Document:

ex4_18.htm

Exhibit 4.18

 

After Recording Return to:

 

Davis Wright Tremaine, LLP

1201 Third Avenue, Suite 2200

Seattle, WA  98101

Attention:  Donald E. Percival

 

 

 

SECOND AMENDED AND RESTATED

INDENTURE OF TRUST

 

Dated as of January 20, 2011

 

between

 

CHUGACH ELECTRIC ASSOCIATION, INC.,

5601 Electron Drive, Anchorage, Alaska 99519,

TRUSTOR

 

AND

 

U.S. BANK NATIONAL ASSOCIATION,

1420 Fifth Avenue, 7th Floor, Seattle, Washington 98101

Attn: Corporate Trust Services,

 

TRUSTEE

 

FIRST MORTGAGE OBLIGATIONS

 

THIS INSTRUMENT CONSTITUTES A DEED OF TRUST,

SECURITY AGREEMENT AND FIXTURE FILING

COVERING REAL AND PERSONAL PROPERTY

(INCLUDING AFTER-ACQUIRED PROPERTY) OF A

TRANSMITTING UTILITY, AND

CONTAINS A FUTURE ADVANCE PROVISION

 

 

  

  

  

 

TABLE OF CONTENTS

 

	
RECITALS OF THE COMPANY

	
1

	 	 
	
GRANTING CLAUSES

	
2

	 	 
	
GRANTING CLAUSE FIRST

	
2

	 	 
	
GRANTING CLAUSE SECOND

	
2

	 	 
	
GRANTING CLAUSE THIRD

	
3

	 	 
	
GRANTING CLAUSE FOURTH

	
3

	 	 
	
EXCEPTED PROPERTY

	
3

	 	 
	
EXCLUDABLE PROPERTY

	
6

 

	1.   DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	
7

	 	 
	
    1.1.

	
Definitions

	
7

	
    1.2.

	
Acts of Holders

	
31

	
    1.3.

	
Notices, etc., to Trustee and Company

	
32

	
    1.4.

	
Notices to Holders; Waiver

	
33

	
    1.5.

	
Form and Contents of Documents Delivered to Trustee

	
33

	
    1.6.

	
Compliance Certificates and Opinions

	
35

	
    1.7.

	
Conflict With Trust Indenture Act

	
35

	
    1.8.

	
Effect Headings and Table of Contents

	
35

	
    1.9.

	
Successors and Assigns

	
36

	
    1.10.

	
Severability clause

	
36

	
    1.11.

	
Benefits of Indenture

	
36

	
    1.12.

	
Governing Law

	
36

	
    1.13.

	
Action by Credit Enhancer When Action by Holders Required

	
36

	
    1.14.

	
Bank Holidays

	
36

	
    1.15.

	
Maturity of Obligations and Indenture

	
37

	
    1.16.

	
Acceptance of Trust by Trustee

	
37

	
    1.17.

	
Investment of Cash Held by Trustee

	
37

	
    1.18.

	
Principal Amount of Certain Obligations

	
38

	
    1.19.

	
Security Agreement and Financing Statement

	
38

	 	 	 
	2.   FORMS OF OBLIGATIONS	
39

	 	 	 
	
    2.1.

	
Forms Generally

	
39

	
    2.2.

	
Form of Trustee’s Certificate of Authentication for Obligations

	
39

	 	 	 
	
3.   THE OBLIGATIONS

	
39

	 	 	 
	
    3.1.

	
Terms and Forms of Pre-Existing Obligations

	
39

	
    3.2.

	
General Title; General Limitations; Issuable in Series

	
40

	
    3.3.

	
Terms of Particular Series

	
40

	
    3.4.

	
Form and Denominations

	
42

	
    3.5.

	
Execution, Authentication, Delivery and Dating

	
42

	
    3.6.

	
Temporary Obligations

	
43

	
    3.7.

	
Registration; Registration of Transfer and Exchange

	
43

	
    3.8.

	
Mutilated, Destroyed, Lost and Stolen Obligations

	
44

  

- i -

  

 

	
    3.9.

	
Payment of Interest; Interest Rights Preserved

	
45

	
    3.10.

	
Persons Deemed Owners

	
46

	
    3.11.

	
Cancellation

	
47

	 	 	 
	4.   EXISTING OBLIGATIONS	
47

	 	 	 
	
    4.1.

	
Effect of Amendment and Restatement; Terms

	
47

	 	 	 
	5.   AUTHENTICATION AND DELIVERY OF ADDITIONAL OBLIGATIONS	
47

	 	 	 
	
    5.1.

	
General Provisions

	
47

	
    5.2.

	
Authentication and Delivery of Additional Obligations Upon Basis of Bondable Additions

	
49

	
    5.3.

	
Authentication and Delivery of Additional Obligations Upon Basis of Retirement or Defeasance of Obligations or Principal Payments on Obligations

	
58

	
    5.4.

	
Authentication and Delivery of Additional Obligations Upon Deposit of Cash With Trustee

	
60

	
    5.5.

	
Authentication and Delivery of Obligations Upon Basis of Designated Qualifying Securities

	
61

	
    5.6.

	
Authentication and Delivery of Conditional Obligations; Loans or Advances Thereunder

	
63

	
    5.7.

	
Authentication and Delivery of Credit Enhancement Obligations

	
64

	
    5.8.

	
Withdrawal of Deposited Cash

	
65

	
    5.9.

	
Authentication and Delivery of Additional Obligations Upon Basis of Certified Progress Payments

	
67

	
    5.10.

	
Conversion of Additional Obligations

	
68

	 	 	 
	6.   RELEASES	
69

	 	 	 
	
    6.1.

	
Right of Company to Possess and Operate Trust Estate; Dispositions Without Release

	
69

	
    6.2.

	
Releases

	
72

	
    6.3.

	
Eminent Domain

	
77

	
    6.4.

	
Written Disclaimer of Trustee

	
78

	
    6.5.

	
Powers Exercisable Notwithstanding Event of Default

	
78

	
    6.6.

	
Powers Exercisable by Trustee or Receiver

	
78

	
    6.7.

	
Purchaser Protected

	
79

	
   6.8.

	
Disposition of Collateral On Discharge of Prior Liens

	
79

	
   6.9.

	
Disposition of Obligations Received

	
79

	
    6.10.

	
Excludable Property

	
80

	 	 	 
	7.   APPLICATION OF TRUST MONEYS	
80

	 	 	 
	
    7.1.

	
“Trust Moneys” Defined

	
80

	
    7.2.

	
Withdrawal on Basis of Bondable Additions

	
80

	
    7.3.

	
Withdrawal on Basis of Retirement or Defeasance of Obligations or Principal Payments on Obligations

	
81

	
    7.4.

	
Withdrawal on Basis of Designated Qualifying Securities

	
82

	
    7.5.

	
Withdrawal on Basis of Certified Progress Payments

	
82

	
    7.6.

	
Retirement of Obligations or Payments on Obligations

	
83

	
    7.7.

	
Withdrawal of Insurance Proceeds

	
85

	
    7.8.

	
Amounts under $100,000

	
88

	
    7.9.

	
Powers Exercisable Notwithstanding Default

	
88

	
    7.10.

	
Powers Exercisable by Trustee or Receiver

	
88

	
    7.11.

	
Disposition of Obligations Retired

	
89

	 	 	 
	8.   DEFEASANCE	
89

	 	 	 
	
    8.1.

	
Termination of Company’s Obligations

	
89

  

- ii -

  

 

	
    8.2.

	
Application of Deposited Money and Money From Defeasance Securities

	
91

	
    8.3.

	
Repayment to Company

	
92

	
    8.4.

	
Reinstatement

	
92

	 	 	 
	9.   EVENTS OF DEFAULT AND REMEDIES	
93

	 	 	 
	
   9.1.

	
Events of Default

	
93

	
    9.2.

	
Acceleration of Maturity Rescission and Annulment

	
95

	
    9.3.

	
Entry

	
96

	
    9.4.

	
Power of Sale; Suits for Enforcement

	
96

	
    9.5.

	
Incidents of Sale

	
97

	
    9.6.

	
Covenant to Pay Trustee Amounts Due on Obligations and Right of Trustee to Judgment

	
98

	
    9.7.

	
Application of Money Collected

	
99

	
    9.8.

	
Receiver

	
101

	
    9.9.

	
Trustee May File Proofs of Claim

	
101

	
    9.10.

	
Trustee May Enforce Claims Without Possession of Obligations

	
102

	
    9.11.

	
Limitation on Suits

	
102

	
    9.12.

	
Unconditional Right of Holders to Receive Principal, Premium and Interest

	
103

	
    9.13.

	
Restoration of Positions

	
103

	
    9.14.

	
Rights and Remedies Cumulative

	
103

	
    9.15.

	
Delay or Omission Not Waiver

	
103

	
   9.16.

	
Control by Holders

	
104

	
    9.17.

	
Waiver of Past Defaults

	
104

	
    9.18.

	
Undertaking for Costs

	
105

	
   9.19.

	
Waiver of Appraisement and Other Laws

	
105

	
   9.20.

	
Suits to Protect the Trust Estate

	
106

	
    9.21.

	
Remedies Subject to Applicable Law

	
106

	
    9.22.

	
Principal Amount of Original Issue Discount Obligation

	
106

	
   9.23.

	
Default Not Affecting All Series of Obligations

	
106

	
    9.24.

	
Defaults Under Qualifying Securities Indentures

	
107

	 	 	 
	10.   THE TRUSTEE	
107

	 	 	 
	
    10.1.

	
Certain Duties and Responsibilities

	
107

	
    10.2.

	
Notice of Defaults

	
108

	
    10.3.

	
Certain Rights of Trustee

	
108

	
    10.4.

	
Not Responsible for Recitals Application of Proceeds or Contents of Disclosure Materials

	
109

	
    10.5.

	
May Hold Obligations

	
110

	
    10.6.

	
Money Held in Trust

	
110

	
    10.7.

	
Compensation and Reimbursement

	
110

	
    10.8.

	
Disqualification; Conflicting Interests

	
111

	
    10.9.

	
Corporate Trustee Required; Eligibility

	
116

	
    10.10.

	
Resignation and Removal; Appointment of Successor

	
117

	
    10.11.

	
Acceptance of Appointment by Successor

	
119

	
   10.12.

	
Merger, Conversion, Consolidation or Succession to Business

	
119

	
    10.13.

	
Preferential Collection of Claims against Company

	
119

	
    10.14.

	
Co-trustees and Separate Trustees

	
123

	
    10.15.

	
Authenticating Agent

	
125

	 	 	 
	11.   HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY	
126

	 	 	 
	
    11.1.

	
Company to Furnish Trustee Semi-Annual Lists of Holders

	
126

	
   11.2.

	
Preservation of Information; Communications to Holders

	
126

	
    11.3.

	
Reports by Trustee

	
128

	
   11.4.

	
Reports by Company

	
130

  

- iii -

  

 

	12.   CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER	
131

	 	 	 
	
   12.1.

	
Consolidation, Merger, Conveyance or Transfer only on Certain Terms

	
131

	
   12.2.

	
Successor Person Substituted

	
132

	 	 	 
	13.   SUPPLEMENTAL INDENTURES	
132

	 	 	 
	
    13.1.

	
Supplemental Indentures Without Consent of Holders

	
132

	
   13.2.

	
Supplemental Indentures With Consent of Holders

	
134

	
    13.3.

	
Execution of Supplemental Indentures

	
136

	
    13.4.

	
Effect of Supplemental Indentures

	
136

	
   13.5.

	
Conformity With Trust Indenture Act

	
136

	
    13.6.

	
Reference in Obligations to Supplemental Indentures

	
136

	 	 	 
	14.   COVENANTS	
136

	 	 	 
	
    14.1.

	
Payment of Principal, Premium and Interest

	
136

	
    14.2.

	
Maintenance of Office or Agency

	
137

	
    14.3.

	
Money for Obligation Payments to be Held in Trust; Repayment of Unclaimed Money

	
137

	
    14.4.

	
Warranty of Title

	
138

	
    14.5.

	
After-Acquired Property; Further Assurances; Recording

	
139

	
    14.6.

	
Limitations on Liens; Payment of Taxes

	
140

	
    14.7.

	
Maintenance of Properties

	
141

	
    14.8.

	
To Insure

	
142

	
    14.9.

	
Corporate Existence

	
143

	
    14.10.

	
To Keep Books; Inspection by Trustee

	
143

	
    14.11.

	
Use of Trust Moneys and Advances by Trustee

	
143

	
   14.12.

	
Statement as to Compliance

	
144

	
    14.13.

	
Waiver of Certain Covenants

	
144

	
    14.14.

	
Rate Covenant

	
144

	
   14.15.

	
Distributions to Members

	
145

	 	 	 
	15.   REDEMPTION OF OBLIGATIONS; SINKING FUNDS	
145

	 	 	 
	
    15.1.

	
General Applicability of Sections 15.01 through 15.07

	
145

	
    15.2.

	
Election to Redeem; Notice to Trustee

	
145

	
    15.3.

	
Selection by Trustee of Obligations to be Redeemed

	
146

	
    15.4.

	
Notice of Redemption

	
147

	
    15.5.

	
Deposit of Redemption Price

	
148

	
    15.6.

	
Obligations Payable on Redemption Date

	
149

	
    15.7.

	
Obligations Redeemed in Part

	
149

	
    15.8.

	
Applicability of Sections  15.08 through 15.10

	
150

	
   15.9.

	
Satisfaction of Sinking Fund Payments with Obligations

	
150

	
    15.10.

	
Redemption of Obligations for Sinking Fund

	
150

	 	 	 
	16.   CONTROL OF PLEDGED SECURITIES	
151

	 	 	 
	
    16.1.

	
Pledged Securities Deposited With Trustee

	
151

	
    16.2.

	
Form of Holding

	
151

	
    16.3.

	
Right of Trustee to Preserve Issuers; Directors’ Qualifying Shares

	
151

	
    16.4.

	
Income Before Event of Default

	
152

	
    16.5.

	
Income After Event of Default

	
152

	
    16.6.

	
Principal and Other Payments

	
153

	
   16.7.

	
Voting

	
154

	
   16.8.

	
Limitations on Issuance of Voting Stock or Grant Membership Interests of Pledged Subsidiaries

	
154

  

- iv -

  

 

	
    16.9.

	
Increase, Reduction or Reclassification of Stock; Dissolution; Consolidation, Etc

	
155

	
    16.10.

	
Enforcement

	
156

	
    16.11.

	
Acquisition of Property of Issuers of Pledged Securities

	
156

	
    16.12.

	
Reorganization

	
156

	
    16.13.

	
Renewal and Refunding

	
157

	
    16.14.

	
Expenses

	
157

	
   16.15.

	
Opinion of Counsel

	
158

	 	 	 
	17.   QUALIFYING SECURITIES; QUALIFYING SECURITIES INDENTURES	
158

	 	 	 
	
    17.1.

	
Registration and Ownership of Designated Qualifying Securities

	
158

	
   17.2.

	
Payments on Qualifying Securities

	
158

	
    17.3.

	
Surrender or Redesignation of Designated Qualifying Securities

	
159

	
   17.4.

	
No Transfer of Qualifying Securities

	
160

	
    17.5.

	
Reorganization

	
160

  

- v -

  

 

THIS SECOND AMENDED AND RESTATED INDENTURE OF TRUST, dated as of January 20, 2011, is between CHUGACH ELECTRIC ASSOCIATION, INC., an Alaska electric cooperative, as Trustor (hereinafter called the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as Trustee (hereinafter called the “Trustee”).

 

	
  

	
1.

	
RECITALS OF THE COMPANY

 

The Company has previously entered into the Amended and Restated Indenture, dated as of April 1, 2001, with U.S. Bank Trust National Association (as amended and supplemented, the “Existing Indenture”), pursuant to which the Company has issued obligations of various series (the “Pre-Existing Obligations”).  The Pre-Existing Obligations Outstanding as of the date hereof consist of $150,000,000 aggregate principal amount of New Bonds, 2001 Series A, $120,000,000 aggregate principal amount of New Bonds, 2002 Series A, and a 2011 CoBank Note in the aggregate principal amount of $37,301,818.50 issued to CoBank, ACB.  The Trustee is the successor by merger to U.S. Bank Trust National Association as the trustee under the Existing Indenture.

 

The Company may from time to time execute and deliver the Pre-Existing Obligations and may authorize the creation, execution and delivery from time-to-time of new bonds, notes and other obligations for the payment of money as hereinafter provided issued on or after the date hereof in one or more series (hereinafter called the “Additional Obligations”; the Pre-Existing Obligations and the Additional Obligations hereinafter called, collectively, the “Obligations”), that, together with all Pre-Existing Obligations Outstanding, shall become governed by and subject to the terms and conditions stated in this Second Amended and Restated Indenture as of the date set forth above.

 

All things have been done which are necessary to amend and restate the Existing Indenture on the terms and conditions set forth herein and to make Obligations executed by the Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of the Company, and to constitute this Indenture a valid mortgage and deed of trust, security agreement and financing statement and contract for the security of the Obligations, in accordance with the terms of the Obligations and this Indenture.

 

Should the indebtedness subject to this Indenture be paid according to the tenor and effect thereof when the same shall become due and payable and should the Company perform all covenants herein contained in a timely manner, then this Indenture shall, upon the request of the Company, be cancelled and surrendered, and appropriate reconveyances and termination statements shall be recorded and filed in the relevant public records.

  

- 1 -

  

 

GRANTING CLAUSES

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, to secure the payment of the principal of (and premium, if any) and interest on the Outstanding Secured Obligations (as hereinafter defined) and the performance of the covenants therein and herein contained and to declare the terms and conditions on which the Outstanding Secured Obligations are secured, and in consideration of the premises and the purchase of Obligations by the Holders (as hereinafter defined) of, or loans and other obligations evidenced by, the Obligations, the Company by these presents does grant, bargain, sell, alienate, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set over and confirm to the Trustee, in trust, all property, rights, privileges and franchises of the Company of every kind and description, real, personal or mixed, tangible or intangible, whether now owned or hereafter acquired by the Company, wherever located, and grants a security interest therein for the purposes herein expressed, except any Excepted Property and Excludable Property (each as hereinafter defined) hereinafter expressly excepted from the lien hereof, and including all and singular the following described property, subject in all cases to the rights of the Company under this Indenture:

 

GRANTING CLAUSE FIRST

 

(a)           all of those fee and leasehold interests in real property set forth in Exhibit A attached hereto, subject in each case to those matters set forth in such Exhibit;

 

(b)           all of the Company’s interest in fixtures, easements, permits, licenses and rights-of-way comprising real property, and all other interests in real property of the Company’s System; and

 

(c)           all right, title and interest of the Company in and to those contracts of the Company (i) relating to the ownership, operation or maintenance of any generation, transmission or distribution facility owned, whether solely or jointly, by the Company, (ii) for the sale of electric power and energy by the Company to a member of the Company and having an original term in excess of three years, (iii) for purchase or sale of services for the transmission of electric power and energy by or on behalf of the Company and having an original term in excess of three years, (iv) Qualified EPC Contracts (as hereinafter defined), and (v) the agreements referred to on Exhibit B attached hereto, including in respect of any of the foregoing, any amendments, supplements and replacements thereto;

 

(d)           but excluding any such property relating solely to Excepted Property and Excludable Property.

 

GRANTING CLAUSE SECOND

 

All other property, real, personal or mixed, of whatever kind and description and wheresoever situated, including without limitation all goods, buildings, improvements, plants, systems, works, structures, electric power plants, stations and substations, powerhouses, electric transmission and distribution lines and systems, conduits, towers, poles, wires, cables, office buildings, warehouses, garages, stables, sheds, shops, and all other structures and buildings, machinery, engines, boilers, dynamos, generators, transformers, electric and mechanical appliances, tools and other equipment, apparatus, appurtenances, and all other property of any nature appertaining to any of the plants, systems, business or operations of the Company, whether or not affixed to the realty, used in the operation of any of the premises or the Company’s electric generation, transmission or distribution facilities, or otherwise, which are now owned or acquired by the Company, and all the estate, right, title and interest of every nature whatsoever, at law as well as in equity, of the Company in and to the same and every part thereof, Trust Moneys (as hereafter defined), Designated Qualifying Securities and, with respect to contracts subjected to the lien of this Indenture by paragraph (c) of Granting Clause First, general intangibles and accounts in each case now owned or which may be hereafter acquired by the Company, it being the intention hereof that all property, rights, privileges and franchises now owned by the Company or acquired by the Company after the date hereof shall be as fully embraced within and subjected to the lien hereof as if such property were specifically described herein, but excluding in all cases Excepted Property and Excludable Property, now owned or which may be hereafter acquired by the Company.

  

- 2 -

  

 

GRANTING CLAUSE THIRD

 

Also any Excepted Property or Excludable Property that may, from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien hereof by the Company or by anyone on its behalf; and the Trustee is hereby authorized to receive the same at any time as additional security hereunder.  Such subjection to the lien hereof of any Excepted Property or Excludable Property as additional security may be made subject to any reservations, limitations or conditions which shall be set forth in a written instrument executed by the Company or the person so acting on its behalf or by the Trustee respecting the ownership, use and disposition of such property or the proceeds thereof.

 

GRANTING CLAUSE FOURTH

 

Together with all and singular the tenements, hereditaments and appurtenances belonging or in anywise appertaining to the aforesaid property or any part thereof, with the reversion and reversions, remainder and remainders and all the rents, issues, profits, revenues and other income, products and proceeds of the property subjected or required to be subjected to the lien of this Indenture.

 

EXCEPTED PROPERTY

 

There is, however, expressly excepted and excluded from the lien and operation of this Indenture the following described property of the Company, now owned or hereafter acquired (herein sometimes referred to as “Excepted Property”):

  

- 3 -

  

 

(a)           all cash on hand or in banks or other financial institutions (excluding (i) such cash to the extent it constitutes proceeds of the Trust Estate in which the security interest created by this Indenture is perfected pursuant to the Uniform Commercial Code, for so long as such perfection continues, and (ii) such cash deposited or required to be deposited with the Trustee pursuant to this Indenture), claims, choses in action and judgments, accounts and general intangibles (except with respect to contracts referred to in Granting Clause First), contracts and contract rights and associated general intangibles (except with respect to contracts referred to in Granting Clause First), shares of Stock (including without limitation any interest of the Company in National Rural Utilities Cooperative Finance Corporation or in CoBank, ACB, but excluding Stock in any Subsidiary then issuing Designated Qualifying Securities), Undesignated Qualifying Securities, bonds, notes, repurchase agreements, evidences of indebtedness and other securities and instruments, attributes of an environmental or similar nature that are created or otherwise arise from the generation, purchase or sale of electricity or that result from the avoidance or reduction of the emission of any gas, chemical or other substance (including any and all environmental air quality credits, green credits, renewable energy credits or certificates, carbon credits, emissions reduction credits, certificates, tags, offsets, tax credits, emission allowances, or similar products or rights as well as reporting rights, however entitled, currently existing or later arising under local, state, regional, federal, or international legislation or regulation or voluntary program), bills, patents, patent licenses and other patent rights, patent applications, trade names and trademarks, and service marks other than (i) ”Pledged Securities” (as defined in Article 16), (ii) Designated Qualifying Securities, and (iii) any other property referred to in this  paragraph (a) which is specifically described in Granting Clause First or is by the express provisions of this Indenture subjected or required to be subjected to the lien hereof;

 

(b)           all automobiles, buses, trucks, truck cranes, tractors, trailers, rolling stock, railcars and similar vehicles and movable equipment and all parts, tools, accessories and supplies used in connection with any of the foregoing;

 

(c)           all vessels, boats, barges and other marine equipment, all airplanes, airplane engines and other flight equipment, and all parts, tools, accessories and supplies used in connection with any of the foregoing;

 

(d)           all goods, inventory, wares and merchandise acquired or produced for the purpose of resale in the ordinary course of business (including electricity), all materials and supplies and other personal property which are consumable (otherwise than by ordinary wear and tear) in their use in the operation of the business of the Company, and all hand and other portable tools, equipment and fuel;

 

(e)           all office furniture, equipment and supplies and all data processing, accounting and other computer equipment, software and supplies;

  

- 4 -

  

 

(f)            all leasehold interests of the Company (for other than office purposes) under leases for an original term (including any period for which the Company shall have a right of renewal) of less than five years;

 

(g)           all leasehold interests for office purposes;

 

(h)           all timber separated from the land included in the Trust Estate and all coal, ore, gas, oil and other minerals, mined, extracted or otherwise separated from the land included in the Trust Estate and all electric energy, gas, steam, water and other products generated, produced or purchased;

 

(i)            the last day of the term of each leasehold estate (oral or written) and any agreement therefor, now or hereafter enjoyed by the Company and whether falling within a general or specific description of property herein; PROVIDED, HOWEVER, that the Company covenants and agrees that it will hold each such last day in trust for the use and benefit of the Holders of the Outstanding Secured Obligations;

 

(j)            all permits, licenses, franchises, contracts, agreements, contract rights and other rights not specifically subjected or required to be subjected to the lien hereof by the express provisions of this Indenture, whether now owned or hereafter acquired by the Company, which by their terms or by reason of applicable law would become void or voidable if mortgaged or pledged hereunder by the Company or which cannot be granted, conveyed, mortgaged, transferred or assigned by this Indenture without the consent of other parties whose consent is not secured, or without subjecting the Trustee to a liability not otherwise contemplated by the provisions of this Indenture, or which otherwise may not be, hereby lawfully and effectively granted, conveyed, mortgaged, transferred and assigned by the Company;

 

(k)           any personal property in which a security interest cannot be lawfully perfected under the laws of the United States or of any state in each case by the filing of a Uniform Commercial Code financing statement;

 

(l)            all property, real, mixed or personal, located outside of the State of Alaska which is not specifically described in the Granting Clauses, not specifically subjected or required to be subjected to the lien of this Indenture by any provision hereof, and not part of or used or for use in connection with any property specifically subjected or required to be subjected to the lien hereof by the express provisions hereof;

 

(m)           the property identified in Exhibit C attached hereto; and

 

(n)           all property released from the lien of this Indenture without being sold, exchanged or otherwise disposed of by the Company, as provided in Section 6.2.

  

- 5 -

  

 

PROVIDED, HOWEVER, that (i) if, upon the occurrence of an Event of Default, the Trustee, or any separate trustee or co-trustee appointed under Section 10.14 or any receiver appointed pursuant to statutory provision or order of court, shall have entered into possession of all or substantially all of the Trust Estate, all the Excepted Property described or referred to in the foregoing paragraph (a) through (g), inclusive, then owned or thereafter acquired by the Company shall immediately, and, in the case of any Excepted Property described or referred to in paragraphs (h) through (k), inclusive, upon demand of the Trustee or such other trustee or receiver, become subject to the lien hereof to the extent permitted by law, and the Trustee or such other trustee or receiver may, to the extent permitted by law, at the same time likewise take possession thereof, and (ii) whenever all Events of Default shall have been cured and the possession of all or substantially all of the Trust Estate shall have been restored to the Company, such Excepted Property shall again be excepted and excluded from the lien hereof to the extent and otherwise as hereinabove set forth.

 

EXCLUDABLE PROPERTY

 

There is also, however, expressly excepted and excluded from the foregoing Granting Clauses and the lien and operation of this Indenture all Excludable Property, now owned or hereafter acquired.

 

The Company may, however, pursuant to Granting Clause Third, subject to the lien of this Indenture any Excepted Property or Excludable Property, whereupon the same shall cease to be Excepted Property or Excludable Property.

 

TO HAVE AND TO HOLD all said property, rights, privileges and franchises of every kind and description, real, mixed or personal hereby and hereafter (by Supplemental Indenture or otherwise) granted, bargained, sold, alienated, remised, released, conveyed, assigned, transferred, mortgaged, hypothecated, pledged, set over or confirmed as aforesaid, or agreed or covenanted so to be, together with all the appurtenances thereto appertaining (said properties, rights, privileges and franchises, including any cash and securities hereafter deposited or required to be deposited with the Trustee (other than any such cash which is specifically stated herein not to be deemed part of the Trust Estate) being herein collectively called the “Trust Estate”) unto the Trustee and its successors and assigns forever.

 

SUBJECT, HOWEVER, to (i) Permitted Encumbrances, (ii) to the extent permitted by Section 14.6, as to property hereafter acquired, (a) any duly recorded or perfected Prior Lien that may exist thereon at the date of the acquisition thereof by the Company, and (b) purchase money mortgages, other purchase money liens, chattel mortgages, security agreements, conditional sales agreements or other title retention agreements created by the Company at the time of acquisition thereof, and (iii) defects of title to and encumbrances on property as shown on Exhibit A and existing on the date hereof.

 

BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and proportionate benefit and security of the Holders from time to time of all the Outstanding Secured Obligations without any priority of any Outstanding Secured Obligations over any other Outstanding Secured Obligations and for the enforcement of the payment of Outstanding Secured Obligations in accordance with their terms.

  

- 6 -

  

 

UPON CONDITION that, until the happening of an Event of Default and subject to the provisions of Article 6 and not in limitation of the rights elsewhere provided in this Indenture, the Company shall be permitted and have the right to possess, use, operate and enjoy the Trust Estate, except cash, securities and other personal property deposited, or required to be deposited, with the Trustee and to explore for, mine, extract, produce and dispose of coal, ore, gas, oil and other minerals or natural resources, to harvest standing timber and to collect, receive and use the rents, issues, profits, revenues and other income, products and proceeds of the Trust Estate or the operation of the property constituting part of the Trust Estate.

 

AND IT IS HEREBY COVENANTED AND DECLARED that all Pre-Existing Obligations are to be authenticated and delivered, the Additional Obligations are to be authenticated and delivered and the Trust Estate is to be held and applied by the Trustee, subject to the further covenants, conditions and trusts hereinafter set forth, and the Company does hereby covenant and agree to and with the Trustee, for the equal and proportionate benefit of all Holders of the Outstanding Secured Obligations as follows:

 

	
1.

	
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

	
  

	
1.1.

	
Definitions.

 

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)           The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.

 

(b)           At any time at which this Indenture is qualified or required to be qualified under the Trust Indenture Act, all other terms used herein which are defined therein either directly or by reference therein, have the meanings assigned to them therein.

 

(c)           All accounting terms not otherwise defined herein have the meanings assigned to them, and all determinations and computations herein provided for shall be made, in accordance with Accounting Requirements (as hereinafter defined), and the express reference to “Accounting Requirements” with respect to certain terms, determinations or computations shall not imply that other terms, determinations and computations shall not be defined or made in accordance with “Accounting Requirements”; PROVIDED, HOWEVER, for purposes of all determinations and computations hereunder (i) if the Company elects to adopt Financial Accounting Standards Board Accounting Standards Codification 825, Financial Instruments (or any successor accounting standard) with respect to any indebtedness, such adoption shall be disregarded; and (ii) the assets, liabilities, equities, revenues, expenses or margins of any variable interest entity that is consolidated for accounting purposes with the Company but which is not a Subsidiary of the Company shall be disregarded.

  

- 7 -

  

 

(d)           All references herein to “Accounting Requirements” refer to such requirements as are in use in the United States at the time of the determination of any computation required or permitted hereunder, or, at the option of the Company, such requirements in use at the date of the execution and delivery of this Indenture.

 

(e)           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.

 

(f)            The words “include” and “including” shall not be terms of limitation, and shall in all cases, whether or not expressly provided, be read to be “include, without limitation,” and “including, without limitation,” respectively.

 

(g)           When used herein the terms “corporation” and “company” or other equivalent terms shall include any legal entity whether in the form of a corporation, cooperative, general partnership, limited partnership, joint venture, association, joint-stock company, limited liability company, limited liability partnership, trust or unincorporated organization.

 

(h)           All references in this instrument to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed, unless such Article, Section or other subdivision of this instrument shall have been amended, in which case the reference shall be to such Article, Section or other subdivision as so amended.

 

(i)            The terms in Granting Clause Second shall have the meaning assigned to them in the Uniform Commercial Code to the extent not otherwise defined herein.

 

	
  

	
(j)

	
The word “or” shall not be exclusive.

 

(k)           Certain terms used principally in Article 10 are defined in that Article.

 

(l)            Reference to a Person means that Person and its successors and permitted assigns.

 

“Accountant” means a Person regularly engaged in the practice of accounting who (except as otherwise expressly provided in this Indenture) may be employed by or affiliated with the Company and who need not be independent, certified, licensed or public.

 

“Accounting Requirements” means the requirements of the system of accounts prescribed by any regulatory authority having jurisdiction over the Company or, in the absence thereof, the requirements of generally accepted accounting principles applicable to similar Persons conducting business similar to that of the Company.  Generally accepted accounting principles refers to a common set of accounting standards and procedures that are either promulgated by an authoritative accounting rulemaking body or accepted as appropriate due to wide-spread application in the United States.

  

- 8 -

  

 

“acquired” means to acquire by lease, purchase, exchange, construction, merger, consolidation, conveyance, transfer or otherwise.  The terms “acquired,” “acquiring” and “acquisition” have meanings correlative to the foregoing.

 

“Acquired Facility” means any property which, within six months prior to the date of its acquisition by the Company, has been used or operated by a Person or Persons other than the Company in a business similar to that in which such property has been or is to be used or operated by the Company.

 

“Act” when used with respect to any Holder or Holders has the meaning stated in Section 1.2.

 

“Additional Obligations” has the meaning stated in the first recital of this Indenture and includes any Obligation authenticated and delivered hereunder after the date hereof.

 

“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 purposes of this definition, “control” of any specified Person means the power to direct the management and policies of such specified Person, directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Amount of Property Additions” or “Amount” as applied to any Property Additions means the Cost to the Company of such Property Additions or the Fair Value to the Company (at the time determined in accordance with the definition of Fair Value to the Company) of such Property Additions, whichever is less.

 

“Application” means an application for the authentication and delivery of Additional Obligations, the advance or issuance of any unadvanced or unissued amount or portion of any Conditional Obligation or series of Conditional Obligations, the release of any part of the Trust Estate, the withdrawal of Deposited Cash or Trust Moneys or the surrender or redesignation of Designated Qualifying Securities under any provision of this Indenture and shall consist of, and shall not be deemed complete until there shall have been delivered to the Trustee, such cash, Obligations, Designated Qualifying Securities, securities and documents as are required by such provision to establish the right of the Company to the action applied for.  The date of a particular Application shall be deemed to be the date of completion of all such deliveries to the Trustee and not the date on which any particular document is so delivered.

  

- 9 -

  

 

“Appraiser” means a Person engaged in the business of appraising property or otherwise qualified to pass upon the Fair Value to the Company of property or any other valuation of property that may be required pursuant to the provisions of this Indenture who (except as otherwise expressly provided in this Indenture) may be employed by or affiliated with the Company and who need not be independent or licensed.

 

“Authenticating Agent” when used with respect to any particular series of Obligations means any Person named as Authenticating Agent for said series in the provisions of this Indenture creating said series until a successor Authenticating Agent therefor becomes such pursuant thereto, and thereafter “Authenticating Agent” shall mean such successor.

 

“Available Margins Certificate” means an Officers’ Certificate, dated not more than 30 days prior to the date of the related Application, and signed, in addition to the two Officers signing the same, by a Person who may be one of such Officers, signing as an Accountant, stating that:

 

(a)           the Margins for Interest for either (i) the fiscal year of the Company immediately preceding the fiscal year in which the relevant Application is made; PROVIDED, HOWEVER, that if such Application is made within 90 days of the end of the immediately preceding fiscal year for purposes of the Application the Company may use the fiscal year of the Company immediately preceding such immediately preceding fiscal year of the Company, or (ii) any twelve consecutive calendar months during the period of 18 calendar months immediately preceding the first day of the calendar month in which the relevant Application is made, are not less than 1.10 times the Interest Charges during such fiscal year or other twelve-month period; and

 

(b)           the Margins for Interest have been calculated in accordance with the definitions contained in this Section.

 

“Board of Directors” means either the board of directors of the Company or any duly authorized committee of such board.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Bondable Additions” means the excess of (1) the Amount of Property Additions over (2) the amount of Retirements (less credits thereto), computed in accordance with Section 5.2 and certified as Bondable Additions in the Summary of Certificate as to Bondable Additions then being delivered in accordance with Section 5.2.

  

- 10 -

  

 

“Bondable Property” means all Property Additions, and all property owned by the Company on the Cut-Off Date which would constitute Property Additions if acquired after that date (except for the requirement to deliver Title Evidence with respect to such property), but Bondable Property shall not include any Excepted Property or Excludable Property .

 

“Book-Entry System” means that system whereby the clearance and settlement of transactions in Obligations held in such system is made through electronic book-entry changes, thereby eliminating the need for physical movement of Obligations, certificates or other instruments.

 

“Capital Assets Lease” has the meaning stated in Section 7.7.

 

“Cede & Co.” means Cede & Co., as nominee for DTC, and any successor nominee of DTC with respect to the Obligations.

 

“Certificate as to Bondable Additions” means an Officers’ Certificate, dated not more than 30 days prior to the date of the related Application, complying with the requirements of Section 5.2 and signed, in addition to the two Officers signing the same as officers, by a Person, who may be one of such officers, signing as an Engineer or an Appraiser and a Person, who may be one of such officers, signing as an Accountant.

 

“Certified Progress Payments” means payments, made by the Company under a Qualified EPC Contract, for generation and related facilities that will constitute Property Additions upon the performance of such Qualified EPC Contract, that are certified by the Company to the Trustee as the basis for (1) loans or advances under Conditional Obligations under Section 5.6, (2) the withdrawal and payment of Deposited Cash under Section 5.8, (3) the authentication and delivery of Additional Obligations under Section 5.9, or (4) the withdrawal and payment of Trust Moneys under Section 7.5.

 

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties theretofore assigned to it under the TIA, then the body performing such duties at such time.

 

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, except to the extent otherwise contemplated by the last paragraph of Section 12.2, “Company” shall mean such successor Person.

 

“Company Consent” “Company Order” and “Company Request”  mean, respectively, a written consent, order or request signed in the name of the Company by an Officer of the Company, and delivered to the Trustee.

 

“Conditional Obligations” has the meaning stated in Section 5.6.

  

- 11 -

  

 

“Cost to the Company” of Property Additions means the actual cost of acquisition or construction thereof by the Company determined in accordance with Accounting Requirements.  Such cost of acquisition or construction shall include capitalized interest and other expenses (including, without limitation, taxes, engineering costs, allocated administrative charges, and expenses, legal costs and expenses, insurance, casualties and supervisory fees and expenses) relating to such acquisition or construction and properly chargeable to the Company’s property accounts in accordance with Accounting Requirements.  When the consideration for Property Additions consists (in whole or in part) of property or securities, the fair market value in cash of such consideration (as of the date of the transfer and delivery thereof) shall be deemed the equivalent of cash in the determination of cost.  The Cost to the Company of any Property Additions acquired as an Acquired Facility shall include the cost to the Company of any franchises, contracts, operating agreements and other rights and Non-Bondable Property simultaneously acquired with, and related to, such Property Additions, for which no separate or distinct consideration shall have been paid or apportioned; and, except in such case, the Cost to the Company of any property, only part of which constitutes Property Additions and all of which is acquired for a single consideration, shall be properly allocated in the Certificate as to Bondable Additions in which such Property Additions are certified to the Trustee. In the case of Property Additions consisting of property owned by a successor corporation at the time it shall have become such by consolidation, merger, conveyance or transfer as provided in Article 12, or acquired by it by such consolidation, merger, conveyance or transfer, the Cost to the Company shall be the gross amount at which such property is recorded in the plant or property accounts (exclusive of any amounts carried in plant or property adjustment accounts) on the books of such successor corporation, or the constituent or predecessor corporation from which such property was acquired, immediately prior to such consolidation, merger, conveyance or transfer, less related reserves for depreciation, depletion, obsolescence, retirements and amortization as of that date.

 

“Credit Enhancement” means, with respect to any Obligation, the provision of an insurance policy, letter of credit, surety bond or any other similar undertaking, whereby the provider thereof becomes unconditionally obligated to pay when due, to the extent not paid by the Company or otherwise, the principal of and interest on such Obligation or on another obligation the payment on which is (i) secured by such Obligation or (ii) credited against the principal and interest due on such Obligation.

 

“Credit Enhancement Obligations” has the meaning stated in Section 5.7.

 

“Credit Enhancer” means any Person that, pursuant to this Indenture or a Supplemental Indenture, is designated as a Credit Enhancer and which provides Credit Enhancement.

 

“Cut-Off Date” means September 30, 2010.

 

“Defaulted Interest” has the meaning stated in Section 3.9.

  

- 12 -

  

 

“Defeasance Securities” means and includes any of the following securities, if and to the extent the same are not subject to redemption or call prior to maturity by anyone other than the holder thereof and are at the time legal for investment of the Company’s funds:

 

(a)            any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America;

 

	
  

	
(b)

	
cash; and

 

(c)            any certificates or any other evidences of an ownership interest in obligations or in specified portions thereof (which may consist of specified portions of the interest thereon) of the character described in paragraph (a) or (b) above.

 

“Deposited Cash” has the meaning stated in Section 5.4.

 

“Designated Qualifying Securities” means, as of the date of determination, such Qualifying Securities held by the Trustee which have been designated by the Company (1) pursuant to Section 5.5 as the basis for the issuance and delivery of Obligations, (2) pursuant to Section 5.6 as the basis for the advance or issuance of any unadvanced or unissued portion of any Conditional Obligation or series of Conditional Obligations, (3) pursuant to Section 5.8 as the basis for the withdrawal of Deposited Cash, (4) pursuant to Section 6.2 as the basis for the release of any part of the Trust Estate, (5) pursuant to Section 7.4 as the basis for the withdrawal of Trust Moneys, or (6) pursuant to Section 17.3(b) as the basis for surrender or redesignation of other Designated Qualifying Securities; subject in all such cases to redesignation or surrender thereof pursuant to Section 17.3.

 

“Distribution” has the meaning stated in Section 14.15.

 

“DTC” means The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, and its successors and assigns.

 

“DTC Participant” means a broker-dealer, bank or other financial institution for which DTC holds Obligations.

 

“Engineer” means a Person engaged in the engineering profession or otherwise qualified to pass upon engineering matters who (except as otherwise expressly provided in this Indenture) may be employed by or affiliated with the Company and who need not be independent, certified or licensed.

 

“Event of Default” has the meaning stated in Section 9.1 or in any Supplemental Indenture.  An Event of Default shall “exist” if an Event of Default shall have occurred and be continuing.

 

“Excepted Property” has the meaning stated in the Granting Clauses hereof.

 

“Excludable Property” means property with respect to which an Officers’ Certificate has been delivered to the Trustee, prior to or in connection with the Company’s acquisition of such property, identifying such property and stating that (1) such property is not to become subject to the lien of this Indenture, and (2) should the Company not have the use of such property it would remain capable of complying with the requirements of Section 14.14.  “Excludable Property” shall include the energy or other output of such certified property, and all property, rights, privileges and franchises of the Company of every kind and description, real, personal or mixed, tangible or intangible, whether now owned or hereafter acquired by the Company, wherever located, including goods (including equipment, materials and supplies), accounts and general intangibles, relating solely to such certified property or the energy or other output of such property.

  

- 13 -

  

 

“Existing Indenture” has the meaning stated in the Recitals of this instrument.

 

“Fair Value to the Company” when used with respect to any particular Property Additions, means the fair value thereof to the Company, determined as of the date of the Company’s acquisition of such Property Additions and in accordance with the provisions of this Indenture; PROVIDED, HOWEVER, that the “Fair Value to the Company” of Property Additions that would not constitute Property Additions but for satisfaction of the conditions set forth in clauses (i) and (ii) of paragraph (d) of the definition of “Property Additions” set forth below shall not exceed the product obtained by multiplying the Fair Value to the Company of such Property Additions (determined as if the remaining term of the leasehold interest to which such property relates were equal to the economic life of such property) by a fraction, the numerator of which shall be the remaining term of the leasehold interest to which such property relates (including any periods for which the Company has the option to extend or renew such leasehold interest) as of the date of the Application and the denominator of which is the useful economic life of such Property Additions; and PROVIDED, FURTHER, that the “Fair Value to the Company” of Property Additions that would not constitute Property Additions but for satisfaction of the conditions set forth in clause (ii) of paragraph (3) of the definition of “Property Additions” shall take into account any irrevocable deposit by the Company of cash or securities (which securities must be rated by any nationally recognized statistical rating organization the higher of (1) “A” or (2) as high as any series of Obligations are rated) in a fund or funds for the exclusive purposes of discharging or securing the Company’s obligations to make rental payments and payments of a fixed price purchase option under any such lease.  The Fair Value to the Company of any particular Property Additions subject to a lien constituting a Permitted Encumbrance or permitted by the proviso to Section 6.2(d)(ii), shall be determined as if such property were free of such lien.

 

“Holder” when used with respect to any Obligation means the Person in whose name such Obligation is registered in the Obligation Register.

 

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented, modified or amended by one or more indentures or other instruments supplemental hereto (including Supplemental Indentures) entered into pursuant to the applicable provisions hereof.

  

- 14 -

  

 

“Independent” when used with respect to any specified Person means such a Person who (i) is in fact independent, (ii) does not have any direct financial interest or any material indirect financial interest in the Company or in any other obligor upon the Obligations or in any Affiliate of the Company or of such other obligor and (iii) is not connected with the Company or such other obligor as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.  Whenever it is herein provided that any Independent Person’s opinion, report or certificate shall be furnished to the Trustee, such opinion, report or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning thereof.

