EXHIBIT 4(j)(1)
This Instrument Grants a Security Interest
by a Public Utility
================================================================================
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
To
JPMORGAN CHASE BANK
Trustee
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General Mortgage Indenture
Dated as of October 10, 2002
================================================================================
This Instrument Contains After-Acquired Property Provisions
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
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TRUST INDENTURE
ACT SECTION INDENTURE SECTION(S)
Section 310(a)(1)................................................................................1109
(a)(2)..................................................................................1109
(a)(3)..................................................................................1114(3)
(a)(4)..................................................................................Not Applicable
(b).....................................................................................1108, 1110
Section 311(a)...................................................................................1113
(b).....................................................................................1113
(c).....................................................................................Not Applicable
Section 312(a)...................................................................................1201, 1202
(b).....................................................................................1202
(c).....................................................................................1202
Section 313(a)...................................................................................1203
(b).....................................................................................1203
(c).....................................................................................1203
(d).....................................................................................1203
Section 314(a)...................................................................................610, 1202
(b).....................................................................................608
(c)(1)..................................................................................105
(c)(2)..................................................................................105
(c)(3)..................................................................................106
(d).....................................................................................402, 607(2), 803,
804, 809
(e).....................................................................................105
Section 315(a)...................................................................................1101, 1103
(b).....................................................................................1102
(c).....................................................................................1101
(d).....................................................................................1101
(e).....................................................................................1018
Section 316(a)...................................................................................1016, 1017
(a)(1)(A)...............................................................................1016
(a)(1)(B)...............................................................................1017
(a)(2)..................................................................................Not Applicable
(b).....................................................................................1012
(c).....................................................................................107
Section 317(a)(1)................................................................................1006
(a)(2)..................................................................................1009
(b).....................................................................................603
Section 318(a)...................................................................................110
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NOTE: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
TABLE OF CONTENTS
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ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..............................................5
SECTION 101. General Definitions..................................................................................5
"Accountant"......................................................................................................6
"Act".............................................................................................................6
"Adjusted Net Earnings"...........................................................................................6
"Affiliate".......................................................................................................7
"Annual Interest Requirements"....................................................................................7
"Authenticating Agent"............................................................................................7
"Authorized Officer"..............................................................................................7
"Authorized Publication"..........................................................................................7
"Authorized Purposes".............................................................................................7
"Business Day"....................................................................................................7
"Commission"......................................................................................................7
"Company".........................................................................................................7
"Company Request".................................................................................................8
"Corporate Trust Office"..........................................................................................8
"Corporation".....................................................................................................8
"Cost"............................................................................................................8
"Defaulted Interest"..............................................................................................8
"Dollar"..........................................................................................................8
"Eligible Obligations"............................................................................................8
"Event of Default"................................................................................................8
"Excepted Property"...............................................................................................8
"Exchange Act"....................................................................................................8
"Exchange Rate"...................................................................................................8
"Expert"..........................................................................................................8
"Expert's Certificate"............................................................................................9
"Expiration Date".................................................................................................9
"Fair Value"......................................................................................................9
"First Mortgage"..................................................................................................9
"First Mortgage Securities".......................................................................................9
"First Mortgage Collateral Bonds".................................................................................9
"First Mortgage Collateralization Date"...........................................................................9
"Funded Cash".....................................................................................................9
"Funded Property".................................................................................................9
"Governmental Authority"..........................................................................................9
"Government Obligations".........................................................................................10
"Holder".........................................................................................................10
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TABLE OF CONTENTS - CONTINUED -
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"Indenture"......................................................................................................10
"Independent"....................................................................................................10
"Independent Expert's Certificate"...............................................................................10
"Initial Expert's Certificate"...................................................................................10
"Initial Series".................................................................................................11
"Interest".......................................................................................................12
"Interest Payment Date"..........................................................................................12
"Investment Securities"..........................................................................................12
"Lien"...........................................................................................................13
"Manager"........................................................................................................13
"Manager Resolution".............................................................................................13
"Matured Event of Default".......................................................................................13
"Maturity".......................................................................................................13
"Maximum Interest Rate"..........................................................................................13
"Mortgaged Property".............................................................................................13
"Net Earnings Certificate".......................................................................................13
"Notice of Default"..............................................................................................13
"Officer's Certificate"..........................................................................................13
"Opinion of Counsel".............................................................................................13
"Original Issue Discount Security"...............................................................................14
"Outstanding"....................................................................................................14
"Paying Agent"...................................................................................................15
"Periodic Offering"..............................................................................................15
"Permitted Liens"................................................................................................15
"Person".........................................................................................................17
"Place of Payment"...............................................................................................18
"Pollution Control Bond Collateral Requirements".................................................................18
"Predecessor Security"...........................................................................................18
"Prepaid Lien"...................................................................................................18
"Property Additions".............................................................................................18
"Purchase Money Lien"............................................................................................18
"Redemption Date"................................................................................................19
"Redemption Price"...............................................................................................19
"Regular Record Date"............................................................................................19
"Responsible Officer"............................................................................................19
"Retired Securities".............................................................................................19
"Securities".....................................................................................................20
"Security Register"..............................................................................................20
"Special Record Date"............................................................................................20
"Stated Interest Rate"...........................................................................................20
"Stated Maturity"................................................................................................20
"Successor Corporation"..........................................................................................20
"Tranche"........................................................................................................20
"Transaction Costs"..............................................................................................20
"Trust Indenture Act"............................................................................................20
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TABLE OF CONTENTS - CONTINUED -
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"Trustee"........................................................................................................20
"Trustee's Lien".................................................................................................21
"United States"..................................................................................................21
SECTION 102. Funded Property; Funded Cash........................................................................21
SECTION 103. Property Additions; Cost............................................................................22
SECTION 104. Net Earnings Certificate; Adjusted Net Earnings; Annual Interest Requirements.......................24
SECTION 105. Compliance Certificates and Opinions................................................................27
SECTION 106. Content and Form of Documents Delivered to Trustee..................................................27
SECTION 107. Acts of Holders; Record Dates.......................................................................29
SECTION 108. Notices, Etc., to Trustee and Company...............................................................31
SECTION 109. Notice to Holders; Waiver...........................................................................31
SECTION 110. Conflict with Trust Indenture Act...................................................................32
SECTION 111. Effect of Headings and Table of Contents............................................................32
SECTION 112. Successors and Assigns..............................................................................32
SECTION 113. Separability Clause.................................................................................32
SECTION 114. Benefits of Indenture...............................................................................32
SECTION 115. Governing Law.......................................................................................32
SECTION 116. Legal Holidays......................................................................................33
SECTION 117. Investment of Cash Held by Trustee..................................................................33
ARTICLE TWO. SECURITY FORMS......................................................................................34
SECTION 201. Forms Generally.....................................................................................34
SECTION 202. Form of Trustee's Certificate of Authentication.....................................................34
ARTICLE THREE. THE SECURITIES....................................................................................35
SECTION 301. Amount Unlimited; Issuable in Series................................................................35
SECTION 302. Denominations.......................................................................................38
SECTION 303. Execution, Authentication, Delivery and Dating......................................................38
SECTION 304. Temporary Securities................................................................................39
SECTION 305. Registration, Registration of Transfer and Exchange.................................................39
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities....................................................41
SECTION 307. Payment of Interest; Interest Rights Preserved......................................................41
SECTION 308. Persons Deemed Owners...............................................................................43
SECTION 309. Cancellation........................................................................................43
SECTION 310. Computation of Interest; Usury Not Intended.........................................................43
SECTION 311. CUSIP Numbers.......................................................................................44
ARTICLE FOUR. ISSUANCE OF SECURITIES.............................................................................44
SECTION 401. General.............................................................................................44
SECTION 402. Issuance of Securities on the Basis of Property Additions...........................................47
SECTION 403. Issuance of Securities on the Basis of Retired Securities...........................................50
SECTION 404. Issuance of Securities on the Basis of Deposit of Cash..............................................50
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ARTICLE FIVE. REDEMPTION OF SECURITIES...........................................................................51
SECTION 501. Applicability of Article............................................................................51
SECTION 502. Election to Redeem; Notice to Trustee...............................................................51
SECTION 503. Selection by Trustee of Securities to Be Redeemed...................................................52
SECTION 504. Notice of Redemption................................................................................52
SECTION 505. Deposit of Redemption Price.........................................................................53
SECTION 506. Securities Payable on Redemption Date...............................................................54
SECTION 507. Securities Redeemed in Part.........................................................................54
ARTICLE SIX. COVENANTS...........................................................................................54
SECTION 601. Payment of Securities; Lawful Possession; Maintenance of Lien.......................................54
SECTION 602. Maintenance of Office or Agency.....................................................................55
SECTION 603. Money for Securities Payments to Be Held in Trust...................................................55
SECTION 604. Existence...........................................................................................56
SECTION 605. Maintenance of Properties...........................................................................57
SECTION 606. Payment of Taxes; Discharge of Liens................................................................57
SECTION 607. Insurance...........................................................................................58
SECTION 608. Recording, Filing, etc. ............................................................................61
SECTION 609. Waiver of Certain Covenants.........................................................................62
SECTION 610. Annual Officer's Certificate as to Compliance.......................................................62
SECTION 611. Limited Issuance of First Mortgage Securities.......................................................62
ARTICLE SEVEN. FIRST MORTGAGE COLLATERAL BONDS; DISCHARGE OF FIRST MORTGAGE.....................................63
SECTION 701. First Mortgage Collateral Bonds.....................................................................63
SECTION 702. Registration and Ownership of First Mortgage Collateral Bonds.......................................64
SECTION 703. Payments on First Mortgage Collateral Bonds.........................................................64
SECTION 704. Surrender of First Mortgage Collateral Bonds........................................................65
SECTION 705. No Transfer of First Mortgage Collateral Bonds......................................................65
SECTION 706. Voting of First Mortgage Collateral Bonds...........................................................65
SECTION 707. Discharge of First Mortgage.........................................................................66
ARTICLE EIGHT. POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY.................................................69
SECTION 801. Quiet Enjoyment.....................................................................................69
SECTION 802. Dispositions without Release........................................................................69
SECTION 803. Release of Funded Property..........................................................................70
SECTION 804. Release of Property Not Constituting Funded Property................................................75
SECTION 805. Release of Minor Properties.........................................................................77
SECTION 806. Withdrawal or Other Application of Funded Cash; Purchase Money Obligations..........................77
SECTION 807. Release of Property Taken by Eminent Domain, etc. ..................................................80
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TABLE OF CONTENTS - CONTINUED -
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SECTION 808. Disclaimer or Quitclaim.............................................................................81
SECTION 809. Miscellaneous.......................................................................................81
ARTICLE NINE. SATISFACTION AND DISCHARGE.........................................................................82
SECTION 901. Satisfaction and Discharge of Securities............................................................82
SECTION 902. Satisfaction and Discharge of Indenture.............................................................85
SECTION 903. Application of Trust Money..........................................................................86
ARTICLE TEN. EVENTS OF DEFAULT; REMEDIES.........................................................................87
SECTION 1001. Events of Default..................................................................................87
SECTION 1002. Acceleration of Maturity; Rescission and Annulment.................................................88
SECTION 1003. Entry upon Mortgaged Property......................................................................89
SECTION 1004. Power of Sale; Suits for Enforcement...............................................................90
SECTION 1005. Incidents of Sale..................................................................................92
SECTION 1006. Collection of Indebtedness and Suits for Enforcement by Trustee....................................93
SECTION 1007. Application of Money Collected.....................................................................93
SECTION 1008. Receiver...........................................................................................94
SECTION 1009. Trustee May File Proofs of Claim...................................................................94
SECTION 1010. Trustee May Enforce Claims Without Possession of Securities........................................95
SECTION 1011. Limitation on Suits................................................................................95
SECTION 1012. Unconditional Right of Holders to Receive Principal, Premium and Interest..........................96
SECTION 1013. Restoration of Rights and Remedies.................................................................96
SECTION 1014. Rights and Remedies Cumulative.....................................................................96
SECTION 1015. Delay or Omission Not Waiver.......................................................................96
SECTION 1016. Control by Holders.................................................................................97
SECTION 1017. Waiver of Past Defaults............................................................................97
SECTION 1018. Undertaking for Costs..............................................................................97
SECTION 1019. Waiver of Appraisement, Usury, Stay and Other Laws.................................................98
SECTION 1020. Defaults under First Mortgage......................................................................98
ARTICLE ELEVEN. THE TRUSTEE......................................................................................98
SECTION 1101. Certain Duties and Responsibilities................................................................98
SECTION 1102. Notice of Defaults.................................................................................99
SECTION 1103. Certain Rights of Trustee.........................................................................100
SECTION 1104. Not Responsible for Recitals or Issuance of Securities or Application of Proceeds.................101
SECTION 1105. May Hold Securities...............................................................................101
SECTION 1106. Money Held in Trust...............................................................................102
SECTION 1107. Compensation and Reimbursement....................................................................102
SECTION 1108. Conflicting Interests.............................................................................103
SECTION 1109. Corporate Trustee Required; Eligibility...........................................................103
SECTION 1110. Resignation and Removal; Appointment of Successor.................................................103
SECTION 1111. Acceptance of Appointment by Successor............................................................105
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SECTION 1112. Merger, Conversion, Consolidation or Succession to Business.......................................105
SECTION 1113. Preferential Collection of Claims Against Company.................................................106
SECTION 1114. Co-trustees and Separate Trustees.................................................................106
SECTION 1115. Appointment of Authenticating Agent...............................................................107
ARTICLE TWELVE. LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY................................................109
SECTION 1201. Company to Furnish Trustee Names and Addresses of Holders.........................................109
SECTION 1202. Preservation of Information; Communications to Holders............................................109
SECTION 1203. Reports by Trustee................................................................................110
SECTION 1204. Reports by Company................................................................................110
ARTICLE THIRTEEN. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..........................................110
SECTION 1301. Company May Consolidate, Etc., Only on Certain Terms..............................................110
SECTION 1302. Successor Corporation Substituted.................................................................111
SECTION 1303. Extent of Lien Hereof on Property of Successor Corporation........................................112
SECTION 1304. Release of Company upon Conveyance or Other Transfer..............................................112
SECTION 1305. Merger into Company; Extent of Lien Hereof........................................................113
ARTICLE FOURTEEN. SUPPLEMENTAL INDENTURES.......................................................................113
SECTION 1401. Supplemental Indentures Without Consent of Holders................................................113
SECTION 1402. Supplemental Indentures With Consent of Holders...................................................115
SECTION 1403. Execution of Supplemental Indentures..............................................................116
SECTION 1404. Effect of Supplemental Indentures.................................................................116
SECTION 1405. Conformity with Trust Indenture Act...............................................................116
SECTION 1406. Reference in Securities to Supplemental Indentures................................................116
SECTION 1407. Modification Without Supplemental Indenture.......................................................117
ARTICLE FIFTEEN. MEETINGS OF HOLDERS; ACTION WITHOUT MEETING....................................................117
SECTION 1501. Purposes for Which Meetings May Be Called.........................................................117
SECTION 1502. Call, Notice and Place of Meetings................................................................117
SECTION 1503. Persons Entitled to Vote at Meetings..............................................................118
SECTION 1504. Quorum; Action....................................................................................118
SECTION 1505. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment
of Meetings....................................................................................119
SECTION 1506. Counting Votes and Recording Action of Meetings...................................................120
SECTION 1507. Action Without Meeting............................................................................120
ARTICLE SIXTEEN. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES.....................121
SECTION 1601. Exemption from Individual Liability...............................................................121
Exhibit A Property Description (Real Property)....................................................................1
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GENERAL MORTGAGE INDENTURE (herein called this "Indenture"), dated as
of October 10, 2002, between CenterPoint Energy Houston Electric, LLC, a limited
liability company duly organized and existing under the laws of the State of
Texas (herein called the "Company"), having its principal office at 1111
Louisiana, Houston, Texas 77002, and JPMORGAN CHASE BANK, a New York state bank
having an office at 600 Travis Street, Suite 1150, Houston, Texas 77002, as
Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture, as originally executed and delivered, to provide for the issuance
from time to time of its bonds, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as contemplated
herein, and to provide security for the payment of the principal of and premium,
if any, and interest, if any, on the Securities. All acts necessary to make this
Indenture a valid agreement of the Company, in accordance with its terms, have
been performed. For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires, capitalized terms
used herein shall have the meanings assigned to them in Article One of this
Indenture.
GRANTING CLAUSES
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, in consideration of
the premises and of the purchase of the Securities by the Holders thereof, and
in order to secure the payment of the principal of and premium, if any, and
interest, if any, on all Securities from time to time Outstanding and the
performance of the covenants therein and herein contained and to declare the
terms and conditions on which such Securities are secured, the Company hereby
grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges, sets
over and confirms to the Trustee, and grants to the Trustee a security interest
in, the following (subject, however, to the terms and conditions set forth in
this Indenture):
GRANTING CLAUSE FIRST
All right, title and interest of the Company, as of the date of the
execution and delivery of this Indenture, as originally executed and delivered,
in and to all property, real, personal and mixed (other than Excepted Property)
including without limitation all right, title and interest of the Company in and
to the following property so located (other than Excepted Property): (a) all
real property owned in fee, easements and other interests in real property
wherever situated, including without limitation, all land and interests in land
covered by the First Mortgage Indenture and in the sixty-five Supplemental
Indentures thereto, as described in Exhibit A hereto, except land and interests
in land which have been specifically released from the Lien of the First
Mortgage Indenture from time to time; (b) all licenses, permits to use the real
property of others, franchises to use public roads, streets and other public
properties, rights of way and other rights or interests relating to the
occupancy or use of real property; (c) all facilities, machinery, equipment and
fixtures for the generation, transmission and distribution of electric energy
including, but not limited to, all plants, powerhouses, dams, diversion works,
generators,
1
turbines, engines, boilers, fuel handling and transportation facilities, air and
water pollution control and sewage and solid waste disposal facilities,
switchyards, towers, substations, transformers, poles, lines, cables, conduits,
ducts, conductors, meters, regulators and all other property used or to be used
for any or all of such purposes; (d) all buildings, offices, warehouses,
structures or improvements in addition to those referred to or otherwise
included in clauses (a) and (c) above; (e) all computers, data processing, data
storage, data transmission and/or telecommunications facilities, equipment and
apparatus necessary for the operation or maintenance of any facilities,
machinery, equipment or fixtures described or referred to in clause (c) above;
and (f) all of the foregoing property in the process of construction;
GRANTING CLAUSE SECOND
Subject to the applicable exceptions permitted by Section 809(3),
Section 1303 and Section 1305, all right, title and interest of the Company in
all property, real, personal and mixed (other than Excepted Property) which may
be hereafter acquired by the Company, it being the intention of the Company that
all such property acquired by the Company after the date of the execution and
delivery of this Indenture, as originally executed and delivered, shall be as
fully embraced within and subjected to the Lien hereof as if such property were
owned by the Company as of the date of the execution and delivery of this
Indenture, as originally executed and delivered;
GRANTING CLAUSE THIRD
Any Excepted Property, which may, from time to time after the date of
the execution and delivery of this Indenture, as originally executed and
delivered, by delivery or by an instrument supplemental to this Indenture, be
subjected to the Lien hereof by the Company, the Trustee being hereby authorized
to receive the same at any time as additional security hereunder; it being
understood that any such subjection to the Lien hereof of any Excepted Property
as additional security may be made subject to such reservations, limitations or
conditions respecting the use and disposition of such property or the proceeds
thereof as shall be set forth in such instrument; and
GRANTING CLAUSE FOURTH
All tenements, hereditaments, servitudes and appurtenances belonging or
in any wise appertaining to the aforesaid property, with the reversions and
remainders thereof;
EXCEPTED PROPERTY
Expressly excepting and excluding, however, from the Lien of this
Indenture all right, title and interest of the Company in and to the following
property, whether now owned or hereafter acquired (herein sometimes called
"Excepted Property"):
(1) all cash on hand or in banks or other financial
institutions, deposit accounts, shares of stock, interests in general or limited
partnerships, bonds, membership interests in limited liability companies, notes,
other evidences of ownership, equity, indebtedness and other securities, of
whatsoever kind and nature, not hereafter paid or delivered to, deposited with
or held by the Trustee hereunder or required so to be;
2
(2) all contracts, leases, operating agreements and other
agreements of whatsoever kind and nature; all contract rights, bills, notes and
other instruments and chattel paper (except to the extent that any of the same
constitute securities, in which case they are separately excepted from the Lien
of this Indenture under clause (1) above); all revenues, income and earnings,
all accounts, accounts receivable and unbilled revenues, and all rents, tolls,
issues, product and profits, claims, credits, demands and judgments; all
governmental and other licenses, permits, franchises, consents and allowances
(except to the extent that any of the same are specifically described in clause
(b) of Granting Clause First of this Indenture, in which case they are included
within the Lien of this Indenture); and all patents, patent licenses and other
patent rights, patent applications, trade names, trademarks, copyrights, domain
names, claims, credits, choses in action and other intangible property and
general intangibles including, but not limited to, computer software;
(3) all automobiles, buses, trucks, truck cranes, tractors,
trailers and similar vehicles and movable equipment; all rolling stock, rail
cars and other railroad equipment; all vessels, boats, barges and other marine
equipment; all airplanes, helicopters, aircraft engines and other flight
equipment; all parts, accessories and supplies used in connection with any of
the foregoing; and all personal property of such character that the perfection
of a security interest therein or other Lien thereon is not governed by the
Uniform Commercial Code as in effect in the jurisdiction in which such property
is located;
(4) all goods, stock in trade, wares, merchandise and
inventory held for the purpose of sale or lease in the ordinary course of
business; all materials, supplies, inventory and other items of personal
property which are consumable (otherwise than by ordinary wear and tear) in
their use in the operation or ownership of the Mortgaged Property; all fuel,
whether or not any such fuel is in a form consumable in the operation or
ownership of the Mortgaged Property, including separate components of any fuel
in the forms in which such components exist at any time before, during or after
the period of the use thereof as fuel; all hand and other portable tools and
equipment; all furniture and furnishings; and computers and data processing,
data storage, data transmission, telecommunications and other facilities,
equipment and apparatus, which, in any case, are used primarily for
administrative or clerical purposes or are otherwise not necessary for the
operation or maintenance of the facilities, machinery, equipment or fixtures
described or referred to in clause (c) or (d) of Granting Clause First of this
Indenture;
(5) all coal, ore, gas, oil and other minerals and all timber,
and all rights and interests in any of the foregoing, whether or not such
minerals or timber shall have been mined or extracted or otherwise separated
from the land; and all electric energy, gas (natural or artificial), steam,
water and other products generated, produced, manufactured, purchased or
otherwise acquired by the Company;
(6) all real property, leaseholds, gas rights, wells, gas
works, stations and substations, transmission pipelines, storage facilities,
holders, tanks, retorts, purifiers, odorizers, scrubbers, compressors, valves,
regulators, pumps, mains, pipes, service pipes, conduits, ducts, fittings and
connections, services, meters, gathering, tap or other pipe lines, facilities,
equipment, apparatus or any other property used or to be used for the
production, gathering transmission, storage or distribution of natural gas,
crude oil or other hydro-carbons or minerals;
3
(7) all property which is the subject of a lease agreement
designating the Company as lessee and all right, title and interest of the
Company in and to such property and in, to and under such lease agreement,
whether or not such lease agreement is intended as security;
(8) all facilities, machinery, equipment and fixtures for the
appropriation, storage, transmission and distribution of water including, but
not limited to, water works, reservoirs, diversion works, stations and
substations, transmission pipelines, canals, raceways, flumes, waterways,
aqueducts, storage facilities, tanks, purifiers, valves, regulators, pumps,
mains, pipes, service pipes, conduits, fittings and connections, services,
meters and any and all other property used or to be used for any or all of such
purposes; and
(9) all property, real, personal and mixed, which prior to the
date of the execution and delivery of this Indenture, as originally executed and
delivered, has been excepted or released from the Lien of the First Mortgage;
provided, however, that subject to the provisions of Section 1303, (x)
if, at any time after the occurrence of an Event of Default, the Trustee, or any
separate trustee or co-trustee appointed under Section 1114 or any receiver
appointed pursuant to Section 1008 or otherwise, shall have entered into
possession of all or substantially all of the Mortgaged Property, all the
Excepted Property described or referred to in the foregoing clauses (2), (3) and
(4), then owned or held or thereafter acquired by the Company, to the extent
that the same is used in connection with, or otherwise relates or is
attributable to, the Mortgaged Property, shall immediately, and, in the case of
any Excepted Property described or referred to in clause (6), to the extent that
the same is used in connection with, or otherwise relates or is attributable to,
the Mortgaged Property, upon demand of the Trustee or such other trustee or
receiver, become subject to the Lien of this Indenture to the extent not
prohibited by law or by the terms of any other Lien or encumbrance on such
Excepted Property, and the Trustee or such other trustee or receiver may, to the
extent not prohibited by law or by the terms of any such other Lien (and subject
to the rights of the holders of all such other Liens), at the same time likewise
take possession thereof, and (y) whenever all Events of Default shall have been
cured and the possession of all or substantially all of the Mortgaged Property
shall have been restored to the Company, such Excepted Property shall again be
excepted and excluded from the Lien hereof to the extent set forth above; it
being understood that the Company may, however, pursuant to Granting Clause
Third, subject to the Lien of this Indenture any Excepted Property, whereupon
the same shall cease to be Excepted Property;
TO HAVE AND TO HOLD all such property, real, personal and mixed, unto
the Trustee, its successors in trust and their assigns forever;
SUBJECT, HOWEVER, to (a) Liens existing at the date of the execution
and delivery of this Indenture, as originally executed and delivered (including,
but not limited to, the Lien of the First Mortgage), (b) as to property acquired
by the Company after the date of the execution and delivery of this Indenture,
as originally executed and delivered, Liens existing or placed thereon at the
time of the acquisition thereof (including, but not limited to, Purchase Money
Liens), (c) Permitted Liens and all other Liens permitted to exist under Section
6.06; and
4
SUBJECT, FURTHER, to the condition that, with respect to any property
which is now or hereafter becomes subject to the Lien of the First Mortgage, the
Lien of this Indenture shall at all times be junior, subject and subordinate to
the Lien of the First Mortgage;
IN TRUST, NEVERTHELESS, for the equal and ratable benefit and security
of the Holders from time to time of all Outstanding Securities without any
priority of any such Security over any other such Security;
PROVIDED, HOWEVER, that the right, title and interest of the Trustee in
and to the Mortgaged Property shall cease, terminate and become void in
accordance with, and subject to the conditions set forth in, Article Nine or
Article Fourteen hereof, and if, thereafter, the principal of and premium, if
any, and interest, if any, on the Securities shall have been paid to the Holders
thereof, or shall have been paid to the Company pursuant to Section 603 hereof,
then and in that case this Indenture shall terminate, and the Trustee shall
execute and deliver to the Company such instruments as the Company shall require
to evidence such termination; otherwise this Indenture, and the estate and
rights hereby granted, shall be and remain in full force and effect; and
IT IS HEREBY COVENANTED AND AGREED by and between the Company and the
Trustee that all the Securities are to be authenticated and delivered, and that
the Mortgaged Property is to be held, subject to the further covenants,
conditions and trusts hereinafter set forth, and the Company hereby covenants
and agrees to and with the Trustee, for the equal and ratable benefit of all
Holders, as follows:
ARTICLE ONE.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. General Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article One have the meanings
assigned to them in this Article One and include the plural as well as the
singular;
(2) all other terms used herein without definition which are
defined in the Trust Indenture Act, either directly or by reference therein,
have the meanings assigned to them therein;
(3) all terms used herein without definition which are defined
in the Uniform Commercial Code as in effect in any jurisdiction in which any
portion of the Mortgaged Property is located shall have the meanings assigned to
them therein with respect to such portion of the Mortgaged Property;
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United
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States, and, except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted in the United States at the date of such computation or, at the
election of the Company from time to time, at the date of the execution and
delivery of this Indenture, as originally executed and delivered;
(5) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture;
(6) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(7) words importing any gender include the other genders;
(8) references to statutes are to be construed as including
all statutory provisions consolidating, amending or replacing the statute
referred to;
(9) references to "writing" include printing, typing,
lithography and other means of reproducing words in a visible form;
(10) the words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation"; and
(11) unless otherwise provided, references to agreements and
other instruments shall be deemed to include all amendments and other
modifications to such agreements and instruments, but only to the extent such
amendments and other modifications are not prohibited by the terms of this
Indenture.
"Accountant" means a Person engaged in the accounting profession or
otherwise qualified to pass on accounting matters (including, but not limited
to, a Person certified or licensed as a public accountant, whether or not then
engaged in the public accounting profession), which Person, unless required to
be Independent, may be an employee or Affiliate of the Company.
"Act", when used with respect to any Holder, has the meaning specified
in Section 107.
"Adjusted Net Earnings" means the amount calculated in accordance with
Section 104(1); provided, however, that if any of the property of the Company
owned by it at the time of the making of any Net Earnings Certificate (a) shall
have been acquired during or after any period for which Adjusted Net Earnings of
the Company are to be computed, (b) shall not have been acquired in exchange or
substitution for property the net earnings of which have been included in the
Adjusted Net Earnings of the Company, and (c) had been operated as a separate
unit and items of revenue and expense attributable thereto are readily
ascertainable, then the net earnings of such property (computed in the manner
provided for the computation of the Adjusted Net Earnings of the Company) during
such period or such part of such period as shall have preceded the acquisition
thereof, to the extent that the same have not otherwise been included in the
Adjusted Net Earnings of the Company, shall be so included.
6
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Annual Interest Requirements" means the amount calculated in
accordance with Section 104(2).
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 1114 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Officer" means the Manager, the President, any Vice
President or the Treasurer of the Company, or any other duly authorized officer,
agent or attorney-in-fact of the Company named in an Officer's Certificate
signed by any of such company officers.
"Authorized Publication" means a newspaper or financial journal of
general circulation, printed in the English language and customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays; or, in the alternative, shall mean such form of communication as may
have come into general use for the dissemination of information of import
similar to that of the information specified to be published by the provisions
hereof. In the event that successive weekly publications in an Authorized
Publication are required hereunder they may be made (unless otherwise expressly
provided herein) on the same or different days of the week and in the same or in
different Authorized Publications. In case, by reason of the suspension of
publication of any Authorized Publication, or by reason of any other cause, it
shall be impractical without unreasonable expense to make publication of any
notice in an Authorized Publication as required by this Indenture, then such
method of publication or notification as shall be made with the approval of the
Trustee shall be deemed the equivalent of the required publication of such
notice in an Authorized Publication.
"Authorized Purposes" means the authentication and delivery of
Securities, the release of property and/or the withdrawal of cash under any of
the provisions of this Indenture.
"Business Day", when used with respect to any Place of Payment or any
other particular location specified in the Securities or this Indenture, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture, as originally executed and delivered, such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a Successor Corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such Successor Corporation.
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"Company Request" or "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Manager, its Chief
Executive Officer, its Chief Financial Officer, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Company Secretary
or an Assistant Company Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of the execution and delivery of this
Indenture, as originally executed and delivered, is as follows: at 600 Travis
Street, Suite 1150, Houston, Texas 77002.
"Corporation" means a corporation, limited liability company, company,
association, joint-stock company or business trust.
