Company and the Trustee and their
successors and assigns and the Owners of the Bonds any right,
remedy or claim under or by reason of this Indenture, this
Indenture being intended to be for the sole and exclusive benefit
of the Pollution Control Corporation, the Company and the Trustee
and their successors and assigns and the Owners of the Bonds.
Section 13.03. Severability. In case any one or more of the
provisions of this Indenture or of the Loan Agreement or of the
Bonds shall, for any reason, be held to be illegal or invalid,
such illegality or invalidity shall not affect any other
provisions of this Indenture or of the Loan Agreement or of such
Bonds, and this Indenture and the Loan Agreement and such Bonds
shall be construed and enforced as if such illegal or invalid
provisions had not been contained herein or therein.
Section 13.04. No Personal Liability of Pollution Control
Corporation Officials. No covenant or agreement contained in the
Bonds or in this Indenture shall be deemed to be the covenant or
agreement of any director, official, officer, agent, or employee
of the Pollution Control Corporation in his individual capacity,
and neither the members of the Board of Directors of the
Pollution Control Corporation nor any official executing the
Bonds shall be liable personally on the Bonds or be subject to
any personal liability or accountability by reason of the
issuance thereof.
Section 13.05. Bonds Owned by the Pollution Control
Corporation or the Company. In determining whether Owners of the
requisite aggregate principal amount of the Bonds have concurred
in any direction, consent or waiver under this Indenture, Bonds
which are owned by the Pollution Control Corporation or the
Company or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company (unless the Pollution Control Corporation, the Company or
such person owns all Bonds which are then Outstanding, determined
without regard to this Section 13.05) shall be disregarded and
deemed not to be Outstanding for the purpose of any such
determination, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Bonds which the Trustee knows
are so owned shall be so disregarded. Upon the request of the
Trustee, the Company and the Pollution Control Corporation shall
furnish to the Trustee a certificate identifying all Bonds, if
any, actually known to either of them to be owned or held by or
for the account of any of the above-described persons, and the
Trustee shall be entitled to rely on such certificate as
conclusive evidence of the facts set forth therein and that all
other Bonds are Outstanding for the purposes of such
determination. Bonds so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Bonds and that the pledgee is not the
Pollution Control Corporation or the Company or any person
directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company. In case of a
dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
Section 13.06. Counterparts. This Indenture may be executed
in any number of counterparts, each of which, when so executed
and delivered, shall be an original; but such counterparts shall
together constitute but one and the same Indenture.
Section 13.07. Governing Law. The laws of the State of
Arizona shall govern the construction and enforcement of this
Indenture and of all Bonds, except that the laws of the State of
New York shall govern the construction and enforcement of the
rights and duties of the Trustee hereunder and the construction
of Section 13.09 hereof and the computation of any period of
grace provided herein.
Section 13.08. Notices. Except as otherwise provided in
this Indenture, all notices, certificates, requests requisitions
or other communications by the Pollution Control Corporation, the
Company, the Trustee, the Paying Agent, any Co-Paying Agent or
the Registrar pursuant to this Indenture shall be in writing and
shall be sufficiently given and shall be deemed given when mailed
by registered mail, postage prepaid, addressed as follows: If to
the Pollution Control Corporation, c/o Mangum, Wall, Stoops &
Warden, 222 East Birch Avenue, Flagstaff, Arizona 86001,
Attention: President; if to the Company, at 220 West Sixth
Street, Tucson, Arizona 85702, Attention: Treasurer; if to the
Trustee, at 100 Wall Street, Suite 1600, New York, New York
10005, Attention: Vice President; if to the Paying Agent, any
Co-Paying Agent or the Registrar, at the address designated in
the acceptance of appointment or engagement. Any of the
foregoing may, by notice given hereunder to each of the others,
designate any further or different addresses to which subsequent
notices, certificates, requests or other communications shall be
sent hereunder.
Section 13.09. Holidays. If the date for making any payment
or the last date for performance of any act or the exercising of
any right, as provided in this Indenture, shall be a Saturday,
Sunday or a public holiday in the city in which is located the
Principal Office of the Trustee, such payment may be made or act
performed or right exercised on the next succeeding business day,
with the same force and effect as if done on the nominal date
provided in this Indenture, and no interest shall accrue for the
period after such nominal date. If the last day of any period of
grace, as provided in this Indenture, shall be a Saturday, Sunday
or a public holiday in the city in which is located the Principal
Office of the Trustee, the last day of such period of grace shall
be deemed to be the next succeeding business day.