 

“Interest Charges” for any period means the total interest charges (other than capitalized interest charges) of the Company for such period (determined in accordance with Accounting Requirements) related to (1) all Outstanding Secured Obligations, (2) outstanding Prior Lien Obligations and (iii) outstanding indebtedness secured by liens described in paragraph (y) of the definition of “Permitted Encumbrances” in all cases including amortization of debt discount and expense or premium, but excluding all interest charges related to (a) Obligations authenticated and delivered on the basis of Qualifying Securities issued by a wholly owned Subsidiary of the Company under a Qualifying Securities Indenture that has a rate covenant substantially identical in substance to Section 14.14 with a requirement of Margins for Interest of not less than 1.10 times Interest Charges, so long as such Subsidiary complies with such rate covenant, and (b) Obligations that have actually been paid by another Person that has agreed to be primarily liable for such Obligation pursuant to an assumption agreement or similar undertaking, PROVIDED, HOWEVER, such assumption agreement or similar undertaking is not a mechanism by which the Company continues to make payments to such Person based on payments made by such Person on account of its assumed liability or by which the Company otherwise seeks to avoid having interest related to such Obligations included in the definition of Interest Charges without the economic substance of an assumption of liability on the part of such Person).

 

“Interest Payment Date” means the Stated Maturity of an installment of interest on the Obligations.

 

“Investment Securities” means any of the following obligations or investment property on which neither the Company, any other obligor on the Obligations nor any Affiliate of either is the obligor: (a) Defeasance Securities; (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 association which has outstanding securities rated in either of the two highest rating categories (without regard to modifiers) for short-term securities or in any of the three 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 in either of the two highest rating categories (without regard to modifiers) for short-term securities or in any of the three 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 in either of the two highest rating categories (without regard to modifiers) for short-term securities or in any of the three highest rating categories (without regard to modifiers) for long-term securities; (e) corporate debt securities which are rated in either of the two highest rating categories (without regard to modifiers) for short-term securities or in any of the three highest rating categories (without regard to modifiers) for long-term securities; (f) 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 in either of the two highest rating categories (without regard to modifiers) for short-term securities or in any of the three highest rating categories (without regard to modifiers) for long-term securities; and (g) 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 or any such successor section of the Internal Revenue Code, PROVIDED, HOWEVER, that the portfolio of such investment company is limited to obligations or securities of the character and investment quality contemplated in clauses (a) through (e) above and repurchase agreements which are fully collateralized by any of such obligations or securities.  References to the rating of any such obligations or investment property shall refer to a rating by a nationally recognized statistical rating organization (as designated by the Commission).

  

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“Leased Assets” has the meaning stated in Section 7.7.

 

“Margins for Interest” means, for any period, the assignable margins of the Company for such period, which shall include revenues of the Company, if any, subject to possible refund at a later date; PROVIDED, HOWEVER, no deductions shall be made as a result of refunds ordered in a subsequent period; adjusted by:

 

	
  

	
(a)

	
adding:

 

	
  

	
(i)

	
Interest Charges;

 

(ii)           the amount, if any, deducted in arriving at assignable margins on account of accruals of Federal income and other taxes imposed on income after deduction of Interest Charges for such period;

 

(iii)           the amount, if any, deducted in arriving at assignable margins on account of any losses incurred by any Subsidiary or Affiliate of the Company other than amounts deducted pursuant to clause (b)(ii) below;

  

- 16 -

  

 

(iv)           the amount, if any, the Company actually receives in such period as a dividend or other distribution of earnings of any Subsidiary or Affiliate (whether or not such earnings were for such period or any earlier period or periods) which amount has not otherwise been reflected as an increase in assignable margins in such period or any earlier period or periods; and

 

(v)           the amount of any expenses or provisions for any non-recurring charge to income or margins or retained earnings of whatever kind or nature (including, without limitation, (A) the recognition of expense due to the non-recoverability of assets or expenses and (B) the accelerated portion of the amortization of any deferred charges or regulatory assets carried on the books of the Company) that has been deducted or otherwise taken into account in arriving at assignable margins whether or not recorded as a non-recurring charge in the Company’s books of account; and

 

	
  

	
(b)

	
subtracting:

 

(i)           the amount, if any, added in arriving at assignable margins on account of any income, gain, earnings or profits of any Subsidiary or Affiliate of the Company other than amounts added pursuant to clause (a)(iv) above; and

 

(ii)           the amount, if any, the Company actually contributes to the capital of, or actually pays under a guarantee or like agreement by the Company of an obligation of, any Subsidiary or Affiliate in such period, to the extent of any accumulated losses incurred by such Subsidiary or Affiliate (whether or not such losses were for such period or any earlier periods), but only to the extent (A) such losses have not otherwise caused other contributions or payments to be subtracted from assignable margins for purposes of computing Margins for Interest for a prior period and (B) such amount has not otherwise been subtracted from assignable margins.

 

Margins for Interest shall be determined in accordance with Accounting Requirements; PROVIDED, HOWEVER, that such determination shall be made on a Company only and not on a consolidated basis.

 

“Maturity” means, when used with respect to any Obligation, the date on which the principal of such Obligation, or any installment thereof, becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration or call for redemption or purchase or prepayment or otherwise; PROVIDED, HOWEVER, that any obligation to purchase or otherwise acquire any Additional Obligation from its Holder shall not constitute an undertaking to pay the principal of such Obligation if so provided in the Supplemental Indenture creating such Additional Obligation.

 

“Non-Bondable Property” means any property owned by the Company other than Bondable Property.

  

- 17 -

  

 

“Obligation Register” and “Obligation Registrar” have the respective meanings stated in Section 3.7.

 

“Obligations” has the meaning stated in the recitals of this Indenture.

 

“Officer” for purposes of any consent, order, certificate, opinion, request or other action hereunder means the President, the General Manager, any Executive Manager or any other officer or employee of the Company authorized by a Board Resolution to give such consent, order, certificate or opinion, or make such request or perform such action.

 

“Officers’ Certificate” means a certificate signed by any two Officers of the Company.  Wherever this Indenture requires that an Officers’ Certificate be signed also by an Accountant, an Engineer or other expert, such Accountant, Engineer or other expert may (except as otherwise expressly provided in this Indenture) be employed by the Company.

 

“Opinion of Counsel” means a written opinion (or, in the case of matters relating to title, real or personal property records or the existence or priority of liens, a written certificate) of counsel who may (except as otherwise expressly provided in this Indenture) be employed by, or be outside counsel to, the Company and who shall be reasonably acceptable to the Trustee.  The acceptance by the Trustee of such opinion shall be sufficient evidence that such counsel is reasonably acceptable to the Trustee.

 

“Original Issue Discount Obligation” means any Obligation declared to be an “Original Issue Discount Obligation” in the Supplemental Indenture establishing the series to which such Obligation belongs.

 

“Outstanding” when used with respect to Obligations means, as of the date of determination, all Pre-Existing Obligations and all Additional Obligations authenticated and delivered under this Indenture, except:

 

(a)           Obligations, or any portion thereof, theretofore cancelled by the Trustee or delivered to the Trustee for cancellation or delivered to the Trustee marked surrendered, cancelled, satisfied or otherwise evidenced to the Trustee’s satisfaction as paid or tendered for payment pursuant to any Supplemental Indenture (and which amount may not be re-advanced);

 

(b)           Obligations for whose payment or redemption money or Defeasance Securities in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) or any other bank, trust company or financial institution in trust, or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent), for the Holders of such Obligations, PROVIDED, HOWEVER that, if such Obligations are to be redeemed, or prepaid, notice of such redemption or prepayment has been duly given or other provision therefor satisfactory to the Trustee has been made;

  

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(c)           Obligations which have been paid pursuant to Section 3.8 or in exchange for or in lieu of which other Obligations have been authenticated and delivered pursuant to this Indenture, other than any such Obligations in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Obligations are held by a bona fide purchaser in whose hands such Obligations are valid obligations of the Company; and

 

(d)           Additional Obligations which have not been sold, pledged or subjected to a security interest and have been surrendered to the Trustee, or which a portion thereof has not been advanced and with respect to such portion any commitment to advance thereunder has terminated, as provided in the last paragraph of Section 5.1;

 

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite principal amount of Obligations Outstanding or the Obligations Outstanding of a series, as the case may be, have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Obligations owned by the Company or any other obligor upon the Obligations or any Affiliate of the Company or of such other obligor (unless the Company, such obligor and such Affiliate or Affiliates own all Obligations Outstanding under this Indenture or, as to matters relating solely to a particular series, all Obligations Outstanding of such series, as the case may be, determined without regard to this proviso) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Obligations which are registered in the name of the Company, an Affiliate of the Company, another obligor on such Obligations (other than a Credit Enhancer) or an Affiliate of such obligor of which the Trustee has been given written notice shall be so disregarded.  Obligations so owned which have been pledged in good faith may be regarded as Outstanding for such purposes if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Obligations and that the pledgee is not the Company or any other obligor upon the Obligations or any Affiliate of the Company or of such other obligor.  For purposes of the definition of “Outstanding,” any Credit Enhancer shall not be an obligor upon any Obligation.

 

“Outstanding” when used with respect to Qualifying Securities, has the meaning contained in the related Qualifying Securities Indenture.

 

“Outstanding Secured Obligations” means, as of the date of determination, (i) all Obligations then Outstanding other than Obligations then owned by the Company or any wholly owned Subsidiary and held in its treasury and (ii) all Obligations, if any, alleged to have been destroyed, lost or stolen which have been replaced or paid as provided in Section 3.8 but whose ownership and enforceability by the Holder thereof have been established by a court of competent jurisdiction or other competent tribunal or otherwise established to the satisfaction of the Company and the Trustee.

 

“Paying Agent” means the Company and any bank or trust company organized under the laws of the United States or any state of the United States and having a combined capital and surplus of not less than $100 million which is authorized by the Company to pay the principal of (and premium, if any) or interest on any Obligations on behalf of the Company.

  

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“Periodic Offering” means an offering of Additional Obligations of a series from time to time any or all of the specific terms of which Additional Obligations, including the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof and the redemption provision, if any, with respect thereto, are to be determined by the Company or its agents at or about the time of the issuance of such Additional Obligations.

 

“Permitted Encumbrances” means:

 

(a)           as to the property specifically described in Granting Clause First, the restrictions, exceptions, reservations, terms, conditions, limitations, interests and other matters which are set forth or referred to in such descriptions or of record on the date hereof, PROVIDED, that such matters do not evidence any mortgage, lien, security, title, charge or encumbrance on or pledge of or security interest in such property that secures indebtedness for borrowed money and is prior to or upon a parity with the lien of this Indenture;

 

(b)           as to property which the Company may hereafter acquire, any restriction, exception, reservation, term, condition, agreement, lease, sublease, covenant, limitation, interest or other matter which is of record on the date of such acquisition or expressed or provided in the deeds or other instruments under which the Company shall acquire the same, PROVIDED, that such matters do not evidence any mortgage, lien security title, charge or encumbrance on or pledge of or security interest in such property that secures indebtedness for borrowed money and is prior to or upon a parity with the lien of this Indenture;

 

(c)           liens for taxes, assessments and other governmental charges not delinquent, and ordinances establishing sewer, lighting or other local improvement districts and assessments therefor;

 

(d)           liens for taxes, assessments and other governmental charges already delinquent which are currently being contested in good faith by appropriate proceedings, PROVIDED the Company shall have set aside on its books adequate reserves, with respect thereto if such reserves are required by Accounting Requirements;

 

(e)           mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s, contractors, subcontractors and carriers’ liens and other similar liens arising in the ordinary course of business or incident to current construction for charges which are not delinquent, or which are being contested in good faith and have not proceeded to judgment and as to which the Company shall have set aside on its books adequate reserves with respect thereto if such reserves are required by Accounting Requirements;

  

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(f)            liens in respect of judgments or awards (i) with respect to which the Company shall in good faith currently be prosecuting  an appeal or proceedings for review and with respect to which the Company shall have secured a stay of execution pending such appeal or proceedings for review, PROVIDED the Company shall have set aside on its books adequate reserves with respect thereto if such reserves are required by Accounting Requirements, or (ii) which are fully covered by insurance;

 

(g)           easements and rights granted by the Company under Section 6.1(d) and similar rights granted by any predecessor in title of the Company;

 

(h)           easements, leases, restrictions, rights of way, exceptions, reservations or other rights of others in any property of the Company for streets, roads, bridges, pipes, pipe lines, railroads, towers, poles, wires, conduits, mains, metering stations, electric, electronic, optical or other power or electric transmission and distribution lines, telecommunications and telephone lines, the removal of oil, gas, coal, minerals or other natural resources and other similar purposes, flood rights, river control and development rights, sewage and drainage rights, restrictions against pollution and zoning laws and defects and irregularities in the record evidence of title, PROVIDED that such easements, leases, restrictions, rights of way, exceptions, reservations or other rights of others do not in the aggregate materially impair the use of the Trust Estate taken as a whole for the purposes for which it is held by the Company;

 

(i)            liens upon lands over which easements, licenses, permits or rights-of-way are acquired by the Company for any of the purposes specified in paragraph (h) of this definition, securing indebtedness neither created, assumed nor guaranteed by the Company nor on account of which it customarily pays interest;

 

(j)             leases to, or permits for occupancy by, other Persons existing at the date of this instrument affecting property owned by the Company at said date (and future modifications, renewals and extensions thereof);

 

(k)            leases to, and permits for occupancy by, other Persons entered into after the date of this instrument affecting property owned by the Company, whether acquired before or after the date of this instrument, (i) for a term of not more than ten years (including any extensions or renewals) or (ii) if for a term of more than ten years which do not materially impair the Company’s use of the property in the conduct of its business;

 

(l)             any lien or privilege vested in any lessor, landlord, licenser or permittor or other Person for rent to become due from, or for other obligations or acts to be performed by, the Company, the payment of which rent or the performance of which other obligations or acts is required under leases, subleases, licenses or permits, so long as the payment of such rent or the performance of such other obligations or acts is not delinquent or being contested in good faith and has not proceeded to judgment and with respect to which the Company shall have set aside on its books adequate reserves if required by Accounting Requirements;

  

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(m)           liens or privileges of any employees of the Company for salary or wages earned but not yet payable;

 

(n)           the burdens of any law or governmental regulation, license or permit requiring the Company to maintain certain facilities or perform certain acts as a condition of the carrying on of the Company’s business or its occupancy of or interference with any public lands or any river or stream or navigable waters;

 

(o)           any restrictions, covenants, defects or irregularities in or other deficiencies of title to any easement or rights-of-way of or used by the Company for pipe lines, telephone lines, telecommunications lines, power lines, towers, poles, wires, conduits, mains, electric transmission lines and distribution lines, substations, metering stations, signal transmission and distribution lines or for similar purposes or appurtenances thereto, or other improvements  thereon, and to any real estate used or to be used primarily for such easement or right-of-way purposes, PROVIDED that (i) the Company shall have obtained from the apparent owner of the lands or estates therein covered by any such easement or right-of-way a sufficient right, by the terms of the instrument granting such right-of-way, to the use thereof for the construction, operation or maintenance of the lines, appurtenances or improvements for which the same are used or are to be used, (ii) the Company has power under eminent domain, or similar statutes, to remove such irregularities or deficiencies, or (iii) such deficiencies may be otherwise remedied without undue effort or expense;

 

(p)           rights reserved to, or vested in, any municipality or governmental or other public authority to control or regulate any property of the Company or the use thereof, or to use such property in any manner, which rights do not materially impair the use of such property, for the purposes for which it is held by the Company;

 

(q)           any obligations or duties, affecting the property of the Company, to any municipality or governmental or other public authority with respect to any franchise, grant, license or permit;

 

(r)           any right which any municipal or governmental authority may have by virtue of any franchise, license, contract or statute;

 

(s)           any restrictions, including restrictions on transfer, liens or other matters arising from, permitted by, or required by, any law or governmental regulation relating to environmental matters, PROVIDED that such restrictions, liens or other matters do not materially impair the use of such property for the purposes for which it is held and as to any liquidated liens, the Company shall have set aside on its books adequate reserves with respect thereto if such reserves are required by Accounting Requirements;

  

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(t)            reservations contained in U. S. patents;

 

(u)           slope or drainage reservations;

 

(v)           the pledge of current assets, in the ordinary course of business, to secure current liabilities;

 

(w)           deposits to secure duties or public or statutory obligations, deposits to secure, or in lieu of, surety, stay, performance or appeal bonds, and deposits as security for the payment of taxes or assessments or similar charges;

 

(x)            any lien or other matter required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable the Company to maintain self-insurance or to participate in any funds established to cover any insurance risks or in connection with worker’s compensation, unemployment insurance, retirement pensions or other social security, or to share in the privileges or benefits required for companies participating in such arrangements;

 

(y)           any lien or other encumbrance created or assumed by the Company in connection with the issuance of debt securities the interest on which is excludable from gross income of the holder of such security pursuant to the Internal Revenue Code, as amended, for the purposes of financing or refinancing, in whole or in part, the acquisition or construction of property used or to be used by the Company;

 

(z)            liens or other encumbrances securing indebtedness for the payment of which money or Defeasance Securities, maturing as to principal and interest in such amounts and at such times, as are sufficient to provide for the full and timely payment of such indebtedness shall have been irrevocably deposited in trust or escrow with the trustee or other holder of such lien, and liens on such deposited money or Defeasance Securities, PROVIDED, 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 irrevocably given in accordance with the mortgage or other instrument creating such lien or other encumbrance or irrevocable instructions to give such notice shall have been given to such trustee or other holder;

 

(aa)          liens arising out of any defeased indenture of the Company;

 

(bb)          the undivided or other interests of other owners, and liens on such interests, in property owned in common or jointly with the Company or in which the Company has an executory or future interest, and rights of such other owners, co-owners or joint owners in such property, including the rights of such owners in and to such property pursuant to ownership contracts or otherwise;

 

(cc)          any lien or other encumbrances of any Person arising on account of the ownership in common or jointly with the Company of an undivided or other interest in property which relate to amounts which are not due and payable, or which are being contested by the Company in good faith, and with respect to which the Company shall have set aside on its books adequate reserves; or

  

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(dd)         liens which have been bonded for the full amount of the obligations secured by such lien or for the payment of which the Company has deposited with the Trustee or with an escrow agent cash or other property with a value equal to the full amount of the obligations secured by such lien.

 

“Person” means any individual, corporation, cooperative, joint venture, association, joint-stock company, limited liability company, general partnership, limited liability partnership, limited partnership, limited liability limited partnership, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“Place of Payment” when used with respect to the Obligations of any series means a city or any political subdivision thereof in which the Company is by this Indenture required to maintain an office or agency for the payment of the principal of or interest on the Obligations of such series.

 

“Pledged Securities” has the meaning stated in Section 16.1.

 

“Pledged Subsidiary” means a Subsidiary of the Company at least a majority of whose outstanding Voting Stock shall at the time be deposited and pledged or required to be deposited and pledged with the Trustee.

 

“Pledged Wholly-Owned Subsidiary” means any Subsidiary of the Company all the shares of stock of all classes of which (other than directors’ qualifying shares required to be owned by directors under any applicable law) shall at the time be owned directly by the Company and deposited and pledged or required to be deposited and pledged with the Trustee.

 

“Predecessor Obligations” of any particular Obligation means every previous Obligation evidencing all or a portion of the same debt as that evidenced by such particular Obligation; and, for purposes of this definition, any Obligation authenticated and delivered under Section 3.8 in lieu of a lost, destroyed or stolen Obligation shall be deemed to evidence the same debt as the lost, destroyed or stolen Obligation.

 

“Pre-Existing Obligations” has the meaning set forth in the recitals to this Indenture.

 

“Prior Lien” means any mortgage, lien, security title, charge or encumbrance on or pledge of or security interest in any of the Trust Estate prior to or upon a parity with the lien of this Indenture, other than Permitted Encumbrances.

  

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“Prior Lien Obligation” means any indebtedness and the evidence thereof, if any, secured by a Prior Lien.

 

“Property Additions” means property as to which the Company shall provide Title Evidence (which, as to Retired property, may be dated as of a date immediately prior to the Retirement) and which shall be (or, if Retired, shall have been) subject to the lien of this Indenture, which shall be properly chargeable to the Company’s fixed plant accounts under Accounting Requirements (including property acquired to replace property Retired and credited to such accounts) and which shall be:

 

(A)          acquired (including acquisition by merger, consolidation, conveyance or transfer) by the Company after the Cut-Off Date, including property in the process of construction, insofar as not reflected on the books of the Company with respect to periods on or prior to the Cut-Off Date, and

 

(B)           used or useful in the business of the Company conducted with the properties described in the Granting Clauses of this Indenture, even though separate from and not physically connected with such properties.

 

Property Additions need not consist of a specific or completed development, plan, betterment, addition, extension, improvement or enlargement, but may include construction work in progress and property in the process of purchase insofar as the Company owns such property.

 

“Property Additions” shall also include:

 

(1)           easements and rights-of-way that are useful for the conduct of the business of the Company, and

 

(2)           property located or constructed on, over or under public highways, rivers or other public property if the Company has the lawful right under easements, permits, licenses or franchises granted by a governmental body having jurisdiction in the premises or by the law of the state in which such property is located to maintain and operate such property for an unlimited, indeterminate or indefinite period or for the period, if any, specified in such permit, license or franchise or law and to remove such property at the expiration of the period covered by such permit, license or franchise or law, or if the terms of such permit, license franchise or law require any public authority having the right to take over such property to pay fair consideration therefor; and

 

(3)           tangible property, which would be properly chargeable to the Company’s fixed plant accounts under Accounting Requirements (including property acquired to replace property Retired and credited to such accounts) if title were vested in the Company, if (i) such property itself (in addition to the Company’s leasehold interest in such property) is subject to the lien of this Indenture and (ii) such property is leased to the Company.

  

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“Property Additions” shall not include:

 

(a)           good will, going concern value, contracts, agreements, franchises, licenses or permits, whether acquired as such, separate and distinct from the property operated in connection therewith, or acquired as an incident thereto;

 

(b)           any Stock or indebtedness or certificates or evidences of interest therein or other securities;

 

(c)           any property that is to remain subject to a Prior Lien (except to the extent permitted by the proviso to Section 6.2(d)(ii)) after the granting of the related Application, or subject to the Permitted Encumbrance described in paragraph (y) of the definition of “Permitted Encumbrances”;

 

(d)           any plant or system or other property in which the Company shall acquire only a leasehold interest, or any betterments, extensions, improvements or additions (other than movable physical personal property which the Company has the right to remove), of, upon or to any plant or system or other property in which the Company shall own only a leasehold interest unless, with respect to any betterment, extension, improvement or addition to a leasehold interest, (i) the term of the leasehold interest in the property to which such betterment, extension, improvement or addition relates shall extend for at least 75% of the useful life of such betterment, extension, improvement or addition and (ii) the lessor shall have agreed to give the Trustee reasonable notice and opportunity to cure any default by the Company under such lease and not to disturb the Trustee’s possession of such leasehold estate in the event the Trustee succeeds to the Company’s interest in such lease upon the Trustee’s exercise of any remedies under this Indenture so long as there is no default in the performance of the tenant’s covenants contained therein; or

 

(e)           Excludable Property.

 

“Qualified EPC Contract” means any contract providing for the engineering, procurement or construction of generation or related facilities (including electric transmission and fuel supply facilities) intended to be owned by the Company, progress payments under which are used as the basis for (1) loans or advances under Conditional Obligations under Section 5.6, (2) the withdrawal and payment of Deposited Cash under Section 5.8, (3) the authentication and delivery of Additional Obligations under Section 5.9, or (4) the withdrawal and payment of Trust Moneys under Section 7.5.

 

“Qualifying Securities” means bonds or other instruments evidencing indebtedness for borrowed money or purchase money indebtedness issued and Outstanding under a Qualifying Securities Indenture and on deposit with the Trustee.

  

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“Qualifying Securities Indenture” means any indenture, mortgage, deed to secure debt, deed of trust or similar instrument entered into by any Subsidiary of the Company or, in the case of a transaction described in the last sentence hereof, by any Person, (1) which contains provisions (and related definitions) substantially identical in substance to the provisions (and related definitions) contained in this Indenture (with such variations and omissions as are appropriate in view of the fact that the Subsidiary and not the Company is a party thereto), except that it may omit or have different provisions (and related definitions) relating to (a) the need to deliver an Available Margins Certificate upon the authentication and delivery of Qualifying Securities issued thereunder, (b) the requirement to establish and collect the rates, rents, charges, fees and other compensation of such Subsidiary expected to yield any particular amount of Margins for Interest, (c) limiting distributions or dividends, (d) provision for cancellation of the Qualifying Securities upon the acquisition by the Company of the property subject to the Qualifying Securities Indenture and (e) such other matters as the Trustee shall determine, in its sole discretion, do not, taken as a whole, materially impair the value of the Qualifying Securities issued thereunder as security for the Obligations; PROVIDED, HOWEVER, that in making any such determination, the Trustee may rely upon certificates of investment bankers or other financial professionals or consultants, and (2) under which Qualifying Securities are issued.  A Qualifying Securities Indenture may be entered into by any Person that succeeds to the Company’s interest in any property constituting part of the Trust Estate prior to such transaction where either (i) the property transferred from the Company is more than 50% of the property owned by the Person immediately after the completion of the transfer or (ii) after the transfer the Person will be engaged in providing utility services to the Company and/or to entities that were direct or indirect customers of the Company immediately prior to the transfer and the Company delivers a certificate to the Trustee, simultaneously with the issuance of the Qualifying Securities, that certifies that the property constituting part of the Trust Estate was transferred to the Person as part of a plan of the Company to restructure in order to be more competitive, deal with regulatory requirements or respond to changes in the utility industry generally (collectively, referred to hereinafter as a “Restructuring Transaction”).

 

“Rates” has the meaning stated in Section 14.14 hereof.

 

“Redemption Date” when used with respect to any Obligation to be prepaid means the date of such prepayment and when used with respect to any Obligation to be redeemed means the date fixed for such redemption pursuant to this Indenture.

 

“Redemption Price” when used with respect to any Obligation to be prepaid means the  amount of the indebtedness to be prepaid and when used with respect to any Obligation to be redeemed means the price at which it is to be redeemed pursuant to this Indenture.  It includes the applicable premium, if any, including any prepayment surcharge, fee or penalty but does not include installments of interest whose Stated Maturity is on or before the Redemption Date.

  

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“Regular Record Date” for the interest payable on any Interest Payment Date on the Obligations of any series means the date specified for such purpose in a Supplemental Indenture creating such series.

 

“Responsible Officer” when used with respect to the Trustee means the chairman or vice-chairman of the board of directors of the Trustee, the chairman or vice-chairman of the executive committee of such board, the president, any vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller, any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“Restructuring Transaction” has the meaning set forth in the definition of “Qualifying Securities Indenture.”

 

“Retired” when used with respect to property, means Bondable Property that, since the Cut-Off Date, has been retired, abandoned, destroyed, worn out, removed, sold, permanently discontinued, lost through the enforcement of any liens or released or otherwise disposed of free of the lien of this Indenture or taken by eminent domain or under the exercise of a right of a government authority to purchase or take the same or recorded as retired on the books of the Company or permanently retired from service for any reason, whether or not replaced, or has become no longer used or useful in the business of the Company, including as a consequence of the termination of any lease, whether or not recorded as retired on the books of the Company, except that, when a minor item of property has been replaced by other property of equal value and efficiency and the cost of such replacement has been charged to other than fixed property accounts such as maintenance, repairs or other similar account, the property replaced shall not be considered as a Retirement.

 

“Retirements” means Bondable Property that has been Retired.  The “amount” of Retirements shall be computed as follows:

 

(a)           as to property owned by the Company on the Cut-Off Date, 75% of the Cost to the Company of such property as recorded on the books of the Company as of the Cut-Off Date (without taking into account depreciation); and

 

(b)           as to Property Additions, the Cost to the Company thereof or the Fair Value to the Company thereof, whichever is less, as certified to the Trustee at the time such Property Additions were certified in a Certificate as to Bondable Additions filed in accordance with Section 5.2 (estimated, if necessary, as to particular property), or if not theretofore so certified, then the Cost to the Company of such Property Additions.

  

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In determining the amount of Retirements for any purpose under this Indenture, neither any reduction in book values of property recorded in the Company’s fixed plant accounts nor the transfer of any amount appearing in any such accounts to intangible or adjustment accounts, required or arising from adjustments required to be made by any regulatory body or otherwise, nor the elimination of any amount so transferred, otherwise than in connection with the actual retirement of physical property, shall be taken into account.

 

“Special Record Date” for the payment of any Defaulted Interest on Obligations means a date fixed by the Trustee pursuant to Section 3.9.

 

“Stated Maturity” when used with respect to any Obligation, any installment of principal thereof, or any installment of interest thereon means the date specified in such Obligation as the date on which the principal of such Obligation or any installment thereof, or such installment of interest, is due and payable (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension).

 

“Stock” means and includes all stock, shares, interests, membership interests, participations or other similar ownership, voting or other interests (however designated) in corporations, cooperatives, partnerships, joint-ventures, associations, joint-stock companies, limited liability companies, partnerships, trusts, unincorporated organizations or other types of legal entities.

 

“Subsidiary” of any specified Person means any corporation, cooperative, partnership, joint-venture, association, joint-stock company, limited liability company, partnership, trust, unincorporated organization or any other type of legal entity at least a majority of whose outstanding Voting Stock shall at the time be owned or held, directly or indirectly, by the specified Person or by one or more of its Subsidiaries.

 

“Supplemental Indenture” means any indenture supplemental hereto and duly authorized in the manner provided herein (and a supplemental indenture to the Existing Indenture shall be deemed to be a Supplemental Indenture hereto with respect to any series of Pre-Existing Obligations created thereby).

 

“System” means all properties and interest in properties of the Company, including but not limited to the Company’s interests in all electric production, transmission, distribution, conservation, load management, general plant and other related facilities, equipment or property and in any mine, well, pipeline, plant, structure or other facility for the development, production, manufacture, storage, fabrication or processing of fossil, nuclear or other fuel of any kind or in any facility or rights with respect to the supply of water, in each case for use, in whole or in major part, in any of the Company’s generating plants, now existing or hereafter acquired by lease, contract, purchase or otherwise or constructed by the Company, including any interest or participation of the Company in any such facilities or any rights to the output or capacity thereof, together with all additions, betterments, extensions and improvements to any of the foregoing or any part thereof hereafter made and together with all lands, easements and rights of way of the Company and all other works, property or structures of the Company and contract rights and other tangible and intangible assets of the Company used or useful in connection with or related to any of the foregoing, including, without limitation, a contract right or other contractual arrangement for the long-term or short-term interconnection, interchange, exchange, pooling, wheeling, transmission, purchase or sale of electric power and energy and other similar arrangements with entities having generation and transmission capabilities.

  

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“TIA” or “Trust Indenture Act” means, as of any time, the Trust Indenture Act of 1939, or any successor statute, as amended and in force at such time.

 

“Title Evidence” with respect to any property, means:

 

(1)           an Opinion of Counsel to the effect that the Company, or the owner-lessor of the property in the case of real property described in paragraph (3) of the definition of “Property Additions”, has title, whether fairly deducible of record or based upon prescriptive rights (or, as to personal property, based on such evidence as counsel shall determine to be sufficient), as in the opinion of counsel is satisfactory for the use thereof in connection with the operations of the Company, and counsel in giving such opinion may disregard any irregularity or deficiency in the record evidence of title which, in the opinion of such counsel, can be cured by proceedings within the power of the Company or does not substantially impair the usefulness of such property for the purpose of the Company and may base such opinion upon his own investigation or upon affidavits, certificates, abstracts of title, statements or investigations made by Persons in whom such counsel has confidence or upon examination of a certificate or guaranty of title or policy of title insurance in which he has confidence; or

 

(2)           a mortgagee’s policy of title insurance (or a commitment to issue a mortgagee’s policy of title insurance containing only customary or standard conditions to issuance) in the aggregate amount of $10,000,000 with respect to property owned on the Cut-Off Date, and thereafter in the amount of the Cost to the Company of the land (on the date of acquisition) included in Property Additions, as such cost is determined by the Company, issued in favor of the Trustee by an entity authorized to insure title in any jurisdiction in which the property is located, showing the Company (or such owner-lessor) as the owner of such land and insuring the lien of this Indenture; or

 

(3)           with respect to any personal property, or any other property that may constitute fixtures or real property solely as a consequence of being affixed to or erected on either (a) real property that was owned by the Company prior to the Cut-Off Date, (b) real property that was acquired by the Company after the Cut-Off Date and as to which the Company has previously provided Title Evidence to the Trustee as described in either paragraph (1) or (2) above, or (c) real property as to which the Company has obtained a valid easement, right-of-way or similar right of use over the real property of another Person, an Officers’ Certificate stating that the Company owns title to such personal property satisfactory for the use thereof in connection with the operations of the Company, and (if such property constitutes fixtures or real property) that the Company continues to have title (satisfactory for the use thereof in connection with the operations of the Company) to the real property to which such property is affixed or, if such real property is described in paragraph (3) of the definition of “Property Additions,” an Officers’ Certificate stating that the Company has a valid leasehold interest in, and is possessed of, such property.

  

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“Trust Estate” has the meaning stated in the habendum to the Granting Clauses.

 

“Trust Moneys” has the meaning stated in  Section 7.1.

 

“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” means such successor Trustee.

 

“Undesignated Qualifying Securities” means, as of the date of determination, all Qualifying Securities deposited with the Trustee and held by the Trustee which are not Designated Qualifying Securities.

 

“Uniform Commercial Code” with respect to any of the Trust Estate, means the Uniform Commercial Code as enacted and in effect from time to time in the state in which such part of the Trust Estate is located.

 

“vice president” means, when used with respect to the Company or the Trustee, any vice president, whether or not designated by a number or a word added to the title.

 

“Voting Stock” means Stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the members of the board of directors (or other governing body) of such corporation or other Person, other than Stock having such power only by reason of the happening of a contingency.

 

	
  

	
1.2.

	
Acts of Holders.

 

(a)           Any request, demand, authorization, direction, notice, approval, consent, waiver or other action provided by this Indenture to be given 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; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Company and (subject to Section 10.1) in favor of the Trustee, if made in the manner provided in this Section.

  

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(b)           The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof.  Whenever 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, and the authority of the Person executing the same, may also be proved in any manner which the Trustee deems sufficient.

 

(c)           The ownership of Obligations shall be proved by the Obligation Register.

 

(d)           Any request, demand, authorization, direction, notice, approval, consent, waiver or other Act of the Holder of any Obligation shall bind every future Holder of the same Obligation and the Holder of every Obligation issued upon the 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 Obligation.  However, unless such Obligation is held in the Book-Entry System and the DTC letter of representations executed by the Company in connection therewith, as amended from time to time, does not permit such revocation, any such Holder or subsequent Holder may revoke by written instrument any such instrument as to his Obligation or portion of an Obligation until such time as written instruments have been received by the Trustee with respect to the requisite percentage of principal amount of Obligations for the action contemplated by such instruments; PROVIDED, HOWEVER, that such revocation shall be effective only if the Trustee receives written notice of revocation before the earlier of (i) the date the amendment, supplement or waiver becomes effective and (ii) the date the Trustee or the Company does or suffers to be done anything in reliance on such instrument.

 

	
  

	
1.3.

	
Notices, etc., to Trustee and Company.

 

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

 

(a)           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 principal corporate trust office, or

 

(b)           the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (except as otherwise expressly provided in  Sections 9.1(c) and 9.1(e) if in writing and mailed, first-class postage prepaid, hand-delivered or delivered by express courier with all charges paid with proof of delivery, to the Company addressed to it at 5601 Electron Drive, Anchorage, AK  99519, Attention: Chief Financial Officer, or at any other address specified for such purpose in a notice previously given by the Company to the Trustee.

  

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1.4.

	
Notices 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 or express courier with all charges paid, to each Holder of such Obligations, at the address of such Holder as it appears in the Obligation Register not later than the latest date, and not earlier than the earliest date, prescribed for such notice.

 

In any case where notice to Holders is given by 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, 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 mail service or by reason of any other cause, it shall be impossible to give such notice by mail, then notification to any Holder as otherwise provided for in Section 1.3(b) for notices to the Company, or as shall be specified by the Company and satisfactory to the Trustee, shall constitute a sufficient notification for every purpose hereunder.

 

	
  

	
1.5.

	
Form and Contents of Documents Delivered to Trustee.

 

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.

 

Any certificate or opinion of an Officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, advice of or representations by, counsel, unless such Officer knows, or in the exercise of reasonable care should know, that the certificate, opinion, advice or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any Opinion of Counsel may be based, insofar as it relates to factual matters or matters of business judgment, upon a certificate or opinion of, advice, statements or representations by, an Officer or Officers of the Company stating that the information with respect to such factual matters is in the possession of the Officers, unless such counsel knows that the certificate, opinion, advice, statements or representations with respect to such matters are erroneous.  Any Opinion of Counsel may be based upon such assumptions, be subject to such qualifications and be stated in such language as at the time delivered is considered in the jurisdiction whose laws are covered by such opinion to be standard practice with respect to opinions relating to such matters.  In addition, in giving any Opinion of Counsel, counsel may rely upon legal opinions addressed to the Company or such counsel as appropriate and consistent with standard practice with respect to reliance on legal opinions of other counsel. Without limiting the foregoing, in giving any Opinion of Counsel with respect to matters involving title or lien priority, counsel may rely upon (i) prior opinions or certificates of counsel for the Company, regardless of to whom such opinions are addressed, and whether delivered by general counsel, special counsel or in-house counsel for the Company provided such counsel has no reason to believe such reliance is unwarranted, and (ii) title insurance policies, title insurance commitments and reports, record search certificates, abstracts and other similar evidences of matters reflected in public records and of the existence of liens.

  

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Whenever any Person is required to make, give or execute two or more Applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one document.

 

Wherever in this Indenture, in connection with any Application, certificate or report to the Trustee, it is provided that the Company shall deliver any document as a condition of the granting of such Application, or as evidence of the Company’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such Application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Company to have such Application granted or to the sufficiency of such certificate or report.  Notwithstanding anything else herein to the contrary, the validity of any action taken or Obligation issued hereunder based upon any Application, certificate or report shall not be affected by the truth and accuracy of such Application, certification or report.  Nothing in the immediately preceding sentence shall, however, limit any rights or remedies available to the Trustee or the Holders under this Indenture or at law or equity against the Company, any officer thereof or any Person with respect to a false or inaccurate Application, certification or report other than any remedy seeking to invalidate the action so taken or Obligation issued.

 

Whenever a clerical, typographical, inadvertent or unintentional error or omission shall be discovered in any document filed with the Trustee, a new document in corrected form, executed as prescribed herein for that originally filed and which may bear the same date as the document originally filed, may be substituted therefor with the same force and effect as if the document originally filed had been filed in the corrected form, or in lieu of such substitution an appropriate adjustment may be made in a like document filed with the Trustee after such discovery.  To the extent that action has been taken hereunder which could not have been taken had the original document been filed in corrected form, such action shall be validated and rendered effective if the substituted or adjusting document shall indicate that any deficiency has been fully satisfied since the filing of the original document.

  

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1.6.

	
Compliance Certificates and Opinions.

 

Except as otherwise expressly provided in this Indenture, 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 an Officers’ Certificate identifying the relevant provisions of this Indenture and stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and, if requested by the Trustee, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such Application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular Application or request, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than statements provided pursuant to Section 14.12 hereof) shall include

 

(a)           a statement that each individual signing such certificate or opinion has read such condition or covenant and the definitions herein relating thereto;

 

(b)           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;

 

(c)           a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such condition or covenant has been complied with; and

 

(d)           a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

 

	
  

	
1.7.

	
Conflict With Trust Indenture Act.

 

At any time at which this Indenture is qualified or required to be qualified under the TIA, if any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control.

 

	
  

	
1.8.

	
Effect Headings and Table of Contents.

 

The Article and Section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof.

  

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1.9.

	
Successors and Assigns.

 

All covenants and agreements in this Indenture by the Company shall, subject to the last paragraph of Section 12.2, bind its successors and assigns, whether so expressed or not.

 

	
  

	
1.10.

	
Severability Clause.

 

In case any provision in this Indenture or in any Obligation 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.

 

	
  

	
1.11.

	
Benefits of Indenture.

 

Nothing in this Indenture or in the Obligations, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder, any separate trustee or co-trustee appointed under Section 10.14 and the Holders of Outstanding Secured Obligations, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

	
  

	
1.12.

	
Governing Law.

 

This Indenture and the Obligations shall be governed by and construed in accordance with the laws of the State of Alaska, without giving effect to its laws and rules relating to conflicts of laws.

 

	
  

	
1.13.

	
Action by Credit Enhancer When Action by Holders Required.

 

Notwithstanding anything herein to the contrary, except as otherwise provided in a Supplemental Indenture authorizing Obligations of any series or maturity within a series for which Credit Enhancement is being provided, if not in default in respect of any of its obligations with respect to Credit Enhancement for such Obligations, the Credit Enhancer for, and not the actual Holders of, such Obligations, shall be deemed to be the Holder of such Obligations at all times for the purpose of (i) giving any approval or consent to the effectiveness of any Supplemental Indenture or to any amendment, change or modification of this Indenture which requires the written approval or consent of Holders of such Obligations; PROVIDED, HOWEVER, that the provisions of this clause (i) shall not apply to any change which could not be made pursuant to Section 13.2 without the consent of each Holder of Obligations affected thereby, and (ii) giving any other approval or consent, giving any notice, effecting any waiver or authorization, exercising any remedies, giving any direction or taking any other action in accordance with the provisions of this Indenture.

 

	
  

	
1.14.

	
Bank Holidays.

 

Except as specified in a Pre-Existing Obligation or a Supplemental Indenture, if the specified date for the making of any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall be a Saturday, Sunday or legal holiday or a day on which banking institutions in the city in which is located the office from which the Trustee performs the functions to which such act or right relates are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day which is not one of the foregoing days without additional interest and with the same force and effect as if made, performed or exercised on the specified date for such payment.

  

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1.15.

	
Maturity of Obligations and Indenture.

 

The Stated Maturity of the Pre-Existing Obligations is set forth in the Pre-Existing Obligations or the Supplemental Indenture establishing the series to which such Pre-Existing Obligations belong.  The Stated Maturity of Additional Obligations authorized pursuant to Article 5 and governed by this Indenture shall be as provided in Supplemental Indentures adopted in accordance with and pursuant to Sections 3.3 and Article 13.  For purposes of Alaska Statutes 34.20.150, the date of maturity of this Indenture is the later of (i) December 31, 2060 or (ii) the date that is five years after the latest Stated Maturity of any Obligation issued under this Indenture.

 

	
  

	
1.16.

	
Acceptance of Trust by Trustee.

 

The Trustee accepts the trusts in this Indenture declared and provided, upon the terms and conditions herein set forth.

 

	
  

	
1.17.

	
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 Article 8 and Section 9.7, at the request of the Company evidenced by a Company Request be invested or reinvested in Investment Securities as designated by the Company, and, unless an Event of Default shall exist, any interest or other earnings on such Investment Securities shall be promptly paid over to the Company as received free and clear of any lien, including the lien of this Indenture.  Such Investment Securities shall be held subject to the same provisions hereof as was 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 was 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 promptly 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 pay over promptly to the Company an amount in cash equal to such excess, free and clear of any lien, including the lien of this Indenture, unless an Event of Default shall exist.  Except as otherwise contemplated by the TIA, the Trustee shall have no liability for losses on Investment Securities made at the request of the Company.

  

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1.18.

	
Principal Amount of Certain Obligations.

 

(a)           At any point in time, the principal amount of an Obligation in any form other than a bond shall not include any amount not then advanced and outstanding thereunder.  The principal amount of any Obligation evidencing an assumption by the Company of all or a part of another obligation shall be the principal amount outstanding under such other obligation, or the portion thereof assumed pursuant to or evidenced by such Obligation.  The principal amount of an Obligation in any form other than a bond shall be reduced as the principal amount of such an Obligation (or the obligation it evidences an assumption of) is paid or otherwise reduced.  The Company retains the right to have such principal payments or reductions readvanced unless the Company elects to have such payments treated as principal payments or retirements for purposes of Sections 5.3, 5.6, 5.8, 6.2, 7.3 or 17.3.  If any such principal payment or reduction shall not be treated as a payment or retirement because the Company has the right to have such paid or reduced amounts readvanced, once the readvance right expires or is relinquished or otherwise terminated, such principal payment or reduction shall thereupon be treated as a principal payment or retirement under such Sections.  The principal amount of an Obligation in any form other than a bond may be evidenced from time to time by an Officers’ Certificate delivered to the Trustee and the Holder of such Obligation.  In the event the Holder objects to the principal amount of such Obligation as set forth in such Officers’ Certificate by delivering a written objection to the Trustee within 60 days of the Holder’s receipt of such Officers’ Certificate, the Trustee may require such other evidence of the principal amount of such Obligation as shall be satisfactory to the Trustee in its sole discretion.  In the absence of any such objection by the Holder, the Trustee may rely conclusively on such Officers’ Certificate.  Such Officers’ Certificate shall contain a statement of the foregoing objection rights of the Holder and the 60-day period for objection.

 

(b)           The principal amount of an Original Issue Discount Obligation shall be determined as provided in Section 9.22.