"Cost" has the meaning specified in Section 103.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Eligible Obligations" means:
(1) with respect to Securities denominated in Dollars,
Government Obligations; or
(2) with respect to Securities denominated in a currency other
than Dollars or in a composite currency, such other obligations or instruments
as shall be specified with respect to such Securities as contemplated by Section
301.
"Event of Default" has the meaning specified in Section 1001.
"Excepted Property" has the meaning specified in the Granting Clauses
of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Exchange Rate" has the meaning specified in Section 1001.
"Expert" means a Person which is an engineer, appraiser or other expert
and which, with respect to any certificate to be signed by such Person and
delivered to the Trustee, is qualified to pass upon the matters set forth in
such certificate. For purposes of this definition, (a) "engineer" means a Person
engaged in the engineering profession or otherwise qualified to pass upon
engineering matters (including, but not limited to, a Person licensed as a
professional engineer, whether or not then engaged in the engineering
profession) and (b) "appraiser" means a Person engaged in the business of
appraising property or otherwise qualified to pass upon the Fair Value or fair
market value of property.
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"Expert's Certificate" means a certificate signed by an Authorized
Officer and by an Expert (which Expert (a) shall be selected either by the
Manager or by an Authorized Officer, the execution of such certificate by such
Authorized Officer to be conclusive evidence of such selection, and (b) except
as otherwise required in Sections 402, 607, 707 and 809, may be an employee or
Affiliate of the Company duly authorized either by the Manager or by an
Authorized Officer) and delivered to the Trustee. The amount stated in any
Expert's Certificate as to the Cost or Fair Value of property shall be
conclusive and binding upon the Company, the Trustee and the Holders.
"Expiration Date" has the meaning specified in Section 107.
"Fair Value", with respect to property, means the fair value of such
property as may reasonably be determined by reference to (a) the amount which
would be likely to be obtained in an arm's-length transaction with respect to
such property between an informed and willing buyer and an informed and willing
seller, under no compulsion, respectively, to buy or sell, (b) the amount of
investment with respect to such property which, together with a reasonable
return thereon, would be likely to be recovered through ordinary business
operations or otherwise, (c) the Cost, accumulated depreciation and replacement
cost with respect to such property and/or (d) any other relevant factors;
provided, however, that (x) the Fair Value of property shall be determined
without deduction for any Liens on such property prior to the Lien of this
Indenture (except as otherwise provided in Section 803) and (y) the Fair Value
to the Company of Property Additions shall not reflect any reduction relating to
the fact that such Property Additions may be of less value to a Person which is
not the owner or operator of the Mortgaged Property or any portion thereof than
to a Person which is such owner or operator. Fair Value may be determined, in
the discretion of the expert certifying the same, without physical inspection,
by the use of accounting and/or engineering records and/or other data maintained
by the Company or otherwise available to such Expert.
"First Mortgage" means the Mortgage and Deed of Trust, dated as of
November 1, 1944, from Houston Lighting & Power Company (Company successor) to
South Texas Commercial National Bank of Houston (JPMorgan Chase Bank, successor)
as trustee, which Mortgage and Deed of Trust and amendments and supplements
thereto have been recorded and filed in the office of the Secretary of State in
the State of Texas as set forth in Exhibit A hereto.
"First Mortgage Securities" means securities or other obligations, from
time to time, issued and Outstanding under the First Mortgage.
"First Mortgage Collateral Bonds" has the meaning specified in Section
701.
"First Mortgage Collateralization Date" means the date on which the
Company delivers to the Trustee the First Mortgage Collateralization Bonds
pursuant to Section 701 hereof.
"Funded Cash" has the meaning specified in Section 102.
"Funded Property" has the meaning specified in Section 102.
"Governmental Authority" means the government of the United States or
of any State or Territory thereof or of the District of Columbia or of any
county, municipality or other political
9
subdivision of any thereof, or any department, agency, authority or other
instrumentality of any of the foregoing.
"Government Obligations" means:
(1) any security which is (A) a direct obligation of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged or (B) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case (A) or
(B), is not callable or redeemable at the option of the issuer thereof; and
(2) certificates, depositary receipts or other instruments which
evidence a direct ownership interest in obligations described in clause (1)
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 (which may include the
Trustee or any Paying Agent) subject to Federal or State supervision or
examination with a combined capital and surplus of at least Fifty Million
Dollars ($50,000,000); and provided, further, that except as may be otherwise
required by law, such custodian shall be obligated to pay to the holders of such
certificates, depositary receipts or other instruments the full amount received
by such custodian in respect of such obligations or specific payments and shall
not be permitted to make any deduction therefrom.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"Independent", when applied to any Accountant or Expert, means such a
Person who (a) is in fact independent, (b) does not have any direct material
financial interest in the Company or in any other obligor upon the Securities or
in any Affiliate of the Company or of such other obligor, (c) is not connected
with the Company or such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or any person performing similar
functions and (d) is approved by the Trustee in the exercise of reasonable care.
"Independent Expert's Certificate" means a certificate signed by an
Independent Expert and delivered to the Trustee.
"Initial Expert's Certificate" means an Expert's certificate delivered
upon the earliest of (a) the first authentication and delivery of Securities,
subsequent to the initial authentication and delivery of the Securities of the
Initial Series (excluding Securities of the Initial Series issued in connection
with a transfer, exchange or replacement of any Predecessor Securities of such
series), upon the basis of Property Additions pursuant to Section 402, (b) the
first release of any
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part of the Mortgaged Property pursuant to Section 803 or 804 and (c) the first
withdrawal of cash on the basis of Property Additions pursuant to Section 806.
"Initial Series" means:
(1) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of Eight Hundred Fifty Million Dollars
($850,000,000) established in the First Supplemental Indenture, dated as of
October 10, 2002, between the Company and the Trustee, the form and terms of
which are established in the Officer's Certificate, dated October 10, 2002,
pursuant to the First Supplemental Indenture;
(2) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of Fifty Million Dollars ($50,000,000)
established in the Second Supplemental Indenture, dated as of October 10, 2002,
between the Company and the Trustee, the form and terms of which are established
in the Officer's Certificate, dated October 10, 2002, pursuant to the Second
Supplemental Indenture;
(3) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of Sixty Eight Million Dollars ($68,000,000)
established in the Third Supplemental Indenture, dated as of October 10, 2002,
between the Company and the Trustee, the form and terms of which are established
in the Officer's Certificate, dated October 10, 2002, pursuant to the Third
Supplemental Indenture;
(4) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of One Hundred Million Dollars ($100,000,000)
established in the Fourth Supplemental Indenture, dated as of October 10, 2002,
between the Company and the Trustee, the form and terms of which are established
in the Officer's Certificate, dated October 10, 2002, pursuant to the Fourth
Supplemental Indenture;
(5) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of Ninety Million Dollars ($90,000,000)
established in the Fifth Supplemental Indenture, dated as of October 10, 2002,
between the Company and the Trustee, the form and terms of which are established
in the Officer's Certificate, dated October 10, 2002, pursuant to the Fifth
Supplemental Indenture;
(6) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of One Hundred Million Dollars ($100,000,000)
established in the Sixth Supplemental Indenture, dated as of October 10, 2002,
between the Company and the Trustee, the form and terms of which are established
in the Officer's Certificate, dated October 10, 2002, pursuant to the Sixth
Supplemental Indenture;
(7) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of Nineteen Million Two Hundred Thousand Dollars
($19,200,000) established in the Seventh Supplemental Indenture, dated as of
October 10, 2002, between the Company and the Trustee, the form and terms of
which are established in the Officer's Certificate, dated October 10, 2002,
pursuant to the Seventh Supplemental Indenture;
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(8) the series of Securities, initially authenticated and delivered in
the aggregate principal amount of One Hundred Million Dollars ($100,000,000)
established in the Eighth Supplemental Indenture, dated as of October 10, 2002,
between the Company and the Trustee, the form and terms of which are established
in the Officer's Certificate, dated October 10, 2002, pursuant to the Eighth
Supplemental Indenture; and
(9) each additional series of Securities, provided that the aggregate
principal amount of the Securities to be authenticated and delivered in respect
of such series, when added to the aggregate principal amount of Securities
outstanding immediately prior to the issuance thereof (other than any Securities
for the payment or redemption of which such Securities are to be issued and any
Securities pledged as security for the payment obligations of the Company in
respect of indebtedness for the satisfaction of which such Securities are to be
issued), shall not exceed an amount equal to the sum of One Billion Seven
Hundred Seventy Seven Million Two Hundred Thousand Dollars ($1,777,200,000) and
the aggregate amount of all Transaction Costs relating to any such series.
"Interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Investment Securities" means any of the following obligations or
securities on which neither the Company, any other obligor on the Securities nor
any Affiliate of either is the obligor: (a) Government Obligations; (b) interest
bearing deposit accounts (which may be represented by certificates of deposit)
in any national or state bank (which may include the Trustee or any Paying
Agent) or savings and loan association which has outstanding securities rated by
a nationally recognized rating organization in either of the two (2) highest
rating categories (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long term securities; (c) bankers' acceptances drawn on and accepted by any
commercial bank (which may include the Trustee or any Paying Agent) which has
outstanding securities rated by a nationally recognized rating organization in
either of the two (2) highest rating categories (without regard to modifiers)
for short term securities or in any of the three (3) highest rating categories
(without regard to modifiers) for long term securities; (d) direct obligations
of, or obligations the principal of and interest on which are unconditionally
guaranteed by, any State or Territory of the United States or the District of
Columbia, or any political subdivision of any of the foregoing, which are rated
by a nationally recognized rating organization in either of the two (2) highest
rating categories (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long term securities; (e) bonds or other obligations of any agency or
instrumentality of the United States; (f) corporate debt securities which are
rated by a nationally recognized rating organization in either of the two (2)
highest rating categories (without regard to modifiers) for short term
securities or in any of the three (3) highest rating categories (without regard
to modifiers) for long term securities; (g) repurchase agreements with respect
to any of the foregoing obligations or securities with any banking or financial
institution (which may include the Trustee or any Paying Agent) which has
outstanding securities rated by a nationally recognized rating organization in
either of the two (2) highest rating categories
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(without regard to modifiers) for short term securities or in any of the three
(3) highest rating categories (without regard to modifiers) for long term
securities; (h) securities issued by any regulated investment company (including
any investment company for which the Trustee or any Paying Agent is the
advisor), as defined in Section 851 of the Internal Revenue Code of 1986, as
amended, or any successor Section of such Code or successor federal statute,
provided that the portfolio of such investment company is limited to obligations
or securities of the character and investment quality contemplated in clauses
(a) through (f) above and repurchase agreements which are fully collateralized
by any of such obligations or securities; and (i) any other obligations or
securities which may lawfully be purchased by the Trustee in its capacity as
such.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, easement, lease, reservation, restriction, servitude, charge or
similar right and any other lien of any kind, including, without limitation, the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement.
"Manager" means the appointed manager of the Company.
"Manager Resolution" means a copy of a resolution certified by the
Company Secretary or an Assistant Company Secretary of the Company to have been
duly adopted by the Manager and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Matured Event of Default" means the occurrence of any default or any
other event under the First Mortgage, and the expiration of the applicable grace
period, if any, specified in the First Mortgage, if the effect of such default
or other event is to accelerate, or to permit the acceleration of, the maturity
of any amount due under the First Mortgage.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Maximum Interest Rate" has the meaning specified in Section 310.
"Mortgaged Property" means, as of any particular time, all property
which at such time is subject to the Lien of this Indenture.
"Net Earnings Certificate" has the meaning specified in Section 104.
"Notice of Default" has the meaning specified in Section 1001.
"Officer's Certificate" means a certificate signed by an Authorized
Officer and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or other counsel acceptable to the Trustee and who may
be an employee or Affiliate of the Company.
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"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 1002.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(1) Securities theretofore canceled or delivered to the
Securities Registrar or the Trustee for cancellation;
(2) Securities deemed to have been paid for all purposes of
this Indenture in accordance with Section 901 (whether or not the Company's
indebtedness in respect thereof shall be satisfied and discharged for any other
purpose); and
(3) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
and the Company that such Securities are held by a bona fide purchaser in whose
hands such Securities are valid obligations of the Company; provided, however,
that in determining whether or not the Holders of the requisite principal amount
of the Outstanding Securities under this Indenture, or the Outstanding
Securities of any series or Tranche, have given, made or taken any request,
demand, authorization, direction, notice, consent, election, waiver or other
action hereunder or whether or not a quorum is present at a meeting of Holders,
as of any date, (A) the principal amount of an Original Issue Discount Security
which shall be deemed to be Outstanding shall be the amount of the principal
thereof which would be due and payable as of such date upon acceleration of the
Maturity thereof to such date pursuant to Section 1002; (B) if, as of such date,
the principal amount payable at the Stated Maturity of a Security is not
determinable, the principal amount of such Security which shall be deemed to be
Outstanding shall be the amount as specified or determined as contemplated by
Section 301; (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be Outstanding
shall be the U.S. dollar equivalent, determined as of such date in the manner
provided as contemplated by Section 301, of the principal amount of such
Security (or, in the case of a Security described in clause (A) or (B) above, of
the amount determined as provided in such clause); and (D) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, election, waiver or other action, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities 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 Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Outstanding", when used with respect to First Mortgage Securities, has
the meaning specified in the First Mortgage.
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"Paying Agent" means any Person, including the Company or any of its
Affiliates, authorized by the Company to pay the principal of or any premium or
interest on any Securities on behalf of the Company.
"Periodic Offering" means an offering of Securities of a series from
time to time any or all of the specific terms of which Securities, including
without limitation the rate or rates of interest, if any, thereon, the Stated
Maturity or Maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents from time to
time subsequent to the initial request for the authentication and delivery of
such Securities by the Trustee, all as contemplated in Section 301 and clause
(2) of Section 401.
"Permitted Liens" means, as of any particular time, any of the
following:
(1) Liens for taxes, assessments and other governmental
charges or requirements which are not delinquent or which are being contested in
good faith by appropriate proceedings or which secure charges that do not exceed
Five Million Dollars ($5,000,000);
(2) mechanics', workmen's, repairmen's, materialmen's,
warehousemen's and carriers' Liens, other Liens incident to construction,
improvement, repair or maintenance of property, Liens or privileges of any
officers or employees of the Company for compensation earned, and other Liens,
including without limitation Liens for worker's compensation awards, arising in
the ordinary course of business for charges or requirements which are not
delinquent or which are being contested in good faith and by appropriate
proceedings;
(3) Liens in respect of attachments, judgments or awards
arising out of judicial or administrative proceedings (i) in an amount not
exceeding the greater of (A) Ten Million Dollars ($10,000,000) and (B) three
percentum (3%) of the sum of (1) the principal amount of the Securities
Outstanding at the time such Lien arises and (2) the principal amount of First
Mortgage Securities Outstanding other than First Mortgage Collateral Bonds at
the time such Lien arises or (ii) with respect to which the Company shall (X) in
good faith be prosecuting an appeal or other proceeding for review and with
respect to which the Company shall have secured a stay of execution pending such
appeal or other proceeding or (Y) have the right to prosecute an appeal or other
proceeding for review;
(4) easements, leases, reservations or other rights of others
in, on, over and/or across, and laws, regulations and restrictions affecting,
and defects, irregularities, deficiencies, exceptions and limitations in title
to, the Mortgaged Property or any part thereof; provided, however, that such
easements, leases, reservations, rights, laws, regulations, restrictions,
defects, irregularities, deficiencies, exceptions and limitations do not in the
aggregate materially impair the use by the Company of the Mortgaged Property
considered as a whole for the purposes for which it is held by the Company;
(5) Liens, defects, irregularities, exceptions and limitations
in title to property subject to rights-of-way in favor of the Company or
otherwise or used or to be used by the Company primarily for right-of-way
purposes or property held by the Company under lease, easement, license or
similar right; provided, however, that (i) the Company shall have obtained from
the apparent owner or owners of such property a sufficient right, by the terms
of the
15
instrument granting such right-of-way, lease, easement, license or similar
right, to the use thereof for the purposes for which the Company acquired the
same, (ii) the Company has power under eminent domain or similar statutes to
remove such defects, irregularities, exceptions or limitations or (iii) such
defects, irregularities, exceptions and limitations may be otherwise remedied
without undue effort or expense; and defects, irregularities, exceptions and
limitations in title to flood lands, flooding rights and/or water rights;
(6) Liens securing indebtedness or other obligations neither
created, assumed nor guaranteed by the Company, nor on account of which it
customarily pays interest, upon real property or rights in or relating to real
property of the Company existing at the date of execution and delivery of this
Indenture, or, as to property thereafter acquired, at the time of the
acquisition thereof by the Company;
(7) leases existing at the date of the execution and delivery
of this Indenture, as originally executed and delivered, affecting properties
owned by the Company at such date and renewals and extensions thereof; and
leases affecting such properties entered into after such date or affecting
properties acquired by the Company after such date which, in either case, (i)
have respective terms (or periods at the end of which the Company may terminate
the lease) of not more than fifteen (15) years (including extensions or renewals
at the option of the tenant) or (ii) do not in the aggregate materially impair
the use by the Company of such properties considered as a whole for the purpose
for which they are held by the Company;
(8) Liens vested in lessors, licensors, franchisors,
permitters or others for rent or other amounts to become due or for other
obligations or acts to be performed, the payment of which rent or the
performance of which other obligations or acts is required under leases,
subleases, licenses, franchises or permits, so long as the payment of such rent
or other amounts or the performance of such other obligations or acts is not
delinquent or is being contested in good faith and by appropriate proceedings;
(9) controls, restrictions, obligations, duties and/or other
burdens imposed by federal, state, municipal or other law, or by rules,
regulations or orders of Governmental Authorities, upon the Mortgaged Property
or any part thereof or the operation or use thereof or upon the Company with
respect to the Mortgaged Property or any part thereof or the operation or use
thereof or with respect to any franchise, grant, license, permit or public
purpose requirement, or any rights reserved to or otherwise vested in
Governmental Authorities to impose any such controls, restrictions, obligations,
duties and/or other burdens;
(10) rights which Governmental Authorities may have by virtue
of franchises, grants, licenses, permits or contracts, or by virtue of law, to
purchase, recapture or designate a purchaser of or order the sale of the
Mortgaged Property or any part thereof, to terminate franchises, grants,
licenses, permits, contracts or other rights or to regulate the property and
business of the Company; and any and all obligations of the Company correlative
to any such rights;
(11) Liens required by law or governmental regulations (i) as
a condition to the transaction of any business or the exercise of any privilege
or license, (ii) to enable the Company to maintain self-insurance or to
participate in any funds established to cover any insurance risks,
16
(iii) in connection with workmen's compensation, unemployment insurance, social
security, any pension or welfare benefit plan or (iv) to share in the privileges
or benefits required for companies participating in one or more of the
arrangements described in clauses (ii) and (iii) above;
(12) Liens on the Mortgaged Property or any part thereof which
are granted by the Company to secure (or to obtain letters of credit that
secure) the performance of duties or public or statutory, bid or performance
obligations or to secure, or serve in lieu of, surety, stay or appeal bonds;
(13) rights reserved to or vested in others to take or receive
any part of any coal, ore, gas, oil and other minerals, any timber and/or any
electric capacity or energy, gas, water, steam and any other products,
developed, produced, manufactured, generated, purchased or otherwise acquired or
used by the Company or by others on property of the Company;
(14) (i) rights and interests of Persons other than the
Company arising out of contracts, agreements and other instruments to which the
Company is a party and which relate to the common ownership or joint use of
property; and (ii) all Liens on the interests of Persons other than the Company
in property owned in common by such Persons and the Company if and to the extent
that the enforcement of such Liens would not adversely affect the interests of
the Company in such property in any material respect;
(15) any restrictions on assignment and/or requirements of any
assignee to qualify as a permitted assignee and/or public utility or public
service corporation or company;
(16) any Liens which have been bonded for the full amount in
dispute or for the payment of which other adequate security arrangements have
been made;
(17) rights and interests granted pursuant to Section 802(4);
(18) Liens granted on air or water pollution control, sewage
or solid waste disposal, or other similar facilities of the Company in
connection with the issuance of pollution control revenue bonds, in connection
with financing the cost of, or the construction, acquisition, improvement,
repair or maintenance of, such facilities;
(19) the Trustee's Lien;
(20) Prepaid Liens;
(21) the Lien of the First Mortgage; and
(22) prior Liens, vendor's Liens and purchase money mortgages.
"Person" means any individual, Corporation, partnership, limited
liability partnership, joint venture, trust, unincorporated organization or any
Governmental Authority.
17
"Place of Payment", when used with respect to the Securities of any
series, or any Tranche thereof, means the place or places where the principal of
and any premium and interest on the Securities of that series are payable as
specified as contemplated by Section 301.
"Pollution Control Bond Collateral Requirements" means the
requirements, if any, under each of the Installment Payment and Bond
Amortization Agreement, dated as of January 1, 1997, between Brazos River
Authority and the Company (as successor) relating to the Trust Indenture, dated
as of January 1, 1997, between Brazos River Authority and Bank One (as
successor) as Trustee thereunder ("Indenture Trustee") and the Installment
Payment Agreement and Bond Amortization Agreement, dated January 1, 1997,
between Matagorda County Navigation District Number One and the Company (as
successor) relating to the Trust Indenture, dated as of January 1, 1997, between
Matagorda County Navigation District One and Bank One (as successor) as Trustee
thereunder ("Indenture Trustee") that, if the Company issues First Mortgage
Bonds in certain circumstances, the Company must also issue First Mortgage Bonds
to each respective Indenture Trustee in an aggregate principal amount equal to
the aggregate principal amount of securities outstanding under the relevant
Trust Indenture.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Prepaid Lien" means any Lien securing indebtedness for the payment,
prepayment or redemption of which there shall have been irrevocably deposited in
trust with the trustee or other holder of such Lien moneys and/or Investment
Securities which (together with the interest reasonably expected to be earned
from the investment and reinvestment in Investment Securities of the moneys
and/or the principal of and interest on the Investment Securities so deposited)
shall be sufficient for such purpose; provided, however, that if such
indebtedness is to be redeemed or otherwise prepaid prior to the stated maturity
thereof, any notice requisite to such redemption or prepayment shall have been
given in accordance with the instrument creating such Lien or irrevocable
instructions to give such notice shall have been given to such trustee or other
holder; and provided, further, that the First Mortgage shall not be deemed to be
a Prepaid Lien unless it shall have been satisfied and discharged and all First
Mortgage Securities issued thereunder shall be deemed to have been paid, all in
accordance with the provisions thereof.
"Property Additions" has the meaning specified in Section 103.
"Purchase Money Lien" means, with respect to any property (and any
improvements or accessions thereto) being acquired or disposed of by the Company
or being released from the Lien of this Indenture, a Lien on such property
which:
(1) is taken or retained by the transferor of such property to
secure all or part of the purchase price thereof;
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(2) is granted to one or more Persons other than the
transferor which, by making advances or incurring an obligation, give value to
enable the grantor of such Lien to acquire rights in or the use of such
property;
(3) is granted to any other Person in connection with the
release of such property from the Lien of this Indenture on the basis of the
deposit with the Trustee or the trustee or other holder of a Lien prior to the
Lien of this Indenture of obligations secured by such Lien on such property (as
well as any other property subject thereto);
(4) is held by a trustee or agent for the benefit of one or
more Persons described in clause (1), (2) and/or (3) above, provided that such
Lien may be held, in addition, for the benefit of one or more other Persons
which shall have theretofore given, or may thereafter give, value to or for the
benefit or account of the grantor of such Lien for one or more other purposes;
or
(5) otherwise constitutes a purchase money mortgage or a
purchase money security interest under applicable law; and, without limiting the
generality of the foregoing, for purposes of this Indenture, the term Purchase
Money Lien shall be deemed to include any Lien described above whether or not
such Lien (x) shall permit the issuance or other incurrence of additional
indebtedness secured by such Lien on such property, (y) shall permit the
subjection to such Lien of additional property and the issuance or other
incurrence of additional indebtedness on the basis thereof and/or (z) shall have
been granted prior to the acquisition, disposition or release of such property,
shall attach to or otherwise cover property other than the property being
acquired, disposed of or released and/or shall secure obligations issued prior
and/or subsequent to the issuance of the obligations delivered in connection
with such acquisition, disposition or release.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means an
officer in the Institutional Trust Services department of the Trustee having
direct responsibility for administration of this Indenture.
"Retired Securities" means (a) any Securities authenticated and
delivered under this Indenture which (i) no longer remain Outstanding by reason
of the applicability of clause (1) or (2) in the definition of "Outstanding"
(other than any Predecessor Security of any Security), (ii) have not been made
the basis under any of the provisions of this Indenture of one or more
Authorized Purposes and (iii) have not been paid, redeemed, purchased or
otherwise retired by the application thereto of Funded Cash and (b) any First
Mortgage Bond authenticated and delivered under the First Mortgage which (x) at
such time could be used as the basis for the
19
authentication and delivery of additional First Mortgage Securities pursuant to
the provisions of the First Mortgage and (y) shall have been retired after the
initial authentication and delivery of the Securities of the Initial Series;
provided, however, that, after the delivery to the Trustee of the Initial
Expert's Certificate, no Security and no such First Mortgage Security shall be
deemed to be a Retired Security unless the retirement thereof shall have
occurred after such delivery of the Initial Expert's Certificate.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Interest Rate" means a rate (whether fixed or variable) at
which an obligation by its terms is stated to bear simple interest. Any
calculation or other determination to be made under this Indenture by reference
to the Stated Interest Rate on a Security shall be made (a) without regard to
the effective interest cost to the Company of such Security and (b) without
regard to the Stated Interest Rate on, or the effective cost to the Company of,
any other obligation for which such Security is pledged or otherwise delivered
as security.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of or interest on such
Security, or such installment of principal or interest, is due and payable.
"Successor Corporation" has the meaning specified in Section 1301.
"Tranche" means a group of Securities which (a) are of the same series
and (b) have identical terms except as to principal amount and/or date of
issuance.
"Transaction Costs" means all costs associated with the issuance and
sale of Securities, including but not limited to the fees and disbursements of
counsel, the compensation of underwriters, and accountants' or other
professional fees.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
the Securities of that series.
20
"Trustee's Lien" has the meaning specified in Section 1107.
"United States" means the United States of America, its Territories,
its possessions and other areas subject to its political jurisdiction.
SECTION 102. Funded Property; Funded Cash.
"Funded Property" means:
(1) all Property Additions to the extent that the same shall
have been designated in an Initial Expert's Certificate to be deemed to be
Funded Property;
(2) all Property Additions to the extent that the same shall
have been made the basis of the authentication and delivery of Securities under
this Indenture pursuant to Section 402;
(3) all Property Additions to the extent that the same shall
have been made the basis of the release of property from the Lien of this
Indenture pursuant to Section 803;
(4) all Property Additions to the extent that the same shall
have been substituted for Funded Property retired pursuant to Section 802;
(5) all Property Additions to the extent that the same shall
have been made the basis of the withdrawal of cash held by the Trustee pursuant
to Section 404 or 806; and
(6) all Property Additions to the extent that the same shall
have been used as the basis of a credit against, or otherwise in satisfaction
of, the requirements of any sinking, improvement, maintenance, replacement or
similar fund or analogous provision established with respect to the Securities
of any series, or any Tranche thereof, as contemplated by Section 301; provided,
however, that any such Property Additions shall cease to be Funded Property when
all of the Securities of such series or Tranche shall have been paid.
In the event that in any certificate filed with the Trustee in
connection with any of the transactions referred to in clauses (1), (2), (3),
(5) and (6) of this Section, only a part of the Cost or Fair Value of the
Property Additions described in such certificate shall be required for the
purposes of such certificate, then such Property Additions shall be deemed to be
Funded Property only to the extent so required for the purpose of such
certificate.
All Funded Property that shall be abandoned, destroyed, released or
otherwise disposed of shall for the purpose of Section 103 hereof be deemed
Funded Property retired and for other purposes of this Indenture shall thereupon
cease to be Funded Property but as in this Indenture provided may at any time
thereafter again become Funded Property. Neither any reduction in the cost or
book value of property recorded in the plant account of the Company, nor the
transfer of any amount appearing in such account to intangible and/or adjustment
or expense accounts, otherwise than in connection with actual retirements of
physical property abandoned, destroyed, released or disposed of, and otherwise
than in connection with the removal of such property in its entirety from plant
account, shall be deemed to constitute a retirement of Funded Property.
21
The Company may make allocations, on a pro-rata or other reasonable
basis (including, but not limited to, the designation of specific properties or
the designation of all or a specified portion of the properties reflected in one
or more generic accounts or subaccounts in the Company's books of account), for
the purpose of determining the extent to which fungible properties, or other
properties not otherwise identified, reflected in the same generic account or
subaccount in the Company's books of account constitute Funded Property or
Funded Property retired.
"Funded Cash" means:
(1) cash, held by the Trustee hereunder, to the extent that it
represents the proceeds of insurance on Funded Property (except as otherwise
provided in Section 607), or cash deposited in connection with the release of
Funded Property pursuant to Article Eight, or the payment of the principal of,
or the proceeds of the release of, obligations secured by Purchase Money Lien
and delivered to the Trustee pursuant to Article Eight, all subject, however, to
the provisions of Section 607 and Section 806;
(2) any cash deposited with the Trustee under Section 404; and
(3) any cash received by the Trustee from the payment of the
principal of First Mortgage Collateral Bonds.
SECTION 103. Property Additions; Cost.
(1) "Property Additions" means, as of any particular time, any
item, unit or element of property which at such time is owned by the Company and
is subject to the Lien of this Indenture; provided, however, that Property
Additions shall not include:
(A) goodwill, going concern value rights or
intangible property except as provided in clause (3) of this Section; or
(B) any property the cost of acquisition or
construction of which is, in accordance with generally accepted accounting
principles, properly chargeable to an operating expense account of the Company.
(2) When any Property Additions are certified to the Trustee
as the basis of any Authorized Purpose (except as otherwise provided in Section
803 and Section 806):
(A) there shall be deducted from the Cost or Fair
Value to the Company thereof, as the case may be (as of the date so certified),
an amount equal to the Cost (or as to Property Additions of which the Fair Value
to the Company at the time the same became Funded Property was certified to be
an amount less than the Cost as determined pursuant to this Section, then such
Fair Value, as so certified, in lieu of Cost) of all Funded Property of the
Company retired to the date of such certification (other than the Funded
Property, if any, in connection with the application for the release of which
such certificate is filed) and not theretofore deducted from the Cost or Fair
Value to the Company of Property Additions theretofore certified to the Trustee;
and
22
(B) there may, at the option of the Company, be added
to such Cost or Fair Value, as the case may be, the sum of:
(i) the principal amount of any obligations
secured by Purchase Money Lien, not theretofore so added and which the Company
then elects so to add, which shall theretofore have been delivered to the
Trustee or the trustee or other holder of a Lien prior to the Lien of this
Indenture as the basis of the release of Funded Property retired from the Lien
of this Indenture or such prior Lien, as the case may be;
(ii) ten-sevenths (10/7) of the amount of
any cash, not theretofore so added and which the Company then elects so to add,
which shall theretofore have been delivered to the Trustee or the trustee or
other holder of a Lien prior to the Lien of this Indenture as the proceeds of
insurance on Funded Property retired (to the extent of the portion thereof
deemed to be Funded Cash) or as the basis of the release of Funded Property
retired from the Lien of this Indenture or from such prior Lien, as the case may
be;
(iii) ten-sevenths (10/7) of the principal
amount of any Security or Securities, or portion of such principal amount, not
theretofore so added and which the Company then elects so to add, (I) which
shall theretofore have been delivered to the Trustee as the basis of the release
of Funded Property retired or (II) the right to the authentication and delivery
of which under the provisions of Section 403 shall at any time theretofore have
been waived under Section 803(4)(C) as the basis of the release of Funded
Property retired;
(iv) the Cost or Fair Value to the Company
(whichever shall be less), after making any deductions and any additions
pursuant to this Section, of any Property Additions, not theretofore so added
and which the Company then elects so to add, which shall theretofore have been
made the basis of the release of Funded Property retired (such Fair Value to be
the amount shown in the Expert's Certificate delivered to the Trustee in
connection with such release); and
(v) the Cost to the Company of any Property
Additions (including Property Additions subject to the Lien of the First
Mortgage) not theretofore so added and which the Company then elects so to add,
to the extent that the same shall have been substituted for Funded Property
retired;
provided, however, that the aggregate of the amounts added under clause (B)
above shall in no event exceed the amounts deducted under clause (A) above.