Section 13.10. Statutory Notice Regarding Cancellation of
Contracts. As required by the provisions of Section 38-511,
Arizona Revised Statutes, as amended, notice is hereby given that
political subdivisions of the State of Arizona or any of their
departments or agencies may, within three (3) years of its
execution, cancel any contract, without penalty or further
obligation, made by the political subdivisions or any of their
departments or agencies on or after September 30, 1988, if any
person significantly involved in initiating, negotiating,
securing, drafting or creating the contract on behalf of the
political subdivisions or any of their departments or agencies
is, at any time while the contract or any extension of the
contact is in effect, an employee or agent of any other party to
the contract in any capacity or a consultant to any other party
of the contract with respect to the subject matter of the
contract.
The Trustee covenants and agrees not to employ as an employee,
agent or, with respect to the subject matter of this Indenture, a
consultant, any person actually known by the Trustee to be
significantly involved in initiating, negotiating, securing,
drafting or creating such Indenture on behalf of the Pollution
Control Corporation within three (3) years from the execution
hereof, unless a waiver is provided by the Pollution Control
Corporation.
IN WITNESS WHEREOF, Coconino County, Arizona Pollution
Control Corporation has caused this Indenture to be executed by
its President and First Trust of New York, National Association
has caused this Indenture to be executed on its behalf by its
Vice President, all as of the day and year first above written.
COCONINO COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
Attest: By: /s/ Bruce J. Nordstrom
--------------------------
President
/s/ Terrence J. Rice
-----------------------------------
Secretary
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
Attest: By: /s/ Patrick J. Crowley
--------------------------
Vice President
/s/ Steven Haas
-----------------------------------
Assistant Secretary
EXHIBIT A
(FORM OF BOND)
No.
COCONINO COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
POLLUTION CONTROL REVENUE BOND,
1997 SERIES A
(TUCSON ELECTRIC POWER COMPANY NAVAJO PROJECT)
INTEREST RATE (PER ANNUM):
MATURITY DATE: DATED:
CUSIP:
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
Coconino County, Arizona Pollution Control Corporation, a
political subdivision of the State of Arizona (the "Pollution
Control Corporation"), for value received, hereby promises to pay
(but only out of the Receipts and Revenues of the Pollution
Control Corporation from the Loan Agreement, as hereinafter
defined, and other moneys pledged therefor) to the Registered
Owner identified above or registered assigns, on the Maturity
Date set forth above, upon the presentation and surrender hereof,
the Principal Amount set forth above and to pay (but only out of
the Receipts and Revenues of the Pollution Control Corporation
from the Loan Agreement and other moneys pledged therefor),
interest on said Principal Amount until payment of said Principal
Amount has been made or duly provided, from the date hereof, at
the Interest Rate set forth above, semi-annually on the first
days of October and April in each year, commencing October 1,
1997. Interest will be calculated on the basis of a 360-day year
of twelve 30-day months.
The principal of and premium, if any, on this Bond are payable
at the principal office of First Trust of New York, National
Association, as Paying Agent, or at the principal office of any
co-paying agent appointed in accordance with the Indenture (as
hereinafter defined), at the option of the Registered Owner
hereof. Interest on this Bond is payable by check drawn upon the
Paying Agent and mailed to the Registered Owner of this Bond as
of the close of business on the Record Date (as defined in the
Indenture), at the registered address of such Registered Owner;
notwithstanding the foregoing, upon request to the Paying Agent
by a Registered Owner of not less than $1,000,000 in aggregate
principal amount of Bonds, interest on such Bonds and, after
presentation and surrender of such Bonds, the principal thereof
shall be paid to such Registered Owner by wire transfer to the
account maintained within the continental United States specified
by such Registered Owner or, if such Registered Owner maintains
an account with the entity acting as Paying Agent, by deposit
into such account. Payment of the principal of and premium, if
any, and interest on this Bond shall be in any coin or currency
of the United States of America as, at the respective times of
payment, shall be legal tender for the payment of public and
private debts.