 

	
  

	
1.19.

	
Security Agreement and Financing Statement.

 

To the extent permitted by applicable law, this Indenture shall be deemed to be a security agreement and financing statement whereby the Company grants to the Trustee a security interest in all of the Trust Estate that is personal property or fixtures under the Uniform Commercial Code, as adopted or hereafter adopted in one or more of the states in which any part of the properties herein described are situated.  The address of the place of business and chief executive office of the Company, as debtor, is 5601 Electron Drive, Anchorage, AK  99519, and the mailing address of the Trustee, as secured party is 1420 Fifth Avenue, 7th Floor, Seattle, Washington 98101, Attention: Corporate Trust Services.

  

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2.

	
FORMS OF OBLIGATIONS

 

	
  

	
2.1.

	
Forms Generally.

 

Obligations may be in the form of bonds, notes, guarantees, assumption agreements or any other undertaking for the payment of borrowed money or purchase money indebtedness.  Obligations of each series shall be in substantially the form set forth in the Supplemental Indenture creating such series, or in a Board Resolution establishing such series and delivered to the Trustee, or in an Officers’ Certificate delivered to the Trustee pursuant to a Supplemental Indenture or Board Resolution, in each 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 the rules of any securities exchange or as may, consistently herewith, be determined by the Officers executing such Obligations, as evidenced by their execution of such Obligations.  Any portion of the text of any Obligation may be set forth on the reverse or subsequent pages thereof, with an appropriate reference thereto on the face of the Obligation if desired.  Such Obligations may be printed, lithographed, typewritten, photocopied or otherwise produced.

 

	
  

	
2.2.

	
Form of Trustee’s Certificate of Authentication for Obligations.

 

The Trustee’s certificate of authentication for Obligations shall be in substantially the following form:

 

This is one of the Obligations of the series designated therein referred to in the within-mentioned Indenture.

 

	
Date:

	  	  	
[_______________], AS TRUSTEE

	  	  	  	
By:

	  
	  	  	  	  	
Authorized Signatory

 

	
3. 

	
THE OBLIGATIONS

 

	
  

	
3.1.

	
Terms and Forms of Pre-Existing Obligations.

 

Authentication of the Pre-Existing Obligations shall be in substantially the form set forth in Section 2.2 and may be either on the Pre-Existing Obligations or on an allonge to be affixed to such Pre-Existing Obligations.  The Pre-Existing Obligations shall be in the forms of such instruments as are delivered to the Trustee for authentication under the Existing Indenture.  The Trustee shall authenticate the Pre-Existing Obligations upon presentation thereof to the Trustee by the Holder thereof (and Section 1.6 hereof shall not apply to require the delivery of any Officers’ Certificate or Opinion of Counsel in connection therewith).  The terms and conditions of the Pre-Existing Obligations, including series designations, principal amounts, maximum aggregate principal amount (if any), maturity dates, interest rates and payment and redemption provisions, shall be as provided for therein or in the Supplemental Indenture establishing the series to which such Pre-Existing Obligations belong.

  

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3.2.

	
General Title; General Limitations; Issuable in Series.

 

Unless specified otherwise by a Company Request or provided for in a Supplemental Indenture, the general title of all series of Obligations shall be “First Mortgage Obligations,” “First Mortgage Notes” or “First Mortgage Bonds”.

 

(a)           Any increase in the principal amount of any Pre-Existing Obligation (other than an advance under a Pre-Existing Obligation held by a Credit Enhancer) shall be deemed an issuance of an Additional Obligation and shall, therefore, be subject to satisfying the conditions for the issuance of Additional Obligations provided in Article 5.

 

(b)           The aggregate principal amount of Obligations which may be authenticated and delivered and Outstanding under this Indenture is not limited, except as provided in Article 5 and the provisions of any Supplemental Indenture creating any series of Obligations and except as may be limited by law.

 

The Obligations may be issued in one or more series as from time to time authorized by the Board of Directors.

 

With respect to the Obligations of any particular series, the Company may incorporate in or add to the general title of such Obligations any words, letters or figures designed to distinguish that series.

 

	
  

	
3.3.

	
Terms of Particular Series.

 

(a)           Each series of Additional Obligations shall be created by a Supplemental Indenture authorized by the Board of Directors and establishing the terms and provisions of such series of Additional Obligations or the method by which such terms and provisions shall be established.  The several series of Additional Obligations may differ from other series of Pre-Existing Obligations or Additional Obligations in any respect not in conflict with the provisions of this Indenture and as may be prescribed in the Supplemental Indenture creating such series.

 

The Company may, at the time of the creation of any series of Additional Obligations or at any time thereafter, make, and the Additional Obligations of such series may contain, provision for:

 

(i)             the timing and amount of principal and interest payments due on such series;

  

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(ii)           the exchange or conversion of the Additional Obligations of such series, at the option of the Holders thereof, for or into new Additional Obligations of a different series or other securities;

 

(iii)           a sinking, amortization, improvement or other analogous fund;

 

(iv)          limiting the aggregate principal amount of the Additional Obligations of such series;

 

(v)           exchanging Additional Obligations of such series, at the option of the Holders thereof, for other Obligations of the same series of the same aggregate principal amount of a different authorized kind or authorized denomination or denominations;

 

(vi)          the authentication of Additional Obligations of such series by the Authenticating Agent;

 

(vii)         the issuance of Additional Obligations of such series in bearer or book-entry form;

 

(viii)        specifying redemption or prepayment terms and procedures with respect to such series;

 

(ix)           specifying business days, grace periods, record dates, other provisions and such covenants, events of default or remedies with respect to Additional Obligations of such series; and

 

(x)            any other terms of the Additional Obligations of such series, or any maturity thereof, not inconsistent with the provisions of this Indenture;

 

all upon such terms as the Board of Directors may determine as evidenced by a Board Resolution.

 

All Additional Obligations of like maturity of the same series shall be substantially identical except that any series may have serial maturities and different interest rates for different maturities and except that the Supplemental Indenture creating such series may provide that Additional Obligations of like maturity of such series need not be identical as to interest rates and terms of redemption.

 

(b)           With respect to Additional Obligations of a series subject to a Periodic Offering, the Supplemental Indenture or the Board Resolution, or Officers’ Certificate pursuant to the Supplemental Indenture or Board Resolution, as the case may be, which establishes such series may provide general terms or parameters for Additional Obligations of such series and specify procedures by which such specific 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).

  

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3.4.

	
Form and Denominations.

 

The form of the Obligations of each series shall be established by the provisions of this Indenture or the Supplemental Indenture creating such series.  The Obligations of each series shall be distinguished from the Obligations of other series in such manner as may be determined by the Officers of the Company executing particular Obligations as evidenced by their execution thereof.  The Supplemental Indenture creating a series of Obligations may designate whether the Obligations will be held in the Book-Entry System.

 

The Obligations of each series shall be issuable in such denominations as shall be provided in the provisions of the Supplemental Indenture creating such series.  In the absence of any such provision with respect to the Obligations of any particular series, the Obligations of such series shall be in the denomination of $1,000 or any integral multiple thereof.

 

The face of each Obligation shall state that the Company is personally obligated and fully liable for the amount due under such Obligation and that, subject to the provisions of this Indenture, each Holder has the right to sue on such Obligations and obtain a personal judgment against the Company for satisfaction of the amount due under such Obligation either before or after a foreclosure of this Indenture under Alaska Statutes 09.45.170-09.45.220.

 

	
  

	
3.5.

	
Execution, Authentication, Delivery and Dating.

 

The Obligations shall be executed on behalf of the Company by any Officer and, if required by a Board Resolution, attested by its Secretary or one of its Assistant Secretaries.  The signature of any of these Officers on the Obligations may be manual or facsimile.  Obligations bearing the manual or facsimile signatures of individuals who were at any time the proper Officers of the Company shall bind the Company, notwithstanding that such individuals or any of them shall have ceased to hold such offices prior to the authentication and delivery of such Obligations or shall not have held such offices at the date of such Obligations.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Obligations executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Obligations, and the Trustee shall authenticate and deliver such Obligations as in this Indenture provided and not otherwise.

 

All Obligations shall be dated as provided in the Supplemental Indenture creating such Obligations or, in the absence thereof, the date of their authentication.

  

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No Obligation shall be secured by, or be entitled to any lien, right or benefit under, this Indenture or be valid or obligatory for any purpose, unless there appears on such Obligation (or an allonge thereto) a certificate of authentication substantially in the form provided for herein, executed by the Trustee or the Authenticating Agent by manual signature, and such certificate upon any Obligation (or an allonge thereto) shall be conclusive evidence, and the only evidence, that such Obligation has been duly authenticated and delivered hereunder.

 

	
  

	
3.6.

	
Temporary Obligations.

 

Pending the preparation of definitive Obligations, the Company may execute, and upon Company Request the Trustee shall authenticate and deliver, temporary Obligations which are printed, lithographed, typewritten, photocopied or otherwise produced or reproduced, in any authorized denomination, substantially of the tenor of the definitive Obligations in lieu of which they are issued, and with such appropriate insertions, omissions, substitutions and other variations as the Officers executing such Obligations may determine, as evidenced by their execution of such Obligations.

 

If temporary Obligations are issued, the Company will cause the definitive Obligations to be prepared without unreasonable delay.  After the preparation of definitive Obligations, the temporary Obligations shall be exchangeable for definitive Obligations upon surrender of the temporary Obligations at the office or agency of the Trustee in a Place of Payment therefor, without charge to the Holder.  Upon surrender for exchange of any one or more temporary Obligations the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Obligations of authorized denominations.  Until so exchanged, temporary Outstanding Secured Obligations shall in all respects be entitled to the security and benefits of this Indenture.  Upon surrender for exchange, temporary Obligations shall be canceled as provided in Section 3.11.

 

	
  

	
3.7.

	
Registration; Registration of Transfer and Exchange.

 

The Company shall cause to be kept at one of the offices or agencies maintained by the Trustee a register (herein sometimes referred to as the “Obligation Register”) in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration of Obligations and registration of transfers of Obligations.  The Trustee is hereby appointed “Obligation Registrar” for the purpose of registering Obligations and transfers of Obligations as herein provided.

 

Upon surrender for registration of transfer of any Obligation at the office or agency of the Trustee (or the delivery of other evidence satisfactory to the Trustee of the transfer of an Obligation), the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Obligations of the same series and maturity, of any authorized denomination and of a like aggregate principal amount, and the Obligation Registrar shall register such transfer on the Obligations Register.

  

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Upon surrender for exchange of any Obligation at the office or agency of the Trustee, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the Holder exchanging such Obligation, one or more new Obligations of the same or, in connection with the exchange of one series of Obligations for another as provided in a Supplemental Indenture, a different series, in each case, in an authorized denomination and of a like aggregate principal amount and maturity.

 

All Obligations surrendered upon registration of any exchange or transfer provided for in this Indenture shall be promptly cancelled by the Trustee and thereafter the Trustee shall retain such Obligations or destroy such Obligations and deliver a certificate of destruction to the Company.

 

All Obligations issued upon any registration of transfer or exchange of Obligations shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same security and benefits under this Indenture, as the Obligations surrendered upon such registration of transfer or exchange.

 

Every Obligation presented or surrendered for registration of transfer, exchange or discharge from registration shall (if so required by the Company or the Obligation Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Obligation Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

 

No service charge shall be made for any registration, discharge from registration, registration of transfer or exchange of Obligations, 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 Obligations, other than exchanges under Sections 3.6, 13.6 or 15.7 not involving any transfer.

 

Except as provided in a Supplemental Indenture, the Company shall not be required (i) to issue, register the transfer or exchange of any Obligation of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Obligations of such series under Section 15.4 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange of any Obligation so selected for redemption in whole or in part, except the unredeemed portion of an Obligation being redeemed in part.

 

	
  

	
3.8.

	
Mutilated, Destroyed, Lost and Stolen Obligations.

 

If (i) any mutilated Obligation is surrendered to the Trustee, or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Obligation, and (ii) there is delivered to the Company and the Trustee such security or indemnity as may be required to save each of the Company and the Trustee harmless, then, in the absence of notice to the Company or the Trustee that such Obligation has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Obligation, a new Obligation of the same series and of like tenor and principal amount and bearing a number not assigned to any other Obligation contemporaneously Outstanding.

  

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In case any such mutilated, destroyed, lost or stolen Obligation has become due and payable, the Company in its discretion may, instead of issuing a new Obligation, pay such Obligation.

 

Upon the issuance of any new Obligation under this Section, 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 expense (including the fees and expenses of the Trustee) connected therewith.

 

Every new Obligation issued pursuant to this Section in lieu of any destroyed, lost or stolen Obligation shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Obligation shall be at any time enforceable by anyone, and shall be entitled to all the security and benefits of this Indenture equally and ratably with all other Outstanding Secured Obligations.

 

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Obligations.

 

	
  

	
3.9.

	
Payment of Interest; Interest Rights Preserved.

 

Interest on any Obligation of any series which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Obligation (or one or more Predecessor Obligations) is registered at the close of business on the Regular Record Date for such interest as specified herein or in the provisions of the Supplemental Indenture creating such series.

 

Any interest on any Obligation of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall be payable as provided in such Obligation, or if not so provided, shall forthwith cease to be payable to the Holder on the relevant Regular Record Date solely by virtue of such Holder having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in paragraphs (a) or (b) below:

 

(a)           The Company may elect to make payment of any Defaulted Interest on the Obligations of any series to the Persons in whose names such Obligations (or their respective Predecessor Obligations) are registered at the close of business on 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 Obligation and the date of the proposed payment (which date shall be such as will enable the Trustee to comply with the next sentence hereof), and 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 in this paragraph provided and not to be deemed part of the Trust Estate or Trust Moneys.  Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of an Obligation of such series at his address as it appears in the Obligation Register not less than 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 mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Obligations of such series (or their respective Predecessor Obligations) are registered on such Special Record Date and shall no longer be payable pursuant to the following Subsection (b).

  

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(b)           The Company may make payment of any Defaulted Interest on the Obligations of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Obligations may be listed and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section, each Obligation delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Obligation shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Obligation and each such Obligation shall bear interest from the date specified in the delivered Obligation, so that neither gain nor loss in interest shall result from such transfer, exchange or substitution.

 

	
  

	
3.10.

	
Persons Deemed Owners.

 

Subject to the provisions of Section 1.13, prior to due presentment of such Obligation for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Obligation is registered in the Obligation Register as the Holder of such Obligation for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.9) interest on such Obligation and for all other purposes whatsoever, whether or not such Obligation be overdue, and, to the extent permitted by law, neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

  

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3.11.

	
Cancellation.

 

All Obligations surrendered for payment, redemption, transfer, reissue, exchange or conversion, if surrendered to the Trustee, shall be promptly cancelled by it, and, if surrendered to any Person other than the Trustee, shall be delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by it.  The Company may at any time deliver to the Trustee for cancellation any Obligations previously authenticated and delivered hereunder, which the Company may have acquired in any manner whatsoever, and all Obligations so delivered shall be promptly cancelled by the Trustee.  No Obligation shall be authenticated in lieu of or in exchange for any Obligation cancelled as provided in this Section, except as expressly provided by this Indenture.  All cancelled Obligations shall be retained by the Trustee in accordance with its document retention policies and, if the cancelled Obligations are destroyed, the Trustee thereafter shall deliver a certificate of destruction to the Company.

 

	
4. 

	
PRE-EXISTING OBLIGATIONS

 

	
  

	
4.1.

	
Effect of Amendment and Restatement; Terms.

 

Obligations Outstanding prior to the date hereof shall remain Outstanding under this Indenture following its amendment and restatement.  The title of any series of Obligations Outstanding on the date hereof may be referred to as “First Mortgage Obligations,” “First Mortgage Bonds” or “First Mortgage Notes” even though the Supplemental Indenture establishing the title of such Obligations does not contain such designation.

 

	
5. 

	
AUTHENTICATION AND DELIVERY OF ADDITIONAL OBLIGATIONS

 

	
  

	
5.1.

	
General Provisions.

 

Additional Obligations of any one or more series, or within a series, may from time to time be executed by the Company and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered by the Trustee upon Company Request, upon the bases permitted by, and upon compliance with the conditions of, Section 5.2 (upon the basis of Bondable Additions), Section 5.3 (upon the basis of retirement or defeasance of, or principal payments on, Obligations previously Outstanding), Section 5.4 (upon the basis of Deposited Cash), Section 5.5 (upon the basis of Designated Qualifying Securities), Section 5.7 (in connection with Credit Enhancement Obligations) and Section 5.9 (upon the basis of Certified Progress Payments) and upon receipt in each case by the Trustee of the following (except to the extent such provisions provide otherwise) upon or prior to the date of the initial issuance of Additional Obligations of such series:

  

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(a)           A Board Resolution authorizing and requesting the authentication and delivery under one or more designated Sections of this Article from time- to- time or at any time of a specified principal amount of Additional Obligations of a designated series;

 

(b)           An Officers’ Certificate, dated within 30 days of the date of the relevant Application for the authentication and delivery of the initial issuance of such Additional Obligations and stating that (1) no Event of Default exists; (2) none of the Trust Estate is subject to any Prior Lien other than Prior Liens permitted by Section 14.6; and (3) all conditions precedent provided for in this Indenture relating to the authentication and delivery of the initial issuance of such Additional Obligations have been complied with (and, in the event such Additional Obligations are subject to a Periodic Offering, that the statements made in such Certificates shall be deemed remade at the time of each subsequent authentication and delivery of such Additional Obligations); and

 

(c)           An Opinion of Counsel:

 

(i)            specifying the certificate or other evidence that shows, or cash deposit that will provide for, compliance with the requirements, if any, of any tax or recording or filing law (other than fees for the recording of documents, for which no cash deposit with the Trustee shall be required) applicable to the authentication and delivery of the initial issuance of the Additional Obligations then applied for, or stating that there is no such requirement;

 

(ii)           specifying the certificate or other evidence that shows the authorization, approval or consent of or to the initial issuance by the Company of the Additional Obligations then applied for by any Federal, state or other governmental regulatory agency whose authorization, approval or consent is at the time required to be obtained by the Company having jurisdiction in the premises, or stating that no such authorization, approval or consent is required;

 

(iii)          stating that none of the Trust Estate is subject to any Prior Lien other than Prior Liens permitted by Section 14.6, PROVIDED, that the opinion required by this clause (iii) may be (A)  with respect to personal property, limited to that part of the Trust Estate in which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code, and (B) with respect to all or a portion of the real property included in the Trust Estate, based upon Title Evidence provided pursuant to Subsection (e) below; and

 

(iv)          stating that such Additional Obligations, when executed by the Company and authenticated and delivered by the Trustee and when issued by the Company (or, in the event of Additional Obligations subject to a Periodic Offering, when the terms of such Additional Obligations have been established as provided in the manner contemplated by this Indenture or the Supplemental Indenture under which such Additional Obligations are established), will be the legal, valid and binding obligations of the Company enforceable in accordance with their terms and the terms of this Indenture (subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles)  and entitled to the benefits of and secured by the lien of this Indenture equally and ratably with all other Outstanding Secured Obligations.

  

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(d)           The documents and any cash deposit specified in such Opinion of Counsel, which cash deposit, if any, shall be held by the Trustee as part of the Trust Estate and applied by the Trustee for the purpose specified therein and, to the extent that such cash deposit ultimately proves to be excessive, returned to the Company upon Company Request.

 

(e)           Title Evidence, dated within 30 days of the date of the relevant Application for the authentication  and  delivery of the initial issuance of such Additional Obligations, indicating that the Trust Estate is subject only to the Permitted Encumbrances and Prior Liens permitted by Section 14.6 hereof.

 

In addition, Additional Obligations of any one or more new series, or Additional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon such Additional Obligations shall be authenticated and delivered by the Trustee upon Company Request, upon the basis permitted by, and upon compliance with the conditions of, Section 5.6.

 

In the event that the Company shall have applied for the authentication and delivery of Additional Obligations under this Article and thereafter, the Company shall not have sold, delivered or pledged, or created some other security interest in such Additional Obligations authenticated and delivered under this Article, the Company may surrender such Additional Obligations to the Trustee, whereupon such Additional Obligations, if not previously canceled, shall be canceled by the Trustee.  The Additional Obligations, so surrendered shall thereafter be treated as though they had never been Outstanding.  In addition, in the event that any portion of an Additional Obligation or series of Additional Obligations shall not be advanced or issued, and the Company’s right to receive and advance or issue such portion terminated to the satisfaction of the Trustee, such portion shall thereafter be treated as though it had never been Outstanding and the basis for issuing such Additional Obligations shall be deemed never to have been used for such purpose.

 

	
  

	
5.2.

	
Authentication and Delivery of Additional Obligations Upon Basis of Bondable Additions.

 

Additional Obligations of one or more new series, or Additional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon the same shall be authenticated and delivered by the Trustee upon Company Request, in an aggregate principal amount up to but not exceeding the product obtained by multiplying a fraction, the numerator of which is 100 and the denominator of which is 110, by Bondable Additions available (which shall include the initial dollar amount for which the Company is to receive credit, pursuant to clause (b)(i) below, for purposes of the initial Certificate as to Bondable Additions) as a basis for such authentication and delivery as shown in item 7 of the Summary of Certificate as to Bondable Additions delivered to the Trustee in accordance with this Section, upon receipt by the Trustee of the instruments and cash referred to in this Section.

  

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Whenever requesting (i) the authentication and delivery of Additional Obligations under this Section, (ii) loans and advances under Conditional Obligations under Section 5.6 upon the basis of Bondable Additions, (iii) the withdrawal of Deposited Cash under Section 5.8 upon the basis of Bondable Additions, (iv) the use of Bondable Additions as a basis, in whole or in part, for the release of any part of the Trust Estate under Section 6.2, or (v) the withdrawal of Trust Moneys under Section 7.2, the Company shall deliver to the Trustee the relevant instruments (comprising the related Application) specified in the following clauses (a) through (g):

 

(a)           (1) In the case of a request for the authentication and delivery of Additional Obligations, the documents and any cash deposits required by Section 5.1 and an Available Margins Certificate; (2) in the case of a request for a loan or advance under a Conditional Obligation under Section 5.6 upon the basis of Bondable Additions, the Available Margins Certificate, Officers’ Certificate and Opinion of Counsel required by Section 5.6; (3) in the case of a request for the withdrawal of Deposited Cash under Section 5.8 upon the basis of Bondable Additions, the Company Request and Officers’ Certificate required by Section 5.8; (4) in the case of a request for the conversion of outstanding principal amounts under Section 5.10 upon the basis of Bondable Additions, the documents required by Section 5.10; (5) in the case of a request for the use of Bondable Additions as a basis for the release of any part of the Trust Estate under Section 6.2, the relevant documents required by Section 6.2 in addition to those specified in the following Subsections (b) through (g), which documents may be modified under certain circumstances as stated in the proviso to Section 6.2(d)(ii); (6) in the case of a request for the withdrawal of Trust Moneys under Section 7.2, the Company Request and Officers’ Certificate required by Section 7.2; and (7) in the case of a request for the use of Bondable Additions as a basis for the redesignation or surrender of Designated Qualifying Securities under Section 17.3, the documents required by Section 17.3.

 

(b)           A Certificate as to Bondable Additions showing in substance:

 

(i)             In the case of the first Certificate as to Bondable Additions, $322,225,226; and, in the case of any subsequent Certificate as to Bondable Additions, the balance (in either case, such amount to constitute item 1 in Summary of Certificate as to Bondable Additions set forth below), if any, of Bondable Additions stated in item 9 of the most recent Summary of Certificate as to Bondable Additions, if any, theretofore delivered to the Trustee, as the balance of Bondable Additions to remain after the action applied for in such most recent Summary.

  

- 50 -

  

 

(ii)           An Amount of Property Additions (item 2 in Summary), not described in any previous Certificate as to Bondable Additions, acquired prior to the end of the period specified in the current Certificate (except that the Amount of Property Additions may include the Amount of Property Additions described in any previous Certificate as to Bondable Additions and used as a basis for the authentication and delivery of Additional Obligations surrendered to the Trustee pursuant to the last paragraph of Section 5.1 or as the basis for any portion of an Additional Obligation or series of Additional Obligations which has not been advanced or issued and for which the right to advance or issue has been terminated as provided in the last paragraph of Section 5.1).  With respect to such Property Additions:

 

(A)           The Certificate shall describe in reasonable detail, and state the Cost to the Company of, such Property Additions, which may include Property Additions to be acquired in connection with the granting of the related Application which shall be considered as already acquired for the purpose of computing the Amount of Property Additions.  The Certificate shall state that none of such Property Additions has been described in any previous Certificate as to Bondable Additions (except Property Additions described in any previous Certificate as to Bondable Additions and used as the basis for the authentication and delivery of Additional Obligations surrendered to the Trustee pursuant to the last paragraph of Section 5.1 or as the basis for any principal amount of an Additional Obligation or series of Additional Obligations which has not been loaned or advanced or an Additional Obligation or series of Additional Obligations which has not been issued and for which the Company’s right to receive a loan or advance under or to issue such Additional Obligation has been terminated as provided in the last paragraph of Section 5.1).  Except for major individual items, such Property Additions may be grouped by major classifications then being used by the Company in the maintenance of its fixed plant accounts and may, in the case of tracts or parcels of land or easements or rights-of-way, be described by reference to the deeds through which they were acquired or to the Supplemental Indenture conveying them to the Trustee.  The Certificate shall specify and separately describe any Property Additions consisting of a major item or an Acquired Facility or Property Additions acquired and paid for in whole or in part through the transfer or delivery of securities or other property, together with a description of the kind and respective amounts of such securities or other property.  The Cost to the Company shall be shown separately for each of such Property Additions which is separately described, whether described as a major item or as an Acquired Facility or as Property Additions acquired and paid for in whole or in part through the transfer or delivery of securities or other property.  The Cost to the Company may be shown in the aggregate for all Property Additions grouped within each particular major classification and the Cost to the Company may be allocated among major items and major classifications by an estimate of such nature and upon such basis as the signers deem proper.

 

(B)           The Certificate shall also state the Fair Value to the Company, in the opinion of the Engineer or Appraiser signing such Certificate, of such Property Additions, separately for each thereof or group thereof for which Cost to the Company is shown separately in the Certificate; PROVIDED, HOWEVER, that if such Property Additions include an Acquired Facility, the Fair Value to the Company thereof shall be stated as being the amount thereof set forth in any Independent Engineer’s or Independent Appraiser’s Certificate required by Subsection 5.2(c).  In addition the Certificate shall also state the fair market value in cash, as stated in any Independent Appraiser’s Certificate required by Subsection 5.2(d), of any securities or other property transferred or delivered to acquire or pay for any such Property Additions.

  

- 51 -

  

 

(C)           The Certificate shall state that, with respect to each of such Property Additions or group thereof for which Cost to the Company is shown separately or by groups in the Certificate, the certified Amount of Property Additions is the lower of the certified Cost to the Company thereof and the certified Fair Value to the Company thereof.

 

(D)           Nothing in this Section shall be deemed to prevent the Company from certifying any Property Additions acquired by the Company during any period without simultaneously certifying other Property Additions that the Company may have acquired in that or any other period, and by so doing the Company shall not be deemed to have lost the right so to certify later such other Property Additions.

 

(iii)           The aggregate amount (item 3 in Summary) of all Retirements during the period from the date to which Retirements had been included in item 3 of the most recent Summary theretofore delivered to the Trustee (or the Cut-Off Date in the case of the first such Certificate) to the later of (a) a date not earlier than the 90th day before the date of the related Application and (b) the end of the period specified in the current Certificate pursuant to clause (ii) above.

 

(iv)           The credits (item 4 in Summary) against Retirements, which shall equal, subject to the provisions of the last sentence of clause (v) below, the sum of the following:

 

(A)           the excess of credits against Retirements carried forward from the most recent Certificate, as provided in the last sentence of clause (v) below;

 

(B)           the aggregate amount of (i) any cash, (ii) purchase money obligations, (iii) the principal amount of retired Obligations or principal amounts paid on Obligations (which amount may not be reloaned or readvanced under such Obligations), (iv) Bondable Additions and (v) Designated Qualifying Securities, in each case, delivered or certified to the Trustee for use as a basis for release of any part of the Trust Estate under Section 6.2 during the period covered by clause (iii) above; and

 

(C)           all insurance moneys received by the Trustee pursuant hereto or paid to a trustee, mortgagee or other holder under a Prior Lien during the period covered by clause (iii) above on account  of the damage, loss or destruction of any Bondable Property.

  

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(v)           The excess (item 6 in Summary) of the Amount of Property Additions shown pursuant to clause (ii) above (item 2) over the net amount of Retirements (item 5), which net amount shall be determined by deducting the credits shown pursuant to clause (iv) above (item 4) from the aggregate amount of Retirements shown pursuant to clause (iii) above (item 3), and such excess shall be the amount of the net Bondable Additions then being certified.  If in any case the credits against Retirements exceed the aggregate amount of Retirements shown pursuant to clause (iii) above (item 3), the net amount of Retirements for the purpose of this clause shall be deemed to be zero, but such excess of credits against Retirements may be carried forward and used as a credit against Retirements in the next Certificate.

 

(vi)          The sum (item 7 in Summary) of the amount shown pursuant to clause (i) above (item 1) and the amount shown pursuant to clause (v) above (item 6), namely the total Bondable Additions then available.

 

(vii)         The total amount (item 8 in Summary) of Bondable Additions which are then being used, which shall equal (in any combination) (i) 110% of the aggregate principal amount of any Additional Obligations whose authentication and delivery are then being applied for under this Section, (ii) 110% of the aggregate principal amount of the loans or other advances under Conditional Obligations which are then being applied for under Section 5.6, (iii) 110% of the amount of any Deposited Cash which is then being withdrawn under Section 5.8, (iv) 100% of any Trust Moneys which are then being withdrawn under Section 7.2, (v) 100% of any Bondable Additions which are then being used as a basis for a release under Section 6.2, (vi) 110% of the aggregate principal amount of Designated Qualifying Securities then being redesignated or surrendered under Section 17.3, and (vii) 110% of the outstanding principal amount then being converted under Section 5.10.

 

(viii)        The balance (item 9 in Summary) of the Bondable Additions shown by the Certificate that will remain after the granting of the Application then being made, which shall be computed by deducting the sum shown pursuant to clause (vii) above (item 8) from the amount shown pursuant to clause (vi) above (item 7).

 

(ix)           Except when converting outstanding principal amounts under Section 5.10, if any of the Property Additions described in the Certificate were acquired with Certified Progress Payments:

 

(A)          the amount of such Property Additions acquired with Certified Progress Payments; and

  

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(B)           the aggregate principal amount of the Additional Obligations authenticated and delivered upon the basis of the Certified Progress Payments used to acquire the Property Additions certified pursuant to subclause (A) above that has been paid, redeemed or otherwise retired or defeased under Article 8, which shall equal the product obtained by multiplying a fraction, the numerator of which is 100 and the denominator of which is 110 by the amount of Property Additions certified pursuant to subclause (A) above.

 

(x)           That the Property Additions described in the Certificate have not previously been certified for use as the basis for converting outstanding principal amounts under Section 5.10.

 

(xi)           That the Property Additions described in the Certificate, except such as have been Retired, are desirable in the conduct of the business of the Company; that the allocation of the Cost to the Company of such Property Additions to each major item or major classification  thereof is, in the opinion of the signers, proper; and that the balance of the Bondable Additions to remain after the action applied for plus the Cost to the Company or the Fair Value to the Company, whichever is less, of uncertified Property Additions is at least equal to the aggregate amount of uncertified Retirements.

 

(xii)          That the allowances or charges, if any, for interest, taxes, engineering, legal and accounting costs and expenses, allocated administrative charges, superintendence fees and expenses, insurance, casualties and other expenses during construction (or in connection with the acquisition of Property Additions) which are included in the Cost to the Company of such of the Property Additions described in the Certificate as were constructed or acquired by or for the Company have been charged and are properly chargeable to fixed plant accounts in accordance with Accounting Requirements and are, in the opinion of the signers, proper in respect of the Property Additions specified.

 

(xiii)         That no portion of the Cost to the Company of the Property Additions described in the Certificate should properly have been charged to maintenance or repairs and that no expenditures are included in the Certificate which under Accounting Requirements are not properly chargeable to fixed plant accounts.

 

(xiv)         That the terms used in the Certificate which are defined herein are used as herein defined.

 

The Certificate as to Bondable Additions required by this Subsection (b) shall be subdivided into numbered paragraphs corresponding to the foregoing clauses (i) to (viii), inclusive, and shall include a Summary in substantially the following form:

  

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Summary of Certificate as to

 

Bondable Additions No. ___

 

The undersigned hereby certify that the following is a true summary of the Certificate:

 

Start with:

 

	
1.

	
The balance of Bondable Additions remaining after the action applied for in the next previous Certificate (Certificate No. _______) [or, in the case of the first Certificate, $322,225,226]

	  	
$ ________

	  	  	  	  
	
Then take the new gross Property Additions as shown in item 2 below:

	  	  
	  	  	  	  
	
2.

	
Amount of additional Property Additions now certified, being the Amount of all or some Property Additions prior to __________ and not certified in any previous Certificate as to Bondable Additions

	  	
$ ________

	  	  	  	  
	
Then determine the deductions for Retirements by deducting item 4 below from item 3 below to produce item 5:

	  	  
	  	  	  	  
	
3.

	
The aggregate amount of all Retirements in the period from __________ through __________

	  	
$ ________

	  	  	  	  
	
4.

	
The sum of the credits against Retirements in the period from __________ through __________

	  	
$ ________

	  	  	  	  
	
5.

	
The net amount of Retirements to be deducted (if less than zero, enter zero)

	  	
$ ________

	  	  	  	  
	
Then determine the net Bondable Additions now being certified by deducting item 5 from item 2 to produce item 6:

	  	  
	  	  	  	  
	
6.

	
Net Bondable Additions now being certified

	  	
$ ________

	  	  	  	  
	
Then add item 1 and item 6 to produce item 7:

	  	  
	  	  	  	  
	
7.

	
Total Bondable Additions available for the action applied for

	  	
$ ________

	  	  	  	  
	
Deduct item 8 from item 7 to produce item 9:

	  	  
	  	  	  	  
	
8.

	
Bondable Additions now being used

	  	
$ ________

	  	  	  	  
	
9.

	
Balance of Bondable Additions to remain after the action applied for

	  	
$ ________

 

  

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Dated ________________________, ________.

 

 

	  	  
	  	
(Title)

	  	  
	  	
(Title)

	  	  
	  	
(Engineer or Appraiser)

	  	  
	  	
(Accountant)

 

(c)           In case any Property Additions described in the Certificate consist of an Acquired Facility, an Engineer’s or Appraiser’s Certificate (which shall be given by an Independent Engineer or Independent Appraiser if this Indenture is qualified under the TIA and the Amount of Property Additions attributed to such Acquired Facility is not less than $25,000 and not less than 1% of the aggregate principal amount of then Outstanding Secured Obligations), dated within 90 days prior to the date of the related Application, stating, in the opinion of the signer, the Fair Value to the Company of the Property Additions constituting such Acquired Facility, except such as have been Retired.

 

(d)           In case any Property Additions described in the Certificate have been acquired or paid for in whole or in part through the transfer or delivery of securities or other property, an Appraiser’s Certificate (which shall be given by an Independent Appraiser if this Indenture is qualified under the TIA and the fair market value of such securities as set forth in such Certificate is not less than $25,000 and not less than 1% of the aggregate principal amount of then Outstanding Secured Obligations) stating, in the opinion of the signer, the fair market value in cash of such securities and other property at the time of the transfer or delivery thereof in payment for such Property Additions, which fair market value shall be deemed to be, in whole or in part, as the case may be, the Cost to the Company of such Property Additions.

 

(e)           Such Supplemental Indenture or other instruments of conveyance, transfer and assignment as, in the Opinion of Counsel, may be necessary to subject to the lien of the Indenture all right, title and interest of the Company in and to the Property Additions so described or an Opinion of Counsel that no such instruments are necessary for such purpose.

 

(f)            An Opinion of Counsel (which may be based on opinions of other counsel deemed by him reliable), dated within five days prior to the date of the Application, to the effect that:

  

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(i)             if such Property Additions include any property located or constructed on, over or under public highways, rivers or other public property, the Company has the lawful right under permits or franchises granted by a governmental body having jurisdiction in the premises or by the law of the state in which such property is located to maintain and operate such property for an unlimited, indeterminate or indefinite period of time or for the period, if any, specified in such permit, franchise or law, and to remove such property at the expiration of the period covered by such permit, franchise or law, or that the terms of such permit, franchise or law require any public authority having the right to take over such property to pay fair consideration therefor or the term of such permit or franchise extends beyond the useful life of such property;

 

(ii)           the Company has corporate power to own and operate such Property Additions;

 

(iii)           the Indenture is, or upon delivery of the instruments of conveyance, transfer or assignment, if any, specified in such Opinion will be, a valid lien upon all Property Additions described in the Certificate (except such as have been Retired) free and clear of any Prior Liens except to the extent otherwise permitted by the proviso to Section 6.2(d)(ii)); and

 

(iv)           the documents which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture for an Application for the action applied for and, upon the basis of such Application, all conditions precedent herein provided for relating to the authentication and delivery of the Additional Obligations therein applied for, the release of the property whose release is being requested, the withdrawal of the Deposited Cash or Trust Moneys whose withdrawal is then being requested or the conversion of outstanding principal amounts under Section 5.10 on the basis of Bondable Additions then requested, have been complied with, as applicable.

 

(g)           Title Evidence indicating that (1) the property described in the related Application qualifies as Property Additions under this Indenture, (2) the Company has or, contemporaneously with the taking of action applied for, will have title to the Property Additions described in the Certificate (except as have been Retired), free and clear of any Prior Liens (except to the extent otherwise permitted by the proviso to Section 6.2(d)(ii) and except for Permitted Encumbrances), (3) the Company has or, contemporaneously with the taking of action applied for, will have duly obtained any easements, rights-of-way or leasehold interest which is described in the Certificate, subject only to Permitted Encumbrances, and (4) the Indenture is, or contemporaneously with the taking of action applied for will be, a valid lien upon all such Property Additions, subject to no liens, encumbrances, covenants, restrictions or other defects other than Permitted Encumbrances and Prior Liens permitted by the proviso to Section 6.2(d)(ii); PROVIDED, that any Title Evidence as to personal property may be limited to such Property Additions in which a lien may be perfected by the filing of a financing statement under the Uniform Commercial Code.

  

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5.3.

	
Authentication and Delivery of Additional Obligations Upon Basis of Retirement or Defeasance of Obligations or Principal Payments on Obligations.

 

Additional Obligations of one or more new series, or Additional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon the same shall be authenticated and delivered by the Trustee upon Company Request, in an aggregate principal amount up to but not exceeding the aggregate principal amount of the Obligations and the aggregate amount of principal payments on Obligations made the basis for such authentication and delivery, upon receipt by the Trustee of the following:

 

(a)           The documents and any cash deposit required by Section 5.1.

 

(b)           Subject to the restrictions of Subsection (d) of this Section, Obligations theretofore authenticated and delivered under this Indenture, whether or not in transferable form, matured or unmatured, cancelled or uncancelled, in an aggregate principal amount which, when added to the aggregate amount of principal payments, if any, on Obligations referred to in Subsection (c) below, will equal or exceed the aggregate principal amount of Additional Obligations whose authentication and delivery are then applied for under this Section 5.3; PROVIDED, HOWEVER, that, in lieu of delivering Obligations to the Trustee, the Company may deposit with or deliver to the Trustee:

 

(i)            cash sufficient to pay at Stated Maturity or to redeem certain specified Obligations theretofore authenticated and delivered hereunder, PROVIDED that, if such Obligations are to be redeemed, notice of such redemption shall have been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee shall have been made; and/or

 

(ii)           an Officers’ Certificate, dated within five days of the relevant Application for the authentication and delivery of such Additional Obligations, stating either or both of:

 

(A)           that cash sufficient to pay or redeem certain specified Obligations theretofore authenticated and delivered hereunder is then held by the Trustee in trust for such purpose and, if such Obligations are to be redeemed, that notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and/or

 

(B)           that certain specified Obligations theretofore authenticated and delivered hereunder have been paid, redeemed or otherwise retired or have ceased to be Outstanding; or

  

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(iii)           an Officers’ Certificate, dated within five days of the relevant Application for the authentication and delivery of such Additional Obligations, stating that certain specified Obligations theretofore authenticated and delivered hereunder have been defeased under Article 8 and are no longer Outstanding.

 

(c)           An Officers’ Certificate, dated within five days of the Application for the authentication and delivery of such Additional Obligations, stating the aggregate amount of principal payments that have been made on specified Obligations (other than Obligations identified in Subsection (d) below) which, when added to the aggregate principal amount of the Obligations delivered to or with respect to which a deposit or delivery has been made with the Trustee pursuant to Subsection (b) above, will equal or exceed the aggregate principal amount of Additional Obligations whose authentication and delivery are then applied for under this Section; PROVIDED, HOWEVER, that in lieu of delivery of such Officers’ Certificate, the Company may deposit with or deliver to the Trustee cash sufficient to make principal payments on the certain specified Obligations in the aggregate amount otherwise required to be stated in such Officers’ Certificate.

 

(d)           An Officers’ Certificate, dated within five days of the relevant Application for the authentication and delivery of such Additional Obligations, stating that the Obligations or principal payments thereon then being made the basis for the authentication and delivery of the Additional Obligations do not include:

 

(i)             any Obligations or any principal payment on an Obligation which shall have theretofore been made, or is currently being otherwise made, the basis for the authentication and delivery of Additional Obligations (or any loan, advance thereunder or issuance thereof), the release of any part of the Trust Estate, the withdrawal or application of Deposited Cash or Trust Moneys or the surrender or redesignation of Designated Qualifying Securities; or

 

(ii)            any Obligation (a) whose payment, redemption or other retirement, or provision therefor, has been effected through the operation of any sinking, amortization, improvement or other analogous fund and (b) whose use under this Article is at the time precluded by any provision of this Indenture; or

 

(iii)           any Obligation which has been surrendered upon any exchange or transfer or any Obligation in lieu of which another Obligation has been authenticated and delivered under Section 3.8; or

 

(iv)           any Obligation which, in accordance with the last paragraph of Section 5.1, is treated as though it had never been Outstanding;

 

(v)           any Obligation authenticated and delivered on the basis of Designated Qualifying Securities or any Obligation that has been paid or deemed paid by the proceeds of the payment or redemption of Designated Qualifying Securities (in all cases after giving effect to any provision of this Indenture whereby Obligations originally authenticated and delivered on one basis shall be deemed to be authenticated and delivered upon another basis); or

  

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(vi)          any Obligation or any principal payment on an Obligation retired or paid pursuant to or by an advance or loan under an Obligation held by a Credit Enhancer and evidencing Credit Enhancement; or

 

(vii)         any Obligation authenticated and delivered on the basis of Certified Progress Payments or any principal payment of amounts outstanding under an Obligation on the basis of Certified Progress Payments unless such Obligation or principal payment has been paid, redeemed, or otherwise retired or defeased under Article 8 using the proceeds of the Additional Obligations whose authentication and delivery are then being applied for (and each such Additional Obligation, or principal amount loaned or advanced thereunder, shall be deemed to have been authenticated and delivered or, in the case of a loan or advance, made on the basis of Certified Progress Payments).

 

(e)           An Opinion of Counsel stating that the documents and cash or Obligations which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture and that, upon the basis of the relevant Application, the conditions precedent to authentication and delivery of the Additional Obligations applied for under this Section 5.3 have been satisfied.

 

(f)           An Available Margins Certificate.

 

Every Obligation received by the Trustee and on the basis of which an Additional Obligation is authenticated and delivered under this Article, if not already cancelled, shall be promptly cancelled and thereafter the Trustee shall destroy such Obligation and deliver a certificate of destruction to the Company.

 

	
  

	
5.4.

	
Authentication and Delivery of Additional Obligations Upon Deposit of Cash With Trustee.

 

Additional Obligations of one or more new series, or Additional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon the same shall be authenticated and delivered by the Trustee upon Company Request, upon receipt by the Trustee of the following:

 

(a)           The documents and any cash deposit required by Section 5.1.

 

(b)           Cash (which may be cash representing the purchase price of, or the proceeds of a loan or advance evidenced by the Additional Obligations to be authenticated and delivered under this Section 5.4) equal to the aggregate principal amount of the Additional Obligations whose authentication and delivery are then applied for under this Section 5.4 (such cash being herein sometimes referred to as “Deposited Cash”).

  

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(c)           An Opinion of Counsel stating that the documents which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture and that, upon the deposit of an amount of cash equal to the aggregate principal amount of the Additional Obligations whose authentication and delivery are so applied for, the conditions precedent to such authentication and delivery of such Additional Obligations under this Article shall have been satisfied.

 

(d)           An Available Margins Certificate.

 

	
  

	
5.5.

	
Authentication and Delivery of Additional Obligations Upon Basis of Designated Qualifying Securities.

 

Additional Obligations of one or more new series, or Additional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon such Additional Obligations shall be authenticated and delivered by the Trustee upon Company Request, in an aggregate principal amount up to but not exceeding the aggregate principal amount of the Designated Qualifying Securities made the basis of such authentication and delivery, upon receipt by the Trustee of the following:

 

(a)           The documents and any cash deposit required by Section 5.1.

 

(b)           An Available Margins Certificate.