(3) Except as otherwise provided in Section 803, the term
"Cost" with respect to Property Additions shall mean the sum of (i) any cash
delivered in payment therefor or for the acquisition thereof, (ii) an amount
equivalent to the fair market value in cash (as of the date of delivery) of any
securities or other property delivered in payment therefor or for the
acquisition thereof, (iii) the principal amount of any obligations secured by
prior Lien (other than the First Mortgage) upon such Property Additions
outstanding at the time of the acquisition thereof, (iv) the principal amount of
any other obligations incurred or assumed in connection with the payment for
such Property Additions or for the acquisition thereof and (v) any other amounts
which, in accordance with generally accepted accounting principles, are properly
charged or
23
chargeable to the plant or other property accounts of the Company with respect
to such Property Additions as part of the cost of construction or acquisition
thereof, including, but not limited to any allowance for funds used during
construction or any similar or analogous amount; provided, however, that,
notwithstanding any other provision of this Indenture,
(A) with respect to Property Additions owned by a
Successor Corporation immediately prior to the time it shall have become such by
consolidation or merger or acquired by a Successor Corporation in or as a result
of a consolidation or merger (excluding, in any case, Property Additions owned
by the Company immediately prior to such time), Cost shall mean the amount or
amounts at which such Property Additions are recorded in the plant or other
property accounts of such Successor Corporation, or the predecessor corporation
from which such Property Additions are acquired, as the case may be, immediately
prior to such consolidation or merger;
(B) with respect to Property Additions which shall
have been acquired (otherwise than by construction) by the Company without any
consideration consisting of cash, securities or other property or the incurring
or assumption of indebtedness or other obligation, no determination of Cost
shall be required, and, wherever in this Indenture provision is made for Cost or
Fair Value, Cost with respect to such Property Additions shall mean an amount
equal to the Fair Value to the Company thereof or, if greater, the aggregate
amount reflected in the Company's books of account with respect thereto upon the
acquisition thereof; and
(C) in no event shall the Cost of Property Additions
be required to reflect any depreciation or amortization in respect of such
Property Additions, or any adjustment to the amount or amounts at which such
Property Additions are recorded in plant or other property accounts due to the
non-recoverability of investment or otherwise.
If any Property Additions are shown by the Expert's Certificate
provided for in Section 402 (2)(B) to include property which has been used or
operated by others than the Company in a business similar to that in which it
has been or is to be used or operated by the Company, the Cost thereof need not
be reduced by any amount in respect of any goodwill, going concern value rights
and/or intangible property simultaneously acquired and in such case the term
Property Additions as defined herein may include such goodwill, going concern
value rights and intangible property.
SECTION 104. Net Earnings Certificate; Adjusted Net Earnings; Annual Interest
Requirements.
A "Net Earnings Certificate" means a certificate signed by an
Authorized Officer and an accountant (who may be employed by or Affiliated with
the Company), stating:
(1) the "Adjusted Net Earnings" of the Company for a period of
twelve (12) consecutive calendar months within the eighteen (18) calendar months
immediately preceding the first day of the month in which the Company Order
requesting the authentication and delivery under this Indenture of Securities is
delivered to the Trustee (provided that for purposes of any Net Earnings
Certificate delivered to the Trustee on or prior to June 30, 2003, the Adjusted
Net Earnings of the Company shall be determined on the basis of twelve (12)
24
consecutive calendar months within the fifteen (15) calendar months immediately
preceding the first day of the month in which the Company order requesting the
authentication and delivery under this Indenture of Securities is delivered to
the Trustee, specifying:
(A) its operating revenues (which may include
revenues of the Company subject when collected or accrued to possible refund at
a future date);
(B) its operating expenses, excluding (i) expenses
for taxes on income or profits and other taxes measured by, or dependent on, net
income, (ii) provisions for reserves for renewals, replacements, depreciation,
depletion or retirement of property (or any expenditures therefor), or
provisions for amortization of property, (iii) expenses or provisions for
interest on any indebtedness of the Company, for the amortization of debt
discount, premium, expense or loss on reacquired debt, for any maintenance and
replacement, improvement or sinking fund or other device for the retirement of
any indebtedness, or for other amortization, (iv) expenses or provisions for any
non-recurring charge to income or to retained earnings of whatever kind or
nature (including without limitation the recognition of expense or impairment
due to the non-recoverability of assets or expense), whether or not recorded as
a non-recurring charge in the Company's books of account, and (v) provisions for
any refund of revenues previously collected or accrued by the Company subject to
possible refund;
(C) the amount remaining after deducting the amount
required to be stated in such certificate by clause (B) above from the amount
required to be stated therein by clause (A) above;
(D) its other income, net of related expenses
(excluding expenses or provisions for any non-recurring charge to the income or
retained earnings of the entity which is the source of such other income of
whatever kind or nature (including without limitation the recognition of expense
or impairment due to the non-recoverability of assets or expense), whether or
not recorded and a non-recurring charge in such entity's books of account),
which other income may include any portion of the allowance for funds used
during construction and other deferred costs (or any analogous amounts) which is
not included in "other income" (or any analogous item) in the Company's books of
account; and
(E) the Adjusted Net Earnings of the Company for such
period of twelve (12) consecutive calendar months (being the sum of the amounts
required to be stated in such certificate by clauses (C) and (D) above); and
(2) the "Annual Interest Requirements," being the interest
requirements for one year, at the respective Stated Interest Rates, if any,
borne prior to Maturity, upon:
(A) all Securities Outstanding hereunder at the date
of such certificate, except any for the payment or redemption of which the
Securities applied for are to be issued; provided, however, that, if Outstanding
Securities of any series bear interest at a variable rate or rates, then the
interest requirement on the Securities of such series shall be determined by
reference to the rate or rates in effect on the day immediately preceding the
date of such certificate;
25
(B) all Securities then applied for in pending
applications for the original issuance of Securities, including the application
in connection with which such certificate is made; provided, however, that if
Securities of any series are to bear interest at a variable rate or rates, then
the interest requirement on the Securities of such series shall be determined by
reference to the rate or rates to be in effect at the time of the initial
authentication and delivery of such Securities; and provided, further, that the
determination of the interest requirement on Securities of a series subject to a
Periodic Offering shall be further subject to the provisions of clause (6) of
Section 401;
(C) all First Mortgage Securities Outstanding at the
date of such certificate, except any First Mortgage Collateral Bonds and except
any for the payment or redemption of which the Securities applied for are to be
issued; provided, however, that, if the Outstanding First Mortgage Securities of
any series bear interest at a variable rate or rates, then the interest
requirement on the First Mortgage Securities of such series shall be determined
by reference to the rate or rates in effect on the day immediately preceding the
date of such certificate; and
(D) the principal amount of all other indebtedness
(except (i) First Mortgage Collateral Bonds, (ii) indebtedness of the Company
the repayment of which supports or is supported by other indebtedness included
in Annual Interest Requirements pursuant to one of the other clauses of this
definition, (iii) indebtedness for the payment of which the Securities applied
for are to be issued, and (iv) indebtedness secured by a Prepaid Lien prior to
the Lien of this Indenture upon property subject to the Lien of this Indenture
outstanding on the date of such certificate and secured by a Lien on a parity
with or prior to the Lien of this Indenture upon property subject to the Lien of
this Indenture), if such indebtedness has been issued, assumed or guaranteed by
the Company or if the Company customarily pays the interest upon the principal
thereof or collections from the Company's customers are applied to, or pledged
as security for the payment of such interest; provided, however, that if any
such indebtedness bears interest at a variable rate or rates, then the interest
requirement on such indebtedness shall be determined by reference to the rate or
rates in effect on the day immediately preceding the date of such certificate;
and provided, further, that any amounts collected by others to be applied to
debt service on indebtedness of the Company, and not otherwise treated on the
Company's books as revenue, shall be added to the Company's operating revenues
when determining Adjusted Net Earnings.
In any case where a Net Earnings Certificate is required as a condition
precedent to the authentication and delivery of Securities, such certificate
shall be accompanied by a certificate signed by an Independent Accountant if the
aggregate principal amount of Securities then applied for plus the aggregate
principal amount of Securities authenticated and delivered hereunder since the
commencement of the then current calendar year (other than those with respect to
which a Net Earnings Certificate is not required, or with respect to which a Net
Earnings Certificate accompanied by a certificate signed by an Independent
Accountant has previously been furnished to the Trustee) is ten percent (10%) or
more of the sum of (a) the principal amount of the Securities at the time
Outstanding, and (b) the principal amount of the First Mortgage Securities at
the time Outstanding other than First Mortgage Collateral Bonds, which
certificate shall provide that such Independent Accountant has reviewed the Net
Earnings
26
Certificate and that such Independent Accountant has no knowledge that any
statements in such Net Earnings Certificate are not true.
SECTION 105. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 106. Content and Form of Documents Delivered to Trustee.
(1) Any Officer's Certificate may be based (without further
examination or investigation), insofar as it relates to or is dependent upon
legal matters, upon an opinion of, or representations by, counsel, and, insofar
as it relates to or is dependent upon matters which are subject to verification
by Accountants, upon a certificate or opinion of, or representations by, an
Accountant, and, insofar as it relates to or is dependent upon matters which are
required in this Indenture to be covered by a certificate or opinion of, or
representations by, an Expert, upon the certificate or opinion of, or
representations by, an Expert, unless, in any case, such officer has actual
knowledge that the certificate or opinion or representations with respect to the
matters upon which such Officer's Certificate may be based as aforesaid are
erroneous.
Any Expert's Certificate may be based (without further examination or
investigation), insofar as it relates to or is dependent upon legal matters,
upon an opinion of, or representations by, counsel, and insofar as it relates to
or is dependent upon factual matters, information with respect to which is in
the possession of the Company and which are not subject to verification by
Experts, upon a certificate or opinion of, or representations by, an officer or
officers of the Company, unless such Expert has actual knowledge that the
certificate or opinion or
27
representations with respect to the matters upon which his certificate or
opinion may be based as aforesaid are erroneous.
Any certificate of an Accountant may be based (without further
examination or investigation), insofar as it relates to or is dependent upon
legal matters, upon an opinion of, or representations by, counsel, and insofar
as it relates to or is dependent upon factual matters, information with respect
to which is in the possession of the Company and which are not subject to
verification by Accountants, upon a certificate of, or representations by, an
officer or officers of the Company, unless such Accountant has actual knowledge
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion may be based as aforesaid are erroneous.
Any Opinion of Counsel may be based (without further examination or
investigation), insofar as it relates to or is dependent upon factual matters,
information with respect to which is in the possession of the Company, upon a
certificate of, or representations by, an officer or officers of the Company,
and, insofar as it relates to or is dependent upon matters which are subject to
verification by Accountants upon a certificate or opinion of, or representations
by, an Accountant, and, insofar as it relates to or is dependent upon matters
required in this Indenture to be covered by a certificate or opinion of, or
representations by, an Expert, upon the certificate or opinion of, or
representations by, an Expert, unless such counsel has actual knowledge that the
certificate or opinion or representations with respect to the matters upon which
his opinion may be based as aforesaid are erroneous. In addition, any Opinion of
Counsel may be based (without further examination or investigation), insofar as
it relates to or is dependent upon matters covered in an Opinion of Counsel
rendered by other counsel, upon such other Opinion of Counsel, unless such
counsel has actual knowledge that the Opinion of Counsel rendered by such other
counsel with respect to the matters upon which his Opinion of Counsel may be
based as aforesaid are erroneous. Further, any Opinion of Counsel with respect
to the status of title to or the sufficiency of descriptions of property, and/or
the existence of Liens thereon, and/or the recording or filing of documents,
and/or any similar matters, may be based (without further examination or
investigation) upon (i) title insurance policies or commitments and reports,
lien search certificates and other similar documents or (ii) certificates of, or
representations by, officers, employees, agents and/or other representatives of
the Company or (iii) any combination of the documents referred to in (i) and
(ii), unless, in any case, such counsel has actual knowledge that the document
or documents with respect to the matters upon which his opinion may be based as
aforesaid are erroneous. If, in order to render any Opinion of Counsel provided
for herein, the signer thereof shall deem it necessary that additional facts or
matters be stated in any Officer's Certificate, certificate of an Accountant or
Expert's Certificate provided for herein, then such certificate may state all
such additional facts or matters as the signer of such Opinion of Counsel may
request.
(2) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents. Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates,
28
statements, opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
(3) Whenever, subsequent to the receipt by the Trustee of any
Manager Resolution, Officer's Certificate, Expert's Certificate, Net Earnings
Certificate, Opinion of Counsel or other document or instrument, a clerical,
typographical or other inadvertent or unintentional error or omission shall be
discovered therein, a new document or instrument may be substituted therefor in
corrected form with the same force and effect as if originally filed in the
corrected form and, irrespective of the date or dates of the actual execution
and/or delivery thereof, such substitute document or instrument shall be deemed
to have been executed and/or delivered as of the date or dates required with
respect to the document or instrument for which it is substituted. Anything in
this Indenture to the contrary notwithstanding, if any such corrective document
or instrument indicates that action has been taken by or at the request of the
Company which could not have been taken had the original document or instrument
not contained such error or omission, the action so taken shall not be
invalidated or otherwise rendered ineffective but shall be and remain in full
force and effect, except to the extent that such action was a result of willful
misconduct or bad faith. Without limiting the generality of the foregoing, any
Securities issued under the authority of such defective document or instrument
shall nevertheless be the valid obligations of the Company entitled to the
benefit of the Lien of this Indenture equally and ratably with all other
Outstanding Securities, except as aforesaid.
SECTION 107. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; or, alternatively, may be embodied in and
evidenced by the record of Holders voting in favor thereof, either in person or
by proxies duly appointed in writing, at any meeting of Holders duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 1101) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 107. The record of any meeting of Holders shall
be proved in the manner provided in Section 1506.
The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee and the
Company deem sufficient. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the
29
same, may also be proved in any other manner which the Trustee and the Company
deem sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, election, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Securities of such series,
provided that the Company may not set a record date for, and the provisions of
this paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph. If
any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 109.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 1002, (iii) any request to institute
proceedings referred to in Section 1011 or (iv) any direction referred to in
Section 1016, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action
30
taken by Holders of the requisite principal amount of Outstanding Securities of
the relevant series on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section
109.
With respect to any record date set pursuant to this Section 107, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 109, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 107, the party hereto which set such record date shall be deemed
to have initially designated the one hundred eightieth (180th) day after such
record date as the Expiration Date with respect thereto, subject to its right to
change the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the one hundred eightieth
(180th) day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents, each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 108. Notices, Etc., to Trustee and Company.
Except as otherwise provided herein, any request, demand,
authorization, direction, notice, consent, election, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attention:
Institutional Trust Services, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to the attention of the Treasurer of the Company at the address of the
Company's principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee by the
Company.
SECTION 109. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by
31
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event otherwise to be specified therein,
and such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 110. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with
a provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
SECTION 111. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 112. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 113. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 114. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 115. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York (including without limitation
Section 5-1401 of the New York General Obligations Law or any successor to such
statute), except to the extent that the Trust
32
Indenture Act shall be applicable and except to the extent that the law of any
jurisdiction wherein any portion of the Mortgaged Property is located shall
mandatorily govern the creation of a mortgage lien on and security interest in,
or perfection, priority or enforcement of the Lien of this Indenture or exercise
of remedies with respect to, such portion of the Mortgaged Property.
SECTION 116. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section 116)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, and no additional interest shall
accrue as the result of such delayed payment.
SECTION 117. Investment of Cash Held by Trustee.
Any cash held by the Trustee or any Paying Agent under any provision of
this Indenture shall, except as otherwise provided in Section 806 or in Article
Nine, at the request of the Company evidenced by Company Order, be invested or
reinvested in Investment Securities designated by the Company (such Company
Order to contain a representation to the effect that the securities designated
therein constitute Investment Securities), and any interest on such Investment
Securities shall be promptly paid over to the Company as received free and clear
of any Lien. Such Investment Securities shall be held subject to the same
provisions hereof as the cash used to purchase the same, but upon a like request
of the Company shall be sold, in whole or in designated part, and the proceeds
of such sale shall be held subject to the same provisions hereof as the cash
used to purchase the Investment Securities so sold. If such sale shall produce a
net sum less than the cost of the Investment Securities so sold, the Company
shall pay to the Trustee or any such Paying Agent, as the case may be, such
amount in cash as, together with the net proceeds from such sale, shall equal
the cost of the Investment Securities so sold, and if such sale shall produce a
net sum greater than the cost of the Investment Securities so sold, the Trustee
or any such Paying Agent, as the case may be, shall promptly pay over to the
Company an amount in cash equal to such excess, free and clear of any Lien. In
no event shall the Trustee be liable for any loss incurred in connection with
the sale of any Investment Security pursuant to this Section.
Notwithstanding the foregoing, if an Event of Default shall have
occurred and be continuing, interest on Investment Securities and any gain upon
the sale thereof shall be held as part of the Mortgaged Property until such
Event of Default shall have been cured or waived, whereupon such interest and
gain shall be promptly paid over to the Company free and clear of any Lien.
33
ARTICLE TWO.
SECURITY FORMS
SECTION 201. Forms Generally.
The definitive Securities of each series shall be in substantially the
form or forms established in the indenture supplemental hereto establishing such
series, or in a Manager Resolution establishing such series, or in an Officer's
Certificate pursuant to such a supplemental indenture or Manager Resolution, in
any case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or automated quotation system on
which the Securities of such series may be listed or traded or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof. If the form of Securities of any series
is established by action taken pursuant to a Manager Resolution, a copy of an
appropriate record of such action shall be certified by the Company Secretary or
an Assistant Company Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 401 for the
authentication and delivery of such Securities.
The Securities of each series shall be issuable in registered form
without coupons. The definitive Securities of each series shall be typewritten,
printed, lithographed or engraved or produced by any combination of these
methods, if required by any securities exchange or automated quotation system on
which the Securities of such series may be listed or traded, on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange or automated quotation system on which the Securities of
such series may be listed or traded, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Date of Authentication:
---------------- --------------------------
As Trustee
By:
-------------------------
Authorized Signatory
34
ARTICLE THREE.
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
Subject to the provisions of Article Four, the aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series each of which may be
issued in Tranches. Subject to the penultimate paragraph of this Section, prior
to the authentication and delivery of Securities of any series there shall be
established by specification in a supplemental indenture or in a Manager
Resolution, or in an Officer's Certificate pursuant to a supplemental indenture
or a Manager Resolution:
(1) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of all other series);
(2) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 507 or 1406 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Persons (without specific identification) to whom
interest on Securities of such series, or any Tranche thereof, shall be payable
on any Interest Payment Date, if other than the Persons in whose names such
Securities (or one or more Predecessor Securities) are registered at the close
of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities
of such series, or any Tranche thereof, is payable or any formulary or other
method or other means by which such date or dates shall be determined, by
reference to an index or other fact or event ascertainable outside of this
Indenture or otherwise (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension);
(5) the rate or rates at which the Securities of such series,
or any Tranche thereof, shall bear interest, if any (including the rate or rates
at which overdue principal shall bear interest, if different from the rate or
rates at which such Securities shall bear interest prior to Maturity, and, if
applicable, the rate or rates at which overdue premium or interest shall bear
interest, if any), or any formulary or other method or other means by which such
rate or rates shall be determined, by reference to an index or other fact or
event ascertainable outside of this Indenture or otherwise; the date or dates
from which such interest shall accrue; the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date, if any, for the interest
payable on such Securities on any Interest Payment Date; and the basis of
computation of interest, if other than as provided in Section 310;
35
(6) the place or places at which and/or the methods (if other
than as provided elsewhere in this Indenture) by which (i) the principal of and
premium, if any, and interest, if any, on Securities of such series, or any
Tranche thereof, shall be payable, (ii) registration of transfer of Securities
of such series, or any Tranche thereof, may be effected, (iii) exchanges of
Securities of such series, or any Tranche thereof, may be effected and (iv)
notices and demands to or upon the Company in respect of the Securities of such
series, or any Tranche thereof, and this Indenture may be served; the Security
Registrar and any Paying Agent or Agents for such series or Tranche; and, if
such is the case, that the principal of such Securities shall be payable without
the presentment or surrender thereof;
(7) the period or periods within which or the date or dates on
which, the price or prices at which and the terms and conditions upon which the
Securities of such series, or any Tranche thereof, may be redeemed, in whole or
in part, at the option of the Company;
(8) the obligation or obligations, if any, of the Company to
redeem or purchase the Securities of such series, or any Tranche thereof,
pursuant to any sinking fund or other mandatory redemption provisions or at the
option of a Holder thereof and the period or periods within which or the date or
dates on which, the price or prices at which and the terms and conditions upon
which such Securities shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and applicable exceptions to the requirements of
Section 504 in the case of mandatory redemption or redemption at the option of
the Holder;
(9) the denominations in which Securities of such series, or
any Tranche thereof, shall be issuable if other than denominations of One
Thousand Dollars ($1,000) and any integral multiple thereof;
(10) the currency or currencies, including composite
currencies, in which payment of the principal of and premium, if any, and
interest, if any, on the Securities of such series, or any Tranche thereof,
shall be payable (if other than in Dollars); it being understood that, for
purposes of calculations under this Indenture (including calculations of
principal amount under Article Four), any amounts denominated in a currency
other than Dollars or in a composite currency shall be converted to Dollar
equivalents by calculating the amount of Dollars which could have been purchased
by the amount of such other currency based on such quotations or methods of
determination as shall be specified pursuant to this clause (10);
(11) if the principal of or premium, if any, or interest, if
any, on the Securities of such series, or any Tranche thereof, are to be
payable, at the election of the Company or a Holder thereof, in a coin or
currency other than that in which the Securities are stated to be payable, the
coin or currency in which payment of any amount as to which such election is
made will be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made; it being understood that, for
purposes of calculations under this Indenture (including calculations of
principal amount under Article Four), any such election shall be required to be
taken into account, in the manner contemplated in clause (10) of this paragraph,
only after such election shall have been made;
(12) if the principal of or premium, if any, or interest, if
any, on the Securities of such series, or any Tranche thereof, are to be
payable, or are to be payable at the election of
36
the Company or a Holder thereof, in securities or other property, the type and
amount of such securities or other property, or the formulary or other method or
other means by which such amount shall be determined, and the period or periods
within which, and the terms and conditions upon which, any such election may be
made; it being understood that all calculations under this Indenture (including
calculations of principal amount under Article Four) shall be made on the basis
of the fair market value of such securities or the Fair Value of such other
property, in either case determined as of the most recent practicable date,
except that, in the case of any amount of principal or interest that may be so
payable at the election of the Company or a Holder, if such election shall not
yet have been made, such calculations shall be made on the basis of the amount
of principal or interest, as the case may be, that would be payable if no such
election were made;
(13) if the amount payable in respect of principal of or
premium, if any, or interest, if any, on the Securities of such series, or any
Tranche thereof, may be determined with reference to an index or other fact or
event ascertainable outside of this Indenture, the manner in which such amounts
shall be determined (to the extent not established pursuant to clause (5) of
this paragraph); it being understood that all calculations under this Indenture
(including calculations of principal amount under Article Four) shall be made on
the basis of the amount that would be payable as principal if such principal
were due, or on the basis of the interest rates in effect, as the case may be,
on the date next preceding the date of such calculation;
(14) if other than the principal amount thereof, the portion
of the principal amount of Securities of such series, or any Tranche thereof,
which shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 1002;
(15) the terms, if any, pursuant to which the Securities of
such series, or any Tranche thereof, may be converted into or exchanged for
membership interests or shares of capital stock or other securities of the
Company or any other Person;
(16) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of the Securities of such
series, or any Tranche thereof, denominated in a currency other than Dollars or
in a composite currency, and any additional or alternative provisions for the
reinstatement of the Company's indebtedness in respect of such Securities after
the satisfaction and discharge thereof as provided in Section 901;
(17) if the Securities of such series, or any Tranche thereof,
are to be issued in global form, (i) any limitations on the rights of the Holder
or Holders of such Securities to transfer or exchange the same or to obtain the
registration of transfer thereof, (ii) any limitations on the rights of the
Holder or Holders thereof to obtain certificates therefor in definitive form in
lieu of temporary form and (iii) any and all other matters incidental to such
Securities;
(18) if the Securities of such series, or any Tranche thereof,
are to be issuable as bearer securities, any and all matters incidental thereto
which are not specifically addressed in a supplemental indenture as contemplated
by clause (4) of Section 1401;
(19) to the extent not established pursuant to clause (17) of
this paragraph, any limitations on the rights of the Holders of the Securities
of such series, or any Tranche thereof, to
37
transfer or exchange such Securities or to obtain the registration of transfer
thereof; and if a service charge will be made for the registration of transfer
or exchange of Securities of such series, or any Tranche thereof, the amount or
terms thereof;
(20) any exceptions to Section 116, or variation in the
definition of Business Day, with respect to the Securities of such series, or
any Tranche thereof;
(21) the terms of any sinking, improvement, maintenance,
replacement or analogous fund for any series; and
(22) any other terms of the Securities of such series, or any
Tranche thereof.
With respect to Securities of a series subject to a Periodic Offering,
the indenture supplemental hereto or the Manager Resolution which establishes
such series, or the Officer's Certificate pursuant to such supplemental
indenture or Manager Resolution, as the case may be, may provide general terms
or parameters for Securities of such series and provide either that the specific
terms of Securities of such series, or any Tranche thereof, shall be specified
in a Company Order or that such terms shall be determined by the Company or its
agents in accordance with procedures specified in a Company Order as
contemplated by clause (2) of Section 401.
Anything herein to the contrary notwithstanding, the Trustee shall be under no
obligation to authenticate and deliver Securities of any series the terms of
which, established as contemplated by this Section, would affect the rights,
duties, obligations, liabilities or immunities of the Trustee under this
Indenture or otherwise.
SECTION 302. Denominations.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, or any Tranche thereof, the Securities of each
series shall be issuable in denominations of One Thousand Dollars ($1,000) and
any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by an
Authorized Officer, under its company seal reproduced or impressed thereon and
attested by its Company Secretary or one of its Assistant Company Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at time of execution the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, or any Tranche thereof, each Security shall be
dated the date of its authentication.
38
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, or any Tranche thereof, no Security shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by the
manual signature of one of its authorized signatories, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if (a) any Security shall have been authenticated and delivered
hereunder to the Company, or any Person acting on its behalf, but shall never
have been issued and sold by the Company, (b) the Company shall deliver such
Security to the Security Registrar for cancellation or shall cancel such
Security and deliver evidence of such cancellation to the Trustee, in each case
as provided in Section 309, and (c) the Company, at its election, shall deliver
to the Trustee a written statement (which need not comply with Section 105 and
need not be accompanied by an Officer's Certificate or an Opinion of Counsel)
stating that such Security has never been issued and sold by the Company, then,
for all purposes of this Indenture, such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled to the
benefits hereof.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, or any
Tranche thereof, the Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, after the
preparation of definitive Securities of such series or Tranche, the temporary
Securities of such series or Tranche shall be exchangeable, without charge to
the Holder thereof, for definitive Securities of such series or Tranche upon
surrender of such temporary Securities at the office or agency of the Company
maintained pursuant to Section 602 in a Place of Payment for such Securities.
Upon such surrender of temporary Securities, the Company shall, except as
aforesaid, execute and the Trustee shall authenticate and deliver in exchange
therefor definitive Securities of the same series and Tranche, of authorized
denominations and of like tenor and aggregate principal amount.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept, with respect to the Securities of
each series, or any Tranche thereof, at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities of such series or Tranche and the registration of
transfer thereof. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided. If any indenture supplemental hereto refers to any transfer agents
39
(in addition to the Security Registrar) initially designated by the Company with
respect to any series of Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which such transfer agent acts, provided that the Company maintains a
transfer agent in each Place of Payment for such series. The Company may at any
time designate additional transfer agents with respect to the Securities of any
series, or any Tranche thereof.
Upon surrender for registration of transfer of any Security of such
series or Tranche at the office or agency of the Company in a Place of Payment
for such series or Tranche, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series and Tranche, of
authorized denominations and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, any Security of
such series or Tranche may be exchanged at the option of the Holder, for one or
more new Securities of the same series and Tranche, of authorized denominations
and of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at any such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee or the Security
Registrar) be duly endorsed or shall be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee or the Security
Registrar, as the case may be, duly executed by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with respect
to Securities of any series, or any Tranche thereof, no service charge shall be
made for any registration of transfer or exchange of Securities, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 304, 507 or
1406 not involving any transfer.
Neither the Trustee nor the Company shall be required, pursuant to the
provisions of this Section 305, (A) to issue, register the transfer of or
exchange any Securities of any series (or of any Tranche thereof) during a
period beginning at the opening of business fifteen (15) days before the day of
the mailing of a notice of redemption of any such Securities of such series or
Tranche selected for redemption under Section 503 and ending at the close of
business on the day of such mailing, or (B) to register the transfer of or
exchange any Security so selected for redemption, in whole or in part, except,
in the case of any Security to be redeemed in part, any portion not to be
redeemed.
40
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them and any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and Tranche, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding and shall cancel
and destroy such mutilated Security.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security is held by a Person purporting to be
the owner of such Security, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and Tranche, and of like tenor and
principal amount and bearing a number not contemporaneously outstanding. If,
after the delivery of such new Security, a bona fide purchaser of the original
Security in lieu of which such new Security was issued presents for payment or
registration such original Security, the Trustee shall be entitled to recover
such new Security from the party to whom it was delivered or any party taking
therefrom, except a bona fide purchaser, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Company and the Trustee in connection therewith
and shall cancel and destroy such new Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 306, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of counsel to the Company and the fees
and expenses of the Trustee, its agents and counsel) connected therewith.
Every new Security of any series issued pursuant to this Section 306 in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section 306 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with
respect to the Securities of any series, or any Tranche thereof, interest on any
Security which is payable, and is
41
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of Securities of such series, or any Tranche
thereof, except that, unless otherwise provided in the Securities of such
series, or any Tranche thereof, interest payable on the Stated Maturity of the
principal of a Security shall be paid to the Person to whom principal is paid.