This Bond is one of the duly authorized Pollution Control
Revenue Bonds, 1997 Series A (Tucson Electric Power Company
Navajo Project) (the "Bonds") of the Pollution Control
Corporation, aggregating Thirty-six Million Seven Hundred
Thousand Dollars ($36,700,000) in principal amount, issued under
and pursuant to the Constitution and laws of the State of
Arizona, particularly Title 35, Chapter 6, Arizona Revised
Statutes, as amended (the "Act"), and the Indenture of Trust,
dated as of April 1, 1997 (the "Indenture"), between the
Pollution Control Corporation and First Trust of New York,
National Association, as trustee (the "Trustee"), for the purpose
of financing and refinancing a portion of the costs of the
acquisition, construction, improvement and equipping of certain
pollution control facilities (the "Facilities") at the Navajo
Generating Station (the "Plant"). Pursuant to the Loan
Agreement, dated as of April 1, 1997 (the "Loan Agreement"),
between the Pollution Control Corporation and Tucson Electric
Power Company, a corporation organized and existing under the
laws of the State of Arizona (the "Company"), the proceeds of the
Bonds, other than accrued interest, if any, paid by the initial
purchasers thereof, will be loaned from time to time to the
Company.
Neither the County of Coconino, Arizona nor the State of
Arizona shall in any event be liable for the payment of the
principal of or premium, if any, or interest on the Bonds, and
neither the Bonds, nor the premium, if any, or the interest
thereon, shall be construed to constitute an indebtedness of the
County of Coconino, Arizona or the State of Arizona within the
meaning of any constitutional or statutory provisions whatsoever.
The Bonds and the premium, if any, and the interest thereon are
limited obligations of the Pollution Control Corporation payable
solely from the Receipts and Revenues of the Pollution Control
Corporation from the Loan Agreement and other moneys pledged
therefor under the Indenture.
The Bonds are equally and ratably secured, to the extent
provided in the Indenture, by the pledge thereunder of the
"Receipts and Revenues of the Pollution Control Corporation from
the Loan Agreement", which term is used herein as defined in the
Indenture and which as therein defined means all moneys paid or
payable to the Trustee for the account of the Pollution Control
Corporation by the Company in respect of the loan payments,
including all receipts of the Trustee which, under the provisions
of the Indenture, reduce the amounts of such payments. The
Pollution Control Corporation has also pledged and assigned to
the Trustee as security for the Bonds all other rights and
interests of the Pollution Control Corporation under the Loan
Agreement (other than its rights to indemnification and its
administrative expenses and certain other rights).
The transfer of this Bond shall be registered upon the
registration books kept at the principal office of First Trust of
New York, National Association, as Registrar, at the written
request of the Registered Owner hereof or his attorney duly
authorized in writing, upon surrender of this Bond at said
office, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Registered
Owner or his duly authorized attorney.
In the manner and with the effect provided in the Indenture,
each of the Bonds may be redeemed prior to maturity, as follows:
(a) The Bonds shall be subject to redemption by the
Pollution Control Corporation, at the direction of the
Company, on any date on or after October 1, 2007 in whole at
any time or in part from time to time, at the applicable
redemption price (expressed as a percentage of principal
amount) set forth below, plus accrued interest to the
redemption date:
Redemption Period Redemption Price
----------------- ----------------
October 1, 2007 through
September 30, 2008 102%
October 1, 2008 through
September 30, 2009 101%
October 1, 2009 and thereafter 100%
(b) The Bonds shall be subject to redemption by the
Pollution Control Corporation, at the direction of the
Company, in whole at any time at the principal amount thereof
plus accrued interest to the redemption date, if:
(i) the Company shall have determined that the continued
operation of the Plant is impracticable, uneconomical or
undesirable for any reason;
(ii) the Company shall have determined that the continued
operation of the Facilities is impracticable, uneconomical
or undesirable due to (A) the imposition of taxes, other
than ad valorem taxes currently levied upon privately owned
property used for the same general purpose as the
Facilities, or other liabilities or burdens with respect to
the Facilities or operation thereof, (B) changes in
technology, in environmental standards or legal requirements
or in the economic availability of materials, supplies,
equipment or labor or (C) destruction of or damage to all or
part of the Facilities;
(iii) all or substantially all of the Facilities or the
Plant shall have been condemned or taken by eminent domain;
or
(iv) the operation of the Facilities or the Plant shall
have been enjoined or shall have otherwise been prohibited
by, or shall conflict with, any order, decree, rule or
regulation of any court or of any federal, state or local
regulatory body, administrative agency or other governmental
body.