 

(c)           Designated Qualifying Securities, which (1) the Company designates as the basis for authentication and delivery of such Additional Obligations; (2) shall be redeemable at the demand of the Trustee on or after an Event of Default; PROVIDED, HOWEVER, that in the case of Designated Qualifying Securities issued in connection with a Restructuring Transaction, this Subsection shall not be applicable; (3) bear interest at the rate at least equal to the rate of interest to accrue on the Additional Obligations to be authenticated and delivered upon the basis of such Designated Qualifying Securities or on the basis of Deposited Cash to the extent any of such Deposited Cash is withdrawn on the basis of such Designated Qualifying Securities; (4) may, but need not, contain provisions for the redemption thereof at the option of the issuer thereof, any such redemption to be made at a redemption price or prices not less than the principal amount thereof; (5) mature on such date or dates and in such principal amounts as shall correspond to the maturity date or dates and principal amounts of the Additional Obligations to be authenticated and delivered upon the basis of such Designated Qualifying Securities or on the basis of Deposited Cash to the extent any of such Deposited Cash is withdrawn on the basis of such Designated Qualifying Securities; (6) contain mandatory redemption provisions corresponding to the mandatory and optional redemption provisions (pursuant to a sinking fund, at the option of the Holder thereof, or otherwise) of the Additional Obligations to be authenticated and delivered on the basis of such Designated Qualifying Securities or on the basis of Deposited Cash to the extent any of such Deposited Cash is withdrawn on the basis of Designated Qualifying Securities; and (7) shall be held by the Trustee in accordance with Article 17.

  

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(d)           An Officers’ Certificate, dated within five days of the relevant Application for the authentication and delivery of Additional Obligations, stating that the Designated Qualifying Securities then being made the basis for such authentication and delivery of Additional Obligations do not include any Designated Qualifying Securities which shall have theretofore been made, or are currently being otherwise made, the basis for the authentication and delivery of Additional Obligations (or any advance or issuance thereunder), the release of any part of the Trust Estate, the withdrawal of Deposited Cash or Trust Moneys or the surrender or redesignation of Designated Qualifying Securities.

 

(e)           An Engineer’s or Appraiser’s Certificate (which shall be given by an Independent Engineer or Independent Appraiser if (1) the aggregate of the fair value of such Designated Qualifying Securities to be deposited with the Trustee in connection with such Application and the fair value of all Designated Qualifying Securities and other securities deposited with the Trustee since the commencement of the then current calendar year (as previously certified to the Trustee) is 10% or more of the aggregate principal amount of Obligations then Outstanding and (2) the fair value of such Designated Qualifying Securities to be deposited with the Trustee in connection with such Application is not less than $2,000,000 (or, if this Indenture is qualified under the TIA, $25,000) and not less than 1% of the aggregate principal amount of Obligations then Outstanding), dated within 30 days prior to the date of the related Application, stating, in the opinion of the signer, the fair value to the Company of such Designated Qualifying Securities to be deposited with the Trustee in connection with such Application.

 

(f)            An Opinion of Counsel (which as to clauses (i), (ii) and (iii) below may be from counsel to the issuer of the Designated Qualifying Securities) stating that:

 

(i)             the forms of the Qualifying Securities delivered pursuant to Subsection (c) above have been duly approved by the issuer of the Designated Qualifying Securities and have been established in conformity with the provisions of the related Qualifying Securities Indenture;

 

(ii)            the terms of such Qualifying Securities have been duly authorized by the issuer of the Designated Qualifying Securities and have been established in conformity with the provisions of the related Qualifying Securities Indenture;

 

(iii)           such Qualifying Securities have been duly issued under the related Qualifying Securities Indenture and constitute valid and legally binding obligations of the issuer of the Designated Qualifying Securities, entitled to the benefits provided by such Qualifying Securities Indenture, and are enforceable in accordance with their terms; and

  

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(iv)          the documents, cash, if any, and Designated Qualifying Securities which have been or are therewith delivered to the Trustee and the Qualifying Securities Indenture pursuant to which such Designated Qualifying Securities have been issued conform to the requirements of this Indenture and that, on the basis of the Application, the conditions precedent provided for in this Indenture relating to the authentication and delivery of the Additional Obligations therein applied for have been complied with.

 

(g)           Certified copies of all opinions, certificates and other documents delivered to the trustee under the applicable Qualifying Securities Indenture in connection with the issuance of such Designated Qualifying Securities.

 

	
  

	
5.6.

	
Authentication and Delivery of Conditional Obligations; Loans or Advances Thereunder.

 

“Conditional Obligations” are (i) Additional Obligations authenticated and delivered as provided in this Section, and under which no principal amount is outstanding thereunder at the time of such authentication and delivery and (ii) Pre-Existing Obligations with principal amounts remaining to be loaned or advanced after the date hereof.

 

Conditional Obligations of one or more new series, or Conditional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon such Conditional Obligations shall be authenticated and delivered by the Trustee upon Company Request, upon receipt by the Trustee of the documents and cash deposit, if any, specified in Subsections (a), (b), (c) and (d) of Section 5.1 (except that the Officers’ Certificate and Opinion of Counsel with respect to the compliance with conditions precedent shall apply only to the conditions precedent set forth in Section 5.1).

 

Loans or advances under a Conditional Obligation shall only be made upon the delivery of a written certification by the Trustee under this Section.  For purposes of the other Sections of this Indenture, each loan or advance under a Conditional Obligation shall be treated as though an Additional Obligation in an aggregate principal amount equal to the amount of the loan or advance was being authenticated and delivered under the applicable Section of this Indenture referred to in Subsection (a) below, and all references to Additional Obligations so authenticated and delivered shall include loans or advances made under Conditional Obligations on the same basis.  Upon Company Request, the Trustee shall deliver to the Company a written certification upon receipt by the Trustee of the following:

 

(a)           Either (1) the relevant documents specified in Subsections (b) through (g), inclusive, of Section 5.2, (2) the relevant documents, Obligations or principal payments on Obligations specified in Subsections (b) through (e) of Section 5.3, (3) the relevant documents and Designated Qualifying Securities specified in Subsections (c) through (g), inclusive, of Section 5.5, or (4) the relevant documents specified in Subsections (c) through (d), inclusive, of Section 5.9 (in each case with such omissions and variations as are appropriate in view of the fact that such Sections are being used as the basis for loans or advances under Conditional Obligations rather than the authentication and delivery of Additional Obligations), which documents would permit the authentication and delivery of Additional Obligations in an aggregate principal amount equal to such requested loan or advance.

  

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(b)           An Available Margins Certificate.

 

(c)           An Officers’ Certificate and an Opinion of Counsel each stating that the conditions precedent provided for in this Indenture for the Trustee to deliver a written certificate with respect to such loan or advance have been complied with.

 

For the purposes of (i) receiving payment on Conditional Obligations, whether at Stated Maturity, upon redemption or if the principal of all Obligations is declared immediately due and payable following an Event of Default, as provided in Section 9.1 of this Indenture, or (ii) computing the principal amount of such Conditional Obligations in connection with any exercise of remedies or Act on the part of the Holder thereof, the principal amount of such Conditional Obligations shall equal the aggregate of the amounts loaned or advanced to, or on behalf of, the Company thereunder, less any repayments thereof.

 

Each written certification required to be delivered by the Trustee under this Section shall state that the Trustee has received the relevant documents specified in Subsections (a) through (c) above and the amount of the loan or advance permitted under this Section by virtue of the delivery of such documents.

 

	
  

	
5.7.

	
Authentication and Delivery of Credit Enhancement Obligations.

 

Additional Obligations of one or more new series, or Additional Obligations of an existing series (“Credit Enhancement Obligations”), may from time to time be executed by the Company and delivered to the Trustee for authentication, and such Credit Enhancement Obligations shall be authenticated and delivered by the Trustee upon Company Request, in connection with the authentication and delivery of any Additional Obligations pursuant to Section 5.2, 5.3, 5.4, 5.5, 5.6 or 5.9, for the purpose of evidencing the Company’s obligation to repay amounts paid by the Credit Enhancer on an Obligation or any loan or advance made to, or on behalf of, the Company (and related interest, fees, charges and other amounts) in connection with Credit Enhancement or liquidity support of the Additional Obligations in connection with which the Credit Enhancement Obligations are authenticated and delivered; PROVIDED, HOWEVER, that the stated maximum principal amount of any such Credit Enhancement Obligations shall not exceed the aggregate principal amount of the Additional Obligations with respect to which such Credit Enhancement or liquidity support is being provided, plus an amount equal to such number of days’ interest thereon as the Company shall determine in connection with (as provided in the Supplemental Indenture) the issuance thereof computed at the maximum interest rate applicable thereto, and the Credit Enhancement Obligation may also evidence the Company’s obligation to pay related fees and other charges related thereto or the enforcement thereof.  Except as otherwise provided in a Supplemental Indenture, for the purposes of (A) receiving payment on a Credit Enhancement Obligation, whether at Stated Maturity, upon redemption or if the principal of all Obligations is declared immediately due and payable following an Event of Default, as provided in Section 9.1 of this Indenture, or (B) computing the principal amount of any Credit Enhancement Obligation in connection with any Act on the part of the Holder, the principal amount of a Credit Enhancement Obligation shall be the actual principal amount that the Company shall owe thereon at the time as a consequence of payments made or loans or advances to or for the account of the Company.  The proceeds of any payment pursuant to, or any loan or advance under, any Credit Enhancement Obligation shall be used solely for the payment of the related Obligation or for the enforcement of, or protection of the security for, such Credit Enhancement Obligation, and for other related fees and charges.

  

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5.8.

	
Withdrawal of Deposited Cash.

 

Until the same is paid upon Company Request as provided in this Section, the Trustee shall hold all Deposited Cash as a part of the Trust Estate; and, upon any sale of the Trust Estate or any part thereof under Article 9, any Deposited Cash then held by the Trustee shall be applied in accordance with Section 9.7; but, prior to any such sale, all or any part of the Deposited Cash shall be applied by the Trustee from time to time as hereinafter in this Section provided.

 

From time to time, whenever the Company becomes entitled to the authentication and delivery of Additional Obligations under Section 5.2 upon the basis of Bondable Additions or under Section 5.3 upon the basis of the retirement or defeasance of, or principal payments on, Obligations, under Section 5.5 upon the basis of Designated Qualifying Securities, or under Section 5.9 upon the basis of Certified Progress Payments, the Trustee shall (in lieu of authenticating and delivering Additional Obligations) pay to or as directed by the Company upon Company Request, and the Company shall be entitled to withdraw and receive or direct payment of, Deposited Cash in an amount equal to the principal amount of the Additional Obligations to whose authentication and delivery the Company would be so entitled, but only upon receipt by the Trustee of the following:

 

(a)           A Company Request requesting the withdrawal and payment to, or as directed by, the Company of a specified amount of Deposited Cash.

 

(b)           An Officers’ Certificate, dated within five days of the date of the relevant Application for such withdrawal and payment stating that no Event of Default exists, that all conditions precedent provided for in this Indenture relating to such withdrawal and payment have been complied with.

  

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(c)           In the case of an Application for the withdrawal and payment of Deposited Cash upon the basis of Bondable Additions, the additional relevant documents specified in Section 5.2 (other than an Available Margins Certificate) for delivery whenever requesting the use of Bondable Additions as a basis for such withdrawal of Deposited Cash under this Section, PROVIDED that any Additional Obligation that was authenticated and delivered on the basis of Deposited Cash that is withdrawn and paid on the basis of Bondable Additions thereafter shall be deemed to have been authenticated and delivered on the basis of Bondable Additions.

 

(d)           In the case of an Application for the withdrawal of Deposited Cash upon the basis of the retirement or defeasance of, or principal payments on, Obligations, the documents and Obligations specified in Subsections (b), (c), (d) and (e) of Section 5.3 for delivery to the Trustee (with such omissions and variations as are appropriate in view of the fact that the Application involves the withdrawal of Deposited Cash and not the authentication and delivery of any Additional Obligations), PROVIDED that thereafter any Additional Obligation that was authenticated and delivered on the basis of Deposited Cash that is withdrawn and paid on the basis of the retirement or defeasance of, or principal payments on, Obligations thereafter shall be deemed to have been authenticated and delivered on the basis of the retirement of Obligations.

 

(e)            In the case of an Application for the withdrawal and payment of Deposited Cash upon the basis of Designated Qualifying Securities, the documents and Designated Qualifying  Securities specified in Subsections (c), (d), (e), (f) and (g) of Section 5.5 for delivery to the Trustee (with such omissions and variations as are appropriate in the view of the fact that the Application involves the withdrawal and payment of Deposited Cash and not the authentication and delivery of Additional Obligations); PROVIDED that thereafter any Additional Obligation that was authenticated and delivered on the basis of Deposited Cash that is withdrawn and paid on the basis of Designated Qualifying Securities thereafter shall be deemed to have been authenticated and delivered on the basis of Designated Qualifying Securities.

 

(f)            In the case of an Application for the withdrawal and payment of Deposited Cash upon the basis of Certified Progress Payments, the documents specified in Subsections (c) and (d) of Section 5.9 for delivery to the Trustee (with such omissions and variations as are appropriate in the view of the fact that the Application involves the withdrawal and payment of Deposited Cash and not the authentication and delivery of Additional Obligations); PROVIDED that thereafter any Additional Obligation that was authenticated and delivered on the basis of Deposited Cash that is withdrawn and paid on the basis of Certified Progress Payments thereafter shall be deemed to have been authenticated and delivered on the basis of Certified Progress Payments.

 

(g)           An Opinion of Counsel stating that the conditions precedent provided for in this Indenture relating to such withdrawal and payment of Deposited Cash have been complied with.

  

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5.9.

	
Authentication and Delivery of Additional Obligations Upon Basis of Certified Progress Payments.

 

Additional Obligations of one or more new series, or Additional Obligations of an existing series, may from time to time be executed by the Company and delivered to the Trustee for authentication, and thereupon such Additional Obligations shall be authenticated and delivered by the Trustee upon Company Request, in an aggregate principal amount up to but not exceeding the product obtained by multiplying a fraction, the numerator of which is 100 and the denominator of which is 110, by the Certified Progress Payments made the basis for such authentication and delivery, upon receipt by the Trustee of the following:

 

(a)           The documents and any cash deposit required by Section 5.1.

 

(b)           An Available Margins Certificate.

 

(c)           An Officers’ Certificate, dated within five days of the relevant Application for the authentication and delivery of Additional Obligations, stating:

 

(i)            the total amount of Certified Progress Payments which are then being made the basis for the authentication and delivery of Additional Obligations, which shall equal 110% of the aggregate principal amount of Additional Obligations whose authentication and delivery are then being applied for under this Section;

 

(ii)            that the sum of (a) the aggregate principal amount of all Additional Obligations then Outstanding that were originally authenticated and delivered on the basis of Certified Progress Payments to the extent such principal amount has not been converted under Section 5.10 plus (b) the aggregate principal amount of the Additional Obligations whose authentication and delivery are then being applied for under this Section does not exceed 40% of the sum of (i) the aggregate principal amount of all Obligations then Outstanding plus (ii) the aggregate principal amount of the Additional Obligations whose authentication and delivery are then being applied for under this Section; and

 

(iii)           that the Certified Progress Payments then being made the basis for the authentication and delivery of Additional Obligations do not include any Certified Progress Payments which shall have theretofore been made, or are otherwise currently being made, the basis for the authentication and delivery of Additional Obligations (or any advance or issuance thereunder).

 

(d)           An Opinion of Counsel stating that the applicable Qualified EPC Contract is part of the Trust Estate and that the actions taken by the Company under this Section with respect to the delivery of documents to the Trustee conform to the requirements of this Indenture and that, upon the basis of the Application, the conditions precedent provided for in this Indenture relating to the authentication and delivery of the Additional Obligations therein applied for have been complied with.

  

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5.10.

	
Conversion of Additional Obligations.

 

From time to time, upon Company Request, all or a portion of the principal amount outstanding under Additional Obligations originally authenticated and delivered (or deemed to have been authenticated and delivered with respect to a loan or advance under a Conditional Obligation) upon the basis of Certified Progress Payments under Section 5.9, shall be converted to principal amounts outstanding under Additional Obligations deemed to have been authenticated and delivered upon the basis of Bondable Additions under Section 5.2, in an aggregate principal amount up to but not exceeding the product obtained by multiplying a fraction, the numerator of which is 100 and the denominator of which is 110, by Bondable Additions acquired with the proceeds of Certified Progress Payments and made the basis for such conversion as shown in item 8 of the Summary of Certificate as to Bondable Additions delivered to the Trustee under this Section, upon receipt by the Trustee of the following:

 

(a)           The relevant documents specified in Subsections (b) through (g), inclusive, of Section 5.2 for delivery to the Trustee whenever requesting the use of Bondable Additions as the basis for converting principal amounts outstanding under Additional Obligations under this Section.

 

(b)           An Officers’ Certificate, dated within five days of the relevant Application requesting the conversion of principal amounts outstanding under Additional Obligations under this Section, stating that:

 

(i)             no Event of Default exists;

 

(ii)            the conditions precedent provided for in this Indenture relating to such conversion have been complied with; and

 

(iii)           identifying the Additional Obligations all or a portion of the principal amount of which is to be converted under this Section and specifying the principal amount to be converted.

 

(c)           An Opinion of Counsel stating that the documents which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, and that, upon the basis of the Application, the conditions precedent provided for in this Indenture relating to the conversion of principal amounts outstanding under Additional Obligations under this Section have been complied with.

 

Upon compliance with the foregoing provisions of this Section, the principal amount outstanding under Additional Obligations specified in the Officers’ Certificate delivered to the Trustee pursuant to Subsection (b) above shall be converted.  By virtue of such conversion, and notwithstanding any other provision of this Indenture, (i) such specified principal amount shall be deemed always to have been outstanding under Additional Obligations authenticated and delivered under Section 5.2 and never to have been outstanding under Additional Obligations upon the basis of Certified Progress Payments and (ii) Property Additions acquired with Certified Progress Payments made the basis for the authentication and delivery of such specified principal amount so converted shall be deemed never to have been acquired with Certified Progress Payments.

  

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6. 

	
RELEASES

 

	
  

	
6.1.

	
Right of Company to Possess and Operate Trust Estate; Dispositions Without Release.

 

So long as no Event of Default shall exist, the Company shall have the right, subject only to the express limitations of this Indenture, to possess, use, manage, operate and enjoy the Trust Estate (other than any cash and securities constituting part of the Trust Estate and deposited with the Trustee), to use and consume such fuel, materials, equipment and supplies as may be necessary or appropriate to generate, transmit and distribute electricity or operate the Company’s business, and to collect, receive, use, invest and dispose of the rents, issues, tolls, profits, revenues and other income, products and proceeds from the Trust Estate, freely and without restriction or hindrance on the part of the Trustee or of the Holders, to gather, cut, mine and produce crops, timber, coal, ore, gas, oil, minerals or other natural resources, products, materials and supplies and to use, consume and dispose of any thereof, and to alter, repair and change the position or location of any of its railroads, mines, mills, plants, warehouses, buildings, works, structures, machinery, equipment and other property, PROVIDED that such alterations, repairs or changes shall not materially diminish the value thereof or impair the lien of this Indenture thereon, and to deal with, exercise any and all rights under, receive and enforce performance under, modify or amend, and adjust and settle all matters relating to current performance of, choses in action, leases and contracts.

 

Except as otherwise expressly  provided herein, the Company shall have, in addition and not in limitation of the rights set forth in the preceding paragraph or otherwise, the right, at any time and from time to time if no Event of Default exists, freely and without restriction on the part of the Trustee or of the Holders, and without any release from or consent by the Trustee,

 

(a)           to sell, exchange or otherwise dispose of, free from the lien of this Indenture, any machinery, equipment, furniture, apparatus, tools or implements, materials or supplies or other similar property subject to the lien hereof, which may have become obsolete or unfit for use or no longer useful, necessary or profitable in the conduct of the business of the Company, upon substituting for the same other machinery, equipment, furniture, apparatus, tools or implements, materials or supplies or other property not necessarily of the same character but of at least equal value to the Company as the property disposed of, which shall forthwith become, without further action, subject to the lien of this Indenture; and no purchaser of any such property shall be bound to inquire into any question affecting the right of the Company to sell or otherwise dispose of the same free from the lien of this Indenture;

  

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(b)           except as otherwise expressly limited by this Section in the case of any particular lease or contract, to abandon, terminate, cancel, release or make alterations in or substitutions  of any leases, contracts or rights-of-way subject to the lien of this Indenture, PROVIDED that any altered or substituted  leases, contracts or rights-of-way shall forthwith, without further action, become subject to the lien of this Indenture to the same extent as those previously existing and PROVIDED FURTHER that, if the Company shall receive any money or property as consideration or compensation for such abandonment, termination, cancellation, release, amendment, alteration or substitution, such money (to the extent it exceeds $500,000 per abandonment, cancellation, release, amendment, alteration or substitution) or property, forthwith upon its receipt by the Company, shall be deposited with the Trustee (unless otherwise required by a Prior Lien) or otherwise subjected to the lien of this Indenture;

 

(c)           to surrender or modify, free and clear of the lien of this Indenture, any franchise, right (charter and statutory), license or permit subject to the lien of this Indenture which it may own or under which it may be operating, PROVIDED that, in the opinion of the Board of Directors or an Officer of the Company, the preservation of such franchise, right, license or permit is no longer necessary in the conduct of the business of the Company, PROVIDED FURTHER that the exercise by any governmental authority, municipality or other political subdivision of any right to terminate a franchise, right, license or permit shall not be deemed to be a surrender or modification of the same; and PROVIDED FURTHER that, if the Company shall be entitled to receive any money or property as consideration or compensation for such surrender or modification, such money (to the extent it exceeds $500,000 per surrender or modification) or property, forthwith upon its receipt by the Company, shall be deposited with the Trustee (unless otherwise required by a Prior Lien) or otherwise subjected to the lien of this Indenture;

 

(d)           to lease or grant rights-of-way, easements, licenses and permits over or in respect of any property constituting part of the Trust Estate, or release or cancel leases, rights-of-way, easements, licenses or permits constituting part of the Trust Estate, free and clear of the lien of the Indenture, PROVIDED that, in the opinion of the Board of Directors or an Officer of the Company, no such grant will impair in any material respect the usefulness of such property in the conduct of the Company’s business and no such release shall occur with respect to any right-of-way, easement, license or permit that is necessary for the operation of the Company’s business, and PROVIDED FURTHER that any cash consideration in excess of $500,000 (per grant or release) received by the Company upon or in connection with the granting thereof, forthwith upon its receipt by the Company, shall be deposited with the Trustee (unless otherwise required by a Prior Lien) or otherwise subjected to the lien of this Indenture;

  

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(e)            to demolish, dismantle, tear down or use for scrap any property in the Trust Estate, or abandon any thereof other than land and interests in land free and clear of the lien of this Indenture if in the opinion of the Board of Directors or any Officer of the Company such demolition, dismantling, tearing down, scrapping or abandonment is desirable in the conduct of the business of the Company and the value and utility of the Trust Estate as an entirety and the security for the Obligations will not thereby be materially impaired;

 

(f)            to alter, repair, replace, change the location or position of and add to its plants, structures, machinery, systems, equipment, fixtures and appurtenances, PROVIDED that no change shall be made in the location of any such property subject to the lien of this Indenture which removes such property into a jurisdiction in which this Indenture and any required financing or continuation statement covering security interests in such property have not been recorded, registered or filed in the manner required by law to preserve the lien of this Indenture on such property  or otherwise impairs in any material respect the lien hereof;

 

(g)            to deal in, sell, dispose of or otherwise use inventory which is subject to the lien of this Indenture in the ordinary course of the Company’s business, or collect, liquidate or otherwise dispose of accounts receivable which are subject to the lien of this Indenture in the ordinary course of the Company’s business or use cash proceeds of the Trust Estate (other than cash deposited or required to be deposited with the Trustee pursuant to this Indenture) in the business of the Company; PROVIDED, that the Company’s right to rely upon this Paragraph (g) shall be conditioned upon and the Company shall deliver to the Trustee, within 30 days following January 1 and July 1 in each year (each, a “Six-Month Period”), an Officers’ Certificate to the effect that all sales of inventory by the Company and all collections and other dispositions of accounts receivable by the Company during such Six-Month Period were in the ordinary course of the Company’s business and that all proceeds therefrom were used by the Company in connection with its business or to make other cash payments permitted by this Indenture, and PROVIDED FURTHER that this Paragraph (g) shall not apply to any disposition of any portion of the Trust Estate in any transaction or related series of transactions involving the disposition of more than 10% of the fair value of the Trust Estate and, in such event, such disposition shall be made pursuant to the provisions of Section 6.2 below; and

 

(h)            to sell, lease, sublease or otherwise dispose of any property constituting part of the Trust Estate, subject to the lien of this Indenture, PROVIDED that the Company shall maintain possession and control of such property pursuant to a lease or sublease meeting the requirements of paragraph (c) of the definition of “Property Additions.”

 

The Trustee shall, from time to time, execute a written instrument to evidence and confirm any action taken by the Company under this Section, upon receipt by the Trustee of (i) a Board Resolution or Officers’ Certificate requesting the same and expressing any required opinions, (ii) an Officers’ Certificate stating that no Event of Default exists and that said action was duly taken in conformity with a designated Subsection of this Section, and (iii) an Opinion of Counsel stating that said action was duly taken by the Company in conformity with said Subsection and that the execution of such written instrument is appropriate to confirm such action under this Section.

  

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6.2.

	
Releases.

 

The Company shall have the right, at any time and from time to time, to sell, exchange or otherwise dispose of any part of the Trust Estate free and clear of the lien of this Indenture (except cash, Pledged Securities and other personal property held by, or required to be deposited with, the Trustee hereunder) and the Trustee shall, from time to time, release property so sold, exchanged or otherwise disposed of from the lien of this Indenture, but only upon receipt by the Trustee of the items specified in this Section.  The Company shall also have the right, at any time and from time to time, to have any part of the Trust Estate released from the lien of this Indenture (except cash, Pledged Securities and other personal property held by, or required to be deposited with, the Trustee hereunder) without selling, exchanging or otherwise disposing of such part of the Trust Estate, and the Trustee shall, from time to time, release such property from the lien of this Indenture, but only upon receipt by the Trustee of the following:

 

(a)           A Board Resolution requesting such release and describing the property so to be released; PROVIDED, HOWEVER, that no Board Resolution shall be required if the Officers’ Certificate delivered pursuant to Subsection 6.2(b) states that the value of each item of property to be released does not exceed $ 5,000,000.

 

(b)           An Officers’ Certificate (hereinafter in this Section called a Release Certificate), dated not more than 30 days prior to the date of the Application for such release and signed also in the case of the following clauses (i), (ii) and (iv), by an Engineer, and in the case of the following clauses (v), if applicable, and (vi), by an Engineer or an Appraiser, setting forth in substance as follows:

 

(i)            if applicable, that the Company has sold or disposed of or has contracted to sell, exchange or otherwise dispose of the property so requested to be released;

 

(ii)           that

 

(A)           such release is desirable in the conduct of the business of the Company or the property to be released is no longer useful or advantageous in the judicious management and maintenance of the Trust Estate or in the conduct of the business of the Company, or

 

(B)           such release is to be made in lieu and reasonable anticipation of the taking of such property by eminent domain by the United States of America or a designated state, municipality or other governmental authority having the power to take such property by eminent domain, or

  

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(C)           such release is to be made in lieu and reasonable anticipation of the exercise of a right of the United States of America or a designated state, municipality or other governmental authority to purchase, or designate a purchaser or order the sale of, such property; or

 

(D)           such release is in connection with the sale and leaseback of any property;

 

(iii)           that no Event of Default exists;

 

(iv)           that, in the opinion of the signers, the proposed release will not impair the security under this Indenture in contravention of the provisions hereof and that all conditions precedent herein provided for relating to such release have been complied with;

 

(v)           the fair value, in the opinion of said Engineer or Appraiser, of the property to be released at the date of the Release Certificate; and if, by virtue of clause (vii) of this Subsection, any of the property to be released shall be separately described in the Release Certificate, the fair value of such property shall be separately stated; PROVIDED, HOWEVER, that it shall not be necessary under this clause to state the fair value of any property whose fair value is certified in an Independent Engineer’s or Independent Appraiser’s Certificate under Subsection (c) of this Section;

 

(vi)           if this Indenture is required to be qualified under the TIA, whether

 

(A)           the aggregate of the fair value of the property to be released at the date of the Release Certificate and the fair value of all securities or other property released since the commencement of the then current calendar year (as previously certified to the Trustee in connection with releases) is 10% or more of the aggregate principal amount of all Obligations at the time Outstanding and whether said fair value of the property to be released is at least $25,000 and at least 1% of the aggregate principal amount of all Obligations at the time Outstanding, or

 

(B)           the fair value of the property to be released at the date of the Release Certificate is more than $5,000,000,

 

and, if all the facts specified in either subclause (A) or (B) above are present, that a certificate of an Independent Engineer or Independent Appraiser as to the fair value of the property to be released will be furnished under Subsection (c) of this Section;

 

(vii)          whether any purchase money obligations to be delivered to the Trustee or to be certified as delivered to the trustee, mortgagee or other holder of a Prior Lien under Subsection (d)(iv) of this Section are to be secured by a purchase money mortgage on less than all the property to be released; and, if so, the property to be covered by such purchase money mortgage shall be separately described.

  

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(c)           In case it shall be stated pursuant to  Subsection (b)(vi) that the same will be furnished, a certificate of an Independent Engineer or Independent Appraiser, dated not more than 30 days prior to the date of the Application for such release, stating the fair value, in the Independent Engineer’s or Independent Appraiser’s opinion, at the date of the Release Certificate of the property to be released, stating separately the fair value of any such property separately described pursuant to Subsection (b)(vii) of this Section and stating also that, in the opinion of the Independent Engineer or Independent Appraiser, the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(d)           Cash equal to the fair value, as certified pursuant to this Section, of the property to be released; PROVIDED, HOWEVER, that, no cash deposit will be required if the Officers, Certificate delivered pursuant to Subsection (b) of this Section states that the value of each item of property to be released does not exceed $500,000 and the value of all property released during the current calendar year under this proviso does not exceed $5,000,000; and PROVIDED FURTHER that, in lieu of all or any part of such cash, the Company shall have the right to deposit and pledge with or deliver to the Trustee any of the items described in the following clauses of this Subsection:

 

(i)            purchase money obligations secured by a mortgage or similar instrument on the property to be released or the portion thereof separately described pursuant to Subsection (b)(vii) of this Section, maturing not more than 10 years after the date of the deposit thereof and not exceeding in principal amount 80% of the fair value of the property covered by such purchase money mortgage, as certified pursuant to Subsection (b)(v) or Subsection (c) of this Section, which purchase money obligations and the mortgage securing the same shall be duly assigned to and deposited and pledged with the Trustee, shall be accompanied by an Officers’ Certificate stating that the aggregate unpaid principal amount of all purchase money obligations received by the Trustee under this clause and then deposited and pledged with it (including those then being deposited and pledged with the Trustee), together with all those then and theretofore delivered to and then held by any trustees, mortgagees or other holders of Prior Liens under clause (iv) of this Subsection, does not exceed 10% of the aggregate principal amount of all Outstanding Secured Obligations and shall be received by the Trustee at their principal amount in lieu of cash;

 

(ii)           the relevant documents specified in Subsections 5.2(b) through (g) for delivery whenever requesting the use of Bondable Additions as a basis, in whole or in part, for the release of any part of the Trust Estate under this Section, said documents to be received by the Trustee in lieu of cash up to the Bondable Additions thereby certified; PROVIDED, HOWEVER, that if all the property to be released was, immediately before the requested release thereof Non-Bondable Property, subject to a Prior Lien, the Bondable Additions being used as a basis for such release may be subject to the same Prior Lien without any deduction for the Prior Lien Obligations thereby secured in computing such Bondable Additions and said documents may be modified accordingly;

  

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(iii)           the relevant documents specified in Subsections (b), (c), (d) and (e) of Section 5.3 (with such omissions and variations as are appropriate in view of the fact that the previous or concurrent retirement or defeasance of, or payment of principal on, the Obligations described therein are being used as the basis for the release of any part of the Trust Estate) for delivery whenever requesting the use of Obligations previously or concurrently retired or defeased, or the payment of principal on any Obligations, as a basis, in whole or in part, for the release of any part of the Trust Estate under this Section, said documents to be received by the Trustee in lieu of cash up to the amount of Obligations previously or concurrently retired or defeased, or principal amount of Obligations paid, and not previously used as a basis for the issuance of Additional Obligations or the withdrawal of cash;

 

(iv)           a certificate of the trustee, mortgagee or other holder of a Prior Lien on all or any part of the property to be released, stating that a specified amount of cash or a specified principal amount of purchase money obligations of the character described in clause (i) of this Subsection and representing proceeds of the sale of such property have been deposited with such trustee, mortgagee or other holder pursuant to the requirements of such Prior Lien, such certificate to be received by the Trustee in lieu of cash equal to the cash and the principal amount of the purchase money obligations so certified to have been deposited with such trustee, mortgagee or other holder, PROVIDED there shall also be delivered to the Trustee an Officers’ Certificate stating that such property to be released was subject to such Prior Lien, which shall be briefly described or otherwise identified, and that the aggregate principal amount of all purchase money obligations received by the Trustee under clause (i) of this Subsection and then deposited and pledged with it, together with all those then and theretofore delivered to and then held by any trustees, mortgagees or other holders of Prior Liens under this clause, does not exceed 10% of the aggregate principal amount of all Obligations then Outstanding;

 

(v)           an Officers’ Certificate stating that the property to be released has been sold or disposed of subject to a specified Prior Lien or Liens existing thereon immediately before such release, briefly describing or otherwise identifying such Prior Lien or Liens, stating the principal amount of the outstanding Prior Lien Obligations secured thereby and stating that such property constitutes all the property which, immediately before such sale, exchange or other disposition was subject to such Prior Lien or Liens, said Certificate to be received by the Trustee in lieu of cash in an amount equal to the principal amount of outstanding Prior Lien Obligations so stated to be secured by such Prior Lien or Liens; and

 

(vi)          whenever Designated Qualifying Securities are used as a basis, in whole or in part, for the release of any part of the Trust Estate under this Section, the relevant documents and Designated Qualifying Securities specified for delivery in paragraphs (c), (d) through (g) of Section 5.5 (with such omissions and variations as are appropriate in view of the fact that the Designated Qualifying Securities described therein are being used as the basis for the release of any part of the Trust Estate and except that the maturity date or dates for such Designated Qualifying Securities may be as determined by the Company), said documents to be received by the Trustee in lieu of cash up to an amount equal to the principal amount of such Designated Qualifying Securities.

  

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(e)

	
An Opinion of Counsel

 

(i)            stating that the certificates, opinions and other instruments and/or cash and/or obligations which have been or are therewith delivered to or deposited and pledged with the Trustee conform to the requirements of this Indenture, that, upon the basis of the Application, all conditions precedent herein provided for or relating to the release from the lien of this Indenture of the property so sold or disposed of or contracted to be sold or disposed of have been complied with in all material respects;

 

(ii)           stating that the purchase money obligations, if any, being delivered to the Trustee or to the trustee, mortgagee or other holder of a Prior Lien are valid obligations and are duly secured by a valid purchase money mortgage constituting a lien upon all the property to be released, or upon the portion thereof separately described pursuant to Subsection (b)(vii) of this Section, free and clear of any Prior Liens other than any existing on the property to be released immediately prior to such release, and that the assignment to the Trustee of such purchase money obligations and the mortgage securing the same is valid and in recordable form;

 

(iii)           in case any cash or purchase money obligation shall be certified to have been deposited with the trustee, mortgagee or other holder of a Prior Lien, stating that the property to be released, or a specified portion thereof, is or immediately before such release was subject to such Prior Lien and that such deposit is required by such Prior Lien;

 

(iv)           in case the sale, exchange or other disposition of the property to be released shall have been certified to be in lieu and reasonable anticipation of the taking of such property by eminent domain, stating that such property could lawfully have been taken by the grantee by eminent domain;

 

(v)           in case the sale, exchange or other disposition of the property to be released shall have been certified, pursuant to Subsection (b)(ii)(C) of this Section, to be in lieu and reasonable anticipation of the exercise of a right to purchase, or to designate a purchaser or order the sale of, such property, stating that the designated governmental authority had, at the time of such sale or disposition, a right to purchase or designate a purchaser of such property or to order its sale;

  

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(vi)           in case an Officers’ Certificate shall have been delivered to the Trustee in lieu of cash pursuant to Subsection (d)(v) of this Section, stating that the property to be released, or a specified portion thereof, is or immediately before such release was subject to the Prior Lien or Liens described or otherwise identified in said Certificate and that the nature and extent of such Prior Lien or Liens and the principal amount of the outstanding Prior Lien Obligations thereby secured are correctly stated in said Certificate.

 

If any property released from the lien of this Indenture as provided in this Section shall continue to be owned by the Company after such release, this Indenture shall not become or be, or be required to become or be, a lien on such property or any improvement, extension or addition to such property or renewals, replacements or substitutions of or for any part or parts of such property unless the Company shall execute and deliver to the Trustee a Supplemental Indenture, in recordable form, containing a grant, conveyance, transfer or mortgage thereof to the Trustee all in accordance with Section 14.5.

 

With respect to any property released from the lien of the Indenture as provided in this Section, the Trustee, upon Company Request, shall execute and deliver a release or other document to be recorded, registered or filed evidencing that such property is not subject to the lien of the Indenture.

 

	
  

	
6.3.

	
Eminent Domain.

 

If any or all of the Trust Estate shall be taken by eminent domain or purchased pursuant to the right of a governmental authority to purchase or designate a purchaser for such property or to order its sale, the Trustee may release the property so taken and shall be fully protected in so doing upon being furnished with:

 

(a)           an Officers’ Certificate requesting such release, describing the property so to be released and stating that such property has been taken by eminent domain or purchased pursuant to the right of a governmental authority to purchase or designate a purchaser for such property or to order its sale and that all conditions precedent herein provided for relating to such release have been complied with;

 

(b)           an Opinion of Counsel stating that an order of a court of competent jurisdiction has been issued providing for the taking of such property by the exercise of the power of eminent domain or that such property has been purchased pursuant to the right of a governmental authority to purchase or designate a purchaser for such property or to order its sale, that such order or such purchase of such property has become final or an appeal therefrom is not being pursued by the Company and that all conditions precedent herein provided for relating to such release have been complied with; and

 

(c)           subject to the requirements of any Prior Lien on the property so taken, cash equal to such award or sale price; PROVIDED, HOWEVER, that, no cash deposit will be required if the Officers’ Certificate delivered pursuant to Subsection (a) of this Section states that the value of each item of property to be taken or purchased does not exceed $500,000 and the value of all property taken or released during the current calendar year under this proviso does not exceed $5,000,000.

  

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6.4.

	
Written Disclaimer of Trustee.

 

(a)           In case the Company proposes to sell, exchange or otherwise dispose of or has sold, exchanged or otherwise disposed of any property not subject to the lien hereof and the transferee thereof requests the Company to furnish a written disclaimer or quit-claim by the Trustee of any interest in such property under this Indenture, the Trustee shall execute such an instrument without substitution of other property or cash upon receipt by the Trustee of:

 

(i)             a Company Request for the execution of such disclaimer or quit-claim; and

 

(ii)            an Officers’ Certificate which shall recite the sale, exchange or other disposition or proposed sale, describe in reasonable detail the property sold or to be sold, state that such property is not subject to the lien hereof, and state that the transferee has requested a written disclaimer or quit-claim by the Trustee.

 

(b)           Upon receipt of a Company Request, the Trustee shall execute and deliver a subordination, non-disturbance, attornment or similar agreement in favor of the beneficiary of any Permitted Encumbrance.

 

	
  

	
6.5.

	
Powers Exercisable Notwithstanding Event of Default.

 

While in possession of all or substantially all of the Trust Estate (other than any cash and securities constituting part of the Trust Estate and deposited with the Trustee), the Company may exercise the powers conferred upon it in the Sections of this Article even though it is prohibited from doing so while an Event of Default exists as provided therein, if the Trustee in its discretion (based upon such opinions and certifications as the Trustee deems necessary), or the Holders of not less than a majority in aggregate principal amount of the Obligations then Outstanding, by Act of such Holders, shall consent to such action (and such consent may be on a retroactive basis, except that if any of the Obligations originally designated as New Bonds, 2001 Series A, or New Bonds, 2002 Series A, shall remain Outstanding, such consent may not be on a retroactive basis unless the Credit Enhancer for such Obligations shall also have consented), in which event none of the instruments required to be furnished to the Trustee under any of such Sections as a condition to the exercise of such powers need state that no Event of Default exists as provided therein.

 

	
  

	
6.6.

	
Powers Exercisable by Trustee or Receiver.

 

In case all or substantially all of the Trust Estate (other than any cash and securities constituting part of the Trust Estate and deposited with the Trustee) shall be in the possession of a trustee or receiver lawfully appointed, the powers hereinbefore in this Article conferred upon the Company with respect to the sale, exchange or other disposition and release of the Trust Estate may be exercised by such trustee or receiver (with the consent of the Trustee or Holders specified in Section 6.5) in which case a written request signed by such receiver or trustee shall be deemed the equivalent of any Board Resolution or Company Request required by this Article and a certificate signed by such trustee or receiver shall be deemed the equivalent of any Officers Certificate required by this Article and such certificate need not state that no Event of Default exists. If the Trustee shall be in possession of the Trust Estate under Section 9.3, such powers may be exercised by the Trustee in its discretion.

  

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6.7.

	
Purchaser Protected.

 

No purchaser or other transferee in good faith of property purporting to be released herefrom shall be bound to ascertain the authority of the Trustee to execute the release or to inquire as to the satisfaction of any conditions herein prescribed for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by this Article to be sold, exchanged or otherwise disposed of by the Company be under any obligation to ascertain or inquire into the authority of the Company to make any such sale, exchange or other disposition. Any release executed by the Trustee under this Article shall be sufficient for the purpose of this Indenture and shall constitute a good and valid release of the property therein described from the lien hereof.

 

	
  

	
6.8.

	
Disposition of Collateral on Discharge of Prior Liens.

 

Upon the cancellation and discharge of any Prior Lien, the Company will cause all cash and purchase money obligations then held by the trustee, mortgagee or other holder of such Prior Lien, which were received by such trustee, mortgagee or other holder in accordance with the provisions of this Article (including all proceeds of or substitutions for any thereof), to be paid to or deposited and pledged with the Trustee, such cash to be held and paid over or applied by the Trustee as provided in Article 7.

 

	
  

	
6.9.

	
Disposition of Obligations Received.

 

All purchase money obligations received by the Trustee under this Article shall be held by the Trustee as a part of the Trust Estate.  Upon payment by or on behalf of the Company to the Trustee of the entire unpaid principal amount of any such obligation, the Trustee shall release and transfer such obligation and any mortgage securing the same upon Company Request.  Any cash received by the Trustee in respect of the principal of any such obligations shall be held by the Trustee as Trust Moneys under Article 7 subject to application as therein provided.  The Trustee shall not be responsible for the collection of the principal of or interest on any such obligations.  All interest and other income on any such obligations, when received by the Trustee, shall, except to any extent otherwise provided in Section 16.4, be paid from time to time upon Company Request, unless an Event of Default shall exist.  If an Event of Default shall exist, any interest and other income on any such obligations not theretofore paid upon Company Request, when collected by the Trustee, shall be applied by the Trustee in accordance with Section 9.7.

  

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6.10.

	
Excludable Property.

 

Upon receipt of an Officers’ Certificate identifying Excludable Property, the Trustee shall execute and deliver a release or other document to be recorded, registered or filed evidencing that such Excludable Property is not subject to the lien of this Indenture.

 

	
7. 

	
APPLICATION OF TRUST MONEYS

 

	
  

	
7.1.

	
“Trust Moneys” Defined.

 

All moneys received by the Trustee

 

(a)           upon the release of property from the lien of this Indenture, including all moneys received in respect of the principal of all purchase money obligations, or

 

(b)           as compensation for, or proceeds of the sale of, any part of the Trust Estate taken by eminent domain or purchased by, or sold pursuant to an order of, a governmental authority or otherwise disposed of, or

 

(c)           as proceeds of insurance upon any part of the Trust Estate, or

 

(d)           as excess principal paid on Designated Qualifying Securities pursuant to Section 17.2(b); or

 

(e)           for application under this Article as elsewhere herein provided, or whose disposition is not elsewhere herein otherwise specifically provided for,

 

(all such moneys being herein sometimes called “Trust Moneys”) shall be held by the Trustee, except as otherwise provided in this Article, as a part of the Trust Estate and, upon any entry upon or sale of the Trust Estate or any part thereof under Article 9, Trust Moneys shall be applied in accordance with Section 9.7; but, prior to any such entry or sale, all or any part of the Trust Moneys may be withdrawn, and shall be paid, released or applied by the Trustee, from time to time as provided in Sections 7.2 to 7.9, inclusive, and may be applied by the Trustee as provided in Sections 10.7, 14.11 and 16.14.

 

	
  

	
7.2.

	
Withdrawal on Basis of Bondable Additions.

 

Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee under this Section upon Company Request, from time to time, equal to the Bondable Additions made the basis for such withdrawal pursuant to Subsection (c) of this Section, upon receipt by the Trustee of the following:

  

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(a)           A Company Request requesting the withdrawal and payment of a specified amount of Trust Moneys.