The initial payment of interest on any Security of any series which is issued
between a Regular Record Date and the related Interest Payment Date shall be
payable as provided in such Security or in the Manager Resolution pursuant to
Section 301 with respect to the related series of Securities. Except in the case
of a Security in global form, at the option of the Company, interest on any
series of Securities may be paid (i) by check mailed to the address of the
Person entitled thereto as it shall appear on the Security Register of such
series or (ii) by wire transfer in immediately available funds at such place and
to such account as designated in writing by the Person entitled thereto as
specified in the Security Register of such series.
Any Paying Agents will be identified in a supplemental indenture
hereto. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however, the Company at all times
will be required to maintain a Paying Agent in each Place of Payment for each
series of Securities.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, any interest on any Security of any series which is
payable, but is not timely paid or duly provided for, on any Interest Payment
Date for Securities of such series (herein called "Defaulted Interest") shall
forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in respect
of which interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a date (herein called a "Special Record
Date") for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security of such series and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided in this clause (1).
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than fifteen (15) days and not less
than ten (10) days prior to the date of the proposed payment and not less than
ten (10) days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be given to each Holder of Securities of such series in the manner
set forth in Section 109, not less than ten (10) days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons
42
in whose names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated quotation system on
which such Securities may be listed or traded, and upon such notice as may be
required by such exchange or automated quotation system, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 307 and Section
305, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of and
premium, if any, and (subject to Sections 305 and 307) interest, if any, on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 309, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be treated in
accordance with the Trustee's document retention policies.
SECTION 310. Computation of Interest; Usury Not Intended.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, or any Tranche thereof, interest on the Securities of
each series shall be computed on the basis of a three hundred sixty (360)-day
year of twelve (12) thirty (30)-day months and interest on the Securities of
each series for any partial period shall be computed on the basis of a three
hundred sixty (360)-day year of twelve (12) thirty (30)-day months and the
actual number of days elapsed in any partial month.
43
The amount of interest (or amounts deemed to be interest under
applicable law) payable or paid on any Security shall be limited to an amount
which shall not exceed the maximum nonusurious rate of interest allowed by the
applicable laws of the State of Texas or any applicable law of the United States
permitting a higher maximum nonusurious rate that preempts such applicable Texas
laws, which could lawfully be contracted for, taken, reserved, charged or
received (the "Maximum Interest Rate"). If, as a result of any circumstances
whatsoever, the Company or any other Person is deemed to have paid interest (or
amounts deemed to be interest under applicable law) or any Holder is deemed to
have contracted for, taken, reserved, charged or received interest (or amounts
deemed to be interest under applicable law), in excess of the Maximum Interest
Rate, then, ipso facto, the obligation to be fulfilled shall be reduced to the
limit of validity, and if from any such circumstance, the Trustee, acting on
behalf of the Holders, or any Holder shall ever receive interest or anything
that might be deemed interest under applicable law that would exceed the Maximum
Interest Rate, such amount that would be excessive interest shall be applied to
the reduction of the principal amount owing on the applicable Security or
Securities and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of any such Security or Securities, such
excess shall be refunded to the Company. In addition, for purposes of
determining whether payments in respect of any Security are usurious, all sums
paid or agreed to be paid with respect to such Security for the use, forbearance
or detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such Bond.
SECTION 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" or other similar
numbers (if then generally in use), and, if so, the Trustee or Security
Registrar may use "CUSIP" or such other numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, in which case none of the Company or, as the case may be, the
Trustee or the Security Registrar, or any agent of any of them, shall have any
liability in respect of any CUSIP number used on any such notice, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company shall promptly notify the Trustee in writing of any change in
"CUSIP" numbers.
ARTICLE FOUR.
ISSUANCE OF SECURITIES
SECTION 401. General.
Subject to the provisions of Section 402, 403 or 404, whichever may be
applicable, and provided that the First Mortgage Collateralization Date has not
occurred, the Trustee shall authenticate and deliver Securities of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
(1) the instrument or instruments establishing the form or
forms and terms of such series, as provided in Sections 201 and 301;
44
(2) a Company Order requesting the authentication and delivery
of such Securities and, to the extent that the terms of such Securities shall
not have been established in an indenture supplemental hereto or in a Manager
Resolution, or in an Officer's Certificate pursuant to a supplemental indenture
or Manager Resolution, all as contemplated by Section 301, either (i)
establishing such terms or (ii) in the case of Securities of a series subject to
a Periodic Offering, specifying procedures, acceptable to the Trustee, by which
such terms are to be established (which procedures may provide for
authentication and delivery pursuant to oral or electronic instructions from the
Company or any agent or agents thereof, which oral instructions are to be
promptly confirmed electronically or in writing), in either case in accordance
with the instrument or instruments delivered pursuant to clause (1) above;
(3) the Securities of such series, executed on behalf of the
Company by an Authorized Officer;
(4) an Opinion of Counsel to the effect that:
(A) the form or forms of such Securities have been
duly authorized by the Company and have been established in conformity with the
provisions of this Indenture;
(B) the terms of such Securities have been duly
authorized by the Company and have been established in conformity with the
provisions of this Indenture; and
(C) when such Securities shall have been
authenticated and delivered by the Trustee and issued and delivered by the
Company in the manner and subject to any conditions specified in such Opinion of
Counsel, such Securities will constitute valid and legally binding obligations
of the Company, enforceable against the Company (subject to customary
exceptions) and entitled to the benefit of the Lien of this Indenture equally
and ratably with all other Securities then Outstanding;
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication and
delivery of such Securities (provided that such Opinion of Counsel addresses the
authentication and delivery of all such Securities) and that, in lieu of the
opinions described in clauses (B) and (C) above, counsel may opine that:
(X) when the terms of such Securities shall have been
established pursuant to a Company Order or Orders or
pursuant to such procedures as may be specified from
time to time by a Company Order or Orders, all as
contemplated by and in accordance with the instrument
or instruments delivered pursuant to clause (1)
above, such terms will have been duly authorized by
the Company and will have been established in
conformity with the provisions of this Indenture; and
(Y) when such Securities shall have been authenticated
and delivered by the Trustee in accordance with this
Indenture and the Company Order or Orders or the
specified procedures referred to in paragraph (X)
above and issued and delivered by the Company in the
manner and subject to any conditions specified in
such Opinion of Counsel, such Securities will
45
constitute valid obligations of the Company, entitled
to the benefit of the Lien of this Indenture equally
and ratably with all other Securities then
Outstanding;
(5) an Officer's Certificate to the effect that, to the
knowledge of the signer, no Event of Default has occurred and is continuing;
provided, however, that with respect to Securities of a series subject to a
Periodic Offering, either (i) such an Officer's Certificate shall be delivered
at the time of the authentication and delivery of each Security of such series
or (ii) the Officer's Certificate delivered at or prior to the time of the first
authentication and delivery of the Securities of such series shall state that
the statements therein shall be deemed to be made at the time of each, or each
subsequent, authentication and delivery of Securities of such series;
(6) a Net Earnings Certificate showing the Adjusted Net
Earnings of the Company for the period therein specified to have been not less
than an amount equal to two (2) times the Annual Interest Requirements therein
specified, all in accordance with the provisions of Section 104; provided,
however, that the Trustee shall not be entitled to receive a Net Earnings
Certificate hereunder if the Securities of such series are to have no Stated
Interest Rate prior to Maturity; and provided, further, that, with respect to
Securities of a series subject to a Periodic Offering, other than Securities
theretofore authenticated and delivered, (i) it shall be assumed in the Net
Earnings Certificate delivered in connection with the authentication and
delivery of Securities of such series that none of the Securities of such series
not yet authenticated and delivered shall have a Stated Interest Rate in excess
of a maximum rate to be stated therein, and thereafter no Securities of such
series which would have a Stated Interest Rate at the time of the initial
authentication and delivery thereof in excess of such maximum rate shall be
authenticated and delivered under the authority of such Net Earnings Certificate
but instead shall only be authenticated and delivered under the authority of a
new Net Earnings Certificate which complies with the requirements of this clause
(6), including the proviso relating to Securities of a series subject to a
Periodic Offering, and (ii) so long as the Stated Interest Rate that Securities
of a series subject to a Periodic Offering bear at the time of the initial
authentication and delivery thereof does not exceed the maximum rate assumed in
the most recent Net Earnings Certificate delivered with respect to the
Securities of such series, the Trustee shall not be entitled to receive a new
Net Earnings Certificate at the time of any subsequent authentication and
delivery of the Securities of such series (unless such Securities are
authenticated and delivered on or after the date which is two years after the
most recent Net Earnings Certificate with respect to such series was delivered
pursuant to this clause (6), in which case this subclause (ii) shall not apply),
provided that no Net Earnings Certificate shall be required in connection with
any issuance of Securities if the Company Order requesting the authentication
and delivery of such Securities is delivered to the Trustee on a date prior to
March 31, 2003; and
(7) such other Opinions of Counsel, certificates and other
documents as may be required under Section 402, 403 or 404, whichever may be
applicable to the authentication and delivery of the Securities of such series.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the forms and terms thereof, the validity thereof and the
compliance of the authentication and delivery
46
thereof with the terms and conditions of this Indenture, upon the Opinion or
Opinions of Counsel and the certificates and other documents delivered pursuant
to this Article Four at or prior to the time of the first authentication and
delivery of Securities of such series until any of such opinions, certificates
or other documents have been superseded or revoked or expire by their terms. In
connection with the authentication and delivery of Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to assume that the
Company's instructions to authenticate and deliver such Securities do not
violate any applicable law or any applicable rule, regulation or order of any
Governmental Authority having jurisdiction over the Company.
Anything herein to the contrary notwithstanding, none of the conditions
specified in Sections 402, 403 and 404 shall be required to be satisfied in
connection with the initial authentication and delivery of the Securities of the
Initial Series.
SECTION 402. Issuance of Securities on the Basis of Property Additions.
(1) Securities of any one or more series may be authenticated
and delivered on the basis of Property Additions which do not constitute Funded
Property in a principal amount not exceeding seventy percentum (70%) of the
balance of the Cost or the Fair Value to the Company of such Property Additions
(whichever shall be less) after making any deductions and any additions pursuant
to Section 103(2) except as otherwise specified in clause (2) with respect to
the Initial Expert's Certificate.
(2) Securities of any series shall be authenticated and
delivered by the Trustee on the basis of Property Additions upon receipt by the
Trustee of:
(A) the documents with respect to the Securities of
such series specified in Section 401;
(B) an Expert's Certificate dated as of a date not
more than ninety (90) days prior to the date of the Company Order requesting the
authentication and delivery of such Securities:
(i) describing generally all property
constituting Property Additions and designated by the Company, in its
discretion, to be made the basis of the authentication and delivery of such
Securities (such description of property to be made by reference, at the
election of the Company, either to specified items, units and/or elements of
property or portions thereof, on a percentage or Dollar basis, or to properties
reflected in specified accounts or subaccounts in the Company's books of account
or portions thereof, on a Dollar basis), and stating the Cost of such property;
(ii) stating that all such property
constitutes Property Additions;
(iii) stating that such Property Additions
are desirable for use in the conduct of the business, or one of the businesses,
of the Company;
47
(iv) stating that such Property Additions,
to the extent of the Cost or Fair Value to the Company thereof (whichever is
less) to be made the basis of the authentication and delivery of such
Securities, do not constitute Funded Property;
(v) stating, except as to Property Additions
acquired, made or constructed wholly through the delivery of securities or other
property or the incurrence of other obligations, that the amount of cash forming
all or part of the Cost thereof was equal to or more than an amount to be stated
therein;
(vi) briefly describing, with respect to any
Property Additions acquired, made or constructed in whole or in part through the
delivery of securities or other property or the incurrence of other obligations,
the securities or other property so delivered or obligations so incurred and
stating the date of such delivery or incurrence;
(vii) stating what part, if any, of such
Property Additions includes property which within six months prior to the date
of acquisition thereof by the Company had been used or operated by others than
the Company in a business similar to that in which it has been or is to be used
or operated by the Company and stating whether or not, in the judgment of the
signers, the Fair Value thereof to the Company, as of the date of such
certificate, is less than One Hundred Thousand Dollars ($100,000) and whether or
not such Fair Value is less than one percentum (1%) of the sum of the aggregate
principal amount of Securities then Outstanding and the aggregate principal
amount of First Mortgage Securities then Outstanding other than First Mortgage
Collateral Bonds;
(viii) stating, in the judgment of the
signers, the Fair Value to the Company, as of the date of such certificate, of
such Property Additions, except any thereof with respect to the Fair Value to
the Company of which a statement is to be made in an Independent Expert's
Certificate pursuant to clause (C) below;
(ix) stating the amount required to be
deducted under Section 103(2)(A) and the amounts elected to be added under
Section 103(2)(B) in respect of Funded Property retired of the Company;
(x) if any property included in such
Property Additions is subject to a Lien (other than the Lien of the First
Mortgage) of the character described (a) in clause (4) of the definition of
Permitted Liens, stating that such Lien does not, in the judgment of the
signers, materially impair the use by the Company of the Mortgaged Property
considered as a whole, or (b) in clause (7)(ii) of the definition of Permitted
Liens, stating that such Lien does not, in the judgment of the signers, in the
aggregate materially impair the use by the Company of such properties,
considered as a whole for the purposes for which it is held by the Company or
(c) in clause (14)(ii) of the definition of Permitted Liens, stating that the
enforcement of such Lien would not, in the judgment of the signers, adversely
affect the interests of the Company in such property in any material respect;
(xi) stating the lower of the Cost or the
Fair Value to the Company of such Property Additions, after the deductions
therefrom and additions thereto specified in such Expert's Certificate pursuant
to clause (ix) above;
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(xii) stating the amount equal to seventy
percentum (70%) of the amount required to be stated pursuant to clause (xi)
above; and
(xiii) stating the aggregate principal
amount of the Securities to be authenticated and delivered on the basis of such
Property Additions (such amount not to exceed the amount stated pursuant to
clause (xii) above); provided, however, that in the Initial Expert's Certificate
there shall be stated, in lieu of such principal amount, the sum of (a) the
principal amount of Securities to be authenticated and delivered on the basis of
Property Additions, (b) the aggregate principal amount of all Securities then
Outstanding and (c) the aggregate principal amount of all First Mortgage
Securities then Outstanding other than First Mortgage Collateral Bonds (such sum
not to exceed the amount stated pursuant to clause (xii) above);
(C) in case any Property Additions are shown by the
Expert's Certificate provided for in clause (B) above to include property which,
within six months prior to the date of acquisition thereof by the Company, had
been used or operated by others than the Company in a business similar to that
in which it has been or is to be used or operated by the Company and such
certificate does not show the Fair Value thereof to the Company, as of the date
of such certificate, to be less than One Hundred Thousand Dollars ($100,000) or
less than one percentum (1%) of the sum of the aggregate principal amount of
Securities then Outstanding and the aggregate principal amount of First Mortgage
Securities then Outstanding other than First Mortgage Collateral Bonds, an
Independent Expert's Certificate stating, in the judgment of the signer, the
Fair Value to the Company, as of the date of such Independent Expert's
Certificate, of (X) such Property Additions which have been so used or operated
and (at the option of the Company) as to any other Property Additions included
in the Expert's Certificate provided for in clause (B) above and (Y) in case
such Independent Expert's Certificate is being delivered in connection with the
authentication and delivery of Securities, any property so used or operated
which has been subjected to the Lien of this Indenture since the commencement of
the then current calendar year as the basis for the authentication and delivery
of Securities and as to which an Independent Expert's Certificate has not
previously been furnished to the Trustee;
(D) in case any Property Additions are shown by the
Expert's Certificate provided for in clause (B) above to have been acquired,
made or constructed in whole or in part through the delivery of securities or
other property or the incurrence of an obligation, an Expert's Certificate
stating, in the judgment of the signers, the fair market value in cash of such
securities or other property or other obligation at the time of delivery thereof
in payment for or for the acquisition of such Property Additions;
(E) an Opinion of Counsel to the effect that:
(i) this Indenture constitutes, or, upon the
delivery of, and/or the filing and/or recording in the proper places and manner
of, the instruments of conveyance, assignment or transfer, if any, specified in
said opinion, will constitute, a Lien on all the Property Additions to be made
the basis of the authentication and delivery of such Securities, subject to no
Lien thereon prior to the Lien of this Indenture except Permitted Liens; and
49
(ii) the Company has corporate or limited
liability authority to operate such Property Additions; and
(F) copies of the instruments of conveyance,
assignment and transfer, if any, specified in the Opinion of Counsel provided
for in clause (E) above.
SECTION 403. Issuance of Securities on the Basis of Retired Securities.
(1) Securities of any one or more series may be authenticated
and delivered on the basis of, and in an aggregate principal amount not
exceeding the aggregate principal amount of, Retired Securities.
(2) Securities of any series shall be authenticated and
delivered by the Trustee on the basis of Retired Securities upon receipt by the
Trustee of:
(A) the documents with respect to the Securities of
such series specified in Section 401; provided, however, that no Net Earnings
Certificate shall be required to be delivered unless the maximum Stated Interest
Rate, if any, on such Retired Securities at the time of their authentication and
delivery was less than the maximum Stated Interest Rate, if any, on such
Securities to be in effect upon the initial authentication and delivery thereof;
and
(B) an Officer's Certificate stating that Retired
Securities, specified by series, in an aggregate principal amount not less than
the aggregate principal amount of Securities to be authenticated and delivered,
have theretofore been authenticated and delivered and, as of the date of such
Officer's Certificate, constitute, or will constitute upon the application of
the proceeds of issuance of the Securities to be authenticated and delivered on
the basis of such Retired Securities to the repayment of the aggregate principal
amount of such Retired Securities, Retired Securities and are the basis for the
authentication and delivery of such Securities.
SECTION 404. Issuance of Securities on the Basis of Deposit of Cash.
(1) Securities of any one or more series may be authenticated
and delivered on the basis of, and in an aggregate principal not exceeding the
amount of, any deposit with the Trustee of cash for such purpose.
(2) Securities of any series shall be authenticated and
delivered by the Trustee on the basis of the deposit of cash when the Trustee
shall have received, in addition to such deposit, the documents with respect to
the Securities of such series specified in Section 401.
(3) All cash deposited with the Trustee under the provisions
of this Section shall be held by the Trustee as a part of the Mortgaged Property
and may be withdrawn from time to time by the Company, upon application of the
Company to the Trustee, in an amount equal to the aggregate principal amount of
Securities to the authentication and delivery of which the Company shall be
entitled under any of the provisions of this Indenture by virtue of compliance
with all applicable provisions of this Indenture (except as hereinafter in this
clause (3) otherwise provided).
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Upon any such application for withdrawal, the Company shall comply with
all applicable provisions of this Indenture relating to the authentication and
delivery of Securities except that the Company shall not in any event be
required to deliver the documents specified in Section 401.
Any withdrawal of cash under this clause (3) shall operate as a waiver
by the Company of its right to the authentication and delivery of the Securities
on which it is based and such Securities may not thereafter be authenticated and
delivered hereunder. Any Property Additions which have been made the basis of
any such right to the authentication and delivery of Securities so waived shall
be deemed to have been made the basis of the withdrawal of such cash and any
Retired Securities which have been made the basis of any such right to the
authentication and delivery of Securities so waived shall be deemed to have been
made the basis of the withdrawal of such cash.
(4) If at any time the Company shall so direct, any sums
deposited with the Trustee under the provisions of this Section may be used or
applied to the purchase, payment or redemption of Securities in the manner and
subject to the conditions provided in clauses (5) and (6) of Section 806.
ARTICLE FIVE.
REDEMPTION OF SECURITIES
SECTION 501. Applicability of Article.
Securities of any series, or any Tranche thereof, which are redeemable
before their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 301 for Securities
of such series or Tranche) in accordance with this Article.
SECTION 502. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Manager Resolution or in another manner specified as contemplated by
Section 301 for such Securities. In case of any redemption at the election of
the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, not less than
forty-five (45) nor more than sixty (60) days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series, or any Tranche thereof, to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, or (b) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction or condition.
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SECTION 503. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series, or any Tranche thereof,
are to be redeemed (unless all the Securities of such series or Tranche and of a
specified tenor are to be redeemed or unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected not
more than sixty (60) days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series, or any Tranche thereof, not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Security of such series, or any Tranche thereof,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series, or any Tranche thereof, and of a specified tenor are to be redeemed
(unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than sixty (60) days prior
to the Redemption Date by the Trustee, from the Outstanding Securities of such
series, or any Tranche thereof, and specified tenor not previously called for
redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company or any Affiliate thereof shall not be included in the Securities
selected for redemption.
SECTION 504. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than thirty (30) nor more than sixty (60) days prior to
the Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
With respect to Securities of each series, or any Tranche thereof, to
be redeemed, each notice of redemption shall identify the Securities to be
redeemed (including CUSIP numbers) and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
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(3) if less than all the Outstanding Securities of any series,
or any Tranche thereof, consisting of more than a single Security are to be
redeemed, the identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be redeemed
and, if less than all the Outstanding Securities of any series, or any Tranche
thereof, consisting of a single Security are to be redeemed, the principal
amount of the particular Security to be redeemed;
(4) that on the Redemption Date the Redemption Price, together
with accrued interest, if any, to the Redemption Date, will become due and
payable upon each such Security to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date;
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if any,
unless it shall have been specified as contemplated by Section 301 with respect
to such Securities that such surrender shall not be required;
(6) that the redemption is for a sinking fund, if such is the
case; and
(7) such other matters as the Company shall deem desirable or
appropriate
(8) with respect to any notice of redemption of Securities at
the election of the Company, unless, upon the giving of such notice, such
Securities shall be deemed to have been paid in accordance with Section 901,
such notice may state that such redemption shall be conditional upon the receipt
by the Paying Agent or Agents for such Securities, on or prior to the date fixed
for such redemption, of money sufficient to pay the principal of and premium, if
any, and interest, if any, on such Securities and that if such money shall not
have been so received such notice shall be of no force or effect and the Company
shall not be required to redeem such Securities. In the event that such notice
of redemption contains such a condition and such money is not so received, the
redemption shall not be made and within a reasonable time thereafter notice
shall be given, in the manner in which the notice of redemption was given, that
such money was not so received and such redemption was not required to be made,
and the Paying Agent or Agents for the Securities otherwise to have been
redeemed shall promptly return to the Holders thereof any of such Securities
which had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
SECTION 505. Deposit of Redemption Price.
On or before the Redemption Date specified in the notice of redemption
given as provided in Section 504, the Company shall deposit with the Trustee or
with a Paying Agent (or,
53
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 603) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 506. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with such notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security; and provided, further, that, except as otherwise
specified as contemplated by Section 301 with respect to such Security, any
installment of interest on any Security the Stated Maturity of which installment
is on or prior to the Redemption Date shall be payable to the Holder of such
Security, or one or more Predecessor Securities, registered as such at the close
of business on the related Record Date according to the terms of such Security
and subject to the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 507. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE SIX.
COVENANTS
SECTION 601. Payment of Securities; Lawful Possession; Maintenance of Lien.
(1) The Company covenants and agrees that it will duly and
punctually pay the principal of and any premium and interest on the Securities
of each series in accordance with the terms of such Securities and this
Indenture.
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(2) At the date of the execution and delivery of this
Indenture, as originally executed and delivered, the Company is lawfully
possessed of the Mortgaged Property.
(3) The Company shall maintain and preserve the Lien of this
Indenture so long as any Securities shall remain Outstanding, subject, however,
to the provisions of Article Eight and Article Fourteen.
SECTION 602. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for the Securities
of each series, or any Tranche thereof, an office or agency where Securities of
that series or Tranche may be presented or surrendered for payment, where
Securities of that series or Tranche may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series or Tranche and this Indenture may be
served. The Company initially appoints the Trustee, acting through its Corporate
Trust Office, as its agent for said purpose. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency and prompt notice to the Holders of any such change in
the manner specified in Section 109. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series, or any Tranche
thereof, may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee, and prompt notice to the Holders in the manner specified
in Section 109, of any such designation or rescission and of any change in the
location of any such other office or agency.
Anything herein to the contrary notwithstanding, any office or agency
required by this Section may be maintained at an office of the Company, in which
event the Company shall perform all functions to be performed at such office or
agency.
SECTION 603. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, or any Tranche thereof, it will, on or
before each due date of the principal of or any premium or interest on any such
Securities, segregate to the extent required by law and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any premium and interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series, or any Tranche thereof, it will provide to a Paying
Agent a sum sufficient to pay the
55
principal of or any premium or interest on such Securities, such sum to be held
as provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for the Securities of any
series, or any Tranche thereof, other than the Company or the Trustee, to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 603,
that such Paying Agent will:
(1) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent; and
(2) during the continuance of any default by the Company (or
any other obligor upon such Securities), upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of such Securities.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall, upon receipt of a Company Request
and at the expense of the Company, cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice 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 publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 604. Existence.
Subject to Article Thirteen and the Company's ability to convert into a
corporation, limited partnership or limited liability partnership or other legal
entity under applicable law, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
limited liability company. On and after any conversion of the Company into a
corporation, limited partnership or limited liability partnership or other legal
entity under
56
applicable law, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate, limited partnership or
limited liability partnership or other existence, as applicable.
SECTION 605. Maintenance of Properties.
The Company shall cause (or, with respect to property owned in common
with others, make reasonable effort to cause) the Mortgaged Property, considered
as a whole, to be maintained and kept in good condition, repair and working
order and shall cause (or, with respect to property owned in common with others,
make reasonable effort to cause) to be made such repairs, renewals,
replacements, betterments and improvements thereof, as, in the judgment of the
Company, may be necessary in order that the operation of the Mortgaged Property,
considered as a whole, may be conducted in accordance with common industry
practice; provided, however, that nothing in this Section shall prevent the
Company from discontinuing, or causing the discontinuance of, the operation and
maintenance of any portion of the Mortgaged Property; and provided, further,
that nothing in this Section shall prevent the Company from selling,
transferring or otherwise disposing of, or causing the sale, transfer or other
disposition of, any portion of the Mortgaged Property or other property, subject
to the provisions of this Indenture.
SECTION 606. Payment of Taxes; Discharge of Liens.
The Company shall pay all taxes and assessments and other governmental
charges lawfully levied or assessed upon the Mortgaged Property, or upon any
part thereof, or upon the interest of the Trustee in the Mortgaged Property,
before the same shall become delinquent, and shall make reasonable effort to
observe and conform in all material respects to all valid requirements of any
Governmental Authority relative to any of the Mortgaged Property and all
covenants, terms and conditions upon or under which any of the Mortgaged
Property is held; and the Company shall not suffer any Lien to be created upon
the Mortgaged Property, or any part thereof, prior to the Lien hereof, other
than Permitted Liens and other than, in the case of property hereafter acquired,
Purchase Money Liens and any other Liens existing or placed thereon at the time
of the acquisition thereof; provided, however, that nothing in this Section
contained shall require the Company (i) to observe or conform to any requirement
of Governmental Authority or to cause to be paid or discharged, or to make
provision for, any such Lien, or to pay any such tax, assessment or governmental
charge so long as the validity thereof shall be contested in good faith and by
appropriate legal proceedings or such Lien, tax, assessment or charge is not
greater than Five Million Dollars ($5,000,000), (ii) to pay, discharge or make
provisions for any tax, assessment or other governmental charge, the validity of
which shall not be so contested if adequate security for the payment of such
tax, assessment or other governmental charge and for any penalties or interest
which may reasonably be anticipated from failure to pay the same shall be given
to the Trustee or (iii) to pay, discharge or make provisions for any Liens
existing on the Mortgaged Property at the date of execution and delivery of this
Indenture, as originally executed and delivered; and provided, further, that
nothing in this Section shall prohibit the issuance or other incurrence of
additional indebtedness, or the refunding of outstanding indebtedness, secured
by any Lien prior to the Lien hereof which is permitted under this Section to
continue to exist.
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SECTION 607. Insurance.
(1) The Company shall (i) keep or cause to be kept all the
Mortgaged Property insured against loss by fire, to the extent that property of
similar character is usually so insured by companies similarly situated and
operating like properties, to a reasonable amount, by reputable insurance
companies, the proceeds of such insurance (except as to any loss of Excepted
Property and except as to any particular loss less than the greater of (A) Ten
Million Dollars ($10,000,000) and (B) three percentum (3%) of the sum of (1) the
principal amount of Securities Outstanding on the date of such particular loss
and (2) the principal amount of the First Mortgage Securities Outstanding other
than First Mortgage Collateral Bonds on the date of such particular loss) to be
made payable, subject to applicable law, to the Trustee as the interest of the
Trustee may appear, to the trustee of the First Mortgage, or to the trustee or
other holder of any other Lien prior hereto upon property subject to the Lien
hereof, if the terms thereof require such payment or (ii) in lieu of or
supplementing such insurance in whole or in part, adopt some other method or
plan of protection against loss by fire at least equal in protection to the
method or plan of protection against loss by fire of companies similarly
situated and operating properties subject to similar fire hazards or properties
on which an equal primary fire insurance rate has been set by reputable
insurance companies; and if the Company shall adopt such other method or plan of
protection, it shall, subject to applicable law (and except as to any loss of
Excepted Property and except as to any particular loss less than the greater of
(X) Ten Million Dollars ($10,000,000) and (Y) three percentum (3%) of the sum of
(1) the principal amount of Securities Outstanding on the date of such
particular loss and (2) the principal amount of the First Mortgage Securities
Outstanding other than First Mortgage Collateral Bonds on the date of such
particular loss) pay to the Trustee on account of any loss covered by such
method or plan an amount in cash equal to the amount of such loss less any
amounts otherwise paid to the Trustee in respect of such loss or paid to the
trustee under the First Mortgage or to the trustee or other holder of any other
Lien prior hereto upon property subject to the Lien hereof in respect of such
loss if the terms thereof require such payment. Any cash so required to be paid
by the Company pursuant to any such method or plan shall for the purposes of
this Indenture be deemed to be proceeds of insurance. In case of the adoption of
such other method or plan of protection, the Company shall also furnish to the
Trustee a certificate of an actuary or other qualified person appointed by the
Company with respect to the adequacy of such method or plan.
Anything herein to the contrary notwithstanding, the Company may have
fire insurance policies with (i) a deductible provision in a dollar amount per
occurrence not exceeding the greater of (A) Ten Million Dollars ($10,000,000)
and (B) three percentum (3%) of the sum of (1) the principal amount of the
Securities Outstanding on the date such policy goes into effect and (2) the
principal amount of the First Mortgage Securities Outstanding other than First
Mortgage Collateral Bonds on the date such policy goes into effect, and/or (ii)
co-insurance provisions with a dollar amount per occurrence not exceeding thirty
percentum (30%) of the loss proceeds otherwise payable; provided, however, that
the dollar amount described in clause (i) above may be exceeded to the extent
such dollar amount per occurrence is below the deductible amount in effect as to
fire insurance (X) on property of similar character insured by companies
similarly situated and operating like property or (Y) on property as to which an
equal primary fire insurance rate has been set by reputable insurance companies.