(c) The Bonds shall be subject to mandatory redemption by
the Pollution Control Corporation, at the principal amount
thereof plus accrued interest to the redemption date, on the
180th day (or such earlier date as may be designated by the
Company) after a final determination by a court of competent
jurisdiction or an administrative agency, to the effect that,
as a result of a failure by the Company to perform or observe
any covenant, agreement or representation contained in the
Loan Agreement, the interest payable on the Bonds is included
for federal income tax purposes in the gross income of the
owners thereof, other than any owner of a Bond who is a
"substantial user" of the Facilities or a "related person"
within the meaning of Section 103(b)(13) of the Internal
Revenue Code of 1954, as amended (the "1954 Code"). No
determination by any court or administrative agency shall be
considered final for the purposes of this paragraph (c) unless
the Company shall have been given timely notice of the
proceeding which resulted in such determination and an
opportunity to participate in such proceeding, either directly
or through an owner of a Bond, and until the conclusion of any
appellate review sought by any party to such proceeding or the
expiration of the time for seeking such review. The Bonds
shall be redeemed either in whole or in part in such principal
amount that the interest payable on the Bonds remaining
outstanding after such redemption would not be included in the
gross income of any owner thereof, other than an owner of a
Bond who is a "substantial user" of the Facilities or a
"related person" within the meaning of Section 103(b)(13) of
the 1954 Code.
(d) In the event that the aggregate of the amounts, if any,
of the proceeds of the Bonds remaining unexpended upon the
completion of the Facilities or upon the termination of the
acquisition and construction thereof, together with any income
or other gain from the investment thereof, shall at any time,
or from time to time, be equal to or greater than $5,000, the
Pollution Control Corporation shall redeem the Bonds, at the
principal amount thereof plus accrued interest to the
redemption date, in the largest aggregate principal amount
which does not exceed the amount of such proceeds together
with income or other gain on an interest payment date
determined as set forth in, and otherwise in accordance with
the provisions of, the Indenture; provided, however, that the
Company may direct that such proceeds and income be applied to
the purchase of the Bonds or in any other manner which will
not impair the validity of the Bonds or the exemption from
gross income for federal tax purposes of the interest thereon.
If less than all of the Bonds at the time outstanding are to
be called for redemption, the particular Bonds or portions of
Bonds to be redeemed shall be selected by the Trustee, in such
manner as the Trustee in its discretion may deem proper, in the
principal amounts designated to the Trustee by the Company or
otherwise as required by the Indenture.
In the event any of the Bonds are called for redemption, the
Trustee shall give notice, in the name of the Pollution Control
Corporation, of the redemption of such Bonds. Such notice shall
be given by mailing a copy of the redemption notice by
first-class mail at least thirty (30) days prior to the date
fixed for redemption to the Registered Owners of the Bonds to be
redeemed at the addresses shown on the registration books;
provided, however, that failure duly to give such notice by
mailing, or any defect therein, shall not affect the validity of
any proceedings for the redemption of the Bonds as to which there
shall be no such failure or defect.
With respect to any notice of redemption of Bonds in
accordance with the redemption provisions lettered (a) or (b)
above, unless, upon the giving of such notice, such Bonds shall
be deemed to have been paid within the meaning of the Indenture,
such notice shall state that such redemption, shall be
conditional upon the receipt, by the Trustee on or prior to the
opening of business on the date fixed for such redemption of
moneys sufficient to pay the principal of and premium, if any,
and interest on such Bonds to be redeemed, and that if such
moneys shall not have been so received said notice shall be of no
force and effect and the Pollution Control Corporation shall not
be required to redeem such Bonds. In the event that such notice
of redemption contains such a condition and such moneys are not
so received, the redemption shall not be made and the Trustee
shall within a reasonable time thereafter give notice, in the
manner in which the notice of redemption was given, that such
moneys were not so received.
If a notice of redemption shall be unconditional, or if the
conditions of a conditional notice of redemption shall have been
satisfied, then upon presentation and surrender of Bonds so
called for redemption at the place or places of payment, such
Bonds shall be redeemed.
Any Bonds and portions of Bonds which have been duly selected
for redemption shall cease to bear interest on the specified
redemption date provided that moneys sufficient to pay the
principal of, premium, if any, and interest on such Bonds shall
be on deposit with the Trustee on the date fixed for redemption
so that such Bonds will be deemed to be paid in accordance with
the Indenture and such Bonds shall thereafter cease to be
entitled to any lien, benefit or security under the Indenture.