 

(b)           An Officers’ Certificate dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys, stating

 

(i)            that no Event of Default exists; and

 

(ii)            that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with.

 

(c)           The additional relevant documents specified in Section 5.2 (other than an Available Margins Certificate) for delivery whenever requesting the use of Bondable Additions as a basis for the withdrawal of Trust Moneys under this Section.

 

	
  

	
7.3.

	
Withdrawal on Basis of Retirement or Defeasance of Obligations or Principal Payments on Obligations.

 

Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee upon Company Request, from time to time, equal to the principal amount of Obligations or principal payments on Obligations made the basis for such withdrawal pursuant to Subsection (c) of this Section, upon receipt by the Trustee of the following:

 

(a)           A Company Request requesting the withdrawal and payment of a specified amount of Trust Moneys.

 

(b)           An Officers’ Certificate, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys, stating

 

(i)            that no Event of Default exists; and

 

(ii)            that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with.

 

(c)           The Obligations and documents which the Company would be required to furnish to the Trustee upon an Application for the authentication and delivery of Obligations under Section 5.3, but without complying with the requirements of Subsections (a), (d), (e) and (f) thereof.

 

(d)           An Opinion of Counsel stating that the documents and Obligations which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, and that, upon the basis of the relevant Application, all conditions precedent herein provided for or relating to withdrawal and payment of the Trust Moneys whose withdrawal and payment is then requested have been complied with.

  

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7.4.

	
Withdrawal on Basis of Designated Qualifying Securities.

 

Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee under this Section to the Company or as otherwise specified in a Company Request, from time to time, equal to the principal amount of Designated Qualifying Securities made the basis for such withdrawal pursuant to Subsection (c) below, upon receipt by the Trustee of the following:

 

(a)           A Company Request requesting the withdrawal and payment of Trust Moneys.

 

(b)           An Officers’ Certificate, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys, stating that:

 

(i)             no Event of Default exists; and

 

(ii)            the conditions precedent provided for in this Indenture relating to such withdrawal and payment have been complied with.

 

(c)           The Designated Qualifying Securities, documents and opinions which the Company would be required to furnish to the Trustee upon an Application for the authentication and delivery of Additional Obligations under Section 5.5, except for the documents and opinions required by Subsections (a), (b) and (f)(iv) thereof (with such omissions and variations as are appropriate in view of the fact that the Designated Qualifying Securities described therein are being used as the basis for the withdrawal and payment of Trust Moneys and except that the maturity date or dates for such Designated Qualifying Securities may be as determined by the Company).

 

(d)           An Opinion of Counsel stating that the Designated Qualifying Securities and the documents which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, and that, upon the basis of the Application, the conditions precedent provided for in this Indenture relating to the withdrawal and payment of the Trust Moneys then requested have been complied with.

 

	
  

	
7.5.

	
Withdrawal on Basis of Certified Progress Payments.

 

Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee under this Section to the Company or as otherwise specified in a Company Request, from time to time, equal to the Certified Progress Payments made the basis for such withdrawal pursuant to Subsection (c) below, upon receipt by the Trustee of the following:

 

(a)           A Company Request requesting the withdrawal and payment of Trust Moneys.

  

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(b)           An Officers’ Certificate, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys, stating that:

 

(i)             no Event of Default exists; and

 

(ii)            the conditions precedent provided for in this Indenture relating to such withdrawal and payment have been complied with.

 

(c)           An Officers’ Certificate, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys, stating that:

 

(i)             the Certified Progress Payments which are then being made the basis for the withdrawal and payment of such Trust Moneys, which shall equal 100% of the Trust Moneys the withdrawal and payment of which is then being applied for under this Section; and

 

(ii)            that the Certified Progress Payments then being made the basis for the authentication and delivery of Additional Obligations do not include any Certified Progress Payments which shall have theretofore been made, or are otherwise currently being made, the basis for (a) the withdrawal and payment of Trust Moneys to the Company or as otherwise specified in a Company Request under this Section, or (b) the authentication and delivery of Additional Obligations (or any advance or issuance thereunder).

 

(d)           An Opinion of Counsel stating that the applicable Qualified EPC Contract is part of the Trust Estate and that the actions taken by the Company under this Section with respect to the delivery of documents to the Trustee conform to the requirements of this Indenture and that, upon the basis of the Application, the conditions precedent provided for in this Indenture relating to the withdrawal and payment of Trust Moneys therein applied for have been complied with.

 

	
  

	
7.6.

	
Retirement of Obligations or Payments on Obligations.

 

Trust Moneys shall be applied by the Trustee from time to time to the redemption of Outstanding Secured Obligations of the several series that may be designated for the purpose by the Company, all in accordance with the provisions applicable to redemption at the option of the Company and with the premiums applicable thereto, or to the payment of the principal of any such Outstanding Secured Obligations at their Stated Maturity or to the purchase thereof upon tender or in the open market or at private sale or upon any exchange or in any one or more of said ways or to any other payment of the principal of any Outstanding Secured Obligations that may be designated by the Company, all in accordance with the rights of the Company to make such payments and with any penalties or premiums applicable thereto, as the Company shall specify in a Company Request, upon receipt by the Trustee of the following:

  

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(a)           A Company Request directing the application pursuant to this Section of a specified amount of Trust Moneys and, in case any such moneys are to be applied to the redemption of Obligations, designating the Obligations so to be redeemed and stating the applicable Redemption Price, if any, or authorizing such designation and statement to be made in an Officers’ Certificate, and, in case such moneys are to be applied to the purchase of Obligations, prescribing the method of purchase, the price or prices to be paid and the maximum principal amount of Obligations to be purchased or authorizing the prescription of such method, price, and maximum principal amount to be made in an Officers’ Certificate, and in case such moneys are to be applied to the payment of principal on Obligations, designating the Obligations on which such payments are to be made, specifying the amount to be paid and stating the applicable penalties or premiums, if any, or authorizing such designation, specification and statement to be made in an Officers’ Certificate.

 

(b)           Cash equivalent to the maximum amount of the accrued interest and the premium or penalty, if any, required to be paid in connection with any such redemption, purchase or payment, which cash shall be held by the Trustee in trust for such purpose.

 

(c)           An Officers’ Certificate, dated not more than 30 days prior to the date of the relevant Application, stating

 

(i)            that no Event of Default exists; and

 

(ii)            that all conditions precedent herein provided for relating to such application of Trust Moneys have been complied with.

 

(d)           An Opinion of Counsel stating that the documents and the cash, if any, which have been or are therewith delivered to and deposited with the Trustee conform to the requirements of this Indenture and that upon the basis of such Application all conditions precedent herein provided for relating to such application of Trust Moneys under this Section in accordance with such Board Resolution have been complied with.

 

Upon compliance with the foregoing provisions of this Section, the Trustee shall apply Trust Moneys as requested by a Company Request, in an amount up to, but not exceeding, the principal amount of the Obligations so redeemed, paid or purchased, or the principal amount of the principal payments on the Obligations so made, and shall use only the cash deposited pursuant to Subsection (b) above, to the extent necessary, to pay any accrued interest, penalty and premium required in connection with such redemption, purchase or payment.

 

A Board Resolution expressed to be irrevocable directing the application of Trust Moneys under this Section to the payment of the principal of particular Obligations shall, for all purposes of this Indenture, be deemed the equivalent of the deposit of money with the Trustee in trust for such purpose.  Such Trust Moneys and any cash deposited with the Trustee pursuant to Subsection (b) of this Section for the payment of accrued interest, penalty and premium shall not, after compliance with the foregoing provisions of this Section, be deemed to be a part of the Trust Estate or Trust Moneys.

  

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7.7.

	
Withdrawal of Insurance Proceeds.

 

(a)           To the extent that any Trust Moneys consist of proceeds of insurance upon any part of the Trust Estate, they may be withdrawn by the Company and shall be paid by the Trustee to the Company or as otherwise specified in a Company Request to reimburse the Company for the Cost to the Company to repair, rebuild or replace the property destroyed or damaged, upon receipt by the Trustee of the following:

 

(i)            An Officers’ Certificate, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys and signed with respect to subclauses (A) and (C), in addition to the two officers signing the same, by a Person, who may be one of such officers, signing as an Accountant, setting forth:

 

(A)           that expenditures have been made, or costs incurred, by the Company in a specified amount for the purpose of making certain repairs, rebuildings and replacements, which shall be briefly described, and setting forth the amount of any such expenditures or costs for the acquisition of a major item of property, which shall be separately specified, in replacement of any destroyed or damaged property;

 

(B)           that no part of such expenditures or costs has been or is being made the basis for the authentication and delivery of Obligations or the withdrawal of any cash or the release of any property from the lien of this Indenture or has been paid out of the proceeds of insurance upon any part of the Trust Estate not required to be paid to the Trustee under Section 14.8;

 

(C)           that there is no outstanding indebtedness, other than costs for which payment is being requested, known to the Company, after due inquiry, for the purchase price or construction of such repairs, rebuildings or replacements, or for labor, wages, materials or supplies in connection with the making thereof, which, if unpaid, might become the basis of a vendor’s, mechanics’, laborers’, materialmen’s, statutory or other similar lien upon any of such repairs, rebuildings or replacements, which lien might, in the opinion of the signers of such Certificate, materially impair the security afforded by such repairs, rebuildings or replacements;

 

(D)           that no Event of Default exists; and

 

(E)           that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with.

 

(ii)           An Engineer’s or Appraiser’s Certificate, dated not more than 30 days prior to the date of the related Application, stating, in the opinion of the signer, the fair value to the Company of any major item of property specified in the foregoing subclause (a)(i)(A); and the Engineer or Appraiser shall be an Independent Engineer or Appraiser if such property constitutes an Acquired Facility and if this Indenture is qualified under the TIA and the fair value to the Company of such Acquired Facility is at least $25,000 and at least 1% of the aggregate principal amount of all Obligations at the time Outstanding.

  

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(iii)           An Opinion of Counsel stating

 

(A)           that the documents which have been or are therewith delivered to the Trustee conform to the requirements of this Indenture, that, upon the basis of the related Application, all conditions precedent herein provided for relating to such withdrawal and payment of Trust Moneys then requested have been complied with; and

 

(B)           that the Company’s right, title and interest in and to such repairs, rebuildings and replacements described in the Officers’ Certificate delivered pursuant to subclause (a)(i)(A) above are subject to the lien of this Indenture.

 

(iv)           Title Evidence indicating that the Company has acquired, or upon payment of the costs to be paid as requested will acquire, title to the repairs, rebuildings or replacements described in the Officers’ Certificate delivered pursuant to subclause (a)(i)(A) above at least equivalent to its title to the property destroyed or damaged.

 

Upon compliance with the foregoing provisions of this Section, the Trustee shall pay on Company Request an amount of Trust Moneys of the character aforesaid equal to the amount of the expenditures or costs stated in such Officers’ Certificate; PROVIDED, HOWEVER, that, in the case of expenditures or costs for the acquisition of a major item of property in replacement of any destroyed or damaged property, such expenditures or costs shall not exceed the fair value to the Company of such replacement as certified pursuant to the foregoing clause (a)(ii).

 

(b)           To the extent that any Trust Moneys consist of proceeds of insurance upon, or payable in consequence of destruction of or damage to, that portion of the Trust Estate consisting of the property (“Leased Assets”) subject to a lease (a “Capital Asset Lease”) described in paragraph (c) of the definition of “Property Additions” or Section 6.1(h), they shall be paid by the Trustee as specified in a Company Request to the lessor under a Capital Asset Lease or its designee, upon receipt by the Trustee of the following:

 

(i)            An Officers’ Certificate, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of such Trust Moneys and signed in the case of the following subclauses (B), (C) and (D) by an Engineer or Appraiser, setting forth in substance as follows:

 

(A)           an amount is, or with an election which shall be made by the Company, will be, due and payable to the lessor under the Capital Asset Lease in respect of such destruction of, or damage to, the Leased Assets and the amount of the request for withdrawal of Trust Moneys to which such Officers’ Certificate relates does not exceed such amount;

  

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(B)           the amount of Trust Moneys to be withdrawn pursuant to such Company Request is not more than the difference between (i) the amount of proceeds of insurance received in consequence of such destruction of or damage to the Leased Assets which has theretofore been deposited with the Trustee, minus either (ii) if the Leased Assets are not to be repaired or replaced, the difference between (A) the fair value in the opinion of said Engineer or Appraiser of the Leased Assets immediately prior to the destruction or damage giving rise to the receipt of the proceeds of insurance, minus (B) the fair value in the opinion of said Engineer or Appraiser of the Leased Assets at the date of such Officers’ Certificate or (iii) if the Leased Assets are to be repaired or replaced, the cost of repair or replacement as estimated by such Engineer or Appraiser;

 

(C)           whether:

 

(a)           the aggregate of the amount of Trust Moneys to be withdrawn in accordance with such Application and the fair value of all Trust Moneys, withdrawn pursuant to this Subsection or securities or other property released pursuant to Section 6.2 since the commencement of the then current calendar year (as previously certified to the Trustee in connection with withdrawals or releases) is 10% or more of the aggregate principal amount of all Obligations at the time Outstanding, and whether such amount of Trust Moneys to be withdrawn is at least $2,000,000 (or, if this Indenture is qualified under the TIA, $25,000) and at least 1% of the aggregate principal amount of all Obligations at the time Outstanding, or

 

(b)           the amount of the Trust Moneys to be withdrawn in accordance with such Application is more than $2,000,000;

 

(D)           that, in the opinion of the signers, the proposed withdrawal will not impair the security under this Indenture in contravention of the provisions hereof; and

 

(E)           that no Event of Default exists.

 

If the facts specified in either paragraph (a) or (b) of subclause (C) above are present, such Officers’ Certificate shall be accompanied by a certificate of an Independent Engineer or Independent Appraiser, dated not more than 30 days prior to the date of the Application for the withdrawal and payment of Trust Moneys, to the effect set forth in subclauses (B) and (D) above.  Upon compliance with the foregoing provisions of this Section, the Trustee shall pay to the Person specified in a Company Request an amount of Trust Moneys of the character aforesaid equal in the amount stated in such Officers’ Certificate.

  

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7.8.

	
Amounts under $100,000.

 

In case the amount of Trust Moneys at any one time received by the Trustee shall not exceed $100,000, the same shall (unless an Event of Default exists) be paid over upon Company Request; and the Company covenants and agrees that it will, within 12 months after such Trust Moneys shall have been so paid over, deposit and file with the Trustee the documents and Obligations, if any, which by the provisions of Section 7.2, 7.3, 7.4, 7.5, 7.6 or 7.7 would have been delivered to the Trustee to entitle the Company to have the Trust Moneys paid over as in such section provided, with such omissions and variations as are appropriate by reason of the fact that such Trust Moneys have theretofore been paid over by the Trustee without prior compliance with such Section. In the event that the Company shall have failed to comply with the foregoing covenant, no further payment may be made under this Section until the Company shall have deposited with and delivered to the Trustee the required documents and Obligations, if any.

 

	
  

	
7.9.

	
Powers Exercisable Notwithstanding Default.

 

While in possession of all or substantially all of the Trust Estate (other than any cash and securities constituting part of the Trust Estate and deposited with the Trustee), the Company may do any of the things enumerated in Sections 7.2 to 7.8, inclusive, which it is prohibited from doing while an Event of Default exists as provided therein, if the Trustee in its discretion (based upon such opinions and certifications as the Trustee deems necessary), or the Holders of not less than a majority in aggregate principal amount of the Obligations then Outstanding, by an Act of such Holders, shall consent to such action (and such consent may be on a retroactive basis, except that if any of the Obligations originally designated as New Bonds, 2001 Series A, or New Bonds, 2002 Series A, shall remain Outstanding, such consent may not be on a retroactive basis unless the Credit Enhancer for such Obligations shall also have consented), in which event any Certificate delivered to the Trustee under any of said Sections shall omit any statement to the effect that no Event of Default exists as provided thereunder.

 

	
  

	
7.10.

	
Powers Exercisable by Trustee or Receiver.

 

In case all or substantially all of the Trust Estate (other than any cash and securities constituting part of the Trust Estate and deposited with the Trustee) shall be in the possession of a receiver or trustee lawfully appointed, the powers hereinbefore in this Article conferred upon the Company with respect to the withdrawal or application of Trust Moneys may be exercised by such receiver or trustee (with the consent of the Trustee or Holders specified in Section 7.9), in which case a written request signed by such receiver or trustee shall be deemed the equivalent of any Board Resolution or Company Request required by this Article and a certificate signed by such receiver or trustee shall be deemed the equivalent of any Officers’ Certificate required by this Article and such certification need not state that no Event of Default exists. If the Trustee shall be in possession of the Trust Estate under Section 9.3, such powers may be exercised by the Trustee in its discretion.

  

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7.11.

	
Disposition of Obligations Retired.

 

All Obligations received by the Trustee and on the basis of which Trust Moneys are paid over or for whose payment, redemption or purchase Trust Moneys are applied under this Article, if not cancelled previously, shall be promptly cancelled by the Trustee and thereafter the Trustee may retain or destroy such Obligations and deliver a certificate of destruction to the Company.

 

	
8. 

	
DEFEASANCE

 

	
  

	
8.1.

	
Termination of Company’s Obligations.

 

(a)           The Company may terminate its obligations under the Obligations and this Indenture if all Obligations previously authenticated and delivered (other than destroyed, lost or stolen Obligations which have been replaced or paid or Obligations for whose payment money or securities has theretofore been held in trust and thereafter repaid to the Company, as provided in Section 8.3) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder and thereunder; or

 

(b)           Except as otherwise provided in this Section, the Company may terminate its obligations under any or all Obligations and all of its obligations under this Indenture to or for the benefit of the Holders of such Obligations, if:

 

(i)           the Company has (A) in case any of such Obligations are to be redeemed on any date prior to their Stated Maturity, given to the Trustee irrevocable instructions to give as provided in Article 15 notice of redemption of such Obligations (other than Obligations which have been purchased by the Trustee at the direction of the Company as hereinafter provided prior to the giving of such notice of redemption), and (B) irrevocably deposited or caused to be deposited with the Trustee or Paying Agent (if other than the Company), under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee and any such Paying Agent, as trust funds in trust for the benefit of the Holders of such Obligations for that purpose, money or Defeasance Securities maturing as to principal and interest in such amounts and at such times as are sufficient (in the opinion of a nationally recognized firm of Independent Accountants expressed in a certificate signed by such firm and delivered to the Trustee), without consideration of any reinvestment of such interest, to pay principal or Redemption Price (if applicable) of, and interest due or to become due on such Obligations (other than destroyed, lost or stolen Obligations which have been replaced or paid or Obligations for whose payment money or securities has theretofore been held in trust and thereafter repaid to the Company as provided in Section 8.3) on or prior to the Redemption Date or Stated Maturity thereof, as the case may be, in accordance with the terms of this Indenture and such Obligations; PROVIDED, that the Trustee or Paying Agent shall have been irrevocably instructed to apply such money or the proceeds of such Defeasance Securities to the payment of said principal, Redemption Price and interest with respect to such Obligations;

  

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(ii)           no Event of Default shall exist on the date of such deposit or shall occur as a result of such deposit;

 

(iii)           [Reserved]

 

(iv)           the Company has paid or caused to be paid all sums then due from the Company hereunder and under such Obligations

 

(v)           [Reserved;]

 

(vi)           the Company has delivered an Opinion of Counsel from a nationally recognized law firm stating that the Holders of such Obligations (or the Trustee for the benefit of such Holders) shall have a perfected security interest under applicable law in the money or Defeasance Securities so deposited; and

 

(vii)           the Company has delivered to the Trustee and any Paying Agent an Officers’ Certificate, each stating that the conditions set forth in clauses (i) through (vi) above have been complied with.

 

After any such irrevocable deposit, the Trustee upon Company Request shall acknowledge in writing the discharge of the Company’s obligations under such Obligations and of the Company’s obligations to or for the benefit of the Holders of such Obligations under this Indenture, except for those surviving obligations specified below.

 

(c)           Notwithstanding the satisfaction of the conditions set forth in Subsection (b) with respect to any Obligations, the Company’s and the Trustee’s obligations to or for the Holders of such Obligations, and the Company’s obligations to the Trustee, in either case under Sections  3.7, 3.8, 8.2, 8.3, 8.4, 10.7, 10.10, 11.2, 14.1, 14.2, 14.3 and 16.14 shall survive until such Obligations are no longer Outstanding.  Thereafter, only the Company’s obligations under Sections 8.3, 8.4, 10.7 and 16.14 shall survive with respect to such Holders or the Trustee.

 

(d)           The Trustee or Paying Agent shall, if so directed by the Company (i) prior to the Stated Maturity of Obligations in respect of which a deposit has been made under clause (b)(i) above which are not to be redeemed prior to their Stated Maturity or (ii) prior to the giving of the notice of redemption referred to in clause (b)(i) above with respect to any Obligations in respect of which a deposit has been made under clause (b)(i) which are to be redeemed on a date prior to their Stated Maturity, apply moneys deposited with the Trustee in respect of such Obligations and redeem or sell Defeasance Securities so deposited with the Trustee and apply the proceeds thereof to the purchase of such Obligations and the Trustee shall immediately thereafter cancel all such Obligations so purchased; PROVIDED, HOWEVER, that the Trustee shall have received a certificate of a nationally recognized firm of Independent Accountants certifying, and setting forth calculations demonstrating, that the moneys and Defeasance Securities remaining on deposit with the Trustee or Paying Agent after the purchase and cancellation of such Obligations shall be sufficient to pay when due the principal or Redemption Price (if applicable) of, and interest due or to become due on, all Obligations in respect of which such moneys and Defeasance Securities are being held by the Trustee or Paying Agent on or prior to the Redemption Date or Stated Maturity thereof, as the case may be.  In the event that on any date as a result of any purchases and cancellations of Obligations as provided in this subsection the total amount of moneys and Defeasance Securities remaining on deposit with the Trustee or Paying Agent under this Section is in excess of the total amount that would have been required to be deposited with the Trustee or Paying Agent on such date under clause (b)(i) in respect of the remaining Obligations for which such moneys and Defeasance Securities are being held, the Trustee or Paying Agent shall, if requested by the Company and upon receipt by the Trustee or Paying Agent of a certificate of a nationally recognized firm of Independent Accountants setting forth the calculation of such excess, pay the amount of such excess to the Company free and clear of any trust, lien, security interest, pledge or assignment securing such Obligations or otherwise existing under this Indenture.

  

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(e)           If the requirements of this Section have been satisfied with respect to all Obligations theretofore Outstanding, then, upon Company Request, the rights and interest created hereby shall be cancelled and surrendered (except as otherwise provided herein) and the Trustee and each co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of the Company, execute and deliver any releases, reconveyances, termination statements and other instruments of satisfaction and discharge as may be necessary to evidence the termination of any lien, security interest and other rights and interests arising under this Indenture and pay, sign, transfer and deliver to the Company or upon Company Order all cash, securities and other property then held by it hereunder as part of the Trust Estate.

 

	
  

	
8.2.

	
Application of Deposited Money and Money From Defeasance Securities.

 

Money or Defeasance Securities deposited with the Trustee or the Paying Agent pursuant to Section 8.1 shall not be part of the Trust Estate and shall not be deemed to be Trust Moneys but shall constitute a separate trust fund for the benefit of persons entitled thereto.  Subject to the provisions of Section 14.3, the Trustee or Paying Agent shall hold in trust money or Defeasance Securities deposited with it pursuant to Section 8.1, and shall apply the deposited money and the money from Defeasance Securities to the payment of the principal or Redemption Price (if applicable) of, and interest on, the Obligations in respect of which such money and Defeasance Securities are deposited.  If money deposited with the Trustee under this Article 8, or money received from principal or interest payments on Defeasance Securities deposited with the Trustee under this Article 8, will be required at a later date for payment of the principal or Redemption Price (if applicable) of, and interest on, the Obligations in respect of which such money and Defeasance Securities are deposited, such money shall, at the written investment direction of the Company, to the extent practicable, be reinvested in Defeasance Securities maturing at times and in amounts that, together with other moneys so deposited or to be generated by other Defeasance Securities, will be sufficient to pay when due the principal or Redemption Price (if applicable) of, and interest to become due on, such Obligations, and the interest earned from such reinvestments shall be paid over to the Company, as received by the Trustee, free and clear of any trust, lien, security interest, pledge or assignment securing such Obligations or otherwise existing under this Indenture.

  

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8.3.

	
Repayment to Company.

 

Subject to Section 8.1, to the extent any Defeasance Securities deposited with the Trustee or Paying Agent under this Article 8, or cash received from principal or interest payments on such Defeasance Securities, will not be required for the payment of the principal or Redemption Price (if applicable) of, and interest on, the Obligations in respect of which such money and Defeasance Securities are deposited, the Trustee and the Paying Agent shall upon Company Request accompanied by a certificate of a nationally recognized firm of Independent Accountants calculating such excess, promptly pay and deliver to the Company any such Defeasance Securities and cash, and thereupon the Trustee or Paying Agent shall be relieved from any liability with respect thereto.  Without limiting the foregoing, the Trustee and the Paying Agent shall pay to the Company upon Company Request any money held by them for the payment of principal, Redemption Price or interest that remains unclaimed for two years after the date such payment was due.  After payment to the Company, Holders entitled to such money must look to the Company for payment as general creditors unless an applicable law designates another person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.

 

	
  

	
8.4.

	
Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any money or Defeasance Securities in accordance with Section 8.1 and the second sentence of Section 8.2 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, (i) the Company’s obligations under this Indenture to or for the benefit of the Holders of Obligations for whose benefit such money or Defeasance Securities were deposited (other than obligations arising under any provisions creating the lien hereof) and under such Obligations shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or Paying Agent is permitted to apply all such money and Defeasance Securities in accordance with Section 8.1, and (ii) the lien of this Indenture shall be reinstated for the benefit of such Holders (and, if the lien of this Indenture shall previously have been fully released, then to the extent possible, the Company shall take all actions required to subject assets of the Company to a lien substantially similar, in amount and otherwise, to the Trust Estate subject to the lien of this Indenture as in effect on the date of the termination of the Company’s obligations hereunder pursuant to Section 8.1, which lien shall be effective until such time as the Trustee or Paying Agent is permitted to apply all such money and Defeasance Securities in accordance with Section 8.1); PROVIDED, HOWEVER, that if the Company has made any payment of interest on or principal of any Obligations because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Obligations to receive such payment from the money or Defeasance Securities held therefor by the Trustee or Paying Agent.  Notwithstanding the foregoing or any other provision of this Indenture, during any period in which the Trustee or Paying Agent is unable, for any of the reasons described in the first sentence of this Section, to apply in accordance with Section 8.1 and the second sentence of Section 8.2 for the benefit of the Holders of any Obligations any money or proceeds from Defeasance Securities deposited with the Trustee with respect to such Obligations pursuant to Section 8.1, the Company’s right to obtain any excess funds from such moneys or proceeds, and the Company’s subrogation rights arising hereunder with respect to such Obligations, shall be suspended.

  

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9. 

	
EVENTS OF DEFAULT AND REMEDIES

 

	
  

	
9.1.

	
Events of Default.

 

“Event of Default” means, wherever used herein, any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)           default in the payment of any interest upon any Obligation when such interest becomes due and payable, and continuance of such default for a period of 30 days or such other period provided for in such Obligation or in the Supplemental Indenture under which such Obligation is issued; or

 

(b)           default in the payment of the principal of (or premium,  if any, on) any Obligation at its Maturity and, if so provided for in such Obligation or the Supplemental Indenture under which such Obligation is issued, the continuance of such default for the period so provided; or

 

(c)           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 or breach of which is dealt with in Subsection (a) or (b) of this Section), and continuance of such default or breach for a period of 30 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 20% in principal amount of the Obligations 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” hereunder, unless such default cannot be reasonably cured within such 30-day period then, so long as a cure is being diligently pursued, the Company shall have a reasonable period of time beyond such 30-day period to complete such cure, but in no event shall such period of time exceed 90 days without the consent of the Holders of not less than 25% in principal amount of the Obligations Outstanding at the end of the 90-day period (provided, however, that for so long as any of the Obligations originally designated as New Bonds, 2001 Series A, or New Bonds, 2002 Series A, shall remain Outstanding, in no event shall such period of time exceed 60 days, unless the Credit Enhancer for such Obligations shall also have consented); or

  

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(d)           a failure to pay any portion of the principal when due and payable (other than amounts due and payable on acceleration) under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company, other than any indebtedness evidenced or secured by an Obligation, whether such indebtedness now exists or shall hereafter be created, which failure shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable in an aggregate principal amount exceeding $25,000,000 without such indebtedness having been discharged or such acceleration having been rescinded or annulled within a period of 10 days after such acceleration; or

 

(e)           the rendering against the Company of a judgment for the payment of moneys in excess of the sum of $25,000,000 and the continuance of such judgment unsatisfied and without stay of execution thereon for a period of 30 days after the entry of such judgment, or the continuance of such judgment unsatisfied for a period of 30 days after the termination of any stay of execution thereon entered within such first mentioned 30 days; but only in either case if such judgment shall have been continued unstayed or unsatisfied for a period of 10 days after written notice of default hereunder shall have been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of not less than 25% in principal amount of the Obligations Outstanding; or

 

(f)           the entry by a court having jurisdiction in the premises of (i) 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 (ii) a decree or order adjudging the Company to be bankrupt or insolvent, or approving as properly filed a petition 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 liquidation of its affairs, and the continuance of any such decree or order for relief of any such other decree or order unstayed and in effect for a period of 60 consecutive days; or

 

(g)           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 similar official of the Company or of any substantial part of its property, or the making by it of an assignment 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.

  

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9.2.

	
Acceleration of Maturity Rescission and Annulment.

 

If an Event of Default exists, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Obligations Outstanding may declare the principal (or, in the case of Obligations of any series constituting Original Issue Discount Obligations, such portion of the principal amount of such Original Issue Discount Obligations as may be specified in the terms of such series) of all the Obligations to be due and payable immediately, by a notice in writing to the Company (and to the Trustee, if given by Holders), and upon any such declaration such principal shall become immediately due and payable.

 

At any time after such a declaration of acceleration has been made, but before any sale of any of the Trust Estate has been made under this Article or any judgment or decree for payment of money due on any Obligations has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Obligations Outstanding (unless such declaration has been made under Section 9.23 only with respect to a particular series of Outstanding Obligations, in which event only a majority in principal amount of the Obligations of such series) may, by written notice to the Company and the Trustee, rescind and annul such declaration and its consequences if

 

(a)           the Company has paid or deposited with the Trustee a sum sufficient to pay

 

(i)            all overdue installments of interest on all Obligations,

 

(ii)           the principal of (and premium, if any, on) any Obligations which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Obligations,

 

(iii)           to the extent that payment of such interest is lawful, interest upon overdue installments of interest at the rate or rates prescribed therefor in such Obligations, and

  

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(iv)           all late payment charges or fees, if any, prescribed in such Obligations, and

 

(v)           all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(b)           all Events of Default, other than the non-payment of the principal of Obligations which have become due solely by such declaration of acceleration, have been cured or have been waived as provided in Section 9.17.

 

No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon.

 

	
  

	
9.3.

	
Entry.

 

The Company agrees that upon the occurrence of an Event of Default the Company, upon demand of the Trustee during the continuance thereof, shall forthwith surrender to the Trustee the actual possession of, and it shall be lawful for the Trustee by such officers or agents as it may appoint to enter and take possession of, the Trust Estate (and the books, papers and accounts of the Company), and to hold, operate, manage and control the Trust Estate (including the making of all needful repairs, and such alterations, additions and improvements as the Trustee shall deem wise) and to receive the rents, issues, tolls, profits, revenues and other income thereof, and, after deducting the costs and expenses of entering, taking possession, holding, operating and managing the Trust Estate, as well as payments for taxes, insurance and other proper charges upon the Trust Estate and reasonable compensation to itself, its agents and counsel, to apply the same as provided in Section 9.7. Whenever all that is then due upon the Obligations and under any of the terms of this Indenture shall have been paid and all defaults hereunder shall have been made good, the Trustee shall surrender possession of such property to the Company.

 

	
  

	
9.4.

	
Power of Sale; Suits for Enforcement.

 

In case an Event of Default shall occur and be continuing, the Trustee, with or without entry, in its discretion may, subject to the provisions of Section 9.16:

 

(a)           sell, subject to any mandatory requirements of applicable law (including Chapter 34.20 of the Alaska Statutes), the Trust Estate as an entirety, or in such parcels as the Holders of a majority in principal amount of the Obligations then Outstanding shall in writing request, or in the absence of such request, as the Trustee may determine, to the highest bidder at public auction and upon such terms as the Trustee may (subject to applicable law) fix; or

 

(b)           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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9.5.

	
Incidents of Sale.

 

Upon any sale of any of the Trust Estate, whether made under the power of sale hereby given or pursuant to judicial proceedings, to the extent permitted by law:

 

(a)           the principal of and accrued interest on all Outstanding  Secured Obligations, if not previously due, shall at once become and be immediately due and payable;

 

(b)           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 price therefor, deliver any Outstanding Secured Obligations or claims for interest thereon in lieu of cash in the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon, and (unless such sale is effected under power of sale) such Obligations, 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;

 

(c)           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;

 

(d)           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 thus 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;

 

(e)           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, its successors and assigns; and

  

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(f)            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.

 

Upon a sale of substantially all the Trust Estate, whether made under the power of sale hereby given or pursuant to judicial proceedings, the Company will permit, to the extent permitted by law, the purchaser thereof and its successors and its and their assigns to take and use the name of the Company and to carry on business under such name or any variant or variants thereof and to use and employ any and all other trade names, brands and trademarks of the Company; and in such event, upon written request of such purchaser or its successors, or its or their assigns, the Company will, at the expense of the purchaser, change its name in such manner as to eliminate any similarity.

 

	
  

	
9.6.

	
Covenant to Pay Trustee Amounts Due on Obligations and Right of Trustee to Judgment.

 

The Company covenants that, if

 

(a)           default is made in the payment of any interest on any Obligation when such interest becomes due and payable, and such default continues for the period prescribed in Section 9.1(a), or

 

(b)           default is made in the payment of the principal of (or premium, if any, on) any Obligation at its Maturity and, if applicable, such default continues for the period prescribed in Section 9.1(b),

 

then upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the Holders of such Obligations, the whole amount then due and payable on such Obligations (including any amount accelerated pursuant to Section 9.2) for principal (and premium, if any) and interest, with interest at the respective rate or rates prescribed therefor in the Obligations on overdue principal (and premium, if any) and, to the extent that payment of such interest is legally enforceable, on overdue installments of interest; and, in addition thereto, all late payment charges and fees, if any, prescribed in such Obligations and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.  If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled to sue for and recover judgment against the Company and any other obligor on the Obligations for the whole amount so due and unpaid and exercise such other rights and remedies as may be provided by law or any agreement entered into pursuant to Section 14.5.

  

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The Trustee shall be entitled to sue and recover judgment as aforesaid either before, after or during the pendency of any proceedings for the enforcement of the lien of this Indenture, and in case of a sale of the Trust Estate 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 Outstanding Secured Obligations, 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 upon any property of the Company shall affect or impair the lien of this Indenture upon the Trust Estate or any rights, powers, or remedies of the Trustee hereunder, or any rights, powers or remedies of the Holders of the Obligations.

 

	
  

	
9.7.

	
Application of Money Collected.

 

Any money collected by the Trustee pursuant to this Article, including any rents, issues, tolls, profits, revenues and other income collected pursuant to Section 9.3 (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 Sections 6.9 and 16.5 to be applied under this Section, 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 Trust Estate, shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest (except as otherwise provided in an Obligation or Supplemental Indenture creating the Series to which such Obligation belongs), upon presentation of the Obligations and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

(a)           First:  To the payment of all undeducted amounts due the Trustee under Sections 10.7 and 16.14;

 

(b)           Second:  To the payment of the interest, principal and premium (if any) then due on the Obligations, as follows:

 

(i)             unless the principal of all of the Obligations shall have become due and payable,

 

First:  Interest - To the payment to the Persons entitled thereto of all installments of interest  then due (and, to the extent that payment of such interest is legally enforceable, interest on overdue installments of interest) on Outstanding Secured Obligations in the order of the maturity of such installments, together with accrued and unpaid interest on the Obligations theretofore called for redemption or prepayment, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without  any discrimination or preference; and

  

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Second:  Principal or Premium - To the payment to the Persons entitled thereto of the unpaid principal and premium (if any) of any Outstanding Secured Obligations which shall have become due, whether at Maturity or by call for redemption or acceleration, and, if the amount available shall not be sufficient to pay in full all the Obligations which shall have become due, then to the payment thereof ratably, according to the amounts of principal and premium (if any) due, to the Persons entitled thereto, without any discrimination or preference; and

 

(ii)           if the principal of all of the Obligations shall have become due and payable, to the payment of the principal, premium (if any) and interest then due and unpaid upon the Outstanding Secured Obligations without preference or priority of principal and premium (if any) over interest or of interest over principal and premium (if any), or of any installment of interest over any other installment of interest, or of any Obligation over any other Obligation, ratably, according to the amounts due respectively for principal, premium (if any) and interest, to the Persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Obligations; and

 

Third:  To the payment of all other amounts due and unpaid on or under the Outstanding Secured Obligations including, but not limited to, penalties, costs and expenses payable to the Holders, ratably, according to the amounts due respectively for such payments, to the Persons entitled thereto without any discrimination or preference;

 

Fourth:  To the payment of any amounts due under Obligations to maintain the value of reserve funds established and maintained in connection with debt securities (i) secured by a pledge of certain Obligations, (ii) issued on behalf of the Company and (iii) with respect to which an opinion was delivered on the date of the issuance of such securities to the effect that the interest on such securities is excluded from the gross income of the holder of such securities pursuant to the Internal Revenue Code, as amended; and

 

Fifth:  To the payment of the remainder, if any, to the Company or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

 

Until such funds are so distributed, such funds shall be invested by the Trustee in overnight deposits with commercial banks having a combined capital and surplus of not less than $500 million or in shares of a money market mutual fund or other collective investment fund registered under the Investment Company Act of 1940, as amended, whose shares are registered under the Securities Act of 1933, as amended, having assets of at least $100 million and having a rating AAAm or AAAm-G by Standard & Poor’s Ratings Group, including money market mutual funds from which the Trustee or its affiliates derive a fee for investment advisory or other services to the fund or as otherwise directed by an Act of the Holders of a majority in principal amount of the Outstanding Secured Obligations.  The interest or other gains on such investments shall be distributed by the Trustee as if such interest or gains were amounts recovered from the Company.

  

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9.8.

	
Receiver.

 

Upon the occurrence of an Event of Default and commencement of judicial proceedings by the Trustee to enforce any right under this Indenture, the Trustee shall be entitled, as against the Company, without notice or demand and without regard to the adequacy of the security for the Obligations or the solvency of the Company, to the appointment of a receiver of the Trust Estate, and of the rents, issues, profits, revenues and other income thereof, but, notwithstanding  the appointment of any receiver, the Trustee shall be entitled to retain possession and control of, and to collect and receive the income from, cash, securities and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder.

 

	
  

	
9.9.

	
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 Obligations or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Obligations 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, premium or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

 

(a)           to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Outstanding Secured Obligations and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

 

(b)           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 amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under  Sections 10.7 and 16.14.

 

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 Obligations 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.

 

	
  

	
9.10.

	
Trustee May Enforce Claims Without Possession of Obligations.

 

All rights of action and claims under this Indenture or the Obligations may be prosecuted and enforced by the Trustee without the possession of any of the Obligations 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.  Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Obligations in respect of which such judgment has been recovered.

 

	
  

	
9.11.

	
Limitation on Suits.

 

No Holder of any Obligation shall have any right to institute any proceeding, judicial or otherwise, under or with respect to this Indenture, or for the appointment of a receiver or trustee or for any other remedy hereunder, unless

 

(a)           such Holder has previously given written notice to the Trustee of a continuing Event of Default;

 

(b)           the Holders of not less than 25% in principal amount of the Obligations Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

(c)           such Holder or Holders (other than a governmental authority) have offered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(d)           the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, if any is required pursuant to Subsection (c), has failed to institute any such proceeding; and

  

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(e)           no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Obligations Outstanding;

 

it being understood and intended that no one or more Holders of Obligations shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the lien of this Indenture or the rights of any other Holders of Obligations, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all Outstanding Secured Obligations.

 

	
  

	
9.12.

	
Unconditional Right of Holders to Receive Principal, Premium and Interest.

 

Notwithstanding any other provision in this Indenture, the Holder of any Obligation shall have the absolute and unconditional right to receive payment of the principal of (and premium, if any) and interest on such Obligation on the dates provided therefor in such Obligation (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.

 

	
  

	
9.13.

	
Restoration of Positions.

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture by foreclosure, entry or otherwise 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 the Company, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

	
  

	
9.14.

	
Rights and Remedies Cumulative.

 

Except as otherwise provided in Sections 3.8, 8.3 and 14.3 with respect to the replacement or payment of mutilated, destroyed, lost or stolen Obligations or the payment of certain moneys, 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.

 

	
  

	
9.15.

	
Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Holder of any Obligation to exercise any right or remedy accruing upon an Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the 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.

  

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9.16.

	
Control by Holders.

 

Subject to the provisions of Section 1.13, the Holders of a majority in principal amount of the Obligations Outstanding shall have the right, during the continuance of an Event of Default,

 

(a)           to require the Trustee to proceed to enforce this Indenture, either by judicial proceedings for the enforcement of the payment of the Obligations or otherwise and the foreclosure of this Indenture, the sale of the Trust Estate or otherwise or, at the election of the Trustee, by the exercise of the power of entry and/or sale hereby conferred; and

 

(b)           to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee hereunder, PROVIDED that

 

(i)            such direction shall not be in conflict with any rule of law or this Indenture,

 

(ii)           the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and

 

(iii)           the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders not taking part in such direction.

 

	
  

	
9.17.

	
Waiver of Past Defaults.

 

Before any sale of any of the Trust Estate has been made under this Article or any judgment or decree for payment of money due has been obtained by the Trustee as provided in this Article, the Holders of not less than a majority in principal amount of the Obligations Outstanding may, by Act of such Holders delivered to the Trustee and the Company, on behalf of the Holders of all the Obligations waive any past default hereunder and its consequences, except a default:

 

(a)            in the payment of the principal of (or premium, if any) or interest on any Obligation, or

  

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(b)           in respect of a covenant or provision hereof which under Article 13 cannot be modified or amended without the consent of the Holder of each Outstanding Obligation 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.

 

	
  

	
9.18.

	
Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Obligation by acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party in such suit, having due regard to the merits and good faith of the claims or defenses made by such party; but the provisions of this Section shall not apply to any suit instituted by the Trustee, by the United States of America (or its agencies or instrumentalities) or by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Obligations Outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Obligation on or after the respective Stated Maturities expressed in such Obligation (or, in the case of redemption or acceleration, on or after the Redemption Date or date of acceleration).

 

	
  

	
9.19.

	
Waiver of Appraisement and Other Laws.

 

To the full extent that it may lawfully so agree, the Company will not at any time insist upon, plead, claim or take the benefit or advantage of, any appraisement, valuation, stay, extension or redemption law now or hereafter in force, in order to prevent or hinder the enforcement of this Indenture or the absolute sale of the Trust Estate, or any part thereof, or the possession 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 property in the Trust Estate marshalled upon any foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Indenture may order the sale of the Trust Estate as an entirety.

 

If any law in this Section referred to and now in force, of which the Company or its successor or successors might take advantage despite this Section, shall hereafter be repealed or cease to be in force, such law shall not thereafter be deemed to constitute any part of the contract herein contained or to preclude the application of this Section.

  

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9.20.

	
Suits to Protect the Trust Estate.

 

The Trustee shall have power to institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the Trust Estate by any acts which may be unlawful or in violation of this Indenture and to protect its interests and the interests of the Holders in the Trust Estate and in the rents, issues, profits, revenues, proceeds, products and other income arising therefrom, including power to institute and maintain proceedings to restrain the enforcement of or compliance with any governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security hereunder or be prejudicial to the interests of the Holders or the Trustee.

 

	
  

	
9.21.

	
Remedies Subject to Applicable Law.

 

All rights, remedies and powers provided by this Article may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Article are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Indenture invalid, unenforceable or not entitled to be recorded, registered, or filed under the provisions of any applicable law.

 

	
  

	
9.22.

	
Principal Amount of Original Issue Discount Obligation.

 

The principal amount of an Original Issue Discount Obligation shall, for purposes of voting, directing the time, place or manner or exercising any remedy, applying moneys, authenticating and delivering Additional Obligations, release of any part of the Trust Estate and for all other purposes hereunder, be determined in the manner specified in the Supplemental Indenture establishing the series to which such Original Issue Discount Obligation belongs.

 

	
  

	
9.23.

	
Default Not Affecting All Series of Obligations.

 

If an Event of Default affecting the rights of the Holders of Obligations of any one or more series which does not similarly affect the rights of Holders of all other series of Obligations at the time Outstanding (including, without limitation, an Event of Default specified in a Supplemental Indenture creating a series of Obligations) shall have occurred and be continuing, then whatever action (including, without limitation, the acceleration of Obligations under Section 9.2, the giving of any request or direction to the Trustee under Section 9.11 or 9.16 or the waiver of any default under Section 9.17) may or shall be taken under this Article upon the occurrence of such Event of Default by or upon the request of the Holders of a specified percentage in principal amount of the Obligations then Outstanding, may or shall be taken in respect of the Obligations then Outstanding of the series as to which such Event of Default shall have been made, by or upon the request of the Holders of the same percentage in principal amount of the Obligations of such series then Outstanding.