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(2) All moneys paid to the Trustee by the Company in
accordance with this Section or received by the Trustee as proceeds of any
insurance, in either case on account of a loss on or with respect to Funded
Property, shall, subject to the requirements of the First Mortgage or other Lien
prior hereto upon property subject to the Lien hereof, be held by the Trustee
and, subject as aforesaid, shall be paid by it from time to time to the Company
to reimburse the Company for amounts (including incremental amounts) expended or
committed for expenditure in the rebuilding, renewal and/or replacement of or
substitution for the property destroyed or damaged or lost, upon receipt by the
Trustee of:
(A) a Company Request requesting such payment;
(B) an Expert's Certificate:
(i) describing the property so damaged or
destroyed or otherwise lost;
(ii) stating the Cost of such property (or,
if the Fair Value to the Company of such property at the time the same became
Funded Property was certified to be an amount less than the Cost thereof, then
such Fair Value, as so certified, in lieu of Cost) or, if such damage or
destruction shall have affected only a portion of such property, stating the
allocable portion of such Cost or Fair Value;
(iii) stating the amounts so expended or
committed for expenditure in the rebuilding, renewal, replacement of and/or
substitution for such property; and
(iv) stating the Fair Value to the Company
of such property as rebuilt or renewed or as to be rebuilt or renewed and/or of
the replacement or substituted property, and if:
(a) within six months prior to the
date of acquisition thereof by the Company, such property has been used or
operated, by a person or persons other than the Company, in a business similar
to that in which it has been or is to be used or operated by the Company; and
(b) the Fair Value to the Company
of such property as set forth in such Expert's Certificate is not less than One
Hundred Thousand Dollars ($100,000) and not less than one percentum (1%) of the
aggregate principal amount of the Securities at the time Outstanding, the Expert
making the statement required by this clause (b) shall be an Independent Expert;
and
(C) an Opinion of Counsel stating that, in the
opinion of the signer, the property so rebuilt or renewed or to be rebuilt or
renewed, and/or the replacement property, is or will be subject to the Lien
hereof to the same extent as was the property so destroyed or damaged or
otherwise lost.
Any such moneys not so applied within thirty-six (36) months after its
receipt by the Trustee, or in respect of which notice in writing of intention to
apply the same to the work of rebuilding, renewal, replacement or substitution
then in progress and uncompleted shall not have
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been given to the Trustee by the Company within such thirty-six (36) months, or
which the Company shall at any time notify the Trustee is not to be so applied,
shall thereafter be withdrawn, used or applied in the manner, to the extent and
for the purposes, and subject to the conditions, provided in Section 806;
provided, however, that if the amount of such moneys shall exceed seventy
percentum (70%) of the amount stated pursuant to clause (B) in the Expert's
Certificate referred to above, the amount of such excess shall not be deemed to
be Funded Cash, shall not be subject to Section 806 and shall be remitted to or
upon the order of the Company upon the withdrawal, use or application of the
balance of such moneys pursuant to Section 806.
Anything in this Indenture to the contrary notwithstanding, if property
on or with respect to which a loss occurs constitutes Funded Property in part
only, the Company may, at its election, obtain the reimbursement of insurance
proceeds attributable to the part of such property which constitutes Funded
Property under this clause (2) and obtain the reimbursement of insurance
proceeds attributable to the part of such property which does not constitute
Funded Property under clause (3) of this Section 607.
(3) All moneys paid to the Trustee by the Company in
accordance with this Section or received by the Trustee as proceeds of any
insurance, in either case on account of a loss on or with respect to property
which does not constitute Funded Property, shall, subject to the requirements of
the First Mortgage or other Lien prior hereto upon property subject to the Lien
hereof, be held by the Trustee and, subject as aforesaid, shall be paid by it to
the Company upon receipt by the Trustee of:
(A) a Company Request requesting such payment;
(B) an Expert's Certificate stating:
(i) that such moneys were paid to or
received by the Trustee on account of a loss on or with respect to property
which does not constitute Funded Property; and
(ii) if true, either (I) that the aggregate
amount of the Cost or Fair Value to the Company (whichever is less) of all
Property Additions which do not constitute Funded Property (excluding, to the
extent of such loss, the property on or with respect to which such loss was
incurred), after making deductions therefrom and additions thereto of the
character contemplated by Section 103, is not less than zero (0) or (II) that
the amount of such loss does not exceed the aggregate Cost or Fair Value to the
Company (whichever is less) of Property Additions acquired, made or constructed
on or after the ninetieth (90th) day prior to the date of the Company Request
requesting such payment; or
(iii) if neither of the statements
contemplated in subclause (ii) above can be made, the amount by which zero (0)
exceeds the amount referred to in subclause (ii)(I) above (showing in reasonable
detail the calculation thereof); and
(C) if the Expert's Certificate required by clause
(B) above contains neither of the statements contemplated in clause (B)(ii)
above, an amount in cash, to be held by the Trustee as part of the Mortgaged
Property, equal to seventy percentum (70%) of the amount shown in clause
(B)(iii) above.
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To the extent that the Company shall be entitled to withdraw proceeds
of insurance pursuant to this clause (3), such proceeds shall be deemed not to
constitute Funded Cash.
(4) Whenever under the provisions of this Section the Company
is required to deliver moneys to the Trustee and at the same time shall have
satisfied the conditions set forth herein for payment of moneys by the Trustee
to the Company, there shall be paid to or retained by the Trustee or paid to the
Company, as the case may be, only the net amount.
SECTION 608. Recording, Filing, etc.
The Company shall cause this Indenture and all indentures and
instruments supplemental hereto (or notices, memoranda or financing statements
as may be recorded or filed to place third parties on notice thereof) to be
promptly recorded and filed and re-recorded and re-filed in such manner and in
such places, as may be required by law in order fully to preserve and protect
the security of the Holders and all rights of the Trustee, and shall furnish to
the Trustee:
(1) promptly after the execution and delivery of this
Indenture, as originally executed and delivered, and of each supplemental
indenture, an Opinion of Counsel either stating that in the opinion of such
counsel this Indenture or such supplemental indenture (or any other instrument,
notice, memorandum or financing statement in connection therewith) has been
properly recorded and filed, so as to make effective the Lien intended to be
created hereby or thereby, and reciting the details of such action, or stating
that in the opinion of such counsel no such action is necessary to make such
Lien effective. The Company shall be deemed to be in compliance with this clause
(1) if (i) the Opinion of Counsel herein required to be delivered to the Trustee
shall state that this Indenture or such supplemental indenture (or any other
instrument, notice, memorandum or financing statement in connection therewith)
has been received for record or filing in each jurisdiction in which it is
required to be recorded or filed and that, in the opinion of such counsel (if
such is the case), such receipt for record or filing makes effective the Lien
intended to be created by this Indenture or such supplemental indenture, and
(ii) such opinion is delivered to the Trustee within such time, following the
date of the execution and delivery of this Indenture, as originally executed and
delivered, or such supplemental indenture, as shall be practicable having due
regard to the number and distance of the jurisdictions in which this Indenture
or such supplemental indenture (or such other instrument, notice, memorandum or
financing statement in connection therewith) is required to be recorded or
filed; and
(2) on or before April 1 of each year, beginning April 1,
2003, an Opinion of Counsel stating either (i) that in the opinion of such
counsel such action has been taken, since the date of the most recent Opinion of
Counsel furnished pursuant to this clause (2) or the first Opinion of Counsel
furnished pursuant to clause (1) of this Section, with respect to the recording,
filing, re-recording, and re-filing of this Indenture and of each indenture
supplemental to this Indenture (or any other instrument, notice, memorandum or
financing statement in connection therewith), as is necessary to maintain the
effectiveness of the Lien hereof, and reciting the details of such action, or
(ii) that in the opinion of such counsel no such action is necessary to maintain
the effectiveness of such Lien.
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The Company shall execute and deliver such supplemental indenture or
indentures and such further instruments and do such further acts as may be
necessary or proper to carry out the purposes of this Indenture and to make
subject to the Lien hereof any property hereafter acquired, made or constructed
and intended to be subject to the Lien hereof, and to transfer to any new
trustee or trustees or co-trustee or co-trustees, the estate, powers,
instruments or funds held in trust hereunder.
SECTION 609. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in:
(1) any covenant or restriction specified with respect to the
Securities of any one or more series, or any one or more Tranches thereof, as
contemplated by Section 301 if before the time for such compliance the Holders
of at least a majority in aggregate principal amount of the Outstanding
Securities of all series and Tranches with respect to which compliance with such
covenant or restriction is to be omitted, considered as one class, shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition; provided, however, that
no such waiver shall be effective as to any of the matters contemplated in
clause (1), (2), (3) or (4) in Section 1402 without the consent of the Holders
specified in such Section; and
(2) Section 604, 605, 606 or 607 or Article Thirteen if before
the time for such compliance the Holders of at least a majority in principal
amount of Securities Outstanding under this Indenture shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition; but, in either case, no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
SECTION 610. Annual Officer's Certificate as to Compliance.
Within one hundred twenty (120) days after the end of each fiscal year
of the Company ending after the date hereof, the Company shall deliver to the
Trustee an Officer's Certificate which need not comply with Section 105,
executed by the principal executive officer, the principal financial officer or
the principal accounting officer of the Company, as to such officer's knowledge
of the Company's compliance with all conditions and covenants under this
Indenture, such compliance to be determined (solely for the purpose of this
Section 610) without regard to any period of grace or requirement of notice
under this Indenture.
SECTION 611. Limited Issuance of First Mortgage Securities.
From and after the date of the initial authorization and delivery of
the Securities of the Initial Series issued under this Indenture and until (but
excluding) the First Mortgage Collateralization Date, the Company shall not
issue any additional First Mortgage Securities, except:
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(1) First Mortgage Securities in an aggregate principal amount
which, when added to the aggregate principal amount of First Mortgage Securities
Outstanding immediately prior to the issuance thereof (other than any Securities
for the payment or redemption of which such First Mortgage Securities are to be
issued), shall not exceed One Billion One Hundred Sixty One Million Two Hundred
Seventeen Thousand Dollars ($1,161,217,000);
(2) to the extent necessary to replace any mutilated, lost or
destroyed First Mortgage Securities or to effect exchanges and transfers of
First Mortgage Securities; and
(3) if at any time First Mortgage Securities are issued
pursuant to clause (1) of this Section, additional First Mortgage Securities in
an aggregate principal amount of up to One Hundred Eighteen Million Dollars
($118,000,000) for the purpose of satisfying any Pollution Control Bond
Collateral Requirements arising at such time.
ARTICLE SEVEN.
FIRST MORTGAGE COLLATERAL BONDS;
DISCHARGE OF FIRST MORTGAGE
SECTION 701. First Mortgage Collateral Bonds.
At any time in the discretion of the Company, the Company may issue and
deliver to the Trustee, to be held by the Trustee as security under this
Indenture, First Mortgage Securities in an aggregate principal amount equal to
the aggregate principal amount of the Securities then Outstanding; provided that
such First Mortgage Securities (the "First Mortgage Collateral Bonds"):
(1) shall mature on such dates and in such principal amounts that, at
each Stated Maturity of the Securities then Outstanding, there shall mature
First Mortgage Securities equal in principal amount to the Securities of such
series or Tranche then to mature;
(2) (A) shall contain, in addition to any mandatory redemption
provisions applicable to all First Mortgage Securities Outstanding under the
First Mortgage, mandatory redemption provisions correlative to the provisions,
if any, for the mandatory redemption (pursuant to a sinking fund or otherwise)
of the Securities then Outstanding or for the redemption thereof at the option
of the Holder or the Company;
(B) shall bear interest and premium, if any, at such rate
and/or amount as shall cause the amount of interest and/or premium payable on
such First Mortgage Collateral Bonds from time to time to be equal to the amount
of interest and/or premium payable on the Securities then Outstanding, any such
interest and premium to be payable at the same times as interest and/or premium
on the Securities then Outstanding;
(C) may not contain provisions for the redemption thereof at
the option of the Company; and
(D) shall be held by the Trustee in accordance with this
Article Seven; and
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(3) contain a mandatory redemption provision requiring that such First
Mortgage Securities be mandatorily redeemed upon any declaration of the
acceleration of the Maturity of the Securities pursuant to Section 1002,
provided that such provision shall also require that, if the Event of Default
giving rise to such declaration of acceleration shall have been deemed to have
been waived and such declaration and the consequences thereof shall have been
deemed to have been rescinded and annulled pursuant to Section 1002, then such
mandatory redemption shall also be deemed to have been waived, rescinded and
annulled with respect to such declaration of acceleration;
and provided further that the Company deliver an Opinion of Counsel to the
Trustee on such date to the effect that:
(w) the forms of such First Mortgage Securities have been duly
authorized by the Company and have been established in conformity with the
provisions of the First Mortgage;
(x) the terms of such First Mortgage Securities have been duly
authorized by the Company and have been established in conformity with the
provisions of the First Mortgage and this Article Seven;
(y) the deposit of such First Mortgage Securities with the Trustee in
accordance herewith has been duly authorized by the Company; and
(z) such First Mortgage Securities have been duly issued under the
First Mortgage and constitute valid and legally binding obligations of the
Company, enforceable against the Company (subject to customary exceptions) and
entitled to the benefit of the Lien of the First Mortgage equally and ratably
with all other First Mortgage Securities Outstanding.
SECTION 702. Registration and Ownership of First Mortgage Collateral Bonds.
All First Mortgage Collateral Bonds shall be registered in the name of
the Trustee or its nominee and shall be owned and held by the Trustee, subject
to the provisions of this Indenture, for the benefit of the Holders of all
Securities from time to time Outstanding, and the Company shall have no interest
therein. The Trustee shall be entitled to exercise all rights of holders under
the First Mortgage either in its discretion (which it need not exercise) or as
otherwise provided in this Article or in Article Ten.
SECTION 703. Payments on First Mortgage Collateral Bonds.
(1) Any payment by the Company of principal of or premium or
interest on any First Mortgage Collateral Bonds shall be applied by the Trustee
to the payment of any principal, premium or interest, as the case may be, in
respect of the Securities which is then due, and, to the extent of such
application, the obligation of the Company hereunder to make such payment in
respect of the Securities shall be deemed to have been satisfied and discharged.
(2) Each supplemental indenture pursuant to which any First
Mortgage Collateral Bonds are issued shall contain a provision to the effect
that any payment by the Company hereunder of principal of or premium or interest
on Securities shall, to the extent thereof, be deemed to satisfy and discharge
the obligation of the Company, if any, to make
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a payment of principal, premium or interest, as the case may be, in respect of
such First Mortgage Collateral Bonds which is then due.
SECTION 704. Surrender of First Mortgage Collateral Bonds.
If at any time after the First Mortgage Bond Collateralization Date any
Securities of any series, or any Tranche thereof, cease to be Outstanding, the
Trustee shall surrender to or upon the order of the Company an equal principal
amount of First Mortgage Collateral Bonds having the same Stated Maturity,
payment provisions and provisions, if any, for mandatory redemption as such
Securities.
SECTION 705. No Transfer of First Mortgage Collateral Bonds.
Subject to the provisions of Section 1020 hereof, the Trustee shall not
sell, assign or otherwise transfer any First Mortgage Collateral Bonds except to
a successor trustee under this Indenture. The Company may take such actions as
it shall deem necessary, desirable or appropriate to effect compliance with such
restrictions on transfer, including the placing of a legend on each First
Mortgage Collateral Bond and the issuance of stop-transfer instructions to the
trustee under the First Mortgage or any other transfer agent thereunder.
SECTION 706. Voting of First Mortgage Collateral Bonds.
The Trustee shall, as the holder of First Mortgage Collateral Bonds
Outstanding under the First Mortgage, attend such meeting or meetings of
bondholders under the First Mortgage or, at its option, deliver its proxy in
connection therewith, as relate to matters with respect to which it is entitled
to vote or consent. So long as no Event of Default hereunder shall have occurred
and be continuing, either at any such meeting or meetings, or otherwise when the
consent of the holders of the First Mortgage Securities Outstanding under the
First Mortgage is sought without a meeting, the Trustee shall vote as holder of
such First Mortgage Collateral Bonds, or shall consent with respect thereto, as
follows:
(1) the Trustee shall vote all First Mortgage Collateral Bonds
Outstanding under the First Mortgage then held by it, or consent with respect
thereto, in favor of any or all amendments or modifications of the First
Mortgage which the Company has requested and which do not have a material
adverse effect on Holders of Securities (and, as to whether or not any such
material adverse effect would so result, the Trustee shall be entitled to
receive and shall be fully protected in relying upon an Officer's Certificate
and Opinion of Counsel); and
(2) with respect to any other amendments or modifications of
the First Mortgage:
(A) at any time when the First Mortgage Collateral
Bonds Outstanding constitute less than a majority in aggregate principal amount
of the First Mortgage Securities then Outstanding under the First Mortgage, the
Trustee shall vote all First Mortgage Collateral Bonds Outstanding under the
First Mortgage then held by it, or consent with respect thereto, proportionately
with what the Trustee reasonably believes will be the vote or consent of the
holders of all other First Mortgage Securities Outstanding under such First
Mortgage the holders of which are eligible to vote or consent; provided,
however, that the Trustee shall not so vote in
65
favor of, or so consent to, any amendment or modification of a First Mortgage
which, if it were an amendment or modification of this Indenture, would require
the consent of Holders, without the prior consent, obtained in the manner
prescribed in Section 1402, of Holders of Securities which would be required
under said Section 1402 for such an amendment or modification of this Indenture;
and
(B) at any time when the First Mortgage Collateral
Bonds Outstanding constitute at least a majority in aggregate principal amount
of the First Mortgage Securities then Outstanding under the First Mortgage, the
Trustee shall vote all First Mortgage Collateral Bonds Outstanding under the
First Mortgage then held by it, or consent with respect thereto, in accordance
with the written direction of the Company evidenced by an Officer's Certificate
or, in the absence of any such direction, proportionately with what the Trustee
reasonably believes will be the vote or consent of the holders of all other
First Mortgage Securities Outstanding under the First Mortgage the holders of
which are eligible to vote or consent; provided, however, that the Trustee shall
not so vote in favor of, or so consent to, any amendment or modification of the
First Mortgage which, if it were an amendment or modification of this Indenture,
would require the consent of Holders, without the prior consent, obtained in the
manner prescribed in Section 1402, of Holders of Securities which would be
required under said Section 1402 for such an amendment or modification of this
Indenture.
SECTION 707. Discharge of First Mortgage
(1) The Trustee shall surrender for cancellation to the
trustee under the First Mortgage all First Mortgage Collateral Bonds then held
by the Trustee upon receipt by the Trustee of:
(A) a Company Order requesting such surrender for
cancellation of such First Mortgage Collateral Bonds;
(B) an Officer's Certificate to the effect that no
First Mortgage Securities are Outstanding under the First Mortgage other than
First Mortgage Collateral Bonds and that promptly upon such surrender the First
Mortgage will be satisfied and discharged pursuant to the terms thereof;
(C) an Expert's Certificate:
(i) describing in reasonable detail all
property constituting Property Additions designated by the Company, in its
discretion, to be deemed, on and after the date of such surrender for
cancellation and for all purposes of this Indenture, to have been made the basis
of the authentication and delivery of all Securities then Outstanding such
Property Additions to have, in the aggregate, a Cost (or as to Property
Additions of which the Fair Value to the Company specified pursuant to subclause
(viii) of this clause (C) or pursuant to clause (D) below is less than the Cost
thereof, then such Fair Value in lieu of Cost) not less than ten-sevenths (10/7)
of the aggregate principal amount of such Securities;
(ii) stating that all such property
constitutes Property Additions;
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(iii) stating that such Property Additions
are desirable for use in the proper conduct of the business of the Company;
(iv) stating that such Property Additions,
to the extent of the Cost (or as to Property Additions of which the Fair Value
to the Company specified pursuant to subclause (viii) of this clause (C) or
pursuant to clause (D) below is less than the Cost thereof, then such Fair Value
in lieu of Cost) to the Company to be deemed to have been made the basis of the
authentication and delivery of such Securities, will no longer constitute Funded
Property (other than pursuant to clause (6) of the definition of "Funded
Property") upon the discharge of the First Mortgage;
(v) stating, except as to Property Additions
acquired, made or constructed wholly through the delivery of securities or other
property, that the amount of cash forming all or part of the Cost thereof was
equal to or more than an amount to be stated therein;
(vi) briefly describing, with respect to any
Property Additions acquired, made or constructed in whole or in part through the
delivery of securities or other property, the securities or other property so
delivered and stating the date of such delivery;
(vii) stating what part, if any, of such
Property Additions included property which within six months prior to the date
of acquisition thereof by the Company had been used or operated by others than
the Company in a business similar to that in which it has been or is to be used
or operated by the Company and stating whether or not, in the judgment of the
signers, the Fair Value thereof to the Company, as of the date of such
certificate, is less than One Hundred Thousand Dollars ($100,000) or one
percentum (1%) of the sum of (x) the aggregate principal amount of Securities
then Outstanding, and (y) the aggregate principal amount of First Mortgage
Securities then Outstanding other than First Mortgage Collateral Bonds;
(viii) stating, in the judgment of the
signers, the Fair Value to the Company, as of the date of such certificate, of
such Property Additions, except any thereof with respect to the Fair Value to
the Company of which a statement is to be made in an Independent Expert's
Certificate as provided for in clause (D) below; provided, however, that if any
such Property Additions shall have theretofore been certified to the trustee
under the First Mortgage as the basis for the authentication and delivery of
First Mortgage Securities:
(x) which are First Mortgage Collateral Bonds as
of the date of such certificate; or
(y) the retirement of which shall have
theretofore been made the basis (whether
directly or indirectly when considered in
light of the issuance and retirement of
successive issues of First Mortgage
Securities) of the authentication and
delivery of First Mortgage Collateral Bonds
then held by the Trustee;
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then there may be stated, in lieu of the Fair Value of such Property Additions
as of the date of such certificate, the Fair Value thereof as so certified to
the trustee under such First Mortgage; and
(ix) stating that the Liens, if any, of the
character described in clause (4) of the definition of "Permitted Liens" to
which a property included in such Property Additions is subject do not, in the
judgment of the signers, in the aggregate materially impair the use of such
property for the purposes for which the same is held by the Company;
(D) in case any Property Additions are shown by the
Expert's Certificate provided for in clause (C) above to include property which,
within six months prior to the date of acquisition thereof by the Company, had
been used or operated by others than the Company in a business similar to that
in which it has been or is to be used or operated by the Company and such
certificate does not show the Fair Value thereof to the Company, as of the date
of such certificate, to be less than One Hundred Thousand Dollars ($100,000) or
less than one percentum (1%) of the sum of (x) the aggregate principal amount of
Securities then Outstanding, and (y) the aggregate principal amount of First
Mortgage Securities then Outstanding other than First Mortgage Collateral Bonds,
an Independent Expert's Certificate stating, in the judgment of the signer, the
Fair Value to the Company, as of the date of such Independent Expert's
Certificate, of (i) such Property Additions which have been so used or operated
and (at the option of the Company) as to any other Property Additions included
in the Expert's Certificate provided for in clause (C) above, and (ii) any
property so used or operated which has been subjected to the Lien of this
Indenture since the commencement of the then current calendar year as the basis
for the authentication and delivery of Securities and as to which an Independent
Expert's Certificate has not previously been furnished to the Trustee;
(E) in case any Property Additions are shown by the
Expert's Certificate provided for in clause (C) above to have been acquired,
made or constructed in whole or in part through the delivery of securities or
other property, a written appraisal of an Expert stating, in the judgment of the
Expert, the Fair Value in cash of such securities or other property at the time
of delivery thereof in payment for or for the acquisition of such Property
Additions;
(F) an Opinion of Counsel to the effect
(i) that (except as to paving, grading and
other improvements to, under or upon highways, bridges, parks or other public
property of analogous character) this Indenture is, or upon (x) the delivery of,
or the filing or recording in the proper places and manner of, the instruments
of conveyance, assignment or transfer, if any, specified in said opinion, or (y)
the satisfaction and discharge of the First Mortgage, will be, a Lien on all the
Property Additions to be deemed to have been made the basis of the
authentication and delivery of Securities then Outstanding, subject to no Lien
thereon prior to the Lien of this Indenture except Permitted Liens; and
(ii) that the Company has corporate
authority to operate the Property Additions with respect to which such
application is made;
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(G) an Opinion of Counsel to the effect that upon
satisfaction and discharge of the First Mortgage the Lien of this Indenture on
the property formerly subject to the Lien of the First Mortgage, to the extent
the same is part of the Mortgaged Property, will be subject to no Lien prior to
the Lien of this Indenture except Permitted Liens and Liens of the character
permitted to exist or to be hereafter created under Section 606; and
(H) copies of the instruments of conveyance,
assignment and transfer, if any, specified in the Opinion of Counsel provided
for in clause (F) above.
(2) The amount of the Cost of any Property Additions and the
Fair Value thereof to the Company and the fair market value in cash of any
securities or other property so delivered in payment therefor or for the
acquisition thereof shall be determined for the purposes of this Section by the
appropriate certificate provided for in this Section.
ARTICLE EIGHT.
POSSESSION, USE AND RELEASE OF MORTGAGED PROPERTY
SECTION 801. Quiet Enjoyment.
Unless one or more Events of Default shall have occurred and be
continuing, the Company shall be permitted to possess, use and enjoy the
Mortgaged Property (except, to the extent not herein otherwise provided, such
cash and securities as are expressly required to be deposited with the Trustee).
SECTION 802. Dispositions without Release.
Unless an Event of Default shall have occurred and be continuing, the
Company may at any time and from time to time, without any release or consent
by, or report to, the Trustee:
(1) sell or otherwise dispose of, free from the Lien of this
Indenture, any machinery, equipment, apparatus, towers, transformers, poles,
lines, cables, conduits, ducts, conductors, meters, regulators, holders, tanks,
retorts, purifiers, odorizers, scrubbers, compressors, valves, pumps, mains,
pipes, service pipes, fittings, connections, services, tools, implements, or any
other fixtures or personalty, then subject to the Lien hereof, which shall have
become old, inadequate, obsolete, worn out, unfit, unadapted, unserviceable,
undesirable or unnecessary for use in the operations of the Company upon
replacing the same by, or substituting for the same, similar or analogous
property, or other property performing a similar or analogous function or
otherwise obviating the need therefor, having a Fair Value to the Company at
least equal to that of the property sold or otherwise disposed of and subject to
the Lien hereof, subject to no Liens prior hereto except Permitted Liens and any
other Liens to which the property sold or otherwise disposed of was subject;
(2) cancel or make changes or alterations in or substitutions
for any and all easements, servitudes, rights-of-way and similar rights and/or
interests;
(3) surrender or assent to the modification of any right,
power, franchise, license, governmental consent or permit under which it may be
operating, provided that any such
69
surrender or modification which adversely affects the Mortgaged Property, taken
as a whole, in any material respect is, in the opinion of the Manager (such
opinion to be stated in a resolution to be filed with the Trustee), necessary or
desirable in the conduct of the business of the Company; and
(4) grant, free from the Lien of this Indenture, easements,
ground leases or rights-of-way in, upon, over and/or across the property or
rights-of-way of the Company for the purpose of roads, pipe lines, transmission
lines, distribution lines, communication lines, railways, removal of coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real property, rights-of-way, facilities and/or equipment; provided,
however, that such grant shall not materially impair the use of the property or
rights-of-way for the purposes for which such property or rights-of-way are held
by the Company.
SECTION 803. Release of Funded Property.
Unless an Event of Default shall have occurred and be continuing, the
Company may obtain the release of any part of the Mortgaged Property, or any
interest therein, which constitutes Funded Property, and the Trustee shall
release all its right, title and interest in and to the same from the Lien
hereof, upon receipt by the Trustee of:
(1) a Company Order requesting the release of such property
and transmitting therewith a form of instrument to effect such release;
(2) an Officer's Certificate stating that, to the knowledge of
the signer, no Event of Default has occurred and is continuing;
(3) an Expert's Certificate made and dated not more than
ninety (90) days prior to the date of such Company Order:
(A) describing generally the property to be released;
(B) stating the Fair Value, in the judgment of the
signers, of the property to be released;
(C) stating the Cost of the property to be released
(or, if the Fair Value to the Company of such property at the time the same
became Funded Property was certified to be an amount less than the Cost thereof,
then such Fair Value, as so certified, in lieu of Cost); and
(D) stating that, in the judgment of the signers,
such release will not impair the security under this Indenture in contravention
of the provisions hereof;
(4) an amount in cash to be held by the Trustee as part of the
Mortgaged Property, equal to the amount, if any, by which seventy percentum
(70%) of the amount referred to in clause (3)(C) above exceeds the aggregate of
the following items:
(A) an amount equal to seventy percentum (70%) of the
aggregate principal amount of any obligations secured by Purchase Money Lien
delivered to the Trustee, to
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be held as part of the Mortgaged Property, subject to the limitations hereafter
in this Section set forth;
(B) an amount equal to seventy percentum (70%) of the
Cost or Fair Value to the Company (whichever is less), after making any
deductions and any additions pursuant to Section 103, of any Property Additions
not constituting Funded Property described in an Expert's Certificate, dated not
more than ninety (90) days prior to the date of the Company Order requesting
such release and complying with clause (B) and, to the extent applicable, clause
(C) in Section 402(2), delivered to the Trustee; provided, however, that the
deductions and additions contemplated by Section 103 shall not be required to be
made if such Property Additions were acquired, made or constructed on or after
the ninetieth (90th) day preceding the date of such Company Order;
(C) the aggregate principal amount of Securities to
the authentication and delivery of which the Company shall be entitled under the
provisions of Section 403, by virtue of compliance with all applicable
provisions of Section 403 (except as hereinafter in this Section otherwise
provided); provided, however, that such release shall operate as a waiver by the
Company of the right to the authentication and delivery of such Securities and,
to such extent, no such Securities may thereafter be authenticated and delivered
hereunder; and any Securities which were the basis of such right to the
authentication and delivery of Securities so waived shall be deemed to have been
made the basis of such release of property;
(D) any amount in cash and/or an amount equal to
seventy percentum (70%) of the aggregate principal amount of any obligations
secured by Purchase Money Lien that, in either case, is evidenced to the Trustee
by a certificate of the trustee or other holder of a Lien prior to the Lien of
this Indenture to have been received by such trustee or other holder in
accordance with the provisions of such Lien in consideration for the release of
such property or any part thereof from such Lien, all subject to the limitations
hereafter in this Section set forth;
(E) on or after the First Mortgage Collateralization
Date, the aggregate principal amount of First Mortgage Securities delivered to
the Trustee to be held as First Mortgage Collateral Bonds;
(F) the aggregate principal amount of any Outstanding
Securities delivered to the Trustee; and
(G) any taxes and expenses incidental to any sale,
exchange, dedication or other disposition of the property to be released;
(5) if the release is on the basis of Property Additions or on
the basis of the right to the authentication and delivery of Securities under
Section 403, all documents contemplated below in this Section; and
(6) if the release is on the basis of the delivery to the
Trustee or to the trustee or other holder of a prior Lien of obligations secured
by Purchase Money Lien, all documents contemplated below in this Section, to the
extent required.