The Registered 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 default under the Indenture, or to institute,
appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.
With certain exceptions as provided therein, the Indenture and
the Loan Agreement may be modified or amended only with the
consent of the Registered Owners of a majority in aggregate
principal amount of all Bonds outstanding under the Indenture
which would be adversely affected thereby.
Reference is hereby made to the Indenture and the Loan
Agreement, copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent
of the rights, duties and obligations of the Pollution Control
Corporation, the Company, the Trustee and the Registered Owners
of the Bonds. The Registered Owner of this Bond, by the
acceptance hereof, is deemed to have agreed and consented to the
terms and provisions of the Indenture and the Loan Agreement.
Among other things, as provided in the Indenture and subject
to certain limitations therein set forth, this Bond or any
portion of the principal amount hereof will be deemed to have
been paid within the meaning and with the effect expressed in the
Indenture, and the entire indebtedness of the Pollution Control
Corporation in respect thereof shall be satisfied and discharged,
if there has been irrevocably deposited with the Trustee, in
trust, money in an amount which will be sufficient and/or
Government Obligations (as defined in the Indenture), the
principal of and interest on which, when due, without regard to
any reinvestment thereof, will provide moneys which, together
with moneys deposited with or held by the Trustee, will be
sufficient, to pay when due the principal of and premium, if any,
and interest on this Bond or such portion of the principal amount
hereof when due.
Among other things, the Loan Agreement contains terms,
provisions and conditions relating to the consolidation or merger
of the Company with or into, and the sale, transfer or other
disposition of assets to, another Person (as defined in the Loan
Agreement), to the assumption by such other Person, in certain
circumstances, of all of the obligations of the Company under the
Loan Agreement and to the release and discharge of the Company,
in certain circumstances, from such obligations.
The Pollution Control Corporation, the Trustee, the Registrar,
the Paying Agent and any co-paying agent may deem and treat the
person in whose name this Bond is registered as the absolute
owner hereof for all purposes, whether or not this Bond is
overdue, and neither the Pollution Control Corporation, the
Trustee, the Paying Agent nor any co-paying agent shall be
affected by any notice to the contrary.
It is hereby certified, recited and declared that all acts,
conditions and things required by the Constitution and laws of
the State of Arizona to exist, to have happened and to have been
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 regular and due form as required by
law.
No covenant or agreement contained in this Bond or the
Indenture shall be deemed to be a covenant or agreement of any
official, officer, agent or employee of the Pollution Control
Corporation in his individual capacity, and neither the members
of the Board of Directors of the Pollution Control Corporation,
nor any official executing this Bond, shall be liable personally
on this Bond or be subject to any personal liability or
accountability by reason of the issuance or sale of this Bond.
This Bond shall not be entitled to any right or benefit under
the Indenture, or be valid or become obligatory for any purpose,
until this Bond shall have been authenticated by the execution by
the Trustee, or its successor as Trustee of the certificate of
authentication inscribed hereon.
IN WITNESS WHEREOF, Coconino County, Arizona Pollution
Control Corporation has caused this Bond to be executed with the
manual or facsimile signature of its President or Vice President
and attested with the manual or facsimile signature of its
Secretary or Assistant Secretary.
COCONINO COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
By
-----------------------------------------
President
ATTEST:
-------------------------------------------
Secretary
EXHIBIT B
(FORM FOR ORDINARY REGISTRATION OF TRANSFER)
COMPLETE AND SIGN THIS FORM FOR ORDINARY
REGISTRATION OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security Or Other Identifying Number of
Assignee
-----------------------------------------------------------------
-----------------------------------------------------------------
Please print or typewrite name and address including postal zip
code of assignee
-----------------------------------------------------------------
this bond and all rights thereunder, hereby irrevocably
constituting and appointing
attorney to register such
transfer on the registration books in the principal office of the
Registrar, with full power of substitution in the premises.
Dated:
-------------------------
----------------------------------------------------------------
NOTE: The signature on this
assignment must correspond with the
name as written on the face of this
Bond in every particular, without
alteration, enlargement or any
change whatsoever.
EXHIBIT C
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is to certify that this Bond is one of the Bonds
described in the within-mentioned Indenture.
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
as Trustee
By
-------------------------------------
Authorized Officer
Date of Authentication:
-----------------------