  

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9.24.

	
Defaults Under Qualifying Securities Indentures.

 

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 Qualifying Securities which arises as a result of a default or a matured event of default under any Qualifying Securities Indenture, whether or not an Event of Default shall then have occurred and be continuing.

 

	
10. 

	
THE TRUSTEE

 

	
  

	
10.1.

	
Certain Duties and Responsibilities.

 

(a)           Except during the continuance of an Event of Default,

 

(i)            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

 

(ii)            in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

 

(b)           In case an Event of Default exists, 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 person would exercise or use under the circumstances in the conduct of his own affairs.

 

(c)           No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that

 

(i)             this paragraph shall not be construed to limit the effect of Subsection (a) above;

 

(ii)            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;

 

(iii)           the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Obligations Outstanding 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

  

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(iv)           no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(d)           Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

	
  

	
10.2.

	
Notice of Defaults.

 

Within 90 days after the occurrence of any default hereunder, the Trustee shall transmit by mail to all Holders entitled to receive reports pursuant to Section 11.3(c), if operative, and if Section 11.3(c) is not operative, to all Holders of Obligations as their names and addresses appear in the Obligation Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; PROVIDED, HOWEVER, that, except in the case of a default in the payment, repayment or prepayment of the principal of (or premium, if any) or interest on any Obligation or in the payment of any sinking or purchase fund installment, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Holders; and PROVIDED FURTHER that, in the case of any default of the character specified in Section 9.1(c) or 9.1(d), no such notice to Holders shall be given until at least 60 days after the occurrence thereof.  For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default.

 

	
  

	
10.3.

	
Certain Rights of Trustee.

 

Except as otherwise provided in Section 10.1:

 

(a)           the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)           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 Board of Directors may be sufficiently evidenced by a Board Resolution;

  

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(c)           whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established  prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;

 

(d)           the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by the Trustee hereunder in good faith and in reasonable reliance thereon;

 

(e)           the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders (other than any governmental authority) shall have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

(f)           the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, or, except as specifically provided herein, compliance by the Company with its agreements or covenants in this Indenture, 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;

 

(g)           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; and

 

(h)           the Trustee shall not be deemed to have knowledge of any Event of Default unless a Responsible Officer of the Trustee shall have received notice thereof from the Company or the Holder of an Obligation or shall otherwise have actual knowledge thereof.

 

	
  

	
10.4.

	
Not Responsible for Recitals Application of Proceeds or Contents of Disclosure Materials.

 

The recitals contained herein and in the Obligations, except the Trustee’s certificate of authentication on the Obligations, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to the value or condition of the Trust Estate 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 Obligations.  The Trustee shall not be accountable for the use or application by the Company of Obligations 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 with respect to any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the Obligations.

  

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10.5.

	
May Hold Obligations.

 

The Trustee, any Paying Agent, Obligation Registrar, Authenticating Agent or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Obligations and, subject to Sections 10.8 and 10.13, if operative, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Obligation Registrar, Authenticating Agent or such other agent.

 

	
  

	
10.6.

	
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.

 

	
  

	
10.7.

	
Compensation and Reimbursement.

 

The Company agrees:

 

(a)           to pay to the Trustee and each Paying Agent from time to time such compensation as may be specifically agreed upon with the Trustee or Paying Agent and, absent specific agreement, reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(b)           except as otherwise expressly provided herein, to reimburse the Trustee and each Paying Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee or Paying Agent in accordance with any provision of this Indenture or as a result of its performance of any obligation under this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to the Trustee’s or Paying Agent’s negligence or bad faith; and

 

(c)           to indemnify the Trustee and each Paying Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust or its duties 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.

  

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All such payments and reimbursements shall be made with interest at the “prime rate” as quoted by and in effect from time to time by the Trustee plus one percent (1%) per annum (such rate to be recomputed, and as so recomputed to take effect, as of the day immediately following the date on which the Trustee publicly announces any change in its “prime rate”).

 

As security for the performance of the obligations of the Company under this Section, the Trustee shall be secured under this Indenture by a lien prior to the Obligations, and for the payment of such compensation, expenses, reimbursements and indemnity the Trustee shall have the right to use and apply any Trust Moneys held by it hereunder for the benefit of any Holders.

 

	
  

	
10.8.

	
Disqualification; Conflicting Interests.

 

(a)           If the Trustee has or shall acquire any conflicting interest, as defined in this Section (certain terms being defined and percentages calculated as hereinafter stated in this Section), if the default to which such conflicting interest relates has not been cured or duly waived or otherwise eliminated within the 90-day period immediately following the date on which the Trustee ascertains  that it has such conflicting interest, it shall, within such 90-day period, either eliminate such conflicting interest or resign in the manner and with the effect hereinafter specified in this Article.

 

(b)           In the event that the Trustee shall fail to comply with the provisions of Subsection (a) of this Section the Trustee shall, within 10 days after the expiration of such 90-day period, transmit notice of such failure to the Holders in the manner and to the extent provided in Section 11.3(c).

 

(c)           For the purposes of this Section, the Trustee shall be deemed to have a conflicting interest if there is an Event of Default and

 

(i)            the Trustee is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Company are outstanding, or is trustee for more than one outstanding series of securities, as hereafter defined, under a single indenture of the Company, unless such other indenture is a collateral trust indenture under which the only collateral consists of Obligations issued under this Indenture, PROVIDED that there shall be excluded from the operation of this clause other series under this Indenture and any indenture or indentures under which other securities, or certificates of interest or participation  in other securities, of the Company are outstanding, if the Company shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that trusteeship under this Indenture and such other indenture or indentures or under more than one outstanding series under a single indenture is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify  the Trustee from acting as such under one of such indentures or with respect to such series; or

  

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(ii)            the Trustee or any of its directors or executive officers is an underwriter for the Company; or

 

(iii)           the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company; or

 

(iv)           the Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee or representative of the Company, or of an underwriter (other than the Trustee itself) for the Company who is currently engaged in the business of underwriting, except that (A) one individual may be a director or an executive officer or both of the Trustee and a director or an executive officer or both of the Company but may not be at the same time an executive officer of both the Trustee and the Company; (B) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director or an executive officer, or both, of the Trustee and a director of the Company; and (C) the Trustee may be designated by the Company or by any underwriter for the Company to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity, or, subject to the provisions of clause (i) above, to act as trustee, whether under an indenture or otherwise; or

 

(v)           10% or more of the voting securities of the Trustee is beneficially owned either by the Company or by any director, partner, or executive officer thereof, or 20% or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10% or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Company or by any director, partner or executive officer thereof, or is beneficially owned, collectively, by any two or more such persons; or

 

(vi)           the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this paragraph defined), (A) 5% or more of the voting securities, or 10% or more of any other class of security, of the Company not including the Obligations issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (B) 10% or more of any class of security of an underwriter for the Company; or

 

(vii)           the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this paragraph defined), 5% or more of the voting securities of any person who, to the knowledge of the Trustee, owns 10% or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company; or

  

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(viii)         the Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this paragraph defined), 10% or more of any class of security of any person who, to the knowledge of the Trustee, owns 50% or more of the voting securities of the Company; or

 

(ix)           the Trustee owns, upon the occurrence of an Event of Default (or any occurrence that would constitute an Event of Default upon the lapse of time or giving of notice) or any anniversary of such date while such Event of Default or occurrence remains outstanding, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25% or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under clauses (vi), (vii) or (viii) above.  As to any such securities of which the Trustee acquired ownership through becoming executor, administrator, or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed 25% of such voting securities or 25% of any such class of security.  Promptly after any Event of Default (or other occurrence that would constitute an Event of Default upon the lapse of time or giving of notice) and annually in each succeeding year that any Event of Default or other occurrence remains outstanding, the Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of such dates.  If the Company fails to make payment in full of the principal of, or the premium, if any, or interest on, any of the Obligations when and as the same becomes due and payable, and such failure continues for 30 days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30-day period, and after such date, notwithstanding the foregoing provisions of this clause, all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of clauses (vi), (vii) or (viii) above; or

 

(x)           except under the circumstances described in Section 10.13(b), the Trustee shall become a creditor of the Company.

 

For purposes of clause (i) above, the term “series of securities” or “series” means a series, class or group of securities issuable under an indenture pursuant to whose terms holders of one such series may vote to direct the Trustee, or otherwise take action pursuant to a vote of such Holders, separately from Holders of another such series; PROVIDED that “series of securities” or “series” shall not include any series of securities issuable under an indenture if all such series rank equally and are wholly unsecured.

  

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The specification of percentages in clauses (v) to (ix) inclusive, above, shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of clause (iii) or (vii) above.

 

For the purposes of clauses (vi), (vii), (viii) and (ix) above only, (a) the terms “security” and “securities” shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (b) an obligation shall be deemed to be in “default” when a default in payment of principal shall have continued for 30 days or more and shall not have been cured; and (c) the Trustee shall not be deemed to be the owner or holder of (1) any security which it holds as collateral security, as trustee or otherwise, for an obligation which is not in default as defined above, or (2) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (3) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative  capacity.

 

Except in the case of the failure to pay, repay or prepay the principal of or interest on any Obligation, or to pay any sinking or purchase fund installment, on the date on which it becomes due, the Trustee shall not be required to resign as provided by this paragraph if such Trustee shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that:

 

(A)          the Event of Default (or other event that would constitute an Event of Default upon the passage of time or giving of notice) otherwise giving rise to an obligation by the Trustee to resign may be cured or waived during a reasonable period and under the procedures described in such application, and

 

(B)           a stay of the Trustee’s duty to resign will not be inconsistent with the interests of Holders of the Obligations.  The filing of such an application shall automatically stay the performance of the duty to resign until the Commission orders otherwise.

 

Any resignation of the Trustee shall become effective only upon the appointment of a successor trustee and such successor’s acceptance of such an appointment.

 

(d)           For the purposes of this Section:

 

(i)            The term “underwriter” when used with reference to the Company means every person who, within one year prior to the time as of which the determination is made, has purchased from the Company with a view to, or has offered or sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors’ or sellers’ commission.

  

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(ii)           The term “director” means any director of a corporation, or any individual performing similar functions with respect to any organization whether incorporated or unincorporated.

 

(iii)           The term “person” means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, or a government or political subdivision thereof.  As used in this clause, the term “trust” shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.

 

(iv)           The term “voting security” means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust, agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person.

 

(v)           The term “Company” means any obligor upon the Obligations.

 

(vi)           The term “executive officer” means the president, every vice president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual  customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors.

 

(vii)           The term “Trustee” includes any separate or co-trustee appointed under Section 10.14.

 

(e)           The percentages of voting securities and other securities specified in this Section shall be calculated in accordance with the following provisions:

 

(i)           A specified percentage of the voting securities of the Trustee, the Company or any other person referred to in this Section (each of whom is referred to as a “person” in this clause) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person.

  

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(ii)           A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding.

 

(iii)           The term “amount” means, when used in regard to securities, the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security.

 

(iv)           The term “outstanding” means issued and not held by or for the account of the issuer.  The following securities shall not be deemed outstanding within the meaning of this definition:

 

(A)           securities of an issuer held in a sinking fund relating to securities of the issuer of the same class;

 

(B)           securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise;

 

(C)           securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and

 

(D)           securities held in escrow if placed in escrow by the issuer thereof;

 

PROVIDED, HOWEVER, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof.

 

(v)           A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; PROVIDED, HOWEVER, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series as different classes, and PROVIDED FURTHER that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture.

 

	
  

	
10.9.

	
Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee hereunder which (i) shall be (A) a corporation or association organized and doing business under the laws of the United States of America, any State or Territory thereof or the District of Columbia, which is authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by Federal, state, territorial or District of Columbia authority, or (B) a corporation or other Person organized and doing business under the laws of a foreign government and permitted by order of the Commission to act as a trustee under an indenture qualified or to be qualified under the TIA, which is authorized under the laws of such foreign government to exercise corporate trust powers and is subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees, and (ii) shall have a combined capital and surplus of at least $50,000,000.  If such corporation or other Person publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation or other Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  Neither the Company nor any Person directly or indirectly controlling, controlled by or under common control with the Company shall serve as Trustee hereunder.  If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

  

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10.10.

	
Resignation and Removal; Appointment of Successor.

 

(a)           No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 10.11.

 

(b)           The Trustee may resign at any time by giving written notice thereof to the Company.  If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(c)           Unless an Event of Default (or an occurrence that would constitute an Event of Default upon the passage of time or the giving of notice) exists, the Company may remove the Trustee with or without cause, by delivery to the Trustee of a Board Resolution effecting such removal.  The Trustee may be removed with or without cause at any time by Act of the Holders of a majority in principal amount of the Obligations Outstanding, delivered to the Trustee and to the Company.

 

(d)           If at any time:

 

(i)           the Trustee shall fail to comply with Section 10.8(a) after written request therefor by the Company or by any Holder who has been a bona fide Holder of an Obligation for at least six months, or

 

(ii)           the Trustee shall cease to be eligible under Section 10.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or

  

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(iii)           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, (1) the Company by a Board Resolution may remove the Trustee, or (2) subject to Section 9.18, any Holder who has been a bona fide Holder of an Obligation 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 and the appointment of a successor Trustee.

 

(e)           If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee.  In case all or substantially all of the Trust Estate shall be in the possession of a receiver or trustee lawfully appointed, such receiver or trustee, by written instrument, may similarly appoint a successor to fill such vacancy until a new Trustee shall be so appointed by the Holders.  If, within one year after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Obligations Outstanding delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company or by such receiver or trustee.  If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, subject to Section 9.18, the Trustee or any Holder who has been a bona fide Holder of an Obligation for at least six months may, on behalf of himself and all other similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(f)           The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Obligations as their names and addresses appear in the Obligation Register and to the Holders of Notes as their addresses have been previously provided to the Trustee in writing.  Each notice shall include the name of the successor Trustee and the address of its principal corporate trust office.  Upon the appointment of a new Trustee in the place of, any Trustee named herein acting hereunder, an instrument, executed and acknowledged by the Trustee, shall be conclusive proof of the proper substitution of such successor or successors or new Trustee, who shall have all the estate powers, duties, rights and privileges of the predecessor Trustee.

 

(g)           Upon the resignation, removal or incapability of the Trustee, all books and records of the Trustee relating to the Trust Estate shall be sent to the successor Trustee within 60 days of such resignation, removal or incapability.  In the event (i) the Trustee resigns due to any conflict of interest or incapability, (ii) there is any change in control, merger, conversion, consolidation or succession to the assets of the Trustee or (iii) the Company is legally required to remove the Trustee as a result of any such change in control, merger, conversion, consolidation or succession, the Trustee shall pay all costs associated with transferring the Trust Estate to a successor Trustee.

  

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10.11.

	
Acceptance of Appointment by Successor.

 

Every successor Trustee appointed hereunder 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 estates, properties, rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument conveying and transferring to such successor Trustee upon the trusts herein expressed all the estates, properties, rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for in Section 10.7 and 16.14. 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 estates, properties, rights, powers and trusts.

 

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, to the extent operative.

 

	
  

	
10.12.

	
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 of 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, to the extent operative, without the execution or filing of any paper or any further act on the part of any of the parties  hereto.  In case any Obligations 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 Obligations so authenticated with the same effect as if such successor Trustee had itself authenticated such Obligations.

 

	
  

	
10.13.

	
Preferential Collection of Claims against Company.

 

(a)           Subject to Subsection (b) below, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company within three months prior to a default (as defined in paragraph (c) below), or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Holders of the Obligations and the holders of other indenture securities (as defined in Subsection (c) below):

  

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(i)            an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three-month period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in clause (ii) below, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and

 

(ii)           all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such three-month period, or an amount equal to the proceeds of any such property, if disposed of, SUBJECT, HOWEVER, to the rights, if any, of the Company and its other creditors in such property or such proceeds.

 

Nothing herein contained, however, shall affect the right of the Trustee:

 

(A)           to retain for its own account (i) payments made on account of any such claim by any Person (other than the Company) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable state law; or

 

(B)           to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three-month period; or

 

(C)           to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three-month period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default would occur within three months; or

 

(D)           to receive payment on any claim referred to in subclause (B) or (C) above, against the release of any property held as security for such claim as provided in subclause (B) or (C) above, as the case may be, to the extent of the fair value of such property.

  

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For the purposes of subclauses (B), (C) and (D) above, property substituted after the beginning of such three-month period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of said subclauses is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim.

 

If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among the Trustee, the Holders and the holders of other indenture securities in such manner that the Trustee, the Holders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for liquidation or reorganization pursuant to the Federal Bankruptcy Code or applicable state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee and the Holders and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for liquidation or reorganization pursuant to the Federal Bankruptcy Code or applicable state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account.  As used in this paragraph, with respect to any claim, the term “dividends” shall include any distribution with respect to such claim, in bankruptcy or receivership or proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable state law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim.  The court in which such bankruptcy, receivership or proceedings for reorganization is pending shall have jurisdiction (i) to apportion among the Trustee, the Holders and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee and the Holders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical  formula.

 

Any Trustee which has resigned or been removed after the beginning of such three-month period shall be subject to the provisions of this Subsection (a) as though such resignation or removal had not occurred.  If any Trustee has resigned or been removed prior to the beginning of such three-month period, it shall be subject to the provisions of this Subsection (a) if and only if the following conditions exist:

  

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(iii)           the receipt of property or reduction of claim, which would have given rise to the obligation to account, if such Trustee had continued as Trustee, occurred after the beginning of such three-month period; and

 

(iv)           such receipt of property or reduction of claim occurred within three months after such resignation or removal.

 

(b)           there shall be excluded from the operation of Subsection (a) above a creditor relationship arising from:

 

(i)            the ownership or acquisition of securities issued under any indenture or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; or

 

(ii)           advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof is given to the Holders at the time and in the manner provided in this Indenture; or

 

(iii)          disbursements made in the ordinary course of  business in the capacity of trustee under an indenture,  transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; or

 

(iv)          an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction (as defined in Subsection (c) below); or

 

(v)           the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or

 

(vi)          the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper (as defined in Subsection (c) below).

 

(c)           For the purposes of this Section only:

 

(i)            The term “default” means any failure to make payment in full of the principal of or interest on any of the Obligations or upon the other indenture securities when and as such principal or interest become due and payable;

  

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(ii)           The term “other indenture securities” means securities  upon which the Company is an obligor outstanding under any other indenture (A) under which the Trustee is also trustee, (B) which contains provisions substantially similar to the provisions of this Section, and (C) under which a default exists at the time of the apportionment of the funds and property held in such special account;

 

(iii)           The term “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 or bankers and payable upon demand;

 

(iv)           The term “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company 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 arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation;

 

(v)           The term “Company” means any obligor upon the Obligations;

 

(vi)          The term “Federal Bankruptcy Code” means Title 11 of the United States Code, as it may be amended from time to time; and

 

(vii)         The term “Trustee” includes any separate or co-trustee appointed under Section 10.14.

 

	
  

	
10.14.

	
Co-trustees and Separate Trustees.

 

At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any of the Trust Estate may at the time be located, 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 25% in principal amount of-the Obligations Outstanding, the Company shall for such purpose join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Company does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of Default has occurred and is continuing, the Trustee alone shall have power to make such appointment.

  

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Should any written instrument from the Company be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Company.

 

Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely:

 

(a)           The Obligations shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely, by the Trustee.

 

(b)           The rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee.

 

(c)           The Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Company evidenced by a Board Resolution, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case an Event of Default has occurred and is continuing, the Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Company.  Upon the written request of the Trustee, the Company shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal.  A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section.

 

(d)           No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such trustee hereunder.

 

(e)           Any Act of Holders delivered to the Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

  

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10.15.

	
Authenticating Agent.

 

The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Obligations issued upon original issue and upon exchange, registration of transfer or partial redemption or pursuant to Sections 3.6, 3.7, 3.8 or  15.7, and Obligations 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.  Such Authenticating Agent shall at all times be a bank or trust company, and shall at all times be a corporation organized and doing business under the laws of the United States or of any state, territory or the District of Columbia, with a combined capital and surplus of at least $50,000,000 and authorized under  such laws to exercise corporate trust powers and subject to supervision or examination by Federal, state, territorial or District of Columbia authority.  If such corporation publishes reports of condition at least annually pursuant to law or the requirements of such supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

 

Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall continue to be the Authenticating Agent hereunder, provided such corporation shall otherwise be eligible under this Section, without the execution or filing of any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation.

 

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and the Company.  The Trustee may at any time terminate the agency of any Authenticating  Agent by giving written notice of termination to such Authenticating Agent and the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Trustee shall promptly appoint a successor Authenticating Agent, shall give written notice of such appointment to the Company and shall mail notice of such appointment by first-class mail, postage prepaid, to all Holders of Obligations of the applicable series as the names and addresses of such Holders appear on the Obligation Register.

 

If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

The Trustee agrees to pay to the Authenticating Agent from time to time reasonable compensation for its services under this Section and the Trustee shall be entitled to be reimbursed by the Company for such payments, subject to Section 10.7 and 16.14.  The provisions of Sections 3.10, 10.4 and 10.5 shall be applicable to any Authenticating Agent.

  

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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.

 

The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 10.7.

 

If an appointment is made pursuant to this Section, the Obligations may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

 

This is one of the Obligations described in the within-mentioned Indenture.

	  	  	  
	  	  	
As Trustee

	  	  	  
	  	
By:

	  
	  	  	
As Authenticating Agent

	  	  	  
	  	
By:

	  
	  	  	
Authorized Officer

 

	
11. 

	
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

	
  

	
11.1.

	
Company to Furnish Trustee Semi-Annual Lists of Holders.

 

The Company will furnish or cause to be furnished to the Trustee semiannually, not less than 45 days nor more than 60 days after March 15 and September 15 of each year, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request, a list in such form as the Trustee may reasonably require containing all the information in the possession or control of the Company, or any of its Paying Agents other than the Trustee, as to the names and addresses of the Holders of Obligations, obtained since the date as of which the next previous list, if any, was furnished, EXCLUDING from any such list the names and addresses received by the Trustee in its capacity as Obligation Registrar.  Any such list may be dated as of a date not more than 15 days prior to the time such information is furnished and need not include information received after such date.

 

	
  

	
11.2.

	
Preservation of Information; Communications to Holders.

 

(a)           The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders of Obligations (i) contained in the most recent list furnished to the Trustee as provided in Section 11.1, (ii) received by the Trustee in the capacity of Paying Agent (if so acting) hereunder, (iii) filed with the Trustee by Holders of Obligations within the two preceding years as provided for in Section 11.3(c)(ii), or (iv) received by the Trustee in its capacity as Obligation Registrar.

  

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The Trustee may (1) destroy any list furnished to it under Section 11.1 upon receipt of a new list so furnished, (2) destroy any information received by it as Paying Agent (if so acting) hereunder upon delivering to itself as Trustee, not earlier than 45 days after each March 15 and September 15 of each year, a list containing the names and addresses of the Holders of Obligations obtained from such information since the delivery of the next previous list, if any, (3) destroy any list delivered to itself as Trustee which was compiled from information received by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so delivered, and (4) destroy, not earlier than two years after filing, any information as to their names and addresses filed with the Trustee by Holders of Obligations as provided for in Section 11.3(c)(ii).

 

(b)           If three or more Holders of Obligations (hereinafter referred to as “applicants”) apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned an Obligation for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of Obligations with respect to their rights under this Indenture or under the Obligations and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either

 

(i)            afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 11.2(a), or

 

(ii)           inform such applicants as to the approximate number of Holders of Obligations whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 11.2(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any specified in such application.

 

If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 11.2(a), a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment,  of the reasonable expenses of such mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the Holders of Obligations or would be in violation of applicable law.  Such written statement shall specify the basis of such opinion.  If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

  

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(c)           Every Holder of Obligations, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any Paying Agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Obligations in accordance with Section 11.2(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 11.2(b).

 

	
  

	
11.3.

	
Reports by Trustee.

 

This Section shall be operative only while this Indenture is required to be qualified under the TIA.

 

(a)           The term “reporting date” means, as used in this Section, June 30 in each year.  Within 60 days after the reporting date in each year, the Trustee shall transmit to the Holders, as provided in Subsection (c) below, a brief report dated as of such reporting date with respect to any of the following events which may have occurred within the previous twelve months (but if no such event has occurred within such period no such report need be transmitted):

 

(i)            any change to its eligibility under Section 10.9 and its qualifications under Section 10.8;

 

(ii)           the creation of or any material change to a relationship specified in clauses (i) through (x) of Subsection 10.8(c);

 

(iii)           the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Obligations, on the Trust Estate or on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than 1/2 of 1% of the principal amount of the Obligations Outstanding on the date of such report;

  

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(iv)          the amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Obligations) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in Section 10.13(b)(ii), (iii), (iv) or (vi);

 

(v)           any change to the property and funds, if any, physically in the possession of the Trustee as such on the date of such report;

 

(vi)          any release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) which the Trustee has not previously reported; PROVIDED, HOWEVER, that to the extent that the aggregate value as shown by the release papers of any or all of such released properties does not exceed an amount equal to 1% of the principal amount of Obligations then Outstanding, the report need only indicate the number of such releases, the total value of property released as shown by the release papers, the aggregate amount of cash received and the aggregate value of property received in substitution therefor as shown by the release papers;

 

(vii)         any additional issue of Obligations which the Trustee has not previously reported; and

 

(viii)        any action taken by the Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Obligations or the Trust Estate, except action in respect of a default, notice of which has been or is to be withheld by the Trustee in accordance with Section 10.2.

 

(b)           The Trustee shall transmit to the Holders, as provided in Subsection (c) below, a brief report with respect to:

 

(i)           the release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) unless the fair value of such property, as set forth in the Officers’ Certificate or certificate of an Engineer or Appraiser under Section 6.2, is less than 10% of the principal amount of Obligations Outstanding at the time of such release, or such release and substitution, such report to be so transmitted within 90 days after such time; and

 

(ii)           the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) since the date of the last report transmitted pursuant to subsection (a) above (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Obligations, on the Trust Estate or on any property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this paragraph, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of the Obligations Outstanding at such time, such report to be transmitted within 90 days after such time.

  

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(c)           Reports pursuant to this Section shall be transmitted by mail:

 

(i)            to all Holders of Obligations, as the names and addresses of such Holders appear in the Obligation Register;

 

(ii)           to such Holders as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and

 

(iii)          except in the case of reports pursuant to Subsection (b) above, to all Holders whose names and addresses have been furnished to or received by the Trustee pursuant to Section 11.1 hereof.

 

(d)           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 of the Obligations are listed and also with the Commission.  The Company will notify the Trustee when the Obligations are listed on any stock exchange.

 

	
  

	
11.4.

	
Reports by Company.

 

This Section shall be operative only while this Indenture is required to be qualified under the TIA.  The Company shall:

 

(a)           file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it will file with the Trustee and the Commission, in accordance with rules and regulations prescribed by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed in such rules and regulations;

 

(b)           file with the Trustee and the Commission, in accordance with rules and regulations prescribed by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required by such rules and regulations; and

  

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(c)           transmit to the Holders of Obligations, within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Section 11.3(c) with respect to reports pursuant to Section 11.3(a), such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (a) and (b) above as may be required by rules and regulations prescribed by the Commission.

 

	
12. 

	
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

 

	
  

	
12.1.

	
Consolidation, Merger, Conveyance or Transfer only on Certain Terms.

 

The Company shall not consolidate with or merge into any other Person or convey or transfer all or substantially all of its properties and assets to any Person, unless: 

 

(a)           such consolidation, merger, conveyance or transfer shall be on such terms as shall fully preserve the lien and security hereof and the rights and powers of the Trustee and the Holders of the Obligations hereunder;

 

(b)           the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer all or substantially all of the Company’s properties and assets shall be a Person organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall execute and deliver to the Trustee a Supplemental Indenture in a form that is recordable and satisfactory to the Trustee, meeting the requirements of Section 13.2 and containing:

 

(i)            an assumption by such successor Person of the due and punctual payment of the principal of (and premium, if any) and interest on all the Obligations and the performance and observance of every covenant and condition of this Indenture and the Obligations to be performed or observed by the Company; and

 

(ii)           a grant, conveyance, transfer and mortgage complying with Section 12.2;

 

(c)           immediately after giving effect to such transaction, no Event of Default hereunder shall exist; and

 

(d)           the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each of which shall state that such consolidation, merger, conveyance or transfer and such Supplemental Indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

  

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12.2.

	
Successor Person Substituted.

 

Upon any consolidation or merger or any conveyance or transfer of the Trust Estate substantially as an entirety in accordance with Section 12.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; SUBJECT, HOWEVER, to the following limitations:

 

The Supplemental Indenture required by Section 12.1 shall contain a grant, conveyance, transfer and mortgage in terms sufficient to include and subject to the lien of this Indenture, subject only to Permitted Encumbrances and any Prior Liens permitted by Section 14.6, all property, rights, privileges and franchises then owned and which may be thereafter acquired by such successor Person (other than Excepted Property and Excludable Property), whereupon such successor Person may cause to be executed, in its own name or in the name of the Company prior to such succession and delivered to the Trustee for authentication,  any Obligations issuable hereunder; and upon request of such successor Person, and subject to all the terms of this Indenture, the Trustee shall authenticate and deliver any Obligations which shall have been previously executed and delivered by the Company to the Trustee for authentication, and any Obligations which such successor Person shall thereafter, in accordance with this Indenture, cause to be executed and delivered to the Trustee for such purpose. Such changes in phraseology and form (but not in substance) may be made in such Obligations as may be appropriate in view of such consolidation, merger, conveyance or transfer.

 

No such conveyance or transfer of the Trust Estate substantially as an entirety shall have the effect of releasing the Person named as “the Company” in the first paragraph of this instrument or any successor Person which shall theretofore have become such in the manner prescribed in this Article from its liability as obligor and maker on any of the Obligations, unless such conveyance or transfer is followed by the complete liquidation of such Person or successor Person and substantially  all its assets immediately following such conveyance or transfer are the Stock or other securities of such successor Person received in such conveyance or transfer.

 

	
13. 

	
SUPPLEMENTAL INDENTURES

 

	
  

	
13.1.

	
Supplemental Indentures Without Consent of Holders.

 

Without the consent of the Holders of any Obligations, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more Supplemental Indentures, in form satisfactory to the Trustee, for any of the following purposes:

  

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(a)           to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional  property; or

 

(b)           to add to the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Obligations or of any series of Obligations, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; or

 

(c)           to create any series of Obligations and make such other provisions as provided in Section 3.3; or

 

(d)           to modify or eliminate any of the terms of this Indenture; PROVIDED, HOWEVER, that (i) in the event any such modification or elimination made in such Supplemental Indenture would adversely affect or diminish the rights of the Holders of any Obligations then Outstanding against the Company or its property, it shall expressly be stated in such Supplemental Indenture that any such modifications or eliminations shall become effective only when there is no Obligation Outstanding of any series created prior to, the execution of such Supplemental Indenture; and (ii) the Trustee may, in its discretion, decline to enter into any such Supplemental Indenture which, in its opinion, may not afford adequate protection to the Trustee when the same becomes operative; or

 

(e)           to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Obligations contained; or

 

(f)           to evidence the appointment of any successor trustee or separate trustee or trustees or co-trustee or co-trustees hereunder, and to define the rights, powers, duties and obligations conferred upon any such separate trustee or trustees or co-trustee or co-trustees; or

 

(g)           to add to the covenants of the Company or the Events of Default for the benefit of the Holders of all or any series of Obligations or to surrender any right or power herein conferred upon the Company; or

 

(h)           to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein or to make any other provisions, with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, PROVIDED such action shall not in the opinion of the Company, as evidenced by an Officers’ Certificate delivered to the Trustee adversely affect the interests of the Holders of the Obligations in any material respect; or

  

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(i)            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 TIA or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly permitted by the TIA and to modify, eliminate or add to the provisions of this Indenture to the extent that any such provisions relating to requirements under the TIA have been modified or eliminated in the TIA after the date of this instrument, EXCLUDING, HOWEVER, the provisions referred to in Section 316(a)(2) of the TIA as in effect at the date as of which this instrument was executed or any corresponding provision in any similar federal statute hereafter enacted; or

 

(j)            to add or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Obligations (i) in bearer form, registrable or not registrable as to principal and with or without interest coupons or (ii) in book-entry form; or

 

(k)           to make any change in the Indenture that, in the reasonable judgment of the Trustee, will not materially and adversely affect the rights of Holders.  For purposes of this paragraph of this Section, any Supplemental Indenture will be presumed not to materially and adversely affect the rights of the Holders if (1) this Indenture, as supplemented and amended by such Supplemental Indenture, provides equally and ratably for the payment of principal of (and premium, if any) and interest on the Outstanding Secured Obligations which are to remain Outstanding, and (2) subject to the last sentence of this paragraph, the Company shall furnish to the Trustee written evidence from one or more nationally recognized statistical rating organizations then rating the Obligations (or other obligations primarily secured by Outstanding Secured Obligations) that their respective ratings of the Outstanding Secured Obligations (or other obligations primarily secured by Outstanding Secured Obligations) that are not subject to Credit Enhancement will not be withdrawn or reduced as a result of the changes in the Indenture effected by such Supplemental Indenture; PROVIDED, HOWEVER, that the failure to qualify for the presumption set forth in this sentence shall not create any presumption to the contrary or be used to question the judgment of the Trustee and PROVIDED, FURTHER, that the provisions of this paragraph may not be used to amend or modify the items listed in paragraphs (a) through (f) of Section 13.2 hereof in any way that is inconsistent with the provisions of such Section 13.2.  The Trustee may rely on the written evidence of the nationally recognized statistical rating organizations then rating the Obligations (or other obligations primarily secured by Outstanding Obligations) with respect to credit matters relating to the Company to the extent that it deems such reliance to be appropriate.

 

	
  

	
13.2.

	
Supplemental Indentures With Consent of Holders.

 

With the consent of the Holders of not less than a majority in principal amount of the Obligations of all series then Outstanding affected by such Supplemental Indenture, by Act of such Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into a Supplemental Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of the Obligations under this Indenture; PROVIDED, HOWEVER, that no such Supplemental Indenture shall, without the consent of the Holder of each Outstanding Obligation affected thereby,

  

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(a)           change the Stated Maturity of the principal of, or any installment of interest on, any Obligation, or reduce the principal amount thereof or the interest thereon or any premium payable upon the redemption thereof, or change any Place of Payment where, or the coin or currency in which, any Obligation, or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or

 

(b)           reduce the percentage in principal amount of the Obligations Outstanding, the consent of whose Holders is required for any such Supplemental Indenture, or the consent of whose Holders is required for any waiver provided for in this Indenture of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences; or

 

(c)           modify or alter the provisions of the proviso to the definition of the term “Outstanding”; or

 

(d)           modify any of the provisions of this Section, Section 9.12 or Section 9.17, except to increase any percentage provided thereby or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Obligation affected thereby; or

 

(e)           permit the creation of any lien (other than as permitted in this Indenture) ranking prior to or on a parity with the lien of this Indenture with respect to all or substantially all of the Trust Estate or terminate the lien of this Indenture on all or substantially all of the Trust Estate except to the extent already permitted hereby;

 

(f)            modify, in the case of Obligations of any series for which a mandatory sinking fund is provided, any of the provisions of this Indenture in such manner as to affect the rights of the Holders of such Obligations to the benefits of such sinking fund; or

 

(g)           modify Section 9.7 of this instrument.

 

The Trustee may in its discretion determine whether or not any Obligation would be affected by any Supplemental Indenture and any such determination shall be conclusive upon the Holder of all Obligations, whether theretofore or thereafter authenticated and delivered hereunder, and the Trustee shall have no liability to any Holder of any Obligation for any such determination made in good faith.

  

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It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed Supplemental Indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

	
  

	
13.3.

	
Execution of Supplemental Indentures.

 

In executing or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trust created by this Indenture, the Trustee shall be entitled to receive, and, subject to Section 10.1, shall be fully protected in relying upon, 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, except to the extent required in the case of a Supplemental Indenture entered into under Section 13.1(i), be obligated to enter into any such Supplemental Indenture which adversely affects the Trustee’s own rights, duties or immunities under this Indenture.

 

	
  

	
13.4.

	
Effect of Supplemental Indentures.

 

Upon the execution of any Supplemental Indenture under this Article, this Indenture shall be modified in accordance therewith and such Supplemental Indenture shall form a part of this Indenture for all purposes; and every Holder of Obligations theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

	
  

	
13.5.

	
Conformity With Trust Indenture Act.

 

After qualification of this Indenture under the TIA, every Supplemental Indenture executed pursuant to this Article thereafter shall conform to the requirements of the TIA as then in effect.

 

	
  

	
13.6.

	
Reference in Obligations to Supplemental Indentures.

 

Obligations authenticated and delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if required by the Trustee or the Company shall, 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 Obligations so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such Supplemental Indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Obligations.

 

	
14. 

	
COVENANTS

 

	
  

	
14.1.

	
Payment of Principal, Premium and Interest.

 

The Company will duly and punctually pay the principal of (and premium, if any) and interest on the Obligations in accordance with the terms of the Obligations and this Indenture.

  

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14.2.

	
Maintenance of Office or Agency.

 

The Company will maintain an office or agency in each Place of Payment where Obligations may be presented or surrendered for payment, where Obligations entitled to be registered, transferred, exchanged or converted may be presented or surrendered for registration, transfer, exchange or conversion and where notices and demands to or upon the Company in respect of the Obligations and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Company shall fail to maintain such an 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 principal corporate trust office of the Trustee, and the Company hereby appoints the Trustee its agent to receive all such presentations, surrenders, notices and demands.

 

	
  

	
14.3.

	
Money for Obligation Payments to be Held in Trust; Repayment of Unclaimed Money.

 

If the Company shall at any time act as its own Paying Agent, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Obligations, segregate and hold in trust for the benefit of the Holders of such Obligations a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Holders or otherwise disposed of as herein provided, and the Company will promptly notify the Trustee of its action or failure so to act.

 

Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of the principal of (and premium, if any) or interest on any Obligations, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Holders of such Obligations entitled to such principal (and premium, if any) or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

 

Moneys so segregated or deposited and held in trust shall not be a part of the Trust Estate and shall not be deemed Trust Moneys but shall constitute a separate trust fund for the benefit of the Persons entitled to such principal, premium or interest.  Except in the case of moneys so segregated by the Company when acting as its own Paying Agent, moneys held in trust by the Trustee or any other Paying Agent for the payment of the principal (or premium, if any) or interest on the Obligations need not be segregated from other funds, except to the extent required by law.

 

The Company will cause each Paying Agent other than the Company and 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, that such Paying Agent will

  

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(a)           hold all sums held by it for the payment of principal of (and premium, if any) or interest on Obligations in trust for the benefit of the Holders of such Obligations until such sums shall be paid to the Holders or otherwise disposed of as herein provided;

 

(b)           give the Trustee notice of any default by the Company (or any other obligor upon the Obligations) in the making of any payment of principal (and premium, if any) or interest; and

 

(c)           at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 

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 money held in trust by the Company or such Paying Agent, such money to be held by the Trustee upon the same trusts as those upon which such money was held by the Company or such Paying Agent; and, upon such payment by the Company, the Company shall be discharged from such trust, 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 held by the Company in trust for the payment of the principal of (and premium, if any) or interest on any Obligation and remaining unclaimed for two years after such principal (and premium, if any) 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 Obligation 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.

 

	
  

	
14.4.

	
Warranty of Title.

 

At the time of the execution and delivery of this instrument, the Company has good and valid title to the real property specifically described in paragraph (a) of Granting Clause First as owned in fee (other than Excludable Property) and good and valid title to the interests in other real property specifically described in Granting Clauses First and Second (other than Excludable Property), subject to no mortgage, lien, charge or encumbrance (other than Permitted Encumbrances) except as stated therein or in the Subject clause to the Granting Clauses, and has full power and lawful authority to grant, bargain, sell, alienate, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm said real property and interests in real property in the manner and form aforesaid.

  

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At the time of the execution and delivery of this instrument, the Company lawfully owns and is possessed of the personal property and securities specifically described in Granting Clauses First and Second, subject to no mortgage, lien, charge or encumbrance (other than Permitted Encumbrances) except as stated therein or in the Subject clause to the Granting Clauses, and has full power and lawful authority to mortgage, assign, transfer, deliver and pledge said personal property and securities in the manner and form aforesaid.

 

The Company hereby does and will forever warrant and defend the title to the property specifically described in Granting Clause First and Second (other than property that is released from the lien of this Indenture pursuant to the provisions hereof) against the claims and demands of all persons whomsoever, except Permitted Encumbrances.

 

	
  

	
14.5.

	
After-Acquired Property; Further Assurances; Recording.

 

All property of every kind, other than Excepted Property and Excludable Property, acquired by the Company after the date hereof, shall, immediately upon the acquisition thereof by the Company, and without any further mortgage, conveyance or assignment, become subject to the lien of this Indenture; SUBJECT, HOWEVER, to the exceptions, if any, permitted by Section 12.2.  Nevertheless, the Company will do, execute, acknowledge and deliver all and every such further acts, conveyances, mortgages, financing statements and assurances as the Trustee shall require for accomplishing the purposes of this Indenture.

 

The Company will cause this instrument and all Supplemental Indentures and other instruments of further assurance, including all financing statements and continuation statements covering security interests in personal property, and all mortgages securing purchase money obligations delivered to the Trustee or to the trustee, mortgagee or other holder of a Prior Lien under Section 6.2 to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, and will execute and file such financing statements and cause to be issued and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve and protect the rights of the Holders and the Trustee hereunder to all property comprising the Trust Estate.  Furthermore, the Company will use its best efforts to cause all contracts and contract rights of the type set forth in paragraph (c) of Granting Clause First and acquired by the Company after the date hereof (other than Excludable Property) to become subject to the lien of this Indenture.  The Company will furnish to the Trustee:

 

(a)           promptly after the execution and delivery of this instrument and of each Supplemental Indenture or other instrument of further assurance, an Opinion of Counsel stating that, in the opinion of such counsel, this instrument and all such Supplemental Indentures and other instruments of further assurance have been properly recorded, registered and filed, or have been received for recording, filing or registration, to the extent necessary to make effective the lien intended to be created by this Indenture, and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the rights of the Holders and the Trustee hereunder, or stating that, in the opinion of such counsel, no such action is necessary to make such lien effective; and

  

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(b)           within 30 days after January 1 in each year, an Opinion of Counsel, dated as of such date, either stating that, in the opinion of such counsel, during the preceding calendar year, such action has been taken with respect to the recording, registering, filing, re-recording, re-registering and re-filing of this instrument and of all Supplemental Indentures, financing statements, continuation statements or other instruments of further assurance as is necessary to maintain the lien of this Indenture (including the lien on any property acquired by the Company after the execution and delivery of this instrument and owned by the Company at the end of the preceding calendar year) and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that, during the preceding calendar year, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the rights of the Holders and the Trustee hereunder, or stating that, in the opinion of such counsel, during the preceding calendar year, no such action is necessary to maintain such lien.

 

Upon the cancellation and discharge of any Prior Lien, the Company may receive all cash, obligations and securities then held by the trustee, mortgagee or other holder of such Prior Lien, which were received by such trustee, mortgagee or other holder on account of the release or the taking by eminent domain or the purchase by a public authority or the sale by virtue of a designation or order of a public authority or any other disposition of, or insurance on, the Trust Estate, or any part thereof (including all proceeds of or substitutions for any thereof).

 

	
  

	
14.6.

	
Limitations on Liens; Payment of Taxes.

 

The Company will not create or incur or suffer or permit to be created or incurred or to exist any mortgage, lien, charge or encumbrance on or pledge of any of the Trust Estate, prior to or upon a parity with the lien of this Indenture except Permitted Encumbrances and except that:

 

(a)           The Company may create, incur or suffer to exist purchase money mortgages or other purchase money liens upon any real property purchased by the Company or acquire real property subject to mortgages and liens existing thereon at the date of acquisition, or acquire or agree to acquire and own personal property subject to or upon chattel mortgages, security agreements, conditional sales agreements or other title retention agreements; PROVIDED that

 

(i)             the principal amount of the indebtedness secured by each such mortgage, lien or agreement shall not exceed 90% of the Cost or Fair Value to the Company at the time of the acquisition thereof by the Company, whichever is less, as evidenced by an Officers’ Certificate, of the property subject thereto; PROVIDED that if the property subject to such mortgage, lien or agreement is not necessary to the operations of the remaining portion of the Company’s business, the principal amount thereby secured shall not exceed 100% of such Cost or Fair Value to the Company, whichever is less;

  

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(ii)           the aggregate principal amount of all indebtedness of the Company at the time outstanding secured by such mortgages, liens and agreements (including extensions, renewals and replacements thereof, as provided by the following Subsection (b), and also the indebtedness then being incurred) shall not exceed 10% of the aggregate principal amount of all Outstanding Secured Obligations; and

 

(iii)           each such mortgage, lien or agreement shall apply only to the property originally subject thereto and fixed improvements erected on such real property or affixed to such personal property or equipment  used in connection with such real or personal property.