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If and to the extent that the release of property is, in whole or in
part, based upon Property Additions (as permitted under the provisions of clause
(4)(B) in the first paragraph of this Section), the Company shall, subject to
the provisions of said clause (4)(B) and except as hereafter in this paragraph
provided, comply with all applicable provisions of this Indenture as if such
Property Additions were to be made the basis of the authentication and delivery
of Securities equal in principal amount to seventy percentum (70%) of the Cost
(or, as to property of which the Fair Value to the Company at the time the same
became Funded Property was certified to be an amount less than the Cost thereof,
such Fair Value, as so certified, in lieu of Cost) of that portion of the
property to be released which is to be released on the basis of such Property
Additions, as shown by the Expert's Certificate required by clause (3) in the
first paragraph of this Section; provided, however, that the Cost of any
Property Additions received or to be received by the Company in whole or in part
as consideration in exchange for the property to be released shall for all
purposes of this Indenture be deemed to be the amount stated in the Expert's
Certificate provided for in clause (3) in the first paragraph of this Section to
be the Fair Value of the property to be released (x) plus the amount of any cash
and the fair market value of any other consideration, further to be stated in
such Expert's Certificate, paid and/or delivered or to be paid and/or delivered
by, and the amount of any obligations assumed or to be assumed by, the Company
in connection with such exchange as additional consideration for such Property
Additions and/or (y) less the amount of any cash and the fair market value of
any other consideration, which shall also be stated in such Expert's
Certificate, received or to be received by the Company in connection with such
exchange in addition to such Property Additions. If and to the extent that the
release of property is in whole or in part based upon the right to the
authentication and delivery of Securities under Section 403 (as permitted under
the provisions of clause (4)(C) in the first paragraph of this Section), the
Company shall, except as hereafter in this paragraph provided, comply with all
applicable provisions of Section 403 relating to such authentication and
delivery. Notwithstanding the foregoing provisions of this paragraph, in no
event shall the Company be required to deliver the documents specified in
Section 401.
If the release of property is, in whole or in part, based upon the
delivery to the Trustee or the trustee or other holder of a Lien prior to the
Lien of this Indenture of obligations secured by Purchase Money Lien, the
Company shall deliver to the Trustee:
(A) an Officer's Certificate (i) stating that no event has
occurred and is continuing which entitles the holder of such Purchase Money Lien
to accelerate the maturity of the obligations, if any, outstanding thereunder
and (ii) reciting the aggregate principal amount of obligations, if any, then
outstanding thereunder in addition to the obligations then being delivered in
connection with the release of such property and the terms and conditions, if
any, on which additional obligations secured by such Purchase Money Lien are
permitted to be issued; and
(B) an Opinion of Counsel stating that, in the opinion of the
signer, (i) such obligations are valid and legally binding obligations,
enforceable against the Company (subject to customary exceptions) and entitled
to the benefit of such Purchase Money Lien equally and ratably with all other
obligations, if any, then outstanding thereunder, (ii) that such Purchase Money
Lien constitutes, or, upon the delivery of, and/or the filing and/or recording
in the proper places and manner of, the instruments of conveyance, assignment or
transfer, if any, specified in such opinion, will constitute, a Lien upon the
property to be released, subject to no
72
Lien prior thereto except Liens generally of the character of Permitted Liens
and such Liens, if any, as shall have existed thereon immediately prior to such
release as Liens prior to the Lien of this Indenture, (iii) if any obligations
in addition to the obligations being delivered in connection with such release
of property are then outstanding, or are permitted to be issued, under such
Purchase Money Lien, (a) that such Purchase Money Lien constitutes, or, upon the
delivery of, and/or the filing and/or recording in the proper places and manner
of, the instruments of conveyance, assignment or transfer, if any, specified in
such opinion, will constitute, a Lien upon all other property, if any,
purporting to be subject thereto, subject to no Lien prior thereto except Liens
generally of the character of Permitted Liens and Liens permitted to exist or to
be hereafter created under Section 606 and (b) that the terms of such Purchase
Money Lien, as then in effect, do not permit the issuance of obligations
thereunder except on the basis of property generally of the character of
Property Additions, the retirement or deposit of outstanding obligations, the
deposit of prior Lien obligations or the deposit of cash.
Anything herein to the contrary notwithstanding (a) the aggregate
principal amount of obligations secured by Purchase Money Lien which may be used
pursuant to subclause (A) and/or subclause (D) of clause (4) in the first
paragraph of this Section as the basis for the release of property from the Lien
of this Indenture shall not exceed seventy-five percentum (75%) of the Fair
Value of the property to be released, as certified pursuant to clause (3)(B) in
the first paragraph of this Section, and (b) no obligations secured by Purchase
Money Lien shall be used as the basis for the release of property hereunder, if
the aggregate principal amount of such obligations to be used by the Company
pursuant to subclause (A) and/or subclause (D) of such clause (4) plus the
aggregate principal amount used by the Company pursuant to said subclause (A)
and subclause (D) in connection with all previous releases of property from the
Lien hereof on the basis of obligations secured by Purchase Money Lien
theretofore delivered to and then held by the Trustee or the trustee or other
holder of a Lien prior to the Lien of this Indenture shall, immediately after
the release then being applied for, exceed forty percentum (40%) of the sum of
(1) the aggregate principal amount of Securities then Outstanding and (2) the
aggregate principal amount of First Mortgage Securities then Outstanding other
than the First Mortgage Collateral Bonds; provided, however, that the limitation
set forth in clause (a) above shall not be applicable if no additional
obligations are then outstanding, or are permitted to be issued, under the
Purchase Money Lien securing such obligations; and provided, further, that there
shall not be taken into account for purposes of the calculation contemplated in
clause (b) above any obligations secured by Purchase Money Lien with respect to
which there shall have been delivered to the Trustee:
(X) an Officer's Certificate (i) if any obligations shall
then be outstanding under such Purchase Money Lien
and/or additional obligations are permitted to be
issued thereunder, either (A) stating that the terms
of such Purchase Money Lien, as then in effect, do
not permit the issuance of obligations thereunder on
the basis of property additions in a principal amount
exceeding seventy percentum (70%) of the balance of
the cost or fair value of such property additions to
the issuer thereof (whichever shall be less) after
making deductions and additions similar to those
provided for in Section 103 or (B) in the event that
the statements contained in clause (A) above cannot
be made, stating that such issuer has irrevocably
waived its right to the authentication and delivery
of obligations under
73
such Purchase Money Lien (1) on any basis, in a
principal amount equal to the excess of (I) the
aggregate principal amount of obligations, if any,
then outstanding under such Purchase Money Lien which
were issued on the basis of property additions or on
the basis of the retirement of obligations which were
issued (whether directly or indirectly when
considered in light of the successive issuance and
retirement of obligations) on the basis of property
additions over (II) an amount equal to seventy
percentum (70%) of the aggregate Dollar amount of
property additions certified as the basis for the
issuance of such obligations then outstanding and (2)
on the basis of property additions, in a principal
amount exceeding seventy percentum (70%) of the
balance of the cost or fair value thereof to such
issuer (whichever shall be less) after making
deductions and additions similar to those provided
for in Section 103 and (ii) stating either (A) that
the obligations secured by such Purchase Money Lien
delivered to the Trustee or to the trustee or other
holder of a Lien prior to the Lien of this Indenture
as the basis for such release of property contain a
provision for mandatory redemption upon the
acceleration of the maturity of all Outstanding
Securities following an Event of Default (whether or
not such redemption may be rescinded upon the
rescission of such acceleration) or (B) that so long
as such obligations are held by the Trustee or the
trustee or other holder of such a prior Lien, an
Event of Default under this Indenture constitutes a
matured event of default under such Purchase Money
Lien (provided, however, that the waiver or cure of
such Event of Default hereunder and the rescission
and annulment of the consequences thereof may
constitute a cure of the corresponding event of
default under such Purchase Money Lien and a
rescission and annulment of the consequences
thereof); and
(Y) an Opinion or Opinions of Counsel to the effect that
(i) if any obligations shall then be outstanding
under such Purchase Money Lien and/or additional
obligations are permitted to be issued thereunder, to
the effect either (A) that the terms of such Purchase
Money Lien, as then in effect, do not permit the
issuance of obligations thereunder upon the basis of
property additions in a principal amount exceeding
seventy percentum (70%) of the balance of the cost or
the fair value thereof to the issuer of such
obligations (whichever shall be less) after making
deductions and additions similar to those provided
for in Section 103, or, if such is not the case, (B)
that the waivers contemplated by clause (X)(i)(B)
above have been duly made and (ii) to the effect
either (A) that the obligations secured by such
Purchase Money Lien delivered to the Trustee or to
the trustee or other holder of a Lien prior to the
Lien of this Indenture as the basis for such release
of property contain a provision for mandatory
redemption upon an acceleration of the maturity of
all Outstanding Securities following an Event of
Default (whether or not such redemption may be
rescinded upon the rescission of such acceleration)
or (B) that, so long as such obligations are held by
the Trustee or the trustee or other holder of such a
prior Lien, an Event of Default under this Indenture
constitutes a
74
matured event of default under such Purchase Money
Lien (provided, however, that the waiver or cure of
such Event of Default hereunder and the rescission
and annulment of the consequences thereof may
constitute a cure of the corresponding event of
default under such Purchase Money Lien and a
rescission and annulment of the consequences
thereof).
If (a) any property to be released from the Lien of this Indenture
under any provision of this Article (other than Section 807) is subject to a
Lien prior to the Lien hereof and is to be sold, exchanged, dedicated or
otherwise disposed of subject to such prior Lien and (b) after such release,
such prior Lien will not be a Lien on any property subject to the Lien hereof,
then the Fair Value of such property to be released shall be deemed, for all
purposes of this Indenture, to be the value thereof unencumbered by such prior
Lien less the principal amount of the indebtedness secured by such prior Lien.
Any Outstanding Securities delivered to the Trustee pursuant to clause
(4) in the first paragraph of this Section shall forthwith be canceled by the
Trustee. Any cash and/or obligations so deposited with the Trustee, and the
proceeds of any such obligations, shall be held as part of the Mortgaged
Property and shall be withdrawn, released, used or applied in the manner, to the
extent and for the purposes, and subject to the conditions, provided in Section
806.
Anything in this Indenture to the contrary notwithstanding, if property
to be released constitutes Funded Property in part only, the Company shall
obtain the release of the part of such property which constitutes Funded
Property under this Section 803 and obtain the release of the part of such
property which does not constitute Funded Property under Section 804. In such
event, (a) the application of Property Additions in the release under this
Section 803 as contemplated in clause (4)(B) in the first paragraph thereof
shall be taken into account in clause (E) or clause (F), whichever may be
applicable, of the Expert's Certificate described in clause (3) in Section 804
and (b) the Trustee shall, at the election of the Company, execute and deliver a
separate instrument of release with respect to the property released under each
of such Sections or a consolidated instrument of release with respect to the
property released under both of such Sections considered as a whole.
SECTION 804. Release of Property Not Constituting Funded Property.
Unless an Event of Default shall have occurred and be continuing, the
Company may obtain the release of any part of the Mortgaged Property, or any
interest therein, which does not constitute Funded Property, and the Trustee
shall release all its right, title and interest in and to the same from the Lien
hereof, upon receipt by the Trustee of:
(1) a Company Order requesting the release of such property
and transmitting therewith a form of instrument to effect such release;
(2) an Officer's Certificate stating that, to the knowledge of
the signer, no Event of Default has occurred and is continuing;
(3) an Expert's Certificate, made and dated not more than
ninety (90) days prior to the date of such Company Order:
75
(A) describing the property to be released;
(B) stating the Fair Value, in the judgment of the
signers, of the property to be released;
(C) stating the Cost of the property to be released;
(D) stating that the property to be released does not
constitute Funded Property;
(E) if true, stating either (i) that the aggregate
amount of the Cost or Fair Value to the Company (whichever is less) of all
Property Additions which do not constitute Funded Property (excluding the
property to be released), after making deductions therefrom and additions
thereto of the character contemplated by Section 103, is not less than zero (0)
or (ii) that the Cost or Fair Value (whichever is less) of the property to be
released does not exceed the aggregate Cost or Fair Value to the Company
(whichever is less) of Property Additions acquired, made or constructed on or
after the ninetieth (90th) day prior to the date of the Company Order requesting
such release;
(F) if neither of the statements contemplated in
clause (E) above can be made, stating the amount by which zero (0) exceeds the
amount referred to in subclause (E)(i) above (showing in reasonable detail the
calculation thereof); and
(G) stating that, in the judgment of the signers,
such release will not impair the security under this Indenture in contravention
of the provisions hereof; and
(4) if the Expert's Certificate required by clause (3) above
contains neither of the statements contemplated in clause (3)(E) above, an
amount in cash, to be held by the Trustee as part of the Mortgaged Property,
equal to the amount, if any, by which seventy percentum (70%) of the lower of
(i) the Cost or Fair Value (whichever shall be less) of the property to be
released and (ii) the amount shown in clause (3)(F) above exceeds the aggregate
of items of the character described in subclauses (C) and (F) of clause (4) in
the first paragraph of Section 803 then to be used as a credit under this
Section 804 (subject, however, to the same limitations and conditions with
respect to such items as are set forth in Section 803).
Anything herein to the contrary notwithstanding, if any part of the
Mortgaged Property is to be released prior to the delivery of the Initial
Expert's Certificate pursuant to Section 402(2)(B), the Company shall deliver to
the Trustee an Initial Expert's Certificate complying with the provisions of
Section 402(2)(B), except that there shall be stated in clause (xiii) the sum of
(x) the aggregate principal amount of Securities then Outstanding and (y) the
aggregate principal amount of First Mortgage Securities then Outstanding other
than First Mortgage Collateral Bonds. Such Initial Expert's Certificate shall be
accompanied by the documents specified in clauses (C),(D), and (E) of Section
402(2). Thereupon, the part of the Mortgaged Property to be released shall be
released pursuant to Section 803, to the extent the same shall constitute Funded
Property, and/or pursuant to Section 804, to the extent the same shall not
constitute Funded Property.
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SECTION 805. Release of Minor Properties.
Notwithstanding the provisions of Sections 803 and 804, unless an Event
of Default shall have occurred and be continuing, the Company may obtain the
release from the Lien hereof of any part of the Mortgaged Property, or any
interest therein, and the Trustee shall whenever from time to time requested by
the Company in a Company Order transmitting therewith a form of instrument to
effect such release, and without requiring compliance with any of the provisions
of Section 803 or 804, release from the Lien hereof all the right, title and
interest of the Trustee in and to the same provided that the aggregate Fair
Value of the property to be so released on any date in a given calendar year,
together with all other property released pursuant to this Section 805 in such
calendar year, shall not exceed the greater of (a) Ten Million Dollars
($10,000,000) and (b) one and one-half percentum (1-1/2%) of the sum of (i) the
aggregate principal amount of Securities then Outstanding and (ii) the aggregate
principal amount of First Mortgage Securities then Outstanding, other than First
Mortgage Collateral Bonds. Prior to the granting of any such release, there
shall be delivered to the Trustee (x) an Officer's Certificate stating that, to
the knowledge of the signer, no Event of Default has occurred and is continuing
and (y) an Expert's Certificate stating, in the judgment of the signers, the
Fair Value of the property to be released, the aggregate Fair Value of all other
property theretofore released pursuant to this Section in such calendar year
and, as to Funded Property, the Cost thereof (or, if the Fair Value to the
Company of such property at the time the same became Funded Property was
certified to be an amount less than the Cost thereof, then such Fair Value, as
so certified, in lieu of Cost), and that, in the judgment of the signers, the
release thereof will not impair the security under this Indenture in
contravention of the provisions hereof. On or before December 31st of each
calendar year, the Company shall deposit with the Trustee an amount in cash
equal to seventy percentum (70%) of the aggregate Cost of the properties
constituting Funded Property so released during such year (or, if the Fair Value
to the Company of any particular property at the time the same became Funded
Property was certified to be an amount less than the Cost thereof, then such
Fair Value, as so certified, in lieu of Cost); provided, however, that no such
deposit shall be required to be made hereunder to the extent that cash or other
consideration shall, as indicated in an Officer's Certificate delivered to the
Trustee, have been deposited with the trustee or other holder of the First
Mortgage or other Lien prior to the Lien of this Indenture in accordance with
the provisions thereof; and provided, further, that the amount of cash so
required to be deposited may be reduced, at the election of the Company, by the
items specified in clause (4) in the first paragraph of Section 803, subject to
all of the limitations and conditions specified in such Section, to the same
extent as if such property were being released pursuant to Section 803. Any cash
deposited with the Trustee under this Section may thereafter be withdrawn, used
or applied in the manner, to the extent and for the purposes, and subject to the
conditions, provided in Section 806.
SECTION 806. Withdrawal or Other Application of Funded Cash; Purchase Money
Obligations.
Subject to the provisions of Section 404 and except as hereafter in
this Section provided, unless an Event of Default shall have occurred and be
continuing, any Funded Cash held by the Trustee, and any other cash which is
required to be withdrawn, used or applied as provided in this Section:
77
(1) may be withdrawn from time to time by the Company to the
extent of an amount equal to seventy percentum (70%) of the Cost or the Fair
Value to the Company (whichever is less) of Property Additions not constituting
Funded Property, after making any deductions and additions pursuant to Section
103, described in an Expert's Certificate, dated not more than ninety (90) days
prior to the date of the Company Order requesting such withdrawal and complying
with clause (B) and, to the extent applicable, clause (C) in Section 402(2),
delivered to the Trustee; provided, however, that the deductions and additions
contemplated by Section 103 shall not be required to be made if such Property
Additions were acquired, made or constructed on or after the ninetieth (90th)
day preceding the date of such Company Order;
(2) may be withdrawn from time to time by the Company in an
amount equal to the aggregate principal amount of Securities to the
authentication and delivery of which the Company shall be entitled under the
provisions of Section 403 hereof, by virtue of compliance with all applicable
provisions of Section 403 (except as hereinafter in this Section otherwise
provided); provided, however, that such withdrawal of cash shall operate as a
waiver by the Company of the right to the authentication and delivery of such
Securities and, to such extent, no such Securities may thereafter be
authenticated and delivered hereunder; and any such Securities which were the
basis of such right to the authentication and delivery of Securities so waived
shall be deemed to have been made the basis of such withdrawal of cash;
(3) on or after the First Mortgage Collateralization Date, may
be withdrawn from time to time by the Company in an amount equal to the
aggregate principal amount of First Mortgage Securities delivered to the Trustee
to be held as First Mortgage Collateral Bonds;
(4) may be withdrawn from time to time by the Company in an
amount equal to the aggregate principal amount of any Outstanding Securities
delivered to the Trustee;
(5) may, upon the request of the Company, be used by the
Trustee for the purchase of Securities in the manner, at the time or times, in
the amount or amounts, at the price or prices and otherwise as directed or
approved by the Company, all subject to the limitations hereafter in this
Section set forth; or
(6) may, upon the request of the Company, be applied by the
Trustee to the payment (or provision therefor pursuant to Article Eight) at
Stated Maturity of any Securities or to the redemption (or similar provision
therefor) of any Securities which are, by their terms, redeemable, in each case
of such series as may be designated by the Company, any such redemption to be in
the manner and as provided in Article Five, all subject to the limitations
hereafter in this Section set forth.
Such moneys shall, from time to time, be paid or used or applied by the
Trustee, as aforesaid, upon the request of the Company in a Company Order, and
upon receipt by the Trustee of an Officer's Certificate stating that, to the
knowledge of the signer, no Event of Default has occurred and is continuing. If
and to the extent that the withdrawal of cash is based upon Property Additions
(as permitted under the provisions of clause (1) above), the Company shall,
subject to the provisions of said clause (1) and except as hereafter in this
paragraph provided, comply with all applicable provisions of this Indenture as
if such Property Additions were made the basis for the authentication and
delivery of Securities equal in principal amount to
78
the cash so to be withdrawn. If and to the extent that the withdrawal of cash is
based upon the right to the authentication and delivery of Securities (as
permitted under the provisions of clause (2) above), the Company shall, except
as hereafter in this paragraph provided, comply with all applicable provisions
of Section 403 relating to such authentication and delivery. Notwithstanding the
foregoing provisions of this paragraph, in no event shall the Company be
required to deliver the documents specified in Section 401.
Notwithstanding the generality of clauses (4) and (5) above, no cash to
be applied pursuant to such clauses shall be applied to the payment of an amount
in excess of the principal amount of any Securities to be purchased, paid or
redeemed except to the extent that the aggregate principal amount of all
Securities theretofore, and of all Securities then to be, purchased, paid or
redeemed pursuant to such clauses is not less than the aggregate cost for
principal of, premium, if any, and accrued interest, if any, on and brokerage
commissions, if any, with respect to, such Securities.
Any Outstanding Securities delivered to the Trustee pursuant to clause
(3) in the first paragraph of this Section shall forthwith be canceled by the
Trustee.
Any obligations secured by Purchase Money Lien delivered to the Trustee
in consideration of the release of property from the Lien of this Indenture,
together with any evidence of such Purchase Money Lien held by the Trustee,
shall be released from the Lien of this Indenture and delivered to or upon the
order of the Company upon payment by the Company to the Trustee of an amount in
cash equal to the aggregate principal amount of such obligations less the
aggregate amount theretofore paid to the Trustee (by the Company, the obligor or
otherwise) in respect of the principal of such obligations.
The principal of and interest on any such obligations secured by
Purchase Money Lien held by the Trustee shall be held by the Trustee as and when
the same are received by the Trustee. The interest received by the Trustee on
any such obligations shall be deemed not to constitute Funded Cash and shall be
remitted to the Company; provided, however, that if an Event of Default shall
have occurred and be continuing, such proceeds shall be held as part of the
Mortgaged Property until such Event of Default shall have been cured or waived.
The Trustee shall have and may exercise all the rights and powers of
any owner of such obligations and of all substitutions therefor and, without
limiting the generality of the foregoing, may collect and receive all insurance
moneys payable to it under any of the provisions thereof and apply the same in
accordance with the provisions thereof, may consent to extensions thereof at a
higher or lower rate of interest, may join in any plan or plans of voluntary or
involuntary reorganization or readjustment or rearrangement and may accept and
hold hereunder new obligations, stocks or other securities issued in exchange
therefor under any such plan. Any discretionary action which the Trustee may be
entitled to take in connection with any such obligations or substitutions
therefor shall be taken, so long as no Event of Default shall have occurred and
be continuing, in accordance with a Company Order, and, during the continuance
of an Event of Default, in its own discretion.
Anything herein to the contrary notwithstanding, the Company may
irrevocably waive all right to the withdrawal pursuant to this Section of, and
any other rights with respect to, any
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obligations secured by Purchase Money Lien held by the Trustee, and the proceeds
of any such obligations, by delivery to the Trustee of a Company Order:
(1) specifying such obligations and stating that the Company
thereby waives all rights to the withdrawal thereof and of the proceeds thereof
pursuant to this Section, and any other rights with respect thereto; and
(2) directing that the principal of such obligations be
applied as provided in clause (5) in the first paragraph of this Section,
specifying the Securities to be paid or redeemed or for the payment or
redemption of which payment is to be made.
Following any such waiver, the interest on any such obligations shall
be applied to the payment of interest, if any, on the Securities to be paid or
redeemed or for the payment or redemption of which provision is to be made, as
specified in the aforesaid Company Order, as and when such interest shall become
due from time to time, and any excess funds remaining from time to time after
such application shall be applied to the payment of interest on any other
Securities as and when the same shall become due. Pending any such application,
the interest on such obligations shall be invested in Investment Securities. The
principal of any such obligations shall be applied solely to the payment of
principal of the Securities to be paid or redeemed or for the payment or
redemption of which provision is to be made, as specified in the aforesaid
Company Order. Pending such application, the principal of such obligations shall
be invested in Eligible Obligations. The obligation of the Company to pay the
principal of such Securities when the same shall become due at Maturity, shall
be offset and reduced by the amount of the proceeds of such obligations then
held, and to be applied, by the Trustee in accordance with this paragraph.
SECTION 807. Release of Property Taken by Eminent Domain, etc.
Should any of the Mortgaged Property, or any interest therein, be taken
by exercise of the power of eminent domain or be sold to an entity possessing
the power of eminent domain under a threat to exercise the same, and should the
Company elect not to obtain the release of such property pursuant to other
provisions of this Article, the Trustee shall, upon request of the Company
evidenced by a Company Order transmitting therewith a form of instrument to
effect such release, release from the Lien hereof all its right, title and
interest in and to the property so taken or sold (or with respect to an interest
in property, subordinate the Lien hereof to such interest), upon receiving (a)
an Opinion of Counsel to the effect that such property has been taken by
exercise of the power of eminent domain or has been sold to an entity possessing
the power of eminent domain under threat of an exercise of such power, (b) an
Officer's Certificate stating the amount of net proceeds received or to be
received for such property so taken or sold, and the amount so stated shall be
deemed to be the Fair Value of such property for the purpose of any notice to
the Holders, (c) if any portion of such property constitutes Funded Property, an
Expert's Certificate stating the Cost thereof (or, if the Fair Value to the
Company of such portion of such property at the time the same became Funded
Property was certified to be an amount less than the Cost thereof, then such
Fair Value, as so certified, in lieu of Cost) and (d) if any portion of such
property constitutes Funded Property, a deposit by the Company of an amount in
cash equal to seventy percentum (70%) of the Cost or Fair Value stated in the
Expert's Certificate delivered pursuant to clause (c) above; provided, however,
that the amount required to be so
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deposited shall not exceed the portion of the net proceeds received or to be
received for such property so taken or sold which is allocable on a pro-rata or
other reasonable basis to the portion of such property constituting Funded
Property; and provided, further, that no such deposit shall be required to be
made hereunder if the proceeds of such taking or sale shall, as indicated in an
Officer's Certificate delivered to the Trustee, have been deposited with the
trustee or other holder of the First Mortgage or other Lien prior to the Lien of
this Indenture. Any cash deposited with the Trustee under this Section may
thereafter be withdrawn, used or applied in the manner, to the extent and for
the purposes, and subject to the conditions, provided in Section 806.
SECTION 808. Disclaimer or Quitclaim.
In case the Company has sold, exchanged, dedicated or otherwise
disposed of, or has agreed or intends to sell, exchange, dedicate or otherwise
dispose of, or a Governmental Authority has ordered the Company to divest itself
of, any Excepted Property or any other property not subject to the Lien hereof,
or the Company desires to disclaim or quitclaim title to property to which the
Company does not purport to have title, the Trustee shall, from time to time,
disclaim or quitclaim such property upon receipt by the Trustee of the
following:
(1) a Company Order requesting such disclaimer or quitclaim
and transmitting therewith a form of instrument to effect such disclaimer or
quitclaim;
(2) an Officer's Certificate describing the property to be
disclaimed or quitclaimed; and
(3) an Opinion of Counsel stating the signer's opinion that
such property is not subject to the Lien hereof or required to be subject
thereto by any of the provisions hereof.
SECTION 809. Miscellaneous.
(1) The Expert's Certificate as to the Fair Value of property
to be released from the Lien of this Indenture in accordance with any provision
of this Article, and as to the nonimpairment, by reason of such release, of the
security under this Indenture in contravention of the provisions hereof, shall
be made by an Independent Expert if the Fair Value of such property and of all
other property released since the commencement of the then current calendar
year, as set forth in the certificates required by this Indenture, is ten
percentum (10%) or more of the aggregate principal amount of the Securities at
the time Outstanding; but such Expert's Certificate shall not be required to be
made by an Independent Expert in the case of any release of property if the Fair
Value thereof, as set forth in the certificates required by this Indenture, is
less than Twenty-five Thousand Dollars ($25,000) or less than one percentum (1%)
of the aggregate principal amount of the Securities at the time Outstanding. To
the extent that the Fair Value of any property to be released from the Lien of
this Indenture shall be stated in an Independent Expert's Certificate, such Fair
Value shall not be required to be stated in any other Expert's Certificate
delivered in connection with such release.
(2) No release of property from the Lien of this Indenture
effected in accordance with the provisions, and in compliance with the
conditions, set forth in this Article and in Sections 105 and 106 shall be
deemed to impair the security of this Indenture in contravention of any
provision hereof.
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(3) If the Mortgaged Property shall be in the possession of a
receiver or trustee, lawfully appointed, the powers herein before conferred upon
the Company with respect to the release of any part of the Mortgaged Property or
any interest therein or the withdrawal of cash may be exercised, with the
approval of the Trustee, by such receiver or trustee, notwithstanding that an
Event of Default may have occurred and be continuing, and any request,
certificate, appointment or approval made or signed by such receiver or trustee
for such purposes shall be as effective as if made by the Company or any of its
officers or appointees in the manner herein provided; and if the Trustee shall
be in possession of the Mortgaged Property under any provision of this
Indenture, then such powers may be exercised by the Trustee in its discretion
notwithstanding that an Event of Default may have occurred and be continuing.
(4) If the Company shall retain any interest in any property
released from the Lien of this Indenture as provided in Section 803, 804 or 805,
this Indenture shall not become or be, or be required to become or be, a Lien
upon such property or such interest therein or any improvements, accessions,
extensions or additions to such property or renewals, replacements or
substitutions of or for such property or any part or parts thereof or the
proceeds thereof unless the Company shall execute and deliver to the Trustee an
indenture supplemental hereto, in recordable form, containing a grant,
conveyance, transfer and mortgage thereof.
(5) Notwithstanding the occurrence and continuance of an Event
of Default, the Trustee, in its discretion, may release from the Lien hereof any
part of the Mortgaged Property or permit the withdrawal of cash, upon compliance
with the other conditions specified in this Article in respect thereof.
(6) No purchaser or grantee of property purporting to have
been released hereunder shall be bound to ascertain the authority of the Trustee
to execute the release, or to inquire as to any facts required by the provisions
hereof for the exercise of such authority; nor shall any purchaser or grantee of
any property or rights permitted by this Article to be sold, granted, exchanged,
dedicated or otherwise disposed of, be under obligation to ascertain or inquire
into the authority of the Company to make any such sale, grant, exchange,
dedication or other disposition.
ARTICLE NINE.
SATISFACTION AND DISCHARGE
SECTION 901. Satisfaction and Discharge of Securities.