 

(b)           The Company may modify, extend, renew or replace any mortgage, lien or agreement permitted by Subsection (a) above upon the same property theretofore subject thereto, or modify, replace, renew or extend the indebtedness secured thereby, PROVIDED that in any such case the principal amount of such indebtedness so modified, replaced, extended or renewed shall not be increased.

 

The Company will pay or cause to be paid as they become due and payable all taxes, assessments and other governmental charges lawfully levied or assessed or imposed upon the Trust Estate or any part thereof or upon any income therefrom, and also (to the extent that such payment will not be contrary to any applicable laws) all taxes, assessments and other governmental charges lawfully levied, assessed or imposed upon the lien or interest of the Trustee or of the Holders in the Trust Estate, so that (to the extent aforesaid) the lien of this Indenture shall at all times be wholly preserved at the cost of the Company and without expense to the Trustee or the Holders; PROVIDED, HOWEVER, that the Company shall not be required to pay and discharge or cause to be paid and discharged any such tax, assessment or governmental charge to the extent that the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings and the Company shall have established and shall maintain adequate reserves on its books for the payment of the same.

 

	
  

	
14.7.

	
Maintenance of Properties.

 

The Company will cause all its properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements,  betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company from discontinuing the operation and maintenance of any of its properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business and not disadvantageous in any material respect to the Holders.

  

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The Company will promptly classify, and record on its books, as retired, all property that has permanently ceased to be used or useful in the business of the Company.

 

	
  

	
14.8.

	
To Insure.

 

The Company will at all times keep all its property of an insurable nature and of the character usually insured by companies operating similar properties, insured in amounts customarily carried, and against loss or damage from such causes as are customarily insured against, by similar companies.  All such insurance shall be effected with responsible insurance carriers.  All policies or other contracts for such insurance upon any part of the Trust Estate shall provide that the proceeds of such insurance (except in the case of any particular casualty resulting in damage or destruction not exceeding $1,000,000 in the aggregate) shall be payable, subject to the requirements of any Prior Lien, to the Trustee as its interest may appear (by means of a standard mortgagee clause or other similar clause acceptable to the Trustee, without contribution).  Each policy or other contract for such insurance, or such mortgagee clause, shall contain an agreement by the insurer that, notwithstanding any right of cancellation reserved to such insurer, such policy or contract shall continue in force for the benefit of the Trustee for at least 30 days after written notice to the Trustee of cancellation; PROVIDED, HOWEVER, that in the event of cancellation due to non-payment of premiums said notice shall be 10 days.  As soon as practicable after the execution of this Indenture, and within 90 days after the close of each calendar year thereafter, and at any time upon the request of the Trustee, the Company will deliver to the Trustee an Officers’ Certificate containing a detailed list of the insurance in force upon the Trust Estate on a date therein specified (which date shall be within 30 days of the delivery of such Certificate), including the names of the insurers with which the policies and other contracts of insurance on the Trust Estate are carried, the numbers, amounts and expiration dates of such policies and other contracts and the property and hazards covered thereby, and stating that the insurance so listed complies with this Section.

 

Any appraisement or adjustment or any loss or damage of or to any part of the Trust Estate and any settlement in respect thereof which may be agreed upon between the Company and any insurer, as evidenced by an Officers’ Certificate, shall be accepted by the Trustee.

 

All proceeds of insurance received by the Trustee shall be held and paid over or applied by the Trustee as provided in Article 7.

 

All proceeds of any insurance on any part of the Trust Estate not payable to the Trustee or the trustee, mortgagee or other holder of a Prior Lien shall be applied by the Company to the repair, rebuilding or replacement of the property destroyed or damaged or shall be deposited with the Trustee to be held and paid over or applied by it as provided in Article 7.

  

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14.9.

	
Corporate Existence.

 

Subject to Article 12, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the Company shall not be required to preserve any right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders, as evidenced by an Officers’ Certificate delivered to the Trustee certifying the action of the Board of Directors and containing an explanation of the factors considered by the Board of Directors in taking such action.

 

	
  

	
14.10.

	
To Keep Books; Inspection by Trustee.

 

The Company will keep proper books of record and account, in which full and correct entries shall be made of all dealings or transactions of or in relation to the Obligations and the plant, properties, business and affairs of the Company in accordance with Accounting Requirements.  The Company will, upon reasonable written notice by the Trustee to the Company and at the expense of the Company, permit the Trustee by its representatives to inspect the plants and properties, books of account, records, reports and other papers of the Company, and to take copies and extracts therefrom, and will afford and procure a reasonable opportunity to make any such inspection, and the Company will furnish to the Trustee any and all information as the Trustee may reasonably request, with respect to the performance by the Company of its covenants in this Indenture; PROVIDED, HOWEVER, the Company shall not be required to make available any information supplied to it by a third party which is subject to a confidentiality agreement with such third party except to the extent allowed by, and subject to the terms of, such confidentiality agreement.

 

	
  

	
14.11.

	
Use of Trust Moneys and Advances by Trustee.

 

If the Company shall fail to perform any of its covenants in this Indenture, the Trustee may, at any time and from time- to- time, after notice to the Company, make advances to effect performance of any such covenant on behalf of the Company; and all moneys so used or advanced by the Trustee, together with interest at the “prime rate” as quoted by and in effect from time to time by the Trustee plus one percent (1%) per annum (such rate to be recomputed, and as so recomputed to take effect, as of the day immediately following the date on which the Trustee publicly announces any change in its “prime rate”), shall be repaid by the Company upon demand.  Nothing contained herein shall be deemed to obligate the Trustee to advance its own monies for any purpose.

  

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14.12.

	
Statement as to Compliance.

 

The Company will deliver to the Trustee, within 120 days after the end of each calendar year, a written statement signed by the principal executive officer and by the principal financial officer or principal accounting officer of the Company stating that a review of the Company’s activities during the preceding calendar year has been made under their supervision and that the Company has fulfilled its obligations hereunder in all material respects during such calendar year.

 

Promptly after any Officer of the Company may reasonably be deemed to have knowledge of a default (as defined in Section 10.2) hereunder, the Company will deliver to the Trustee a written notice specifying the nature and period of existence thereof and the action the Company is taking and proposes to take with respect thereto.

 

Promptly upon becoming aware of the ownership of any Obligation by any Affiliate of the Company, any other obligor under such Obligation or any Affiliate of such obligor, the Company shall give the Trustee notice thereof.

 

	
  

	
14.13.

	
Waiver of Certain Covenants.

 

The Company may omit in any particular instance to comply with any covenant or condition set forth in this Article except Sections 14.1, 14.2, 14.3, 14.9, 14.10, 14.11 and the first sentence of Section 14.14 if before or after the time for such compliance the Holders of at least a majority in principal amount of all Obligations then Outstanding shall, by Act of such Holders, either waive in writing such compliance in such instance or generally waive in writing such compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant 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 covenant or condition shall remain in full force and effect.

 

	
  

	
14.14.

	
Rate Covenant.

 

The Company shall establish and collect rates, rents, charges, fees and other compensation (collectively, “Rates”) for the use or the sale of the output, capacity or service of the System that, together with other moneys available to the Company, produce moneys sufficient to enable the Company to comply with all its covenants under this Indenture.  Subject to any necessary regulatory approval or determination, the Company also shall establish and collect Rates for the use or the sale of output, capacity or service of the System that, together with other revenues available to the Company, are reasonably expected to yield Margins for Interest for each fiscal year of the Company equal to at least 1.10 times Interest Charges for such period.  Promptly upon any material change in the circumstances which were contemplated at the time such Rates were most recently reviewed, but not less frequently than once every twelve months, the Company shall review the Rates so established and shall promptly establish or revise such Rates as necessary to comply with the foregoing requirements; PROVIDED, HOWEVER, that if (i) upon any such review of Rates based on a material change in circumstances, the Company determines that Rates are required to be established or revised in order for the Company to comply with this Section 14.14 and (ii) there are less than six calendar months remaining in the current fiscal year, it will be sufficient for purposes of complying with this Section 14.14 if the Company establishes or revises its Rates so as to reasonably expect to meet the covenant for the next succeeding twelve-month period commencing with the first day of the calendar month  next succeeding the date of any such revision, subject in the case of the foregoing Margins for Interest requirement to any necessary regulatory approval or determination.

  

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14.15.

	
Distributions to Members.

 

The Company shall not directly or indirectly declare or pay any dividend or make any payments of, distributions of, or retirements of patronage capital to its members (each a “Distribution”) if, at the time thereof or after giving effect thereto, (i) an Event of Default shall exist, or (ii) the Company’s equities and margins (determined in accordance with Accounting Requirements) as of the end of the Company’s most recent fiscal quarter would be less than thirty percent (30%) of the Company’s total long-term debt and equities and margins (determined in accordance with Accounting Requirements) at such time; PROVIDED, HOWEVER, that, so long as no Event of Default shall exist, the Company may, in any fiscal year, make a Distribution of up to the lesser of (x) five percent (5%) of the Company’s aggregate equities and margins on the books of the Company as of the end of the immediately preceding fiscal year or (y) fifty percent (50%) of the prior fiscal year’s assignable margins (determined in accordance with the definition of Margins for Interest), whether or not allocated to members.  For purposes of this Section, determination of aggregate margins and equities and total long-term debt and equities shall not include any amount on account of earnings retained in any Subsidiary or Affiliate of the Company and any such determination of total long-term debt and equities shall exclude the debt of any Subsidiary or Affiliate.

 

	
15. 

	
REDEMPTION OF OBLIGATIONS; SINKING FUNDS

 

	
  

	
15.1.

	
General Applicability of Sections 15.1 through 15.7.

 

Obligations which by their express terms are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise provided with respect to the Obligations of any particular series by the provisions of a Supplemental Indenture creating such series) in accordance with Sections 15.1 through  15.7, inclusive.

 

	
  

	
15.2.

	
Election to Redeem; Notice to Trustee.

 

The election of the Company to redeem any Obligations shall be evidenced by a Board Resolution.  In case of any redemption at the election of the Company of less than all the Outstanding Obligations of any series, the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee in the sole discretion of the Trustee) notify the Trustee in writing of such Redemption Date and of the principal amount of Obligations of such series to be redeemed and of the numbers of any Outstanding Obligations of such series then owned by the Company.

  

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If at the time the Company provides notice of redemption to the Trustee pursuant to this Section, the Trustee or a Paying Agent does not have on deposit (which, if the Company is the Paying Agent, shall be segregated and held in trust as provided in Section 14.3) sufficient available funds to pay the Redemption Price for the Obligations so called for redemption, then the notice of redemption shall be conditional and revocable; that is, the Company shall be under no obligation to deposit or provide, or cause to be deposited or provided, to the Trustee funds to effect such redemption and, if it does not elect to do so by 2:00 p.m., New York City time, on the Redemption Date, then the Obligations called for redemption shall not be redeemed pursuant to the above-mentioned notice of redemption or the notice of redemption given to the Holders pursuant to Section 15.4.

 

If the Obligations of any series to be redeemed consist of Obligations having different Stated Maturities or different rates of interest (or methods of computing interest), then the Company may, in the notice delivered to the Trustee pursuant to this Section, direct that the Securities of such series to be redeemed shall be selected from among groups of such Obligations having specified Stated Maturities or rates of interest (or methods of computing interest) and the Trustee shall thereafter select the particular Obligations to be redeemed in the manner set forth below from among the groups of Obligations so specified.

 

	
  

	
15.3.

	
Selection by Trustee of Obligations to be Redeemed.

 

Unless otherwise provided in a Supplemental Indenture authorizing a particular series of Obligations, if less than all the Outstanding Obligations of any series or maturity within a series are to be redeemed, the particular Obligations to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the Outstanding Obligations of such series or maturity within a series which have not previously been called for redemption by such method as the Trustee shall deem fair and appropriate.  In any such selection pursuant to this Section, the Trustee shall make such adjustments, reallocations and eliminations as it shall deem proper to the end that the principal amount of Obligations of such series or maturity within a series so selected shall be equal to the greater of $1,000 and the smallest authorized denomination of the Obligations of such series, or a multiple thereof, by increasing or decreasing or eliminating the amount which would otherwise be allocable to any Holder by an amount not exceeding such minimum.  The Trustee in its discretion may determine the particular Obligations (if there is more than one) registered in the name of any Holder which are to be redeemed, in whole or in part.  In any case where any Obligations of such series are registered in the same name, the Trustee in its discretion may treat the aggregate principal amount so registered as if it were represented by one Obligation of such series.

  

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The Trustee shall promptly notify the Company in writing of the Obligations selected for redemption and, in the case of any Obligation selected for partial redemption, the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Obligations shall relate, in the case of any Obligation redeemed or to be redeemed only in part, to the portion of the principal of such Obligation which has been or is to be redeemed.

 

	
  

	
15.4.

	
Notice of Redemption.

 

Except as otherwise provided in a Supplemental Indenture, notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Obligations of such series to be redeemed, at his address appearing in the Obligation Register.

 

Except as otherwise provided in a Supplemental Indenture, all notices of redemption shall state:

 

(a)           the CUSIP number (if any) of all Obligations to be redeemed,

 

(b)           the Redemption Date,

 

(c)           the Redemption Price,

 

(d)           the principal amount of Obligations of each series to be redeemed, and, if less than all Outstanding Obligations of a series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Obligations of such series to be redeemed,

 

(e)           that on the Redemption Date the Redemption Price of each of the Obligations to be redeemed will become due and payable and that the interest thereon shall cease to accrue from and after said Redemption Date if the Redemption Price is then paid,

 

(f)            the place or places where the Obligations of each series to be redeemed are to be surrendered for payment of the Redemption Price, which shall be the office or agency of the Company in each Place of Payment for such series,

 

(g)           if it be the case, that such Obligations are to be redeemed by the application of certain specified Trust Moneys,

 

(h)           if it be the case, that such redemption is to satisfy sinking fund requirements,

  

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(i)             if it be the case that the notice of redemption for such Obligations is conditional and revocable, (i) that the redemption of such Obligations is conditional upon the Company depositing or providing, or causing to be deposited or provided, to the Trustee or the Paying Agent, by 2:00 p.m. New York City time on the redemption date, funds (which, if the Company is the Paying Agent, shall be segregated and held in trust pursuant to Section 14.3) sufficient to effect such redemption, (ii) that if such funds are not so provided, such Obligations will not be redeemed on such date and the notice of the redemption of such Obligations will be of no force or effect, (iii) that the Company is under no obligation to deposit or provide, or cause to be deposited or provided, such funds, and (iv) that neither the Company nor the Trustee shall be liable to any Holder if the Company does not deposit or provide, or cause to be deposited or provided, funds sufficient to effect such redemption with the result that such Obligations are not redeemed on the Redemption Date specified in such notice, and

 

(j)            if it be the case that the notice of redemption is unconditional and irrevocable, (i) that the Trustee or the Paying Agent has on deposit sufficient funds to effect such redemption (which, if the Company is acting as its own Paying Agent, shall be segregated and held in trust as provided in Section 14.3), and (ii) that such Obligations shall become due and payable at the Redemption Price on the Redemption Date specified in the notice.

 

Notice of redemption of Obligations to be redeemed at the election of the Company 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.

 

	
  

	
15.5.

	
Deposit of Redemption Price.

 

Neither the Company (if the notice of redemption for such Obligations is conditional and revocable) nor the Trustee shall be liable to any Holder if the Company does not deposit or provide, or cause to be deposited or provided, funds sufficient to effect redemption of any Obligations with the result that such Obligations are not redeemed on the Redemption Date specified in such notices.  If such funds shall not have been so received, the Trustee shall give notice to the Holders, in the manner in which the notice of redemption was given to the Holders, that such funds were not so received.

 

If, at the time notice of redemption is delivered to the Holders, the Trustee or Paying Agent has on deposit (which, if the Company is acting as its own Paying Agent, is segregated and held in trust as provided in Section 14.3) an amount of money sufficient to pay the Redemption Price of all the Obligations which are to be redeemed on the Redemption Date, then the notice of redemption is unconditional and irrevocable and the Obligations specified in the notice of redemption shall become due and payable at the specified Redemption Price on the specified Redemption Date.  Such money shall be held in trust for the benefit of the Persons entitled to such Redemption Price and shall not be deemed to be part of the Trust Estate or Trust Moneys.

  

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Subject to the requirements of any Supplemental Indenture, the Company may determine what sinking fund requirements (if any) to apply redeemed Obligations against.

 

	
  

	
15.6.

	
Obligations Payable on Redemption Date.

 

Notice of redemption having been given as aforesaid, the Obligations 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 the Company shall default in the payment of the Redemption Price) such Obligations shall cease to bear interest.  Upon surrender of any such Obligation for redemption in accordance with said notice or compliance with such other terms as may be provided in any Supplemental Indenture relating thereto, such Obligation shall be paid by the Company at the Redemption Price.  Installments of interest with a Stated Maturity on or prior to the Redemption Date shall be payable to the Holders of the Obligations registered as such on the relevant Record Dates according to the terms of such Obligations and the provisions of Section 3.9.

 

If any Obligation called for redemption shall not be so paid upon surrender thereof for redemption or as otherwise provided under Section 15.7 in lieu of surrender, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Obligation.

 

	
  

	
15.7.

	
Obligations Redeemed in Part.

 

Unless otherwise provided in any Supplemental Indenture, any Obligation 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 Obligation, without service charge, a new Obligation or Obligations of the same series and maturity of any authorized denomination or denominations as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Obligation so surrendered.

 

In lieu of surrender under the preceding paragraph, payment of the Redemption Price of a portion of any Obligation held in the Book-Entry System may be made directly to the Holder thereof without surrender thereof if there shall have been filed with the Trustee either (i) a written agreement between the Company and such Holder and, if such Holder is a nominee, the Person for whom such Holder is a nominee, that payment shall be so made and that such Holder will not sell, transfer or otherwise dispose of such Obligation unless prior to delivery thereof such Holder shall present such Obligation to the Trustee for notation thereon of the portion of the principal thereof redeemed or shall surrender such Obligation in exchange for a new Obligation or Obligations for the unredeemed balance of the principal of the surrendered Obligation or (ii) a certificate of the Company that such an agreement has been entered into and remains in force.

  

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15.8.

	
Applicability of Sections 15.8 through 15.10.

 

The provisions of Sections 15.8 through 15.10 shall be applicable to any sinking fund for the retirement of Obligations of a series except as otherwise specified as contemplated by Section 3.3 for Obligations of a particular series.

 

The minimum amount of any sinking fund payment provided for by the terms of Obligations of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Obligations of any series is herein referred to as an “optional sinking fund payment”.  If provided for by the terms of Obligations of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 15.9.  Each sinking fund payment shall be applied to the redemption of Obligations of any series as provided for by the terms of Obligations of such series.

 

	
  

	
15.9.

	
Satisfaction of Sinking Fund Payments with Obligations.

 

The Company (a) may deliver Outstanding Obligations of a series (other than any previously called for redemption) and (b) may apply, as a credit, Obligations of a series which have been redeemed either at the election of the Company pursuant to the terms of such Obligations or through the application of permitted optional sinking fund payments pursuant to the terms of such Obligations, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Obligations of such series required to be made pursuant to the terms of such Obligations as provided for by the terms of such series; PROVIDED that such Obligations have not been previously so credited.  Such Obligations shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Obligations for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

	
  

	
15.10.

	
Redemption of Obligations for Sinking Fund.

 

Not less than 60 days prior to each sinking fund payment date for any series of Obligations, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Obligations of that series pursuant to Section 15.9 and will also deliver to the Trustee any Obligations to be so delivered.  Not less than 30 days before each such sinking fund payment date the Trustee shall select the Obligations to be redeemed upon such sinking fund payment date in the manner specified in Section 15.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 15.4.  Such notice having been duly given, the redemption of such Obligations shall be made upon the terms and in the manner stated in Sections 15.6 and  15.7.

  

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16. 

	
CONTROL OF PLEDGED SECURITIES

 

	
  

	
16.1.

	
Pledged Securities Deposited With Trustee.

 

Any Stock and certificates representing the same and any obligations and indebtedness and evidences thereof and any other securities which are at the time deposited with the Trustee or required to be deposited and pledged with the Trustee, except Undesignated Qualifying Securities and Designated Qualifying Securities, are herein sometimes collectively called the “Pledged Securities.”

 

As and when any Pledged Securities shall come into the possession of the Company or under its control, the Company shall forthwith deposit and pledge the same with the Trustee, together with such proper instruments of assignment and transfer as the Trustee may reasonably require, which shall include express authority to the Trustee to vote any Stock included therein to the extent herein provided or permitted and to cause such authority to be recorded in the entry of transfer of such Stock on the books of the entity issuing the same.

 

The Trustee shall not be obliged at any time to accept any Pledged Securities or to cause or to permit a transfer thereof to be made to it, if, in the opinion of the Trustee, such action would subject it to the risk of any liability or expense, unless the Trustee shall be indemnified to its satisfaction for so doing.

 

The Trustee shall not be under any duty to examine into or pass upon the validity or genuineness of any of the Pledged Securities.  The Trustee shall be entitled to assume that any Pledged Securities are genuine and valid and what they purport to be and that any endorsements or assignments thereof are genuine and valid.

 

	
  

	
16.2.

	
Form of Holding.

 

The Trustee may hold any Pledged Securities in bearer form or in the name of the Trustee or any nominee or nominees of the Trustee or (unless an Event of Default exists or the Holders of a majority in principal amount of the Obligations then Outstanding otherwise direct) in the name of the Company or any nominee or nominees of the Company, endorsed or assigned in blank or in favor of the Trustee.  The Trustee may deliver any of the Pledged Securities to the Company for a period of not more than 21 days or to the issuer thereof for the purpose of making exchanges or registrations or transfers or for such other purposes in furtherance of this trust as the Trustee may deem advisable.

 

	
  

	
16.3.

	
Right of Trustee to Preserve Issuers; Directors’ Qualifying Shares.

 

The Trustee may do whatever in its judgment may be necessary for the purpose of preserving or extending the legal existence of any Person whose Stock is included in the Pledged Securities, but (subject to Section 10.1) it shall be under no duty to take any action in respect thereof.  Upon Company Request stating that the Company has no shares for the purpose under its control other than shares held hereunder, the Trustee shall transfer or permit the Company to transfer as many shares of stock as may be necessary to qualify the requisite number of persons to act as directors of or in any other official relation to the corporation issuing such shares; PROVIDED, HOWEVER, that no such transfer of the stock of any Pledged Subsidiary shall be made which would change the status of the issuing corporation as a Pledged Subsidiary. In every such case the Trustee may make such arrangements as it shall deem necessary for the protection of the trust hereunder in respect of the shares so transferred.  While such shares remain so transferred they shall not be deemed to be Pledged Securities, but when such shares are no longer needed for such qualification purposes they shall immediately be redeposited and repledged and thereupon again become Pledged Securities.

  

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16.4.

	
Income Before Event of Default.

 

Unless an Event of Default exists, the Company from time to time shall be entitled to receive and collect for its own use all interest paid on any Pledged Security (other than any such interest which shall have been collected or paid out of the proceeds of any sale or condemnation or expropriation of any property covered by a mortgage or other lien securing such Pledged Security) and all dividends on any Pledged Security which are paid in cash out of the net profits or earned surplus of the issuing corporation accrued since the date of deposit and pledge of such Pledged Security with the Trustee hereunder. The Trustee from time to time shall execute and deliver upon Company Request suitable orders in favor of the Company or its nominee for the payment of such interest and cash dividends and shall deliver upon Company Request any and all coupons held by the Trustee representing such interest as the date of the maturity thereof approaches.  The Trustee shall likewise pay over all sums which are received or collected by it as such interest or cash dividends.  Until actually paid, all rights to such interest or cash dividends shall remain subject to the lien hereof.

 

The Trustee shall be entitled (subject to Section 10.1) to assume that any cash dividend received by it on any Pledged Security is paid out of the net profits or earned surplus of the issuing corporation accrued since the date of deposit and pledge of such Pledged Security with the Trustee hereunder and that any interest has not been collected or paid out of the proceeds of any such sale or condemnation or expiration, unless and until notified in writing to the contrary by any Holder or the Company or the person making such payment, in which event the Trustee may (subject to Section 10.1) accept an Officers’ Certificate stating any pertinent facts in connection with any such dividend or interest as conclusive evidence of such facts.

 

	
  

	
16.5.

	
Income After Event of Default.

 

If an Event of Default exists, in addition to the other remedies herein provided, the Trustee shall collect and receive all interest and dividends on Pledged Securities and shall cancel and revoke all interest and dividend orders in favor of the Company or its nominee.  All money so received by the Trustee which, in the absence of an Event of Default, would be receivable by the Company under Section 16.4, shall be applied in accordance with Section 9.7.

  

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In every such case, after all Events of Default have been cured, the right of the Company to receive and collect interest and dividends, and the duty of the Trustee with respect thereto, under Section 16.4, shall revive and continue; and the Trustee shall pay over upon Company Request any such interest or dividends received by it which, in the absence of an Event of Default, would be receivable by the Company under Section 16.4 and then remain unexpended in its hands.

 

	
  

	
16.6.

	
Principal and Other Payments.

 

In case any sum shall be paid on account of:

 

(a)            the principal of (or premium, if any, on) any Pledged Security, or

 

(b)           any dividend upon any Pledged Security other than a cash dividend paid out of the net profits or earned surplus of the issuing corporation accrued since the date of deposit and pledge of such Pledged Security with the Trustee hereunder, or

 

(c)           the liquidation or dissolution or reduction of capital of the corporation issuing any Pledged Security, or

 

(d)           interest on any Pledged Security which shall have been collected or paid out of the proceeds of any sale or condemnation or expropriation of any property covered by a mortgage or other lien securing such Pledged Security,

 

or in case any other distribution (including stock dividends but excluding any dividend excluded by Subsection (b)) shall be made in respect of any Pledged Security, such sum or other distribution shall be paid or delivered to the Trustee to be held as a part of the Trust Estate.

 

In case the Company or the Trustee shall receive rights to subscribe to additional securities in respect of any Pledged Securities, the Company may exercise or (subject to Section 16.8) sell such rights in its discretion; PROVIDED, HOWEVER, that (i) all securities acquired by exercise of such rights shall forthwith be deposited and pledged with the Trustee hereunder, (ii) all net proceeds from the sale of any such rights shall forthwith be paid to the Trustee, (iii) if the Company shall not have elected to exercise or sell such rights by the fifth business day prior to the expiration thereof, it shall give the Trustee notice thereof and the Trustee shall forthwith sell or, in the event that Section 16.8 is applicable, may exercise such rights in such manner as in its uncontrolled discretion it may deem advisable and (iv) if an Event of Default exists, the Trustee shall be entitled at any time in its discretion to exercise or sell such rights.

  

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16.7.

	
Voting.

 

Unless an Event of Default exists, the Company shall have the right to vote and give consents with respect to all Pledged Securities and from time to time, in case any Pledged Securities have been transferred into the name of the Trustee or its nominee or nominees, the Trustee, upon Company Request, shall execute and deliver or cause to be executed and delivered to the Company or its nominee appropriate powers of attorney or proxies to vote such Pledged Securities or to execute a waiver or consent with respect thereto, for such purpose or purposes as may be specified in such request; PROVIDED, HOWEVER, that such right of the Company shall not include (and every such power of attorney or proxy shall be limited, either generally or specifically, to provide in effect that the powers thereby conferred do not include) any power to vote for or to authorize or consent to any act or thing inconsistent with or in avoidance of the Company’s obligations under this Indenture.

 

If an Event of Default exists, the Trustee may in its discretion, and if requested by the Holders of a majority in principal amount of the Obligations then Outstanding shall, revoke all such powers of attorney and proxies and the Trustee may in its discretion vote and exercise, or cause the nominee or nominees of the Trustee to vote and exercise, all the powers of an owner with respect to any Pledged Securities.  In so voting and exercising the powers of an owner with respect to any Pledged Securities, the Trustee shall not be required to attend any meeting of security holders, but the Trustee may vote or act by power of attorney or proxy and such power of attorney or proxy may be granted to any person selected by the Trustee, including an officer of the Company.  The Trustee may so vote and exercise the powers of an owner with respect to any Pledged Securities for any purpose or purposes which the Trustee, in its discretion, shall deem advisable and in the interest of the Holders, whether or not such action may involve a change in the character of any Pledged Security or in the corporate identity or business of the issuer thereof or in the proportionate interest or voting power represented by such security.  In every such case, after all Events of Default have been cured, the right of the Company to vote and give consents with respect to the Pledged Securities, and the duty of the Trustee to execute powers of attorney and proxies as hereinabove provided, shall revive and continue.

 

	
  

	
16.8.

	
Limitations on Issuance of Voting Stock or Grant Membership Interests of Pledged Subsidiaries.

 

The Company will not permit any Pledged Subsidiary to issue any additional shares of Voting Stock, other than stock dividends, unless simultaneously there shall be made effective provision that certificates for all such additional Voting Stock, forthwith upon the issue thereof, will be deposited and pledged with the Trustee; PROVIDED, HOWEVER, that, if the, holders of any stock of such Pledged Subsidiary not then included in the Pledged Securities shall have a preemptive right to subscribe for and purchase their pro rata share of such additional shares of Voting Stock, then such part of such additional shares as shall be actually subscribed for and purchased by such stockholders pursuant to such preemptive right may be issued to them and need not be deposited and pledged with the Trustee.

  

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16.9.

	
Increase, Reduction or Reclassification of Stock; Dissolution; Consolidation, Etc.

 

Except as otherwise provided in Article 14 or this Article, the capital stock of any corporation whose shares are included in the Pledged Securities may be increased (subject to Section 16.8) or reduced or reclassified (other than a reclassification resulting in the creation of a preferred stock of any Pledged Subsidiary or a reclassification reducing the proportionate voting power of any Pledged Securities in any corporation) and any such corporation may be dissolved; PROVIDED, HOWEVER, that effective provision shall (to the extent the Company has any control of such matters) be made that, in the case of any such increase, whether by stock dividend or otherwise (subject to Section 16.8), certificates for such part of each class of additional stock as shall be proportionate to the part of the entire issued and outstanding capital stock of such class of such corporation previously deposited and pledged with the Trustee and, in the case of any such reclassification, any distribution in connection therewith shall be deposited and pledged with the Trustee and that, in the case of any such reduction, there shall continue to be deposited and pledged with the Trustee certificates for not less than the same proportion of such class of capital stock deposited and pledged with the Trustee before such reduction. The Trustee may make any exchange, substitution, cancellation or surrender of certificates of stock held by it for the purpose of such increase, reduction, reclassification or dissolution.  Prior to any such cancellation or surrender of stock certificates for the purpose of dissolution, the share, if any, of all the assets of the corporation so dissolved which is distributable in respect of the Pledged Securities (excluding Excepted Property) shall be subjected to the lien of this Indenture.  The Trustee shall be entitled to receive and shall (subject to Section 10.1) be fully protected in relying upon an Officers’ Certificate as to the amount of the share of the assets of any corporation dissolved as aforesaid which is so distributable to the holder of such Pledged Securities.

 

The deposit and pledge with the Trustee at any time of any shares of stock of any corporation shall not prevent any one or more of the following transactions:

 

(a)           subject to the provisions of Articles 12 and 14, the merger or consolidation of any Pledged Subsidiary into or with the Company or the conveyance or transfer of all or any of the assets of any Pledged Subsidiary to the Company, or

 

(b)           the merger or consolidation of any corporation, any of whose shares may be Pledged Securities, into or with any other corporation other than the Company, or the conveyance or transfer of all or any of the assets of any corporation, any of whose shares may be Pledged Securities, to any other corporation other than the Company; PROVIDED, HOWEVER, that no such action involving a Pledged Subsidiary shall be taken unless the corporation resulting from such consolidation, or into which such merger shall be made, or which shall have acquired the assets of a Pledged Subsidiary, shall thereupon be a Pledged Wholly-Owned Subsidiary.

  

- 155 -

  

 

	
  

	
16.10.

	
Enforcement.

 

In case default shall be made in the payment of the principal of or interest on any Pledged Security or in the due performance of any covenant contained in any Pledged Security or the instrument securing the same, then and in any such case (without prejudice, however, to any right to claim a default under this Indenture or to assert any right consequent upon such default) the Trustee, upon Company Request, may, in its discretion and upon receipt of indemnity to its satisfaction, cause, or join with other owners of like securities in causing, such proceedings as may be approved by the Trustee to be instituted and prosecuted to collect such principal and interest or enforce the performance of such covenant.  If an Event of Default exists, the Trustee may, and upon the written request of the Holders of a majority in principal amount of the Obligations then Outstanding shall, upon receipt of indemnity to its satisfaction, institute such proceedings without Company Request.

 

	
  

	
16.11.

	
Acquisition of Property of Issuers of Pledged Securities.

 

In case, at any time, all or any of the property of any corporation, any of whose securities are at the time Pledged Securities, shall be sold upon insolvency or foreclosure or otherwise, then and in such event, if the property of such corporation or the property sold can be acquired by crediting on any of the Pledged Securities any sum accruing or to be received thereon out of the proceeds of such property, the Trustee in its discretion may, and if requested by Company Request or by the Holders of a majority in principal amount of the Obligations then Outstanding and provided by the Company or such Holders with the amount of any cash necessary therefor shall, purchase such property or cause the same to be purchased, either in the name of the Trustee or the Company or a purchasing trustee or trustees as the Trustee may determine, and shall use or permit the Company or such purchasing trustees to use such Pledged Securities so far as necessary to make payment for such property. In case of any such purchase the Trustee shall take such steps as it may deem proper to cause the property so purchased to be vested in the Company subject to the lien of this Indenture, or in some other corporation organized or to be organized with power to acquire and manage such property, or partly in the Company and partly in such other corporation, as the Company may deem advisable, PROVIDED that all debt of such corporation with a maturity more than one year from date of issuance (except such, if any, as shall represent a lien existing upon the property at the time it was acquired) and certificates for all the capital stock (except directors’ qualifying shares) of such corporation shall be deposited and pledged with the Trustee.  In case the property so sold shall not be purchased in the manner hereinabove in this Section provided, the Trustee shall receive the proceeds of sale accruing on and apportioned to such Pledged Securities and such proceeds shall be held and paid over or applied by the Trustee as provided in Article 7.

 

	
  

	
16.12.

	
Reorganization.

 

With Company Consent, the Trustee may join in any plan of voluntary or involuntary reorganization or readjustment or rearrangement in respect of any Pledged Securities and may accept or authorize the acceptance of new securities issued in exchange therefor under any such plan.  If an Event of Default exists, the Trustee shall be entitled to take such steps without Company Consent.

  

- 156 -

  

 

Any new securities so issued shall be deposited and pledged with the Trustee under this Indenture.  If the Trustee does not join in such plan or reorganization or readjustment or rearrangement, the Trustee shall receive any moneys accruing on or apportioned to such Pledged Securities and such moneys shall be held and paid over or applied by the Trustee as provided in Article 7.

 

	
  

	
16.13.

	
Renewal and Refunding.

 

Nothing contained in this Article shall prevent

 

(a)           the renewal or extension, without impairment of lien or security, at the same or at a lower or higher rate of interest, of any of the obligations or indebtedness of any corporation included in the Pledged Securities, or

 

(b)           the issue in substitution for any such obligations or indebtedness of other obligations or indebtedness of such corporation for equivalent amounts and of substantially equal or superior rank as to security, if any;

 

PROVIDED, HOWEVER, that every such obligation or indebtedness as so renewed or extended shall continue to be subject to the lien hereof and every substituted obligation or indebtedness and the evidence thereof shall be deposited and pledged with the Trustee.

 

Except as otherwise provided in Article 14, unless an Event of Default exists, the Trustee upon receipt of a Company Request shall, and if an Event of Default exists the Trustee may without such Company Request, consent to any such renewal, extension or substitution.

 

	
  

	
16.14.

	
Expenses.

 

On demand of the Trustee, the Company forthwith will pay or satisfactorily provide for all expenses incurred by the Trustee under this Article, including all expenditures (except as otherwise provided in Section 16.11) made to acquire the ownership and title to any property which the Trustee shall purchase or shall cause or authorize to be purchased under this Article.  Without impairment of or prejudice to any of its rights hereunder by reason of any default of the Company, the Trustee in its discretion may advance all such expenses and other sums required or may procure such advances to be made by others.  The Company will repay all such advances, with interest thereon at the rate of 10% per annum, and for all such advances the Trustee shall be secured by a lien on the Trust Estate prior to the Obligations.  For the repayment of all such advances the Trustee shall have the right to use and apply any Trust Moneys held by it under Article 7 as part of the Trust Estate.

  

- 157 -

  

 

	
  

	
16.15.

	
Opinion of Counsel.

 

The Trustee shall be entitled, before taking any action under this Article, to receive an Opinion of Counsel stating the legal effect of any transaction relating to the Pledged Securities and the steps necessary to be taken to consummate the same and stating also that such action is in compliance with the provisions hereof and will not materially adversely impair the security of the Holders hereunder in contravention of the provisions hereof.  Such Opinion of Counsel shall (subject to Section 10.1) be full protection to the Trustee for any action taken or omitted to be taken by it in reliance thereon.

 

	
17. 

	
QUALIFYING SECURITIES; QUALIFYING SECURITIES INDENTURES

 

	
  

	
17.1.

	
Registration and Ownership of Designated Qualifying Securities.

 

Designated Qualifying Securities delivered to the Trustee pursuant to Sections 5.5, 5.6, 5.8, 6.2, 7.4 and 17.3 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 Obligations from time to time Outstanding, and the Company shall have no interest therein.  The Trustee shall be entitled to exercise all rights of security holders under each Qualifying Securities Indenture in its discretion except as otherwise provided in this Article or in Article 9.

 

	
  

	
17.2.

	
Payments on Qualifying Securities.

 

Unless an Event of Default shall have occurred and be continuing:

 

(a)           Any payment of principal of Designated Qualifying Securities shall be applied by the Trustee to the payment of the principal of the Obligations which were authenticated and delivered on the basis of such Qualifying Securities which is then due, and, to the extent of such application, the obligation of the Company to make such payment in respect of such Obligations shall be deemed to have been satisfied and discharged;

 

(b)           If, at the time of any such payment of principal of Designated Qualifying Securities, the principal then due in respect of the Obligations which were authenticated and delivered on the basis of such Qualifying Securities, if any, shall be less than such payment, the excess of such payment shall constitute Trust Moneys and shall be held by the Trustee as part of the Trust Estate, to be withdrawn, used or applied in the manner, to the extent and for the purposes, and subject to the conditions, provided in Article 7.  Any Outstanding Obligations, which were authenticated and delivered on the basis of Designated Qualifying Securities which have been paid, shall be thereafter deemed not to have been authenticated and delivered on the basis of Designated Qualifying Securities;

 

(c)           Any payment of premium or interest on Designated Qualifying Securities shall be applied by the Trustee to the payment of premium or interest, as the case may be, on the Obligations which were authenticated and delivered on the basis of such Designated Qualifying Securities, if any, which is then due, and, to the extent of such application, the obligation of the Company to make such payment in respect of such Obligations shall be deemed to have been satisfied and discharged;

  

- 158 -

  

 

(d)           If, at the time of any such payment of premium or interest on Designated Qualifying Securities, the premium or interest, as the case may be, then due in respect of the Obligations which were authenticated and delivered on the basis of such Designated Qualifying Securities, if any, shall be less than such payment, the excess of such payment shall be remitted to the Company upon receipt by the Trustee of a Company Request requesting the same; and

 

(e)           Any payment to the Trustee of principal of, or premium or interest on, any Undesignated Qualifying Securities shall be remitted to the Company upon receipt by the Trustee of a Company Request requesting the same.

 

	
  

	
17.3.

	
Surrender or Redesignation of Designated Qualifying Securities.

 

(a)           At the time any Obligations of any series, which shall have been authenticated and delivered upon the basis of the issuance and delivery to the Trustee of Designated Qualifying Securities, shall cease to be Outstanding (other than as a result of the application of the proceeds of the payment or redemption of such Designated Qualifying Securities), the Company, by notice to the Trustee, may designate an equal principal amount of such Designated Qualifying Securities as Undesignated Qualifying Securities.  Upon Company Request, the Trustee shall surrender for cancellation any Undesignated Qualifying Securities.

 

(b)           Upon Company Request and receipt of the opinions required by paragraphs (f) and (g) of Section 5.5, the Trustee shall surrender for cancellation any Designated Qualifying Securities specified in such request in exchange for an equal principal amount of substitute Qualifying Securities, which substitute Qualifying Securities shall comply with Section 5.5(c) (except that, if the Designated Qualifying Securities to be surrendered were delivered other than as the basis for the authentication and delivery of Additional Obligations, the maturity date or dates for such substitute Qualifying Securities may be as determined by the Company) and which the Company shall designate as the basis for such surrender.  Upon receipt of a notice of an event of default under a Qualifying Securities Indenture, the Trustee shall surrender for cancellation all Undesignated Qualifying Securities issued under such Qualifying Securities Indenture.

 

(c)           Upon receipt of a notice of a meeting of bondholders under a Qualifying Securities Indenture, the Trustee shall surrender for cancellation all Undesignated Qualifying Securities issued under such Qualifying Securities Indenture.  Upon delivery to the Trustee of (i) the relevant documents specified in Subsections (b) through (g), inclusive, of Section 5.2 for delivery whenever requesting the use of Bondable Additions as the basis for the surrender or redesignation of Designated Qualifying Securities, or (ii) the relevant documents and Obligations specified in Subsections (b), (d) and (e) of Section 5.3 for the delivery to the Trustee whenever requesting the use of retired or defeased Obligations or payments on Obligations as the basis for the surrender or redesignation of Designated Qualifying Securities, in each case with such omissions and variations as are appropriate in view of the fact that the Application involves the surrender or redesignation of Designated Qualifying Securities and not the authentication and delivery of Additional Obligations, and in each case together with an Opinion of Counsel stating that all conditions precedent provided for in this Indenture relating to such surrender or redesignation of Qualifying Securities have been complied with, the Trustee shall, upon Company Request surrender to the Company or redesignate Designated Qualifying Securities as Undesignated Qualifying Securities in a principal amount equal to the principal amount of the Obligations that could have been issued on the basis thereof.  Upon receipt by the Trustee of the documents specified in this Section, all Obligations then Outstanding which were authenticated and delivered on the basis of such surrendered or redesignated Qualifying Securities shall thereafter be deemed not to have been authenticated and delivered on the basis of Designated Qualifying Securities.

  

- 159 -

  

 

	
  

	
17.4.

	
No Transfer of Qualifying Securities.

 

The Trustee shall, as a holder of Qualifying Securities Outstanding under each Qualifying Securities Indenture, attend such meeting or meetings of bondholders under such Qualifying Securities Indenture, or, at its option, deliver its proxy in connection therewith, as relates to matters with respect to which it is entitled to vote or consent.  So long as no Event of Default shall have occurred and be continuing, either at any such meeting or meetings, or otherwise when the consent of the holders of the Qualifying Securities Outstanding under any Qualifying Securities Indenture is sought without a meeting, the Trustee shall vote as holder of such Qualifying Securities, or shall consent with respect thereto.  The Trustee shall vote all Qualifying Securities Outstanding under such Qualifying Securities Indenture then held by it, or consent with respect thereto, as the Trustee reasonably believes will be in the best interests of the Holders; PROVIDED, HOWEVER, that the Trustee shall not so vote in favor of, or so consent to, any amendment or modification of a Qualifying Securities Indenture 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 13.2, of Holders of Securities which would be required under Section 13.2 for such an amendment or modification of this Indenture.

 

	
  

	
17.5.

	
Reorganization.

 

With Company Consent, the Trustee may join in any plan of voluntary or involuntary reorganization or readjustment or rearrangement in respect of any Qualifying Securities and may accept or authorize the acceptance of new securities issued in exchange therefor under any such plan.  If an Event of Default exists, the Trustee shall be entitled to take such steps without Company Consent.

  

- 160 -

  

 

Any new securities so issued shall be deposited and pledged with the Trustee under this Indenture.  If the Trustee does not join in such plan or reorganization or readjustment or rearrangement, the Trustee shall receive any moneys accruing on or apportioned to such Qualifying Securities and such moneys shall be held and paid over or applied by the Trustee as provided in Article 7.

 

*   *   *

 

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.

  

- 161 -

  

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

 

 

	  	
CHUGACH ELECTRIC ASSOCIATION, INC.,

	  	
an Alaska electric cooperative

	  	  	  	  
	  	  	  	  
	  	
By:

	
/s/ Michael R. Cunningham

	  	  	
Name:

	
Michael R. Cunningham

	  	  	
Title:

	
Sr. Vice President and

	  	  	  	
Chief Financial Officer

 

	
STATE OF ALASKA

	
)

	  	
) ss.

	
THIRD JUDICIAL DISTRICT

	
)

 

On this 17th day of January, 2011, before me, a Notary Public in and for the State of Alaska, personally appeared Michael R. Cunningham, to me known to be the Sr. Vice President and Chief Financial Officer of Chugach Electric Association, Inc., the electric cooperative that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said electric cooperative for the uses and purposes therein mentioned and on oath stated that s/he was authorized to execute said instrument on behalf of said electric cooperative.

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written.

 

	  	
Thomas M. Schulman

	  	
Print name:

	  	
/s/ Thomas M. Schulman

	  	
Notary Public in and for the State of Alaska, residing at Anchorage, Alaska

	  	
My commission expires:

	  	
10-10-11

 

Second Amended and Restated Indenture of Trustee – Company Signature Page

  

 

  

 

	  	
U.S. BANK NATIONAL ASSOCIATION,

	  	
a national banking association,

	  	
as Trustee

	  	  	  	  
	  	  	  	  
	  	
By:

	
/s/ Thomas Zrust

	  	  	
Name:

	
Thomas Zrust

	  	  	
Title:

	
Vice President

 

 

	
STATE OF WASHINGTON

	
)

	  	
) ss.

	
COUNTY OF KING

	
)

 

On this 14th day of  January, 2011, before me, a Notary Public in and for the State of Washington, personally appeared Thomas Zrust, to me known to be the Vice President of U.S. Bank National Association, the national banking association that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said national banking association for the uses and purposes therein mentioned and on oath stated that s/he was authorized to execute said instrument on behalf of said national banking association.

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written.

 

	  	
/s/ Kim J. Kropp

	  	
Print name:

	  	
Kim J. Kropp

	  	
Notary Public in and for the State of Washington, residing at

	  	
Sammamish

	  	
My commission expires:

	  	
12/19/2011

 

 

Second Amended and Restated Indenture of Trustee – Company Signature Page

  

 

  

EXHIBIT A

 

REAL PROPERTY

 

Parcel 1:  (460870-1)

 

Tract S-2, Spenard Lake Tracts, according to the official plat thereof, filed under Plat Number 85-288, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 2:  (460870-2)

 

C.E.A. Baxter Lake Substation Tract, according to the official plat thereof, filed under Plat Number 92-133, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 3:  (460870-4)

 

Tracts C and D, Beluga C.E.A. Generation Site Subdivision, according to the official plat thereof, filed under Plat Number 92-124, Records of the Anchorage Recording District, Judicial District, State of Alaska.

 

Excepting therefrom the subsurface estate but together with all sand and gravel.

 

 

Parcel 4:  (460870-5)

 

Tract B, Beluga C.E.A. Auxiliary Site Subdivision, according to the official plat thereof, filed under Plat Number 89-5, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

Excepting therefrom the subsurface estate but together with all sand and gravel.

 

 

Parcel 5:  (460870-6)

 

That portion of the Southeast one-quarter (SE) of Section 24, Township 8 North, Range 11 West, Seward Meridian, lying northwesterly of the centerline of the North Kenai Road, as shown on the State of Alaska Department of Public Works, Division of Highway Right-of-Way Plat for the Project No. S0490 (3), Sheet 8 of 10, dated July 1961, as described in the Warranty Deed recorded at Book 208 at Page 189, located in the Kenai Recording District, Third Judicial District, State of Alaska.

  

Exhibit A - 1

  

Parcel 6:  (460870-7)

 

Lot 1-A-1, Century Village Unit No. 3, according to the official plat thereof, filed under Plat Number 75-207, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 7:  (460870-8)

 

C.E.A. Substation Reserve, according to the official plat thereof, filed under Plat Number 76-160, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 8:  (460870-9)

 

Lot 6, Block 12, Debarr Vista Subdivision, Seventh Addition, according to the official plat thereof, filed under Plat Number P-242H, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 9:  (460870-10)

 

Lots 17 and 18, Block 3, Girdwood Townsite, U.S. Survey 1177, according to the official plat thereof, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 10:  (460870-12)

 

That portion of Government Lot 2, Section 30, Township 12 North, Range 2 West, Seward Meridian, records of the Anchorage Recording District, Third Judicial District, State of Alaska, more particularly described as follows:

 

Commencing at the Northeast corner of Lot 2, which is the point of beginning; thence West 417.72 feet; thence South 208.71 feet; thence East 417.72 feet; thence North 208.71 feet to the point of beginning.

  

Exhibit A - 2

  

Parcel 11:  (460870-13)

 

Tract A, C.E.A. Hillside Substation Subdivision, according to the official plat thereof, filed under Plat Number 91-8, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

Excepting therefrom that portion conveyed to the State of Alaska, Department of transportation and Public Facilities by Warranty Deed recorded April 21, 1999 in Book 3458 at Page 879.

 

 

Parcel 12:  (460870-14)

 

Lot 1A-1, Block 1, WEST ADDITION-KNIK HEIGHTS SUBDIVISION, according to the official plat thereof, filed under Plat Number 2010-91, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 13:  (460870-16)

 

Tract 2, International Industrial Center Subdivision, according to the official plat thereof, filed under Plat Number 69-17, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 14:  (460870-17)

 

Tract 4, International East, according to the official plat thereof, filed under Plat Number 87-28, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 15:  (460870-19)

 

Unsubdivided parcel within the Southwest one-quarter of Section 11, Township 12 North, Range 4 West, Seward Meridian, located within the Anchorage Recording District, Third Judicial District, State of Alaska, as set forth and described in that certain Warranty Deed recorded February 25, 1965 in Book 296 at Page 351 and further described as:

 

Beginning at the Northeast corner of the Northwest quarter of the Southwest quarter (NW1/4 SW1/4) of Section 11, Township 12 North, Range 4 West, Seward Meridian; thence South 30 feet to the true point of beginning; thence, due West 100 feet to a point; thence, due South 65 feet to a point; thence due East 100 feet to a point; thence, due North 65 feet to the true point of beginning.

  

Exhibit A - 3

  

Parcel 16:  (460870-20)

 

Lots 1 and 2, Block 3, Highland Subdivision, according to the official plat thereof, filed under Plat Number P-302, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 17:  (460870-21)

 

Lot 3A, Block 3, Highland Subdivision, according to the official plat thereof, filed under Plat Number 93-84, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 18:  (460870-22)

 

Lot E-3B, Campbell Creek Commercial Park, according to the official plat thereof, filed under Plat Number 94-38, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 19:  (460870-23)

 

Tract A, Spring Forest Subdivision, according to the official plat thereof, filed under Plat Number 76-231, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 20:  (460870-26)

 

The East 100 feet of the West 200 feet of the North one-half of the Northeast one-quarter of Section 5, Township 13 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska, shown as Tract C on that certain Right of Way Dedication Plat entitled Chugach Electric Association Inc. R.O.W. Plat, filed under Plat Number 73-22A, Records of the Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 21:  (460870-27)

 

The West 200 feet of the South one-half of the Northeast one-quarter (also known as the West 200 feet of Section Lot 2) of Section 5, Township 13 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska, shown as Tract A on that certain Right of Way Dedication Plat entitled Chugach Electric Association Inc. R.O.W. Plat, filed under Plat Number 73-22A, Records of the Palmer Recording District, Third Judicial District, State of Alaska.

  

Exhibit A - 4

  

Parcel 22:  (460870-28)

 

The West 100 feet of the North one-half of the Northeast one-quarter of Section 5, Township 13 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska, shown as Tract B on that certain Right of Way Dedication Plat entitled Chugach Electric Association Inc. R.O.W. Plat, filed under Plat Number 73-22A, Records of the Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 23:  (460870-29)

 

A parcel of land within Section 5, Township 13 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska, more particularly described as follows:

 

Beginning at the North quarter corner of Section 5, Township 13 North, Range 4 West, Seward Meridian, Alaska, thence East a distance of 200 feet to a brass cap, which is the true point of beginning; thence East a distance of 200 feet to a second brass cap; thence South 0o08'30" East a distance of 2,011.36 feet to a third brass cap; thence South 89o51'30" West a distance of 200 feet to a fourth brass cap; thence North 0o08'30" West for a distance of 2,011.85 feet to the true point of beginning; being also known as Tract G on that certain Right of Way Dedication Plat entitled Chugach Electric Association Inc. R.O.W. Plat, filed under Plat Number 73-22A, Records of the Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 24:  (460870-30)

 

The East 100 feet of the West 500 feet of the North one-half of the Northeast quarter; and the East 100 feet of the West 500 feet of the North 528 feet of Government Lot 2 of Section 5, Township 13 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska, shown as Tract H on that certain Record of Survey filed under Plat Number 95-21, Records of the Palmer Recording District, Third Judicial District, State of Alaska.

  

Exhibit A - 5

  

Parcel 25:  (460870-31; 460870-32; 460870-33; 460870-34)

 

Parcel No. 2 of Matanuska Susitna Borough Platting Board Waiver Resolution Serial No. 95-6-PWd, as recorded March 8, 1995 in Book 798 at Page 218, and further described as the West 500 feet of the Northeast one-quarter of Section 32, Township 14 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 26:  (460870-36; 460870-37; 460870-38; 460870-39; 460870-40)

 

Parcel No. 2 of Matanuska Susitna Borough Platting Board Waiver Resolution Serial No. 95-7-PWd, as recorded March 8, 1995 in Book 798 at Page 220, and further described as the West 500 feet of the Southeast one-quarter of Section 32, Township 14 North, Range 4 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 27:  (460870-41)

 

The West 1/2 of the West 1/2 of the Northeast 1/4 of the Northeast 1/4, and the South 1/2 of the East 1/2 of the West 1/2 of the Northeast 1/4 of the Northeast 1/4 of Section 18, Township 12 North, Range 3 West, SEWARD MERIDIAN, Anchorage Recording District, Third Judicial District, State of Alaska;

 

Excepting that portion of said land lying within the Alaska Railroad right of way.

 

 

Parcel 28:  (460870-42)

 

Lot 2, Block 1, Vans Subdivision, according to the official plat thereof, filed under Plat Number 78-180, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 28A:  (460870-42)

 

Access Rights as granted in that certain Agreement to Provide Access recorded September 13, 2000 in Book 3737 at Page 124 and amended by instrument recorded October 6, 2004 under Serial Number 2004-075521-0, as it affects the following:

 

Lot 1, Block 1, VANS SUBDIVISION, according to the official plat thereof, filed under Plat Number 78-180, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

  

Exhibit A - 6

  

Parcel 29:  (460870-43)

 

Tract 2-B, North Star Subdivision, according to the official plat thereof, filed under Plat Number 71-272, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 30:  (460870-44)

 

Teeland Substation Tract as described in Matanuska-Susitna Borough Planning Commission Waiver Resolution Serial No. 74-17 filed January 30, 1979 as 79-94W, located in the Northeast one-quarter (NE) of Section 34, Township 17 North, Range 2 West, Seward Meridian, Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 31:  (460870-45)

 

Lot 28, Block 2, SETTLERS BAY SUBDIVISION UNIT NO. 1, according to the official plat thereof, filed under Plat Number 75-61, Records of the Palmer Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 32:  (460870-47)

 

Lot 24, McRae Homestead, according to the official plat thereof, filed under Plat Number P- 49C, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

Parcel 33:  (460870-49)

 

 

Lots 29N, 30N, 31N, and 32N, Woodland Park Addition, according to the official plat thereof, filed under Plat Number P-61B, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Parcel 34:  (460870-11)

 

Lots 19, 20, and 21, Block 3, GIRDWOOD TOWNSITE, U.S. SURVEY 1177, according to the official plat thereof, Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

 

 

Permitted Exceptions

  

Exhibit A - 7

  

 

(Affects Parcel 1, File Number 460870-1)

 

	
1.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
2.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 010-301-15-000

 

	
3.

	
Permit for Underground Telephone Cable including the terms and provisions thereof:

 

	
  

	
Dated:

	
June 30, 1966

	
  

	
Recorded:

	
July 22, 1966, Miscellaneous Book 129 at Page 345

	
  

	
Executed by:

	
United States Department of the Interior, acting through the Alaska Rail and the City of Anchorage

 

	
4.

	
Easements as dedicated and shown on the plat of said subdivision.

 

	
5.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows; 

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
6.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
7.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed By:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

 

	
8.

	
[Intentionally deleted.]

 

	
9.

	
[Intentionally deleted.]

 

(Affects Parcel 2, File Number 460870-2)

 

	
10.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

  

Exhibit A - 8

  

 

	
11.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No: 007-172-83-000

 

	
12.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
  

	
Affects:

	
East 3 feet

 

	
13.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
August 6, 1952

	
  

	
Recording Information:

	
Book 76 Page 370

	
  

	
Affects:

	
Blanket Easement

 

	
14.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
September 3, 1952

	
  

	
Recording Information:

	
Book 78 Page 190

	
  

	
Affects:

	
Blanket Easement

 

	
15.

	
Contract and Grant of Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
November 5, 1953 

	
  

	
In Favor of:

	
United States of America 

	
  

	
For

	
Electric transmission lines and appurtenances thereto 

	
  

	
Affects:

	
Portion along the North boundary as set forth in said instrument 

 

Assignment and Transfer of Easement, including the terms and provisions thereof, from the United States of America to the Municipality of Anchorage, doing business as Municipal Light and Power, the Chugach Electric Association, Inc., and the Matanuska Electric Association, Inc., collectively referred to as Eklutna Partners, by instrument recorded October 2, 1997 in Book 3133 at Page 538.

 

	
16.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
July 14, 1982 

	
  

	
In Favor of:

	
State of Alaska, Department of Transportation and Public Facilities 

	
  

	
For:

	
Underground utilities and appurtenances thereto 

	
  

	
Affects:

	
Portion along the North boundary as set forth in said instrument 

  

Exhibit A - 9

  

 

	
17.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
February 7, 1986

	
  

	
Recording Information:

	
Book 1382 Page 787

	
  

	
Affects:

	
Blanket Easement

 

	
18.

	
Notice of Zoning Action, including the terms and provisions thereof: 

 

	
  

	
Recorded:

	
September 10, 1992, Book 2315 Page 23

	
  

	
Executed by:

	
Municipality of Anchorage

 

	
19.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
20.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
21.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
22.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

 

	
23.

	
[Intentionally deleted.]

 

	
24.

	
[Intentionally deleted.]

  

Exhibit A - 10

  

 

(Affects Parcel 3, File Number 460870-4)

 

	
25.

	
Terms, reservations, conditions and provisions contained in the interim conveyance from the United States of America as herein noted,

 

	
  

	
Recorded:

	
February 7, 1979

	
  

	
Recording Information:

	
Book 377 Page 871

 

	
  

	
And Re-Recorded:

	
March 16, 1984

	
  

	
Recording Information:

	
Book 1065 Page 244

 

	
26.

	
The terms, covenants, conditions and provisions, including rights-of-way and easements as contained in the Alaska Native Claims Settlement Act, dated December 18, 1971, U.S. Public Law 92-203, 85 Stat. 688, 43 U.S.C.A. 1601, et seq.

 

	
27.

	
Reservation of the subsurface estate in said land including, but not limited to, rights of entry to explore, develop or remove minerals from said subsurface estate, as set forth in Sections 14(f) and 14(g) of the Alaska Native Claims Settlement Act referred to hereinabove. 

 

NOTE: No assurance is given as to the vertical delineation of the surface and subsurface estates in said land as provided in said act.

 

	
28.

	
Taxes due the Kenai Peninsula Borough are EXEMPT for 2010.

Tax Account No: 20129039 (Tract C)

Tax Account No: 20129038 (Tract D)

 

	
29.

	
Rights of the public and of governmental bodies in and to that portion of the premises herein described lying below the high water mark of unnamed creek.

 

	
30.

	
Any prohibition or limitation on the use, occupancy or improvements of the land resulting from the right of the public or riparian owners to use any waters which may cover the land or to use any portion of the land which is now or may formerly have been covered by water.

 

	
31.

	
Reservation of section line easement 50 feet in width along each side of section line as provided by A.S. 19.10.010.

 

	
32.

	
Indemnification Agreement and the terms and conditions thereof:

 

	
  

	
Between:

	
Cook Inlet Region, Inc.

	
  

	
And:

	
Chugach Electric Association, Inc.

	
  

	
Recording Information:

	
May 18, 1990, Book 2032 Page 466

 

	
33.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
January 28, 1992, Book 2234 Page 627 

	
  

	
In Favor of:

	
Marathon Oil Company 

	
  

	
For:

	
Utility right of way and easement for a buried natural gas pipeline 

	
  

	
Affects:

	
50 feet in width as set forth in said instrument 

  

Exhibit A - 11

  

 

The interest of Marathon Oil Company was assigned to Beluga Pipe Line Company by instrument recorded September 8, 1993 in Book 2491 at Page 995.

 

	
34.

	
Right-of-Way Lease, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
June 12, 1992, Book 2283 Page 199 

	
  

	
In Favor of:

	
Marathon Oil Company 

	
  

	
For:

	
Construction, operation, maintenance and termination of a natural gas pipeline 

	
  

	
Affects:

	
50 feet in width as set forth in said instrument 

 

The interest of Marathon Oil Company was assigned to Beluga Pipe Line Company by instrument recorded September 8, 1993 in Book 2491 at Page 995.

 

	
35.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
36.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
37.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

 

	
38.

	
[Intentionally deleted.]

 

	
39.

	
[Intentionally deleted.]

 

(Affects Parcel 4, File Number 460870-5)

 

	
40.

	
Terms, reservations, conditions and provisions contained in the interim conveyance from the United States of America as herein noted,

 

	
  

	
Recorded:

	
February 7, 1979

	
  

	
Recording Information:

	
Book 377 Page 871

 

	
  

	
And Re-Recorded:

	
March 16, 1984

	
  

	
Recording Information:

	
Book 1065 Page 244

  

Exhibit A - 12

  

 

	
41.

	
The terms, covenants, conditions and provisions, including rights-of-way and easements as contained in the Alaska Native Claims Settlement Act, dated December 18, 1971, U.S. Public Law 92-203, 85 Stat. 688, 43 U.S.C.A. 1601, et seq.

 

	
42.

	
Reservation of the subsurface estate in said land including, but not limited to, rights of entry to explore, develop or remove minerals from said subsurface estate, as set forth in Sections 14(f) and 14(g) of the Alaska Native Claims Settlement Act referred to hereinabove.

 

NOTE: No assurance is given as to the vertical delineation of the surface and subsurface estates in said land as provided in said act.

 

	
43.

	
Taxes due the Kenai Peninsula Borough are EXEMPT for 2010.

Tax Account No.: 20129031

 

	
44.

	
Rights of the public and/or governmental agencies in and to any portion of the above described real property lying within any roadway or public easement areas.

 

	
45.

	
Reservation of section line easement 50 feet in width along each side of section line as provided by A.S. 19.10.010.

 

	
46.

	
Indemnification Agreement and the terms and conditions thereof:

 

	
  

	
Between:

	
Cook Inlet Region, Inc.

	
  

	
And:

	
Chugach Electric Association, Inc.

	
  

	
Recording Information:

	
June 19, 1989, Book 1914 Page 725

 

	
47.

	
Right of Way Easement, including the terms and provisions thereof, granted to Matanuska Telephone Association, Inc. , and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
November 21, 1991

	
  

	
Recording Information:

	
Book 2214 Page 483

	
  

	
Affects:

	
A strip of land ten (10) feet in width. (exact location not defined of record)

 

	
48.

	
Easements as dedicated and shown on the plat of said subdivision.

 

	
49.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
50.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

  

Exhibit A - 13

  

 

	
51.

	
[Intentionally deleted.]

 

	
52.

	
[Intentionally deleted.]

 

(Affects Parcel 5, File Number 460870-6)

 

	
53.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

Said patent, among other things, reserves all oil, gas and other minerals together with the privileges, mining and drilling rights and immunities.

 

	
54.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 20129031

 

	
55.

	
Right of Way Easement, including the terms and provisions thereof, granted to Homer Electric Association, Inc., and it's assigns and/or successor's in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
June 5, 1968

	
  

	
Recording Information:

	
Book 31 Page 161

	
  

	
Affects:

	
Blanket Easement

  

Exhibit A - 14

  

 

	
56.

	
Right of Way Grant to Nikiski Alaska Pipeline Company including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 10, 1976

	
  

	
Recorded:

	
March 25, 1976, Book 93 Page 710

	
  

	
Executed by:

	
Price Lake Associates, a Partnership

 

	
57.

	
Easements, building setback lines, notes and dedications, as set forth and delineated on the face of the plat of Bernice Lake Repeater Site, according to Plat No. 85-115.

 

	
58.

	
[Intentionally deleted.]

 

	
59.

	
[Intentionally deleted.]

 

(Affects Parcel 6, File Number 460870-7)

 

	
60.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
61.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

 

	
  

	
Tax Account No.: 007-201-86-000

 

	
62.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 23, 1952

	
  

	
Recording Information:

	
Book 75 Page 350

	
  

	
Affects:

	
Blanket Easement

 

	
63.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
64.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

 "There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
65.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
66.

	
Covenants, conditions and restrictions, as shown on the Plat of said subdivision.

  

Exhibit A - 15

  

 

	
67.

	
Right-of-Way Agreement and the terms and conditions thereof:

 

	
  

	
Between:

	
State of Alaska, Department of Natural Resources

	
  

	
And:

	
Chugach Electric Association

	
  

	
Recording Information:

	
April 24, 2000, Book 3622 Page 974

 

	
68.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

 

	
69.

	
[Intentionally deleted.]

 

	
70.

	
[Intentionally deleted.]

 

(Affects Parcel 7, File Number 460870-8)

 

	
71.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
72.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

 

	
  

	
Tax Account No.: 012-531-03-000

 

	
73.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 25, 1952

	
  

	
Recording Information:

	
Book 76 Page 95

	
  

	
Affects:

	
Blanket Easement

 

	
74.

	
Reservation of all oil, gas and mineral rights as reserved in an instrument

 

	
  

	
Recorded:

	
May 24, 1965

	
  

	
Recording Information:

	
Book 302 Page 212

  

Exhibit A - 16

  

 

	
75.

	
Covenants, conditions and restrictions, including terms and provisions thereof, as set forth or referred to in the deed but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 U.S.C. 3604(c):

 

	
  

	
Recorded:

	
May 24, 1965

	
  

	
Recording Information:

	
Book 302 Page 212 

 

	
76.

	
Reservation of all oil, gas and mineral rights as reserved in an instrument

 

	
  

	
Recorded:

	
July 17, 1968

	
  

	
Recording Information:

	
Book 368 Page 172

 

Note: Title to the mineral estate, as it pertains to said oil, gas and mineral rights, has not been further searched and assurance thereto is not covered under this Policy.

 

	
77.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
June 3, 1976

	
  

	
Recording Information:

	
Book 105 Page 891

	
  

	
Affects:

	
The West 20 feet of the East 62 feet

 

	
78.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
79.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
80.

	
The effect of the notes which appear on the plat of said subdivision.

  

Exhibit A - 17

  

 

	
81.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

 

	
82.

	
[Intentionally deleted.]

 

	
83.

	
[Intentionally deleted.]

 

(Affects Parcel 8, File Number 460870-9)

 

	
84.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
85.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

 

	
  

	
Tax Account No.: 006-143-28-000

 

	
86.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933. 

 

	
  

	
Affects:

	
East 3 feet

 

	
87.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
February 11, 1952

	
  

	
Recording Information:

	
Book 67 Page 377

	
  

	
Affects:

	
Blanket Easement

 

	
88.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
July 14, 1952

	
  

	
Recording Information:

	
Book 75 Page 134

	
  

	
Affects:

	
Blanket Easement

 

	
89.

	
Easements as dedicated and shown on the plat of said subdivision.

 

	
90.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
91.

	
Covenants, conditions and restrictions, as shown on the Plat of said subdivision.

  

Exhibit A - 18

  

 

	
92.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Transportation and Chugach Electric Association, Inc.

 

	
93.

	
[Intentionally deleted.]

 

	
94.

	
[Intentionally deleted.]

 

(Affects Parcel 9, File Number 460870-10)

 

	
95.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
96.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 075-153-40-000 (Lot 17)

Tax Account No.: 075-153-41-000 (Lot 18)

 

	
97.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

 

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
98.

	
Resolution No. 2000-111 (S) for Sanitary Sewer Improvements in Old Girdwood Lateral Sewer Special Improvement District Special Assessment District Number (LID) 60-9, including the terms, provisions and assessments therein, 

 

	
  

	
Recorded:

	
April 23, 2001

 

	
  

	
Recording Information:

	
Book 3818 Page 491

 

	
99.

	
[Intentionally deleted.]

 

	
100.

	
[Intentionally deleted.]

 

(Affects Parcel 10, File Number 460870-12)

 

	
101.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
102.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 021-011-12-000

  

Exhibit A - 19

  

 

	
103.

	
Matters as shown on Record of Survey according to Plat No. 2008-39.

 

	
104.

	
Memorandum of Understanding including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
105.

	
[Intentionally deleted.]

 

	
106.

	
[Intentionally deleted.]

 

(Affects Parcel 11, File Number 460870-13)

 

	
107.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
108.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No.: 017-112-99-000

 

	
109.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
September 15, 1963

	
  

	
Recording Information:

	
Book 96 Page 35

	
  

	
Affects:

	
Blanket Easement

 

	
110.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
May 3, 1965

	
  

	
Recording Information:

	
Misc. Book 103 Page 143

	
  

	
Affects:

	
West 10 feet of former Lot 7, Fairmont Subdivision (now within Tract A)

  

Exhibit A - 20

  

 

	
111.

	
Notice of Zoning Action, including the terms and provisions thereof:

 

	
  

	
Dated:

	
October 30, 1989

	
  

	
Recorded:

	
November 8, 1989, Book 1966 Page 310

	
  

	
Executed by:

	
Anchorage Municipal Planning and Zoning Commission

 

	
112.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
113.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
114.

	
The effect of the notes which appear on the plat of said subdivision. 

 

	
115.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
116.

	
[Intentionally deleted.]

 

	
117.

	
[Intentionally deleted.]

 

(Affects Parcel 12, File Number 460870-14)

 

	
118.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
119.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No.: 017-035-20-000

  

Exhibit A - 21

  

 

	
120.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
March 3, 1958

	
  

	
Recording Information:

	
Book E3 Page 167

	
  

	
Affects:

	
Blanket Easement

 

	
121.

	
Covenants, conditions, restrictions and/or easements; but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, family status, or national origin to the extent such covenants, conditions or restrictions violate Title 42, Section 3604(c), of the United States Codes:

 

	
  

	
Recording Information:

	
July 22, 1958, Book M4 Page 27

 

	
122.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
July 13, 1960, Misc. Book 15 Page 120 

	
  

	
In Favor of:

	
Alaska Pipeline Company 

	
  

	
For:

	
Right of way for pipelines and appurtenances thereto 

	
  

	
Affects:

	
Exact location not defined of record 

 

Said easement has been assigned to Alaska Gas and Service Company, Division of Alaska Interstate Company by assignment recorded February 29, 1972 in Misc. Book 207 at Page 201.

 

	
123.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

124.           Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets. There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
125.

	
The effect of the notes which appear on the plat of said subdivision.

  

Exhibit A - 22

  

 

	
126.

	
Notice of Zoning Action, including the terms and provisions thereof:

 

	
  

	
Dated:

	
May 26, 1992

	
  

	
Recorded:

	
September 4, 1992, Book 2313 Page 307

	
  

	
Executed by:

	
Municipality of Anchorage Planning and Zoning Commission

 

	
127.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
128.

	
[Intentionally deleted.]

 

	
129.

	
[Intentionally deleted.]

 

(Affects Parcel 13, File Number 460870-16)

 

	
130.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
131.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No.: 010-351-02-000

 

	
132.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
133.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 3, 1952

	
  

	
Recording Information:

	
Book 74 Page 326

	
  

	
Affects:

	
Blanket Easement

  

Exhibit A - 23

  

 

	
134.

	
Right of Way Easement, including the terms and provisions thereof, granted to City of Anchorage, and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 27, 1966

	
  

	
Recording Information:

	
Misc. Book 130 Page 69

	
  

	
Affects:

	
Portion along the Westerly boundary as set forth in said instrument

 

	
135.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
136.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
November 5, 1973, Misc. Book 220 Page 662 

 

	
  

	
In Favor of:

	
Greater Anchorage Area Borough 

	
  

	
For:

	
Public use 

	
  

	
Affects:

	
Northerly 30 feet 

 

	
137.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
June 12, 1978, Book 305 Page 240 

	
  

	
In Favor of:

	
Alaska Pipeline Company, a subsidiary of Alaska Interstate Company 

	
  

	
For:

	
Right-of-way for pipelines and appurtenances thereto 

	
  

	
Affects:

	
West 10 feet 

 

	
138.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
November 22, 1978, Book 357 Page 406 

	
  

	
In Favor of:

	
Anchorage, a municipal corporation 

	
  

	
For:

	
Public right-of-way 

	
  

	
Affects:

	
South 25 feet of the East 896 feet 

 

	
139.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
December 16, 1988, Book 1833 Page 251 

	
  

	
In Favor of:

	
ENSTAR Natural Gas Company 

	
  

	
For:

	
Right-of-way for pipelines and appurtenances thereto 

	
  

	
Affects:

	
A strip of land 10 feet in width as set forth in said instrument 

  

Exhibit A - 24

  

 

	
140.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
141.

	
[Intentionally deleted.]

 

	
142.

	
[Intentionally deleted.]

 

(Affects Parcel 14, File Number 460870-17)

 

	
143.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
144.

	
Reservations and exceptions as contained in the State of Alaska Patent, as recorded February 19, 1979 in Book 461 at Page 649.

 

Amended by instrument recorded December 7, 2004 under Serial Number 2004-090755-0

 

	
145.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No.: 010-531-02-000

 

	
146.

	
Reservation of section line easement 50 feet in width along each side of section line as provided by A.S. 19.10.010.

 

	
147.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
148.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
149.

	
The effect of the notes which appear on the plat of said subdivision. 

  

Exhibit A - 25

  

 

	
150.

	
Memorandum of Understanding including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001 in Book 3792 at Page 160

	
  

	
Executed by:

	
The State of Alaska Department of Administration and Chugach Electric Association, Inc.

 

	
151.

	
[Intentionally deleted.]

 

	
152.

	
[Intentionally deleted.]

 

(Affects Parcel 15, File Number 460870-19)

 

	
153.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
154.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No: 012-272-05-000

 

	
155.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
December 12, 1955

	
  

	
Recording Information:

	
Book 126 at page 58

	
  

	
Affects:

	
Blanket Easement

 

	
156.

	
Reservation of all rights to sub-surface minerals, oil, and gas oil, gas and mineral rights as reserved in an instrument

 

	
  

	
Recorded:

	
February 25, 1965

	
  

	
Recording Information:

	
Book 269 at Page 351

 

	
157.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
November 2, 1966 in Misc. Book 135 at Page 171 

	
  

	
In Favor of:

	
the City of Anchorage 

	
  

	
For:

	
telephone system 

	
  

	
Affects:

	
The North 5 feet 

  

Exhibit A - 26

  

 

	
158.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001 in Book 3792 at Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
159.

	
[Intentionally deleted.]

 

	
160.

	
[Intentionally deleted.]

 

(Affects Parcel 16, File Number 460870-20)

 

	
161.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
162.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 016-161-35-000 (Lot 1)

Tax Account No.: 016-161-34-000 (Lot 2)

 

	
163.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 1962

	
  

	
Recording Information:

	
Book 75, Page 186

	
  

	
Affects:

	
Blanket Easement

 

	
164.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
June 5, 1986 in Book 1433, Page 379 

 

	
  

	
In Favor of:

	
Anchorage, a municipal corporation 

	
  

	
For:

	
Trail and walkway easement 

	
  

	
Affects:

	
The North 15 feet of Lot 1 and a portion of Lot 2 more particularly described as follows: 

 

Commencing at the northeast (NE) corner of said Lot 2 Block 3, Highland Subdivision; thence S 0o 08' 00" W, along the easterly property line of said Lot 2, a distance of Fifteen Feet (15'); thence S 89o 53' 00" W, a distance of 40.28 feet, to a point; thence S 60o 00' 00" W a distance of 40.14 feet, to a point on the westerly property line of said lot 2; thence N 0o 08'00" E, along the westerly property line of said Lot 2 a distance of 35 feet; thence N 89o 53' 00" E. along the northerly property line of said Lot 2, a distance of 75 Feet to the true point of beginning.

  

Exhibit A - 27

  

 

	
165.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
166.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
August 5, 2009, Serial Number 2009-052062-0 

	
  

	
In Favor of:

	
ENSTAR Natural Gas Company 

	
  

	
For:

	
Gas Pipelines and appurtenances thereto 

	
  

	
Affects:

	
North 10 Feet of Lot 1 and Lot 2 

 

	
167.

	
[Intentionally deleted.]

 

	
168.

	
[Intentionally deleted.]

 

(Affects Parcel 17, File Number 460870-21)

 

	
169.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
170.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 016-161-55-000

 

	
171.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 16, 1952

	
  

	
Recording Information:

	
Book 75 at Page 186

	
  

	
Affects:

	
Blanket Easement

 

	
172.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
July 19, 1985 in Book 1295 at Page 758 

	
  

	
In Favor of:

	
Anchorage, a municipal corporation 

	
  

	
For:

	
Right of way and easement 

	
  

	
Affects:

	
the Northerly 30 feet as set forth therein 

 

	
173.

	
The effect of the notes which appear on the plat of said subdivision. 

 

	
174.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

  

Exhibit A - 28

  

 

	
175.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
176.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
July 9, 1993 in Book 2454 at Page 516 

	
  

	
In Favor of:

	
Anchorage, an Alaska municipal corporation 

	
  

	
For:

	
Public use as set forth therein 

	
  

	
Affects:

	
The Northernmost 30 feet 

 

	
177.

	
Joint Well Agreement and the terms and conditions thereof:

 

	
  

	
Between:

	
Chugach Electric Association, Inc. as Owner of Lot 3A

	
  

	
And:

	
G & J Flooring Contractors, Inc. as Owner of Lot 4A

	
  

	
Recording Information:

	
October 15, 1993 in Book 2516 at Page 768

 

	
178.

	
Municipality of Anchorage Covenant to Provide No Build Easement and the terms and conditions thereof:

 

	
  

	
Between:

	
Frontier Paving Corporation as Owner of Lot 4A

	
  

	
And:

	
  

	
And:

	
Chugach Electric Association, Inc. as Owner of Lot 3A The Municipality of Anchorage

	
  

	
Recording Information:

	
March 5, 1997, Book 3034 Page 622

	
  

	
Affects:

	
The South 14 feet of the East 82 feet

 

	
179.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001 in Book 3792 at Page 160

	
  

	
Executed by:

	
The State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
180.

	
[Intentionally deleted.]

  

Exhibit A - 29

  

 

	
181.

	
[Intentionally deleted.]

 

(Affects Parcel 18, File Number 460870-22)

 

	
182.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
183.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 009-252-24-000

 

	
184.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
February 11, 1952

	
  

	
Recording Information:

	
Book 67 at Page 392

	
  

	
Affects:

	
Blanket Easement

 

	
185.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
186.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
187.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
188.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001 in Book 3792 at Page 160

	
  

	
Executed by:

	
The State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
189.

	
[Intentionally deleted.]

 

	
190.

	
[Intentionally deleted.]

 

(Affects Parcel 19, File Number 460870-23)

 

	
191.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

  

Exhibit A - 30

  

 

	
192.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 015-321-03-000

 

	
193.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 25, 1952

	
  

	
Recording Information:

	
Book 76 at Page 84

	
  

	
Affects:

	
Blanket Easement

 

	
194.

	
The effect of the notes which appear on the plat of said subdivision. 

 

	
195.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets.  There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
196.

	
Easements as dedicated and shown on the plat of said subdivision. 

 

	
197.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001 in Book 3792 at Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
198.

	
[Intentionally deleted.]

 

	
199.

	
[Intentionally deleted.]

 

(Affects Parcel 20, File Number 460870-26)

 

	
200.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded May 18, 1973 in Book 72 at Page 67.

 

	
201.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 13N04W05A004

  

Exhibit A - 31

  

 

	
202.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
203.

	
Rights of access and egress from said premises. We find no Notice in the records of any dedicated or improved roadways abutting subject property.

 

	
204.

	
Reservation of all oil, gas and other minerals lying below 100 feet vertically in depth beneath the surface as reserved in an instrument 

 

	
  

	
Recorded:

	
December 23, 1970

	
  

	
Recording Information:

	
Book 86D at Page 252

 

	
205.

	
Matters as shown on that certain Right of Way Plat filed May 2, 1973 under Plat No. 73-22A.

 

	
206.

	
Matters as shown on that certain Record of Survey filed March 8, 1995 under Plat No. 95-21.

 

	
207.

	
[Intentionally deleted.]

 

	
208.

	
[Intentionally deleted.]

 

(Affects Parcel 21, File Number 460870-27)

 

	
209.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded May 19, 1973 in Book 72 at Page 67.

 

	
210.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 13N04W05A002

 

	
211.

	
Rights of access and egress from said premises. We find no Notice in the records of any dedicated or improved roadways abutting subject property.

 

	
212.

	
Reservation of all oil, gas and other minerals lying below 100 feet vertically in depth beneath the surface as reserved in an instrument 

 

	
  

	
Recorded:

	
January 30, 1967

	
  

	
Recording Information:

	
Book 64D at Page 208

  

Exhibit A - 32

  

 

	
213.

	
Condition and restriction contained in instrument 

 

	
  

	
Recorded:

	
January 30, 1967

	
  

	
Recording Information:

	
Book 64D at Page 208

	
  

	
As Follows:

	
"...the substation which may be constructed as a part of the transmission line from Grantee's Beluga Station shall be located at least 275 feet north of the present bluff line of said property; and under the further special condition and restriction that any submarine cable used for said transmission line will be buried beneath the ground for the same distance of said 275 feet."

 

	
214.

	
Matters as shown on that certain Right of Way Plat filed May 2, 1973 under Plat No. 73-22A.

 

	
215.

	
Matters as shown on that certain Record of Survey filed March 8, 1995 under Plat No. 95-21.

 

	
216.

	
[Intentionally deleted.]

 

	
217.

	
[Intentionally deleted.]

 

(Affects Parcel 22, File Number 460870-28)

 

	
218.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded May 18, 1973 in Book 72 at Page 67.

 

	
219.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 13N04W05A002

 

	
220.

	
Rights of access and egress from said premises. We find no Notice in the records of any dedicated or improved roadways abutting subject property.

 

	
221.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
222.

	
Reservation of all oil, gas and other minerals lying below 100 feet vertically in depth beneath the surface as reserved in an instrument 

 

	
  

	
Recorded:

	
January 30, 1967

	
  

	
Recording Information:

	
Book 64D at Page 208

 

	
223.

	
Matters as shown on that certain Right of Way Plat filed May 2, 1973 under Plat No. 73-22A.

  

Exhibit A - 33

  

 

	
224.

	
Matters as shown on that certain Record of Survey filed March 8, 1995 under Plat No. 95-21.

 

	
225.

	
[Intentionally deleted.]

 

	
226.

	
[Intentionally deleted.]

 

(Affects Parcel 23, File Number 460870-29)

 

	
227.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded May 18, 1973 in Book 72 at Page 67.

 

	
228.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 13N04W05A006

 

	
229.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
230.

	
Rights of access and egress from said premises. We find no Notice in the records of any dedicated or improved roadways abutting subject property.

 

	
231.

	
Reservation of all oil, gas and other minerals lying below 100 feet vertically in depth beneath the surface as set forth therein as reserved in an instrument 

 

	
  

	
Recorded:

	
May 10, 1973

	
  

	
Recording Information:

	
Book 71 at Page 819

 

	
232.

	
Matters as shown on that certain Right of Way Plat filed May 2, 1973 under Plat No. 73-22A.

 

	
233.

	
Matters as shown on that certain Record of Survey filed March 8, 1995 under Plat No. 95-21.

 

	
234.

	
[Intentionally deleted.]

 

	
235.

	
[Intentionally deleted.]

 

(Affects Parcel 24, File Number 460870-30)

 

	
236.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded May 19, 1973 in Book 72 at Page 67.

 

	
237.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 13N04W05A008

  

Exhibit A - 34

  

 

	
238.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
239.

	
Rights of access and egress from said premises. We find no Notice in the records of any dedicated or improved roadways abutting subject property.

 

	
240.

	
Reservation of all oil, gas and other minerals lying below 100 feet vertically in depth beneath the surface as set forth therein as reserved in an instrument 

 

	
  

	
Recorded:

	
July 3, 1980

	
  

	
Recording Information:

	
Book 215 at Page 420

 

	
241.

	
Matters as shown on that certain Record of Survey filed March 8, 1995 under Plat No. 95-21.

 

	
242.

	
Matanuska Susina Borough Platting Board Waiver Resolution Serial No. 95-5-PWd, including the terms and provisions thereof, recorded March 8, 1995 in Book 798 at Page 215.  (Affects a portion of said property.)

 

	
243.

	
[Intentionally deleted.]

 

	
244.

	
[Intentionally deleted.]

 

(Affects Parcel 25, File Number 460870-31; 460870-32; 460870-33; 460870-34)

 

	
245.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded April 11, 1962 in Book 41 at Page 289.

 

	
246.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof wherein the State of Alaska has selected the minerals reserved to the United States:

 

	
  

	
Recorded:

	
November 26, 1968 in Book 73D at Page 207 

	
  

	
And recorded: 

	
April 11, 2006 under Serial Number 2006-009230-0

 

Note: Title to the mineral estate, as it pertains to said mineral rights, has not been further searched and assurance thereto is not covered under this Policy.

 

	
247.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 14N04W32A011

 

	
248.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
249.

	
Rights of access and egress from said premises.  We find no Notice in the records of any dedicated or improved roadways abutting subject property.

  

Exhibit A - 35

  

 

	
250.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
July 26, 1966

	
  

	
Recording Information:

	
Misc. Book 9 at Page 41

	
  

	
Affects:

	
Blanket Easement as to the West 100 feet

 

	
251.

	
Matanuska Susitna Borough Platting Board Waiver Resolution Serial No. 95-6-PWd, including the terms and provisions thereof, as recorded March 8, 1995 in Book 798 at Page 218.

 

PLEASE NOTE:

 

The Plat Waiver hereinabove created the description of the parcel as set forth on Schedule A.  It combined the parcel commonly referred to as Tract F with the East 100 feet of the West 300 feet, the East 100 feet of the West 400 feet, and the East 100 feet of the West 500 feet.  Together they are assessed under one tax parcel number, 14N04W32A011.

 

	
252.

	
[Intentionally deleted.]

 

	
253.

	
[Intentionally deleted.]

 

(Affects Parcel 26, File Number 460870-36; 460870-37; 460870-38; 460870-39; 460870-40)

 

	
254.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof, as recorded October 21, 1964 in Book 54 at Page 294.

 

	
255.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof wherein the State of Alaska has selected the minerals reserved to the United States: 

 

	
  

	
Recorded:

	
November 26, 1968 in Book 73D at Page 207 

	
  

	
And recorded: 

	
April 11, 2006 under Serial Number 2006-009230-0

 

Note: Title to the mineral estate, as it pertains to said mineral rights, has not been further searched and assurance thereto is not covered under this Policy. 

 

	
256.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 14N04W32D012

 

	
257.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

  

Exhibit A - 36

  

 

	
258.

	
Rights of access and egress from said premises. We find no Notice in the records of any dedicated or improved roadways abutting subject property.

 

	
259.

	
Easement, including terms and provisions contained therein: 

 

	
  

	
Recording Information:

	
December 29, 1966 in Misc. Book 9 at Page 340 

	
  

	
In Favor of:

	
DeMaris Baldwin 

	
  

	
For:

	
"The right to use that road which may be built" as set forth therein 

	
  

	
Affects:

	
The West 15 feet 

 

Amendment No. 1 thereto recorded November 3, 1971 in Book Misc. 17 at Page 303. 

 

	
260.

	
Matanuska Susitna Borough Platting Board Waiver Resolution Serial No. 95-7-PWd, including the terms and provisions thereof, as recorded March 8, 1995 in Book 798 at Page 220.

 

Please Note:

 

The Plat Waiver hereinabove created the description of the parcel as set forth on Schedule A. It combined the parcels commonly referred to as Tracts D and E, with the East 100 feet of the West 300 feet, the East 100 feet of the West 400 feet, and the East 100 feet of the West 500 feet. Together they are assessed under one tax parcel number, 14N04W32D012.

 

	
261.

	
[Intentionally deleted.]

 

[Intentionally deleted.]

 

(Affects Parcel 27, File Number 460870-41)

 

	
263.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
  

	
Recorded:

	
November 24, 1950 

	
  

	
Recording Information:

	
Volume 52 Page 233

 

	
264.

	
Reservations and exceptions as contained in the State of Alaska Patent recorded February 19, 1985, Book 1229 Page 458.

 

	
265.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 016-021-31-000

 

	
266.

	
Rights of the public and/or governmental agencies in and to any portion of the above described real property lying within any roadway or public easement areas.

  

Exhibit A - 37

  

 

	
267.

	
Reservation of section line easement 33 feet in width along each side of section line as provided by 43 USC 932 and reenacted by 1721 CLA 1933.

 

	
268.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument

 

	
  

	
Recorded:

	
February 11, 1952

	
  

	
Recording Information:

	
Book 67 Page 384

	
  

	
Affects:

	
Blanket Easement

 

	
269.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
August 25, 1969, Misc. 178 Page 56 

	
  

	
In Favor of:

	
Public 

	
  

	
For

	
Public use 

	
  

	
Affects:

	
See instrument for exact location 

 

	
270.

	
An easement reserved in a deed, including the terms and provisions thereof;

 

	
  

	
Recorded:

	
December 3, 1969, Book 395 Page 243 

	
  

	
From:

	
Henry F. Wollf and Myrle Wollf, husband and wife

	
  

	
To:

	
Norman S. Stone, Jr. and Marguerite R. Stone, husband and wife and Donald L. Williams and

	
  

	
Shelia S. Williams, husband and wife 

	
  

	
For:

	
Ingress and