Any Security or Securities, or any portion of the principal amount
thereof, shall be deemed to have been paid for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be satisfied
and discharged, if there shall have been irrevocably deposited with the Trustee
or any Paying Agent (other than the Company), in trust:
(1) money (including Funded Cash not otherwise applied
pursuant to Section 806) in an amount which shall be sufficient; or
(2) in the case of a deposit made prior to the Maturity of
such Securities or portions thereof, Eligible Obligations, which shall not
contain provisions permitting the
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redemption or other prepayment thereof at the option of the issuer thereof, the
principal of and the interest on which when due, without any regard to
reinvestment thereof, will provide moneys which, together with the money, if
any, deposited with or held by the Trustee or such Paying Agent, shall be
sufficient; or
(3) a combination of (1) or (2) which shall be sufficient, to
pay when due the principal of and premium, if any, and interest, if any, due and
to become due on such Securities or portions thereof; provided, however, that in
the case of the provision for payment or redemption of less than all the
Securities of any series or Tranche, such Securities or portions thereof shall
have been selected by the Security Registrar as provided herein and, in the case
of a redemption, the notice requisite to the validity of such redemption shall
have been given or irrevocable authority shall have been given by the Company to
the Trustee to give such notice, under arrangements satisfactory to the Trustee;
and provided, further, that the Company shall have delivered to the Trustee and
such Paying Agent:
(A) if such deposit shall have been made prior to the
Maturity of such Securities, a Company Order stating that the money and Eligible
Obligations deposited in accordance with this Section shall be held in trust, as
provided in Section 903;
(B) if Eligible Obligations shall have been
deposited, an Opinion of Counsel to the effect that such obligations constitute
Eligible Obligations and do not contain provisions permitting the redemption or
other prepayment thereof at the option of the issuer thereof, and an opinion of
an Independent Accountant of nationally recognized standing, selected by the
Company, to the effect that the other requirements set forth in clause (2) above
have been satisfied;
(C) if such deposit shall have been made prior to the
Maturity of such Securities, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its indebtedness in
respect of such Securities or portions thereof will have been satisfied and
discharged as contemplated in this Section; and
(D) either:
(i) an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (a) the Company has
received from, or there has been published by the Internal Revenue Service a
ruling or (b) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case (a) or (b) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such
Securities shall not recognize income gain or loss for federal income tax
purposes as a result of the deposit, defeasance and discharge to be effected
with respect to such Securities and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would be the case if
such deposit, defeasance and discharge had not occurred; or
(ii) an instrument wherein the Company,
notwithstanding the satisfaction and discharge of its indebtedness in respect of
the Securities, shall assume the obligation (which shall be absolute and
unconditional) to irrevocably deposit with the Trustee such additional sums of
money, if any, or additional Government Obligations, if any, or any
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combination thereof, at such time or times, as shall be necessary, together with
the money and/or Government Obligations theretofore so deposited, to pay when
due the principal of and premium, if any, and interest due and to become due on
such Securities or portions thereof; provided, however, that such instrument may
state that the Company's obligation to make additional deposits as aforesaid
shall be subject to the delivery to it by the Trustee of (a) a notice asserting
the deficiency accompanied by an opinion of an independent public accountant of
nationally recognized standing showing the calculation thereof and (b) an
opinion of tax counsel in the United States reasonably acceptable to the Trustee
to the effect that the Holders of the Outstanding Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
Upon the deposit of money or Eligible Obligations, or both, in
accordance with this Section, together with the documents required by clauses
(A), (B), (C) and (D) above, the Trustee shall, upon Company Request,
acknowledge in writing that such Securities or portions thereof are deemed to
have been paid for all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof has been satisfied and discharged
as contemplated in this Section. In the event that all of the conditions set
forth in the preceding paragraph shall have been satisfied in respect of any
Securities or portions thereof except that, for any reason, the Officer's
Certificate specified in clause (C) (if otherwise required) shall not have been
delivered, such Securities or portions thereof shall nevertheless be deemed to
have been paid for all purposes of this Indenture, and the Holders of such
Securities or portions thereof shall nevertheless be no longer entitled to the
benefit of the Lien of this Indenture or of any of the covenants of the Company
under Article Six (except the covenants contained in Sections 602 and 603) or
any other covenants made in respect of such Securities or portions thereof as
contemplated by Section 301, but the indebtedness of the Company in respect of
such Securities or portions thereof shall not be deemed to have been satisfied
and discharged prior to Maturity for any other purpose; and, upon Company
Request, the Trustee shall acknowledge in writing that such Securities or
portions thereof are deemed to have been paid for all purposes of this
Indenture.
If payment at Stated Maturity of less than all of the Securities of any
series, or any Tranche thereof, is to be provided for in the manner and with the
effect provided in this Section, the Security Registrar shall select such
Securities, or portions of principal amount thereof, in the manner specified by
Section 503 for selection for redemption of less than all the Securities of a
series or Tranche.
In the event that Securities which shall be deemed to have been paid
for purposes of this Indenture, and, if such is the case, in respect of which
the Company's indebtedness shall have been satisfied and discharged, all as
provided in this Section, do not mature and are not to be redeemed within the
sixty (60) day period commencing with the date of the deposit of moneys or
Eligible Obligations, as aforesaid, the Company shall, as promptly as
practicable, give a notice, in the same manner as a notice of redemption with
respect to such Securities, to the Holders of such Securities to the effect that
such deposit has been made and the effect thereof.
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Notwithstanding that any Securities shall be deemed to have been paid
for purposes of this Indenture, as aforesaid, the obligations of the Company and
the Trustee in respect of such Securities under Sections 304, 305, 306, 504,
602, 603, 1107 and 1114 and this Article shall survive.
The Company shall pay, and shall indemnify the Trustee or any Paying
Agent with which Eligible Obligations shall have been deposited as provided in
this Section against, any tax, fee or other charge imposed on or assessed
against such Eligible Obligations or the principal or interest received in
respect of such Eligible Obligations, including, but not limited to, any such
tax payable by any entity deemed, for tax purposes, to have been created as a
result of such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any time
after a Security would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's indebtedness in respect
thereof would be deemed to have been satisfied and discharged, pursuant to this
Section (without regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the money or
Eligible Obligations, or combination thereof, deposited with it as aforesaid to
the Company or its representative under any applicable Federal or State
bankruptcy, insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction and discharge of
the Company's indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Security shall be deemed to remain Outstanding
and (b) any satisfaction and discharge of the Company's indebtedness in respect
of any Security shall be subject to the provisions of the last paragraph of
Section 603.
SECTION 902. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 902), and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the satisfaction and discharge of
this Indenture, when:
(1) either,
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and (ii)
Securities for the payment of which money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section 603) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation:
(i) have become due and payable; or
(ii) will become due and payable at their
Stated Maturity within one year of the date of deposit; or
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(iii) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company;
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such purpose
money in an amount sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 1107, the obligations of
the Trustee to any Authenticating Agent under Section 1115 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section 902, the obligations of the Trustee under Section 903 and the last
paragraph of Section 603 shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall release, quit claim and otherwise turn over to the
Company the Mortgaged Property (other than money and Eligible Obligations held
by the Trustee pursuant to Section 903) and shall execute and deliver to the
Company such deeds and other instruments as, in the judgment of the Company,
shall be necessary, desirable or appropriate to effect or evidence such release
and quitclaim and the satisfaction and discharge of this Indenture.
SECTION 903. Application of Trust Money.
Neither the Eligible Obligations nor the money deposited pursuant to
Section 901, nor the principal or interest payments on any such Eligible
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of and premium, if any, and
interest, if any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 603; provided, however, that any cash received from such principal or
interest payments on such Eligible Obligations, if not then needed for such
purpose, shall, to the extent practicable and upon Company Request and delivery
to the Trustee of the documents referred to in clause (y) in the first paragraph
of Section 901, be invested in Eligible Obligations of the type described in
clause (2) in the first paragraph of Section 901 maturing at such times and in
such amounts as shall be sufficient, together with any other moneys and the
proceeds of any other Eligible Obligations then held by the Trustee, to pay when
due the principal of and premium, if any, and interest, if any, due and to
become due on such Securities or portions thereof on and prior to the Maturity
thereof, and interest earned from such reinvestment shall be paid over to the
Company
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as received, free and clear of the Lien of this Indenture, except the Lien
provided by Section 1107; and provided, further, that any moneys held in
accordance with this Section on the Maturity of all such Securities in excess of
the amount required to pay the principal of and premium, if any, and interest,
if any, then due on such Securities shall be paid over to the Company free and
clear of the Lien of this Indenture, except the Lien provided by Section 1107;
and provided, further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this Section shall
be held as part of the Mortgaged Property until such Event of Default shall have
been waived or cured.
ARTICLE TEN.
EVENTS OF DEFAULT; REMEDIES
SECTION 1001. Events of Default.
"Event of Default" means any of the following events which shall have
occurred and be continuing:
(1) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a period of
thirty (30) days; or
(2) default in the payment of the principal of or any premium
on any Security when it becomes due and payable; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty a
default in the performance of which or the breach of which is elsewhere in this
Section 1001 specifically dealt with and continuance of such default or breach
for a period of ninety (90) days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least thirty-three percentum (33%) in principal amount of
the Securities then Outstanding a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" unless the Trustee, or the Trustee and the Holders of a principal
amount of Securities not less than the principal amount of Securities the
Holders of which gave such notice, as the case may be, shall agree in writing to
an extension of such period prior to its expiration; provided, however, that the
Trustee, or the Trustee and the Holders of such principal amount of Securities,
as the case may be, shall be deemed to have agreed to an extension of such
period if corrective action is initiated by the Company within such period and
is being diligently pursued; or
(4) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition by
one or more Persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
87
liquidation of its affairs, and any such decree or order for relief or any such
other decree or order shall have remained unstayed and in effect for a period of
ninety (90) consecutive days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an assignment of a
substantial part of its property and assets for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in furtherance of
any such action; or
(6) the occurrence of a Matured Event of Default; provided,
however, that, anything in this Indenture to the contrary notwithstanding, the
waiver or cure of such event of default under the First Mortgage and the
rescission and annulment of the consequences thereof under the First Mortgage
shall constitute a cure of the corresponding Event of Default hereunder and a
rescission and annulment of the consequences thereof.
Notwithstanding the foregoing provisions of this Section 1001, if the
principal or any premium or interest on any Security is payable in a currency
other than the currency of the United States and such currency is not available
to the Company for making payment thereof due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to Holders by making such payment in
the currency of the United States in an amount equal to the currency of the
United States equivalent of the amount payable in such other currency, as
determined by the Trustee by reference to the noon buying rate in The City of
New York for cable transfers for such currency ("Exchange Rate"), as such
Exchange Rate is reported or otherwise made available by the Federal Reserve
Bank of New York on the date of such payment, or, if such rate is not then
available, on the basis of the most recently available Exchange Rate.
Notwithstanding the foregoing provisions of this Section 1001, any payment made
under such circumstances in the currency of the United States where the required
payment is in a currency other than the currency of the United States will not
constitute an Event of Default under this Indenture.
SECTION 1002. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default shall have occurred and be continuing, then in
every such case the Trustee or the Holders of not less than thirty-three
percentum (33%) in principal amount of the Securities then Outstanding may
declare the principal amount (or, if any of the Securities are Discount
Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof as contemplated by Section 301) of all Securities
then Outstanding to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee if given by
88
Holders), and upon such declaration such principal amount (or specified amount),
together with premium, if any, and accrued interest, if any, thereon, shall
become immediately due and payable, all subject, however, in the case of an
Event of Default described in clause (6) of Section 1001, to the proviso
contained in such clause (6).
At any time after such a declaration of acceleration of the Maturity of
the Securities has been made, but before any sale of any of the Mortgaged
Property has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter provided in this Article
Ten, the Event of Default giving rise to such declaration of acceleration shall,
without further act, be deemed to have been waived, and such declaration and its
consequences shall, without further act, be deemed to have been rescinded and
annulled, if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all
Securities of that series;
(B) the principal of and premium, if any, on any
Securities then Outstanding which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities; and
(C) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities, other
than the non-payment of the principal of Securities which have become due solely
by such declaration of acceleration, have been cured or waived as provided in
Section 1017.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 1003. Entry upon Mortgaged Property.
If an Event of Default shall have occurred and be continuing, the
Company, upon demand of the Trustee and if and to the extent permitted by law,
shall forthwith surrender to the Trustee the actual possession of, and the
Trustee, by such officers or agents as it may appoint, may enter upon and take
possession of, the Mortgaged Property; and the Trustee may hold, operate and
manage the Mortgaged Property and make all needful repairs and such renewals,
replacements, betterments and improvements as to the Trustee shall seem prudent;
and the Trustee may receive the rents, issues, profits, revenues and other
income of the Mortgaged Property, to the extent, if any, that the same shall not
then constitute Excepted Property; and, after deducting the costs and expenses
of entering, taking possession, holding, operating and managing the Mortgaged
Property, as well as payments for insurance and taxes and other proper charges
upon the Mortgaged Property prior to the Lien of this Indenture and reasonable
compensation to itself, its agents and counsel, the Trustee may apply the same
as provided in Section 1007. Whenever all that is then due in respect of the
principal of and premium, if any, and interest, if any, on the
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Securities and under any of the terms of this Indenture shall have been paid and
all defaults hereunder shall have been cured or shall have been waived as
provided in Section 1017, the Trustee shall surrender possession of the
Mortgaged Property to the Company.
SECTION 1004. Power of Sale; Suits for Enforcement.
If an Event of Default shall have occurred and be continuing, the
Trustee, by such officers or agents as it shall appoint, with or without entry,
in its discretion may, subject to the provisions of Section 1016 and if and to
the extent permitted by law:
(1) Foreclosure. Sell, subject to applicable law, the
Mortgaged Property.
(A) Foreclosure of Real Property. Mortgaged Property
constituting real property shall be sold in accordance with this Section
1004(1)(A). The sale shall be a public sale at auction held between 10 A.M. and
4 P.M. on the first Tuesday of a month. The sale shall take place at the county
courthouse in the county in which the Mortgaged Property is located, or if it is
located in more than one county, the sale will be made at the courthouse in one
of those counties. The sale shall occur at the area at that courthouse which the
commissioners' court of that county has designated as the place where such sales
are to take place by designation recorded in the real property records of that
county, or if no area is so designated, then the notice of sale shall designate
the area at the courthouse where the sale covered by that notice is to take
place, and the sale shall occur in that area. Notice of the sale shall include a
statement of the earliest time at which the sale will occur and shall be given
at least twenty-one (21) days before the date of the sale; (i) by posting at the
courthouse door of each county in which the Mortgaged Property is located a
written notice designating the county in which the Mortgaged Property will be
sold; (ii) by filing in the Office of the County Clerk of each county in which
the Mortgaged Property is located a copy of the notice posted under subsection
(1) above; and (iii) by the holders of the indebtedness to which this power of
sale is related serving written notice of the sale by certified mail on each
debtor who, according to the records of such holders, is obligated to pay such
indebtedness. The sale shall begin at the time stated in the notice of sale or
not later than three (3) hours after that time. Service of any notice under this
Section 1004(1)(A) by certified mail is complete when the notice is deposited in
the United States mail, postage prepaid and addressed to the debtor entitled to
it at that debtor's last known address as shown by the records of the Trustee
and the Holders. The affidavit of a person knowledgeable of the facts to the
effect that service was completed is prima facie evidence of service. After such
written notice shall have been posted and filed, as aforesaid, and such notice
shall have been served upon such debtor or debtors, as aforesaid, the Trustee
(or his successor or substitute then acting) shall perform his duty to enforce
this Indenture by selling the Mortgaged Property, either as an entirety or in
parcels, by one sale or several sales, as the Trustee acting may elect, all
rights to a marshalling of assets or sale in inverse order of alienation being
WAIVED, as aforesaid to the highest bidder or bidders for cash, and make due
conveyance to the purchaser or purchasers, with general warranty, and the title
to such purchaser or purchasers, when so made by the Trustee acting, the Company
binds itself, its successors and assigns, to warrant and forever defend against
claims and demands of every person whomsoever lawfully claiming or to claim the
same or any part thereof (such warranty to supersede any provision contained in
this Indenture limiting the liability of the Company), subject to Permitted
Liens and Liens and claims permitted in accordance with Section 606. The
provisions of this Indenture with respect to posting and giving
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notices of sale are intended to comply with the provisions of Section 51.002 of
the Texas Property Code as in force and effect as of the date hereof, and in the
event the requirement for any notice under such Section 51.002 shall be
eliminated or the prescribed manner of giving it shall be modified by future
amendment to, or adoption of any statute superseding, such Section 51.002, the
requirement for such particular notice shall be deemed stricken from or modified
in this Indenture in conformity with such amendment or superseding statute,
effective as of its effective date. The manner prescribed in this Indenture for
serving or giving any notice, other than that to be posted or caused to be
posted by the Trustee acting, shall not be deemed exclusive but such notice or
notices may be given in any other manner permitted by applicable law. Said sale
shall forever be a bar against the Company, its successors and assigns, and all
other persons claiming under it. It is expressly agreed that the recitals in
each conveyance to the purchaser shall be full evidence of the truth of the
matters therein stated, and all lawful prerequisites to said sale shall be
conclusively presumed to have been performed. The Trustee may require minimum
bids at any foreclosure sale and may cancel and abandon the sale if no bid is
received equal to or greater than any such minimum bid. For the avoidance of
doubt, references to the term Mortgaged Property in this Section 1004(1)(A) are
references to all or a portion of the Mortgaged Property to be sold in
accordance with this Section 1004(1)(A) at any one time and not the Mortgaged
Property in its entirety.
(B) Foreclosure of Other Property. Mortgaged Property
constituting property other than real property shall be sold in accordance with
this Section 1004(1)(B). In conducting the sale, the Trustee shall have all of
the rights and remedies provided by applicable law or by this Indenture,
including but not limited to the right to require the Company to assemble the
Mortgaged Property and make it available to the Trustee at a place to be
designated by the Trustee which is reasonably convenient to both the Trustee and
the Company, the right to take possession of the Mortgaged Property with or
without demand and with or without process of law and the right to sell and
dispose of the same and distribute the proceeds according to Section 1007 of
this Indenture. Any requirement of reasonable notice shall be met if the Trustee
sends such notice to the Company at least ten (10) days prior to the date of
sale, disposition or other event giving rise to the required notice. The parties
hereto further agree that any sale of the Mortgaged Property held
contemporaneously with and upon the same notice as required in Section
1004(1)(A) (for the real property) shall be deemed to be a public sale conducted
in a commercially reasonable manner. With respect to the Mortgaged Property that
has become so attached to the real property that an interest therein arises
under the real property law of the State of Texas, this Indenture shall also
constitute a financing statement and a fixture filing under the Texas Uniform
Commercial Code.
(2) Judicial Foreclosure. In addition to the foregoing,
proceed to protect and enforce its rights and the rights of the Holders under
this Indenture by sale pursuant to judicial proceedings or by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Indenture or in aid
of the execution of any power granted in this Indenture or for the foreclosure
of this Indenture or for the enforcement of any other legal, equitable or other
remedy, as the Trustee, being advised by counsel, shall deem most effectual to
protect and enforce any of the rights of the Trustee or the Holders.
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SECTION 1005. Incidents of Sale.
Upon any sale of any of the Mortgaged Property, whether made under the
power of sale hereby given or pursuant to judicial proceedings, to the extent
permitted by law:
(1) the principal amount (or, if any of the Securities are
Original Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified in the terms thereof as contemplated by Section
301) of all Outstanding Securities, if not previously due, shall at once become
and be immediately due and payable, together with premium, if any, and accrued
interest, if any, thereon;
(2) any Holder or Holders or the Trustee may bid for and
purchase the property offered for sale, and upon compliance with the terms of
sale may hold, retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver any
Outstanding Securities or claims for interest thereon in lieu of cash to the
amount which shall, upon distribution of the net proceeds of such sale, be
payable thereon, and such Securities, in case the amounts so payable thereon
shall be less than the amount due thereon, shall be returned to the Holders
thereof after being appropriately stamped to show partial payment;
(3) the Trustee may make and deliver to the purchaser or
purchasers a good and sufficient deed, bill of sale and instrument of assignment
and transfer of the property sold;
(4) the Trustee is hereby irrevocably appointed the true and
lawful attorney of the Company, in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment and transfer of the property
so sold; and for that purpose it may execute all necessary deeds, bills of sale
and instruments of assignment and transfer, and may substitute one or more
persons, firms or corporations with like power, the Company hereby ratifying and
confirming all that its said attorney or such substitute or substitutes shall
lawfully do by virtue hereof; but, if so requested by the Trustee or by any
purchaser, the Company shall ratify and confirm any such sale or transfer by
executing and delivering to the Trustee or to such purchaser or purchasers all
proper deeds, bills of sale, instruments of assignment and transfer and releases
as may be designated in any such request;
(5) all right, title, interest, claim and demand whatsoever,
either at law or in equity or otherwise, of the Company of, in and to the
property so sold shall be divested and such sale shall be a perpetual bar both
at law and in equity against the Company, its successors and assigns, and
against any and all persons claiming or who may claim the property sold or any
part thereof from, through or under the Company; and
(6) the receipt of the Trustee or of the officer making such
sale shall be a sufficient discharge to the purchaser or purchasers at such sale
for his or their purchase money and such purchaser or purchasers and his or
their assigns or personal representatives shall not, after paying such purchase
money and receiving such receipt, be obliged to see to the application of such
purchase money, or be in anywise answerable for any loss, misapplication or
non-application thereof.
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SECTION 1006. Collection of Indebtedness and Suits for Enforcement by Trustee.
If an Event of Default described in clause (1) or (2) of Section 1001
shall have occurred and be continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Securities with
respect to which such Event of Default shall have occurred, the whole amount
then due and payable on such Securities for principal and premium, if any, and
interest, if any, and, in addition thereto, such further amount as shall be
sufficient to cover any amounts due to the Trustee under Section 1107.
If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and
as trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid,
may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor
upon such Securities and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such
Securities, wherever situated.
The Trustee shall, to the extent permitted by law, be entitled to sue
and recover judgment as aforesaid either before, during or after the pendency of
any proceedings for the enforcement of the Lien of this Indenture, and in case
of a sale of the Mortgaged Property or any part thereof and the application of
the proceeds of sale as aforesaid, the Trustee, in its own name and as trustee
of an express trust, shall be entitled to enforce payment of, and to receive,
all amounts then remaining due and unpaid upon the Securities then Outstanding
for principal, premium, if any, and interest, if any, for the benefit of the
Holders thereof, and shall be entitled to recover judgment for any portion of
the same remaining unpaid, with interest as aforesaid. No recovery of any such
judgment by the Trustee and no levy of any execution upon any such judgment upon
any of the Mortgaged Property or any other property of the Company shall affect
or impair the Lien of this Indenture upon the Mortgaged Property or any part
thereof or any rights, powers or remedies of the Trustee hereunder, or any
rights, powers or remedies of the Holders.
SECTION 1007. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article, including
any rents, issues, profits, revenues and other income collected pursuant to
Section 1003 (after the deductions therein provided) and any proceeds of any
sale (after deducting the costs and expenses of such sale, including a
reasonable compensation to the Trustee, its agents and counsel, and any taxes,
assessments or Liens prior to the Lien of this Indenture, except any thereof
subject to which such sale shall have been made), whether made under any power
of sale herein granted or pursuant to judicial proceedings, and any money
collected by the Trustee under Section 806, together with, in the case of an
entry or sale or as otherwise provided herein, any other sums then held by the
Trustee as part of the Mortgaged Property, shall be applied in the following
order, to the extent permitted by law, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
premium, if any, or interest, if any, upon presentation of the Securities and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
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First: To the payment of all amounts due the Trustee under
Section 1107;
Second: To the payment of the whole amount then due and unpaid
upon the Outstanding Securities for principal and premium, if
any, and interest, if any, in respect of which or for the
benefit of which such money has been collected; and in case
such proceeds shall be insufficient to pay in full the whole
amount so due and unpaid upon such Securities, then to the
payment of such principal and interest, if any, thereon
without any preference or priority, ratably according to the
aggregate amount so due and unpaid, with any balance then
remaining to the payment of premium, if any, and, if so
specified as contemplated by Section 301 with respect to the
Securities of any series, or any Tranche thereof, interest, if
any, on overdue premium, if any, and overdue interest, if any,
ratably as aforesaid, all to the extent permitted by
applicable law; provided, however, that any money collected by
the Trustee pursuant to Section 806 in respect of interest or
pursuant to Section 1003 shall first be applied to the payment
of interest accrued on the principal of Outstanding
Securities; and
Third: To the payment of the remainder, if any, to the Company
or to whomsoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct.
SECTION 1008. Receiver.
If an Event of Default shall have occurred and, during the continuance
thereof, the Trustee shall have commenced judicial proceedings to enforce any
right under this Indenture, the Trustee shall, to the extent permitted by law,
be entitled, as against the Company, without notice or demand and without regard
to the adequacy of the security for the Securities or the solvency of the
Company, to the appointment of a receiver of the Mortgaged Property.
SECTION 1009. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal, premium, if any, and interest, if any, owing and unpaid in respect of
the Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
amounts due to the Trustee under Section 1107) and of the Holders allowed in
such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section 1107.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 1010. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee under Section 1107, its agents and
counsel, be for the ratable benefit of the Holders of the Securities in respect
of which such judgment has been recovered.
SECTION 1011. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver, assignee, trustee, liquidator or sequestor (or other
similar official), or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such sixty (60) day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing himself of, any
provision of this Indenture to affect, disturb or prejudice the Lien of this
Indenture or the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right
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under this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
SECTION 1012. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 1013. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and such Holder shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and such Holder shall continue
as though no such proceeding had been instituted.
SECTION 1014. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Anything in this Article to the contrary notwithstanding, the
availability of the remedies set forth herein (on an individual or cumulative
basis) and the procedures set forth herein relating to the exercise thereof
shall be subject to (a) the law (including, for purposes of this paragraph,
general principles of equity) of any jurisdiction wherein the Mortgaged Property
or any part thereof is located to the extent that such law is mandatorily
applicable and (b) the rights of the holder of any Lien prior to the Lien of
this Indenture, and, if and to the extent that any provision of this Article
conflicts with any provision of such applicable law and/or with the rights of
the holder of any such prior Lien, such provision of law and/or the rights of
such holder shall control.
SECTION 1015. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and
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remedy given by this Article Ten or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
SECTION 1016. Control by Holders.
If an Event of Default shall have occurred and be continuing, the
Holders of not less than a majority in principal amount of the Securities then
Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) subject to the provisions of Section 1101, the Trustee
shall have the right to decline to follow such direction if a Responsible
Officer or Officers of the Trustee shall, in good faith, determine that the
proceeding so directed would involve the Trustee in personal liability or would
otherwise be contrary to applicable law.
SECTION 1017. Waiver of Past Defaults.
Before any sale of any of the Mortgaged Property and before a judgment
or decree for payment of the money due shall have been obtained by the Trustee
as herein provided, the Holders of not less than a majority in principal amount
of the Securities then Outstanding may on behalf of the Holders of all the
Outstanding Securities waive any past default hereunder and its consequences,
except a default:
(1) in the payment of the principal of or any premium or
interest on any Security Outstanding; or
(2) in respect of a covenant or provision hereof which under
Article Fourteen cannot be modified or amended without the consent of the Holder
of each Outstanding Security of any series or Tranche affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 1018. Undertaking for Costs.
The Company and the Trustee agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and such court may in its discretion
assess reasonable
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costs including reasonable attorneys' fees and expenses, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section 1018 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Holder or group of Holders holding in the aggregate more
than ten percentum (10%) in principal amount of the Securities then Outstanding,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of or interest on any Security, on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date). Neither this Section 1018 nor the Trust Indenture
Act shall be deemed to authorize any court to require such an undertaking or
such an assessment in any proceeding instituted by the Company.
SECTION 1019. Waiver of Appraisement, Usury, Stay and Other Laws.
To the full extent that it may lawfully so agree, the Company shall not
at any time set up, claim or otherwise seek to take the benefit or advantage of
any appraisement, valuation, stay, extension or redemption law, now or hereafter
in effect, in order to prevent or hinder the enforcement of this Indenture or
the absolute sale of the Mortgaged Property, or any part thereof, or the
possession thereof, or any part thereof, by any purchaser at any sale under this
Article; and the Company, for itself and all who may claim under it, so far as
it or they now or hereafter may lawfully do so, hereby waives the benefit of all
such laws. The Company, for itself and all who may claim under it, waives, to
the extent that it may lawfully do so, all right to have the Mortgaged Property
marshalled upon any foreclosure of the Lien hereof, and agrees that any court
having jurisdiction to foreclose the Lien of this Indenture may order the sale
of the Mortgaged Property as an entirety.
SECTION 1020. Defaults under First Mortgage.
In addition to every other right and remedy provided herein, the
Trustee may exercise any right or remedy available to the Trustee in its
capacity as owner and holder of First Mortgage Collateral Bonds which arises as
a result of a default or event of default under the First Mortgage, whether or
not an Event of Default shall then have occurred and be continuing.
ARTICLE ELEVEN.
THE TRUSTEE
SECTION 1101. Certain Duties and Responsibilities.
(1) Except during the continuance of an Event of Default, (A)
the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and (B) in
the absence of gross negligence or bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
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under a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture.
(2) In case an Event of Default shall have occurred and be
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(3) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(A) this subsection shall not be construed to limit
the effect of Clause (1) of this Section;
(B) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(C) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders entitled to so direct the Trustee, as provided
herein, relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(D) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 1102. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder in
the manner and to the extent required to do so by the Trust Indenture Act,
unless such default shall have been cured or waived; provided, however, that in
the case of any default of the character specified in Section 1001(3), no such
notice to Holders shall be given until at least seventy-five (75) days after the
occurrence thereof. For the purpose of this Section 1102, the term "default"
means any event which is, or after notice or lapse of time, or both, would
become, an Event of Default.
The Trustee shall give to the trustee under the First Mortgage a copy
of each notice of default given to the Holders pursuant to this Section 1102.
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SECTION 1103. Certain Rights of Trustee.
Subject to the provisions of Section 1101:
(1) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Manager shall be sufficiently evidenced by a Manager
Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate;
(4) the Trustee may consult with counsel, and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(8) the Trustee is not required to give any bond or surety
with respect to the performance of its duties or the exercise of its powers
under this Indenture;
(9) in the event the Trustee receives inconsistent or
conflicting requests and indemnity from two or more groups of Holders, each
representing less than a majority in
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aggregate principal amount of the Securities then Outstanding, the Trustee, in
its sole discretion, may determine what action, if any, shall be taken;
(10) the Trustee's immunities and protections from liability
and its right to indemnification in connection with the performance of its
duties under this Indenture shall extend to the Trustee's officers, directors,
agents and employees. Such immunities and protections and right to
indemnification, together with the Trustee's right to compensation, shall
survive the Trustee's resignation or removal and final payment of the
Securities; and
(11) the Trustee is not required to take notice or deemed to
have notice of any default or Event of Default hereunder, except Events of
Default under Section 1001(1) and (2), unless a Responsible Officer of the
Trustee has actual knowledge thereof or has received notice in writing of such
default or Event of Default from the Company or the holders of at least
thirty-three percentum (33%) in aggregate principal amount of the Securities
then Outstanding, and in the absence of any such notice, the Trustee may
conclusively assume that no such default or Event of Default exists.
SECTION 1104. Not Responsible for Recitals or Issuance of Securities or
Application of Proceeds.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the value or condition of the Mortgaged Property or any part thereof, or as to
the title of the Company thereto or as to the security afforded thereby or
hereby, or as to the validity or genuineness of any securities at any time
pledged and deposited with the Trustee hereunder, or as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of the Securities or the
proceeds thereof or of any money paid to the Company or upon Company Order under
any provision hereof. The Trustee shall have no responsibility to make or to see
to the making of any recording, filing or registration of any instrument or
notice (including any financing or continuation statement or any tax or
securities form) (or any rerecording, refiling or reregistration of any
thereof); at any time in any public office or elsewhere for the purpose of
perfecting, maintaining the perfection of or otherwise making effective the Lien
of this Indenture or for any other purpose and shall have no responsibility for
seeing to the insurance on the Mortgaged Property or for paying any taxes
relating to the Mortgaged Property or for otherwise maintaining the Mortgaged
Property, including, but not limited to, attending to any environmental matters
in respect thereof or disposing of any hazardous or other wastes located
thereon.
SECTION 1105. May Hold Securities.
Each of the Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its commercial banking
or in any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 1108 and 1113, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent. Each of said
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entities, in its commercial banking or in any other capacity, may also engage in
or be interested in any financial or other transaction with the Company and,
subject to Sections 1108 and 1113, may act as depository, trustee or agent for
any committee of Holders of Securities secured hereby or other obligations of
the Company as freely as if it were not Trustee, Authenticating Agent, Paying
Agent or Security Registrar. The provisions of this Section shall extend to
Affiliates of said entities.
SECTION 1106. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 1107. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
for all services rendered by it hereunder in such amounts as the Company and the
Trustee shall agree in writing from time to time (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except those attributable to its negligence, willful misconduct or
bad faith.
As security for the performance of the obligations of the Company under
this Section 1107, the Trustee shall have a Lien (the "Trustee's Lien") secured
by this Indenture prior to the Securities upon the Mortgaged Property and upon
all other property and funds held or collected by the Trustee as such, other
than property and funds held in trust under Section 903 (except moneys payable
to the Company as provided in Section 903). "Trustee" for purposes of this
Section 1107 shall include any predecessor Trustee; provided, however, that the
negligence, willful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.
The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity under this Section 1107. The Company shall defend the claim
and the Trustee shall
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cooperate in the defense. The Trustee may have separate counsel and, in the
event the subject matter of the claim involves a conflict of interest between
the Company and the Trustee, the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not pay for any settlement made
without its consent.
In the event the Trustee incurs expenses or renders services in any
proceedings which result from an Event of Default under Section 1001(4) or (5),
or from any default which, with the passage of time, would become such Event of
Default, the expenses so incurred and compensation for services so rendered are
intended to constitute expenses of administration under the United States
Bankruptcy Code or equivalent law.
SECTION 1108. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
SECTION 1109. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least Fifty Million Dollars ($50,000,000). If
any such Person publishes reports of condition at least annually, pursuant to
law or to the requirements of its supervising or examining authority, then for
the purposes of this Section 1109 and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee with respect to the
Securities of any series shall cease to be eligible in accordance with the
provisions of this Section 1109, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article Eleven.
SECTION 1110. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article Eleven shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 1111.
(2) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 1111 shall not have been delivered to the Trustee within thirty (30)
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
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(3) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(4) If at any time:
(A) the Trustee shall fail to comply with Section
1108 after written request therefor by the Company or by any Holder who has been
a bona fide Holder for at least six months; or
(B) the Trustee shall cease to be eligible under
Section 1109 and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(C) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (a) the Company, acting
pursuant to the authority of a Manager Resolution, may remove the Trustee with
respect to all Securities, or (b) subject to Section 1018, any Holder who has
been a bona fide Holder for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the appointment of
a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause (other than as contemplated in subclause (B) in clause (4) of this
Section), with respect to the Securities of one or more series, the Company, by
a Manager Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series) and shall comply with the applicable
requirements of Section 1111. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of such series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 1111, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of such series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 1111, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(6) 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 Company shall have delivered to the Trustee (i) a Manager
Resolution appointing a successor Trustee, effective as of a date specified
therein, and (ii) an instrument of acceptance of such appointment, effective
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as of such date, by such successor Trustee in accordance with Section 1111, the
Trustee shall be deemed to have resigned as contemplated in clause (2) of this
Section, the successor Trustee shall be deemed to have been appointed pursuant
to clause (5) of this Section and such appointment shall be deemed to have been
accepted as contemplated in Section 1111, all as of such date, and all other
provisions of this Section and Section 1111 shall be applicable to such
resignation, appointment and acceptance except to the extent inconsistent with
this clause (6).
(7) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
109. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
SECTION 1111. Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor
Trustee with respect to any series of Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(2) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in clause (1) of this Section.
(3) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article Eleven.
SECTION 1112. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article Eleven,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
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SECTION 1113. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities (other than by reason of a
relationship described in Section 311(b) of the Trust Indenture Act)), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Company (or any such other obligor). For
purposes of Section 311(b)(4) and (6) of the Trust Indenture Act:
(1) "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after delivery of
the goods or securities in currency or in checks or other orders drawn upon
banks and payable upon demand; and
(2) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or incurred
by the Company (or any such obligor) for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to, possession
of, or a Lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise previously
constituting the security; provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the Company
(or any such obligor) arising from the making, drawing, negotiating or incurring
of the draft, bill of exchange, acceptance or obligation.
SECTION 1114. Co-trustees and Separate Trustees.
(1) At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Mortgaged Property may at
the time be located, the Company and the Trustee shall have power to appoint,
and, upon the written request of the Trustee or of the Holders of at least
thirty-three percentum (33%) in principal amount of the Securities then
Outstanding, the Company shall for such purpose join with the Trustee in the
execution and delivery of all instruments and agreements necessary or proper to
appoint, one or more Persons approved by the Trustee and, if no Event of Default
shall have occurred and be continuing, by the Company either to act as
co-trustee, jointly with the Trustee, of all or any part of the Mortgaged
Property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons, in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Company does not join in such appointment within fifteen
(15) days after the receipt by it of a request so to do, or if an Event of
Default shall have occurred and be continuing, the Trustee alone shall have
power to make such appointment.
(2) Should any written instrument or instruments from the
Company be required by any co-trustee or separate trustee so appointed to more
fully confirm to such co-trustee or separate trustee such property, title, right
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Company.
(3) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
conditions:
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(A) the Securities shall be authenticated and
delivered, and all rights, powers, duties and obligations hereunder in respect
of the custody of securities, cash and other personal property held by, or
required to be deposited or pledged with the Trustee hereunder shall be
exercised solely by the Trustee;
(B) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed either
by the Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such co-trustee or
separate trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee;
(C) the Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Company, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, if an Event of Default shall have occurred and be continuing, the
Trustee shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Company. Upon the
written request of the Trustee, the Company shall join with the Trustee in the
execution and delivery of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided
in this Section;
(D) neither the Trustee nor any co-trustee or
separate trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(E) any Act of Holders delivered to the Trustee shall
be deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 1115. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to the Securities of one or more series, or any Tranche thereof which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series or Tranche issued upon original issuance, exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States, any State or Territory thereof or the
District of Columbia or the Commonwealth of Puerto Rico, authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of
not less than Fifty Million Dollars ($50,000,000) and subject to supervision or
examination by Federal or State authority. If
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such Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section 1115, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section 1115, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 1115.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent
shall be the successor Authenticating Agent hereunder, provided such corporation
shall be otherwise eligible under this Section 1115, without the execution or
filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 1115, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 109 to all Holders
of Securities of the series or Tranche with respect to which such Authenticating
Agent will serve. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 1115.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 1115, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 1107.
If an appointment with respect to the Securities of one or more series,
or any Tranche thereof, shall be made pursuant to this Section 1115, the
Securities of such series or Tranche may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Date of Authentication:
-------------
,
-------------------------
as Trustee
By: ,
------------------------
as Authenticating Agent
By:
------------------------
Authorized Officer
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If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 105 and need not be accompanied by an Opinion of
Counsel), shall appoint, in accordance with this Section and in accordance with
such procedures as shall be acceptable to the Trustee, an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.
ARTICLE TWELVE.
LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY
SECTION 1201. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(1) semi-annually, not later than January 15 and July 15 in
each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities of each series as of the
preceding January 1 or July 1 as the case may be; and
(2) at such other times as the Trustee may request in writing,
within thirty (30) days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than fifteen (15) days
prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.
SECTION 1202. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 1201 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 1201 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided in the Trust
Indenture Act.
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Every Holder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 1203. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more
than twelve (12) months shall be transmitted no later than January 31 in each
calendar year, commencing with the first January 31 after the first issuance of
Securities under this Indenture.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company.
SECTION 1204. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided in the Trust Indenture Act. The Company will
notify the Trustee when any Securities are listed on any stock exchange.
ARTICLE THIRTEEN.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 1301. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease, subject to the Lien of this Indenture, all of the
Mortgaged Property as or substantially as an entirety to any Person, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease all of the Mortgaged Property as or
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the Mortgaged Property as or
substantially as an entirety shall be a Person organized and validly existing
under the laws of the United States, any State or Territory thereof or the
District of Columbia (such Person being hereinafter sometimes called the
"Successor Corporation") and shall execute and deliver to the Trustee an
indenture supplemental hereto, in form satisfactory to the Trustee, which:
(A) in the case of a consolidation, merger,
conveyance or other transfer, or in the case of a lease if the term thereof
extends beyond the last Stated Maturity of
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the Securities then Outstanding, contains an express assumption by the Successor
Corporation of the due and punctual payment of the principal of and premium, if
any, and interest, if any, on all the Securities then Outstanding and the
performance and observance of every covenant and condition of this Indenture to
be performed or observed by the Company; and
(B) in the case of a consolidation, merger,
conveyance or other transfer, contains a grant, conveyance, transfer and
mortgage by the Successor Corporation, of the same tenor of the Granting Clauses
herein:
(i) confirming the Lien of this Indenture on
the Mortgaged Property (as constituted immediately prior to the time such
transaction became effective) and subjecting to the Lien of this Indenture all
property, real, personal and mixed, thereafter acquired by the Successor
Corporation which shall constitute an improvement, extension or addition to the
Mortgaged Property (as so constituted) or a renewal, replacement or substitution
of or for any part thereof; and
(ii) at the election of the Successor
Corporation subjecting to the Lien of this Indenture such property, real,
personal or mixed, in addition to the property described in clause (i) of this
Section, then owned or thereafter acquired by the Successor Corporation as the
Successor Corporation shall, in its sole discretion, specify or describe
therein, and the Lien confirmed or created by such grant, conveyance, transfer
and mortgage shall have force, effect and standing similar to those which the
Lien of this Indenture would have had if the Company had not been a party to
such consolidation, merger, conveyance or other transfer and had itself, after
the time such transaction became effective, purchased, constructed or otherwise
acquired the property subject to such grant, conveyance, transfer and mortgage;
(2) in the case of a lease, such lease shall be made expressly
subject to termination by the Company or by the Trustee at any time during the
continuance of an Event of Default, and also by the purchaser of the property so
leased at any sale thereof hereunder, whether such sale be made under the power
of sale hereby conferred or pursuant to judicial proceedings;
(3) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing; and
(4) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture, comply with this
Article Thirteen and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 1302. Successor Corporation Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease, subject to the Lien
of this Indenture, of the Mortgaged Property as or substantially as an entirety
in accordance with Section 1301, the Successor Corporation formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and
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may exercise every right and power of, the Company under this Indenture with the
same effect as if such Successor Corporation had been named as the Company
herein. Without limiting the generality of the foregoing:
(1) all property of the Successor Corporation then subject to
the Lien of this Indenture, of the character described in Section 103, shall
constitute Property Additions;
(2) the Successor Corporation may execute and deliver to the
Trustee, and thereupon the Trustee shall, subject to the provisions of Article
Four, authenticate and deliver, Securities upon any basis provided in Article
Four; and
(3) the Successor Corporation may, subject to the applicable
provisions of this Indenture, cause Property Additions to be applied to any
other Authorized Purpose.
All Securities so executed by the Successor Corporation, and
authenticated and delivered by the Trustee, shall in all respects be entitled to
the benefit of the Lien of this Indenture equally and ratably with all
Securities executed, authenticated and delivered prior to the time such
consolidation, merger, conveyance or other transfer became effective.
SECTION 1303. Extent of Lien Hereof on Property of Successor Corporation.
Unless, in the case of a consolidation, merger, conveyance or other
transfer contemplated by Section 1301, the indenture supplemental hereto
contemplated in clause (1)(B) in Section 1301, or any other indenture, contains
a grant, conveyance, transfer and mortgage by the Successor Corporation as
described in subclause (ii) thereof, neither this Indenture nor such
supplemental indenture shall become or be, or be required to become or be, a
Lien upon any of the properties:
(1) owned by the Successor Corporation or any other party to
such transaction (other than the Company) immediately prior to the time of
effectiveness of such transaction; or
(2) acquired by the Successor Corporation at or after the time
of effectiveness of such transaction, except, in either case, properties
acquired from the Company in or as a result of such transaction and
improvements, extensions and additions to such properties and renewals,
replacements and substitutions of or for any part or parts thereof.
SECTION 1304. Release of Company upon Conveyance or Other Transfer.
In the case of a conveyance or other transfer to any Person or Persons
as contemplated in Section 1301, upon the satisfaction of all the conditions
specified in Section 1301, the Company (such term being used in this Section
without giving effect to such transaction) shall be released and discharged from
all obligations and covenants under this Indenture and on and under all
Securities then Outstanding (unless the Company shall have delivered to the
Trustee an instrument in which it shall waive such release and discharge) and
the Trustee shall acknowledge in writing that the Company has been so released
and discharged.
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SECTION 1305. Merger into Company; Extent of Lien Hereof.
(1) Nothing in this Indenture shall be deemed to prevent or
restrict any consolidation or merger after the consummation of which the Company
would be the surviving or resulting corporation or any conveyance or other
transfer, or lease, subject to the Lien of this Indenture, of any part of the
Mortgaged Property which does not constitute the entirety, or substantially the
entirety, thereof.
(2) Unless, in the case of a consolidation or merger described
in clause (1) of this Section, an indenture supplemental hereto shall otherwise
provide, this Indenture shall not become or be, or be required to become or be,
a Lien upon any of the properties acquired by the Company in or as a result of
such transaction or any improvements, extensions or additions to such properties
or any renewals, replacements or substitutions of or for any part or parts
thereof.
ARTICLE FOURTEEN.
SUPPLEMENTAL INDENTURES
SECTION 1401. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Manager Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form reasonably
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, or successive successions, and the assumption by any such successor of
the covenants, agreements and obligations of the Company herein and in the
Securities, all as provided in Article Thirteen; or
(2) to add one or more covenants of the Company or other
provisions for the benefit of the Holders of, or to remain in effect only so
long as there shall be Outstanding, all or any series of Securities, or any
Tranches thereof (and if such covenants are to be for the benefit of less than
all series of Securities, stating that such covenants are expressly being
included solely for the benefit of such series), or to surrender any right or
power herein conferred upon the Company; or
(3) to correct or amplify the description of any property at
any time subject to the Lien of this Indenture; or better to assure, convey and
confirm unto the Trustee any property subject or required to be subjected to the
Lien of this Indenture; or to subject to the Lien of this Indenture additional
property (including property of Persons other than the Company), to specify any
additional Permitted Liens with respect to such additional property and to
modify Section 802 in order to specify therein any additional items with respect
to such additional property; or
(4) to establish the form or terms of Securities of any series
or Tranche as permitted by Sections 201 and 301; or
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(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
1111; or
(6) to provide for the procedures required to permit the
Company to utilize, at its option, a non-certificated system of registration for
all, or any series or Tranche of, the Securities; or
(7) to change any place or places where (A) the principal of
and premium, if any, and interest, if any, on all or any series of Securities,
or any Tranche thereof, shall be payable, (B) all or any series of Securities,
or any Tranche thereof, may be surrendered for registration of transfer, (C) all
or any series of Securities, or any Tranche thereof, may be surrendered for
exchange and (D) notices and demands to or upon the Company in respect of all or
any series of Securities, or any Tranche thereof, and this Indenture may be
served; or
(8) to cure any ambiguity, to correct or supplement any
provision in this Indenture which may be defective or inconsistent with any
other provision herein, or to make any other additions to, deletions from or
other changes to the provisions under this Indenture, provided that such
additions, deletions and/or other changes shall not adversely affect the
interests of the Holders of Securities of any series or Tranche in any material
respect; or
(9) to provide for the authentication and delivery of bearer
bonds and coupons appertaining thereto representing interest, if any, thereon
and for the procedures for the registration, exchange and replacement thereof
and for the giving of notice to, and the solicitation of the vote or consent of,
the Holders thereof, and for any and all other matters incidental thereto; or
(10) to comply with the rules or regulations of any securities
exchange or automated quotation system on which any of the Securities may be
listed or traded; or
(11) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to this Indenture such other provisions as
may be expressly permitted by the Trust Indenture Act, excluding, however the
provisions referred to in Section 316(a)(2) of the Trust Indenture Act as in
effect at the date as of which this instrument was executed or any corresponding
provision in any similar federal statute hereafter enacted.
Without limiting the generality of the foregoing, if the Trust Indenture Act as
in effect at the date of the execution and delivery of this Indenture, as
originally executed and delivered, or at any time thereafter shall be amended
and if any such amendment shall require one or more changes to any provisions
hereof or the inclusion herein of any additional provisions, or shall by
operation of law be deemed to effect such changes or incorporate such provisions
by reference or otherwise, this Indenture shall be deemed to have been amended
so as to conform to such amendment to the Trust Indenture Act, and the Company
and the Trustee may, without the
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consent of any Holders, enter into an indenture supplemental hereto to evidence
such amendment hereof.
SECTION 1402. Supplemental Indentures With Consent of Holders.
Subject to the provisions of Section 1401, with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities of all series then Outstanding under this Indenture, considered as
one class, by Act of said Holders delivered to the Company and the Trustee, the
Company and the Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture; provided, however, that if
there shall be Securities of more than one series Outstanding hereunder and if a
proposed supplemental indenture shall directly affect the rights of the Holders
of Securities of one or more, but less than all, of such series, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if a proposed
supplemental indenture shall directly affect the rights of the Holders of
Securities of one or more, but less than all, of such Tranches, then the consent
only of the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all Tranches so directly affected, considered as one
class, shall be required; and provided, further, that no such supplemental
indenture shall:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or the amount of any
installment of interest thereon or change the method of calculating such rate or
any premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security or any other Security which
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 1002, or change the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date) without the consent of the Holder of such Security; or
(2) permit the creation of any Lien (not otherwise permitted
hereby) ranking prior to the Lien of this Indenture with respect to all or
substantially all of the Mortgaged Property, or (except by virtue of a
supplemental indenture described in clause (9) in Section 1401) terminate the
Lien of this Indenture on all or substantially all of the Mortgaged Property or
deprive the Holders of the benefit of the Lien of this Indenture, without, in
any such case, the consent of the Holders of all Securities then Outstanding; or
(3) reduce the percentage in principal amount of the
Outstanding Securities of any series, or any Tranche thereof, the consent of the
Holders of which is required for any such supplemental indenture, or the consent
of the Holders of which is required for any waiver (of compliance with any
provision of this Indenture or any default hereunder and its consequence), or
reduce the requirements for quorum or voting provided for in this Indenture
without the consent of the Holder of each Outstanding Security of such series;
or
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(4) modify any of the provisions of this Section 1402, Section
1017 or Section 609, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived, without
the consent of the Holder of each Outstanding Security affected thereby;
provided, however, that this clause shall not be deemed to require the consent
of any Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section 1402 and Section 609, or the deletion of
this proviso, in accordance with the requirements of Sections 1111 and 1401(5).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of, or that is to remain in effect only so long as there shall be
Outstanding, one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series or Tranche.
It shall not be necessary for any Act of Holders under this Section
1402 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 1403. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Fourteen or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 1101) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 1404. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
Fourteen, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 1405. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Fourteen
shall conform to the requirements of the Trust Indenture Act.
SECTION 1406. Reference in Securities to Supplemental Indentures.
Securities of any series, or any Tranche thereof, authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article Fourteen may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any series, or
any Tranche thereof, so modified as to conform, in the opinion of the Trustee
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and the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series or Tranche.
SECTION 1407. Modification Without Supplemental Indenture.
To the extent, if any, that the terms of any particular series of
Securities shall have been established in or pursuant to a Manager Resolution or
an Officer's Certificate pursuant to a supplemental indenture or a Manager
Resolution as contemplated by Section 301, and not in a supplemental indenture,
additions to, changes in or the elimination of any of such terms may be effected
by means of a supplemental Manager Resolution or a supplemental Officer's
Certificate, as the case may be, delivered to, and accepted by, the Trustee,
provided, however, that such supplemental Manager Resolution or supplemental
Officer's Certificate shall not be accepted by the Trustee or otherwise be
effective unless all conditions set forth in this Indenture which would be
required to be satisfied if such additions, changes or elimination were
contained in a supplemental indenture shall have been appropriately satisfied.
Upon the acceptance thereof by the Trustee, any such supplemental Manager
Resolution or supplemental Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1404 and 1406 and a
"supplemental indenture", "indenture supplemental" to this Indenture or
"instrument" supplemental to this Indenture for purposes of Section 608.
ARTICLE FIFTEEN.
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of one or more, or all, series, or
any Tranche or Tranches thereof, may be called at any time and from time to time
pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series or Tranches.
SECTION 1502. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series, or any Tranche or Tranches thereof,
for any purpose specified in Section 1501, to be held at such time and (except
as provided in clause (2) of this Section 1502) at such place in the Borough of
Manhattan, the City of New York, as the Trustee shall determine, or, with the
approval of the Company, at any other place. Notice of every such meeting,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 109, not less than twenty-one (21) nor more than one hundred
eighty (180) days prior to the date fixed for the meeting.
(2) The Trustee may be asked to call a meeting of the Holders
of Securities of one or more, or all, series, or any Tranche or Tranches
thereof, by the Company or by the Holders of thirty-three percentum (33%) in
aggregate principal amount of all of such series and Tranches, considered as one
class, for any purpose specified in Section 1501, by written request
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setting forth in reasonable detail the action proposed to be taken at the
meeting. If the Trustee shall have been asked by the Company to call such a
meeting, the Company shall determine the time and place for such meeting and may
call such meeting by giving notice thereof in the manner provided in clause (1)
of this Section, or shall direct the Trustee, in the name and at the expense of
the Company, to give such notice. If the Trustee shall have been asked to call
such a meeting by Holders in accordance with this clause (2), and the Trustee
shall not have given the notice of such meeting within twenty-one (21) days
after receipt of such request or shall not thereafter proceed to cause the
meeting to be held as provided herein, then the Holders of Securities of such
series and Tranches, in the principal amount above specified, may determine the
time and the place in the Borough of Manhattan, The City of New York, or in such
other place as shall be determined or approved by the Company, for such meeting
and may call such meeting for such purposes by giving notice thereof as provided
in clause (1) of this Section.
(3) Any meeting of Holders of Securities of one or more, or
all, series, or any Tranche or Tranches thereof, shall be valid without notice
if the Holders of all Outstanding Securities of such series or Tranches are
present in person or by proxy and if representatives of the Company and the
Trustee are present, or if notice is waived in writing before or after the
meeting by the Holders of all Outstanding Securities of such series, or any
Tranche or Tranches thereof, or by such of them as are not present at the
meeting in person or by proxy, and by the Company and the Trustee.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of one
or more, or all, series, or any Tranche or Tranches thereof, a Person shall be
(a) a Holder of one or more Outstanding Securities of such series or Tranches or
(b) a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities of such series or Tranches by such
Holder or Holders. The only Persons who shall be entitled to attend any meeting
of Holders of Securities of any series or Tranche shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of the series and Tranches with respect to which a
meeting shall have been called as herein before provided, considered as one
class, shall constitute a quorum for a meeting of Holders of Securities of such
series and Tranches; provided, however, that if any action is to be taken at
such meeting which this Indenture expressly provides may be taken by the Holders
of a specified percentage, which is less than a majority, in principal amount of
the Outstanding Securities of such series and Tranches, considered as one class,
the Persons entitled to vote such specified percentage in principal amount of
the Outstanding Securities of such series and Tranches, considered as one class,
shall constitute a quorum. In the absence of a quorum within one hour of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series and Tranches, be dissolved. In
any other case the meeting may be adjourned for such period as may be determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned
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meeting, such adjourned meeting may be further adjourned for such period as may
be determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Except as provided by Section 1505, notice of the reconvening
of any meeting adjourned for more than thirty (30) days shall be given as
provided in Section 109 not less than ten (10) days prior to the date on which
the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series and Tranches
which shall constitute a quorum.
Except as limited by Section 1402, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of the
series and Tranches with respect to which such meeting shall have been called,
considered as one class; provided, however, that, except as so limited, any
resolution with respect to any action which this Indenture expressly provides
may be taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of such series and
Tranches, considered as one class, may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of such series and Tranches, considered as one
class.
Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities of the series and Tranches with respect to which such
meeting shall have been held, whether or not present or represented at the
meeting.
SECTION 1505. Attendance at Meetings; Determination of Voting Rights; Conduct
and Adjournment of Meetings.
(1) Attendance at meetings of Holders may be in person or by
proxy; and, to the extent permitted by law, any such proxy shall remain in
effect and be binding upon any future Holder of the Securities with respect to
which it was given unless and until specifically revoked by the Holder or future
Holder (except as provided in Section 107) of such Securities before being
voted.
(2) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders in regard to proof of the holding of such Securities and
of the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations and approved by the Company, the
holding of Securities shall be proved in the manner specified in Section 107 and
the appointment of any proxy shall be proved in the manner specified in Section
107. Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof
specified in Section 107 or other proof.
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(3) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders as provided in Section 1502(2), in which case the
Company or the Holders of Securities of the series and Tranches calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of all series and Tranches represented at the
meeting, considered as one class.
(4) At any meeting each Holder or proxy shall be entitled to
one vote for each One Thousand Dollars ($1,000) principal amount of Outstanding
Securities held or represented by such Holder; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Security challenged as
not Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder of a
Security or proxy.
(5) Any meeting duly called pursuant to Section 1502 at which
a quorum is present may be adjourned from time to time by Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities of
all series and Tranches represented at the meeting, considered as one class; and
the meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the Holders
or of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities, of the series and Tranches with respect
to which the meeting shall have been called, held or represented by them. The
permanent chairman of the meeting shall appoint two (2) inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to such record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that such notice was given as provided in Section 1502
and, if applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 1507. Action Without Meeting.
In lieu of a vote of Holders at a meeting as herein before contemplated
in this Article, any request, demand, authorization, direction, notice, consent,
waiver or other action may be made, given or taken by Holders by one or more
written instruments as provided in Section 106.
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ARTICLE SIXTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND
EMPLOYEES
SECTION 1601. Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, member, manager,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or any predecessor or successor corporation or company, either
directly or through the Company or any predecessor or successor corporation or
company or any Successor Corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations of the Company, and that no
such personal liability whatsoever shall attach to, or is or shall be incurred
by, the incorporators, members, managers, stockholders, officers, directors, or
employees, as such, of the Company or any predecessor or successor corporation
or company, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, member, manager, stockholder, officer,
director or employee, as such, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such
Securities.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
121
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
By: /s/ Rufus S. Scott
------------------------------------
Name: Rufus S. Scott
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By:
------------------------------------
Name:
Title:
122
Exhibit A
Real Property
That certain Mortgage and Deed of Trust dated as of November 1, 1944
from Houston Lighting & Power Company to South Texas Commercial National Bank of
Houston, filed for record in the office of the Secretary of State of the State
of Texas (the "Records") on February 19, 1974 under File No. 74-00016051, as
amended and supplemented by the following sixty-five (65) supplemental
indentures, filed in the Records on the respective dates and under the
respective file numbers indicated (the following described Notices of Merger and
Name Changes having been filed in the Records on the respective dates and under
the respective file numbers indicated as well):
<Table>
<Caption>
Supplemental Indenture Date of Filing File No.
---------------------- -------------- --------
First Supplemental Indenture February 19, 1974 00-00019587
Second Supplemental Indenture February 19, 1974 00-00019591
Third Supplemental Indenture February 19, 1974
Fourth Supplemental Indenture February 19, 1974 00-00019593
Fifth Supplemental Indenture February 19, 1974 00-00019595
Sixth Supplemental Indenture February 19, 1974 00-00019586
Seventh Supplemental Indenture February 19, 1974 00-00019597
Eighth Supplemental Indenture February 19, 1974 00-00019589
Ninth Supplemental Indenture February 19, 1974 00-00019588
Tenth Supplemental Indenture February 19, 1974 00-00019581
Eleventh Supplemental Indenture February 19, 1974 00-00019598
Twelfth Supplemental Indenture February 19, 1974 00-00019592
Thirteenth Supplemental Indenture February 19, 1974 00-00019593
Fourteenth Supplemental Indenture February 19, 1974 00-00019596
Fifteenth Supplemental Indenture February 19, 1974 00-00019590
</Table>
1
<Table>
Sixteenth Supplemental Indenture February 19, 1974 00-00019585
Seventeenth Supplemental Indenture February 19, 1974 00-00019584
Eighteenth Supplemental Indenture February 19, 1974 00-00019583
Nineteenth Supplemental Indenture February 19, 1974 00-00019582
Twentieth Supplemental Indenture October 8, 1976 00-00019600
Twenty-First Supplemental Indenture September 30, 1977 00-00019601
Twenty-Second Supplemental Indenture September 1, 1978 00-00019602
Twenty-Third Supplemental Indenture December 7, 1978 00-00019603
Twenty-Fourth Supplemental Indenture December 12, 1979 00-00019604
Twenty-Fifth Supplemental Indenture June 5, 1980 00-00019605
Twenty-Sixth Supplemental Indenture February 5, 1981 00-00019606
Twenty-Seventh Supplemental Indenture March 4, 1982 00-00019607
Twenty-Eighth Supplemental Indenture March 10, 1983 00-00019608
Twenty-Ninth Supplemental Indenture November 4, 1985 00-00019609
Thirtieth Supplemental Indenture November 24, 1986 00-00019610
Thirty-First Supplemental Indenture November 24, 1986 94-00677858
Thirty-Second Supplemental Indenture March 19, 1987 00-00019611
Thirty-Third Supplemental Indenture January 27, 1988 00-00019614
Thirty-Fourth Supplemental Indenture January 27, 1988 00-00019613
Thirty-Fifth Supplemental Indenture January 27, 1988 00-00019612
Thirty-Sixth Supplemental Indenture June 21, 1988 00-00019615
Thirty-Seventh Supplemental Indenture June 21, 1988 00-00019616
Thirty-Eighth Supplemental Indenture July 18, 1988 00-00019617
Thirty-Ninth Supplemental Indenture October 17, 1988 00-00019618
Fortieth Supplemental Indenture January 11, 1989 74-00648711
</Table>
2
<Table>
Forty-First Supplemental Indenture February 8, 1989 74-00661896
Forty-Second Supplemental Indenture February 14, 1989 94-00677859
Forty-Third Supplemental Indenture February 14, 1989 94-00677860
Forty-Fourth Supplemental Indenture May 24, 1989 74-00712229
Forty-Fifth Supplemental Indenture July 6, 1989 74-00730399
Forty-Sixth Supplemental Indenture July 6, 1989 74-00730400
Forty-Seventh Supplemental Indenture July 6, 1989 74-00730401
Forty-Eighth Supplemental Indenture November 8, 1989 74-00565762
Forty-Ninth Supplemental Indenture December 20, 1989 74-00583642
Fiftieth Supplemental Indenture December 20, 1989 74-00583643
Fifty-First Supplemental Indenture March 26, 1991 91-00046447
Fifty-Second Supplemental Indenture March 25, 1992 92-00645424
Fifty-Third Supplemental Indenture March 25, 1992 92-00645425
Fifty-Fourth Supplemental Indenture April 6, 1992 92-00651721
Fifty-Fifth Supplemental Indenture April 6, 1992 92-00651722
Fifty-Sixth Supplemental Indenture October 7, 1992 92-00731509
Fifty-Seventh Supplemental Indenture October 7, 1992 92-00731541
Fifty-Eighth Supplemental Indenture February 26, 1993 93-00628739
Fifty-Ninth Supplemental Indenture March 23, 1993 94-00677861
Sixtieth Supplemental Indenture July 12, 1993 94-00677862
Sixty-First Supplemental Indenture December 15, 1995 95-00748203
Sixty-Second Supplemental Indenture December 15, 1995 95-00748204
Sixty-Third Supplemental Indenture December 30, 1993 95-00750337
Sixty-Fourth Supplemental Indenture July 17, 1995 95-00685914
Sixty-Fifth Supplemental Indenture July 17, 1995 95-00685915
</Table>
3
<Table>
<Caption>
Notice of Merger and Name Change Date of Filing File No.
- -------------------------------- -------------- --------
Houston Industries Incorporated September 4, 1997 97-00708206
Reliant Energy, Incorporated May 26, 1999 99-00695760
CenterPoint Energy Houston Electric, LLC September 11, 2002 03-00012545
</Table>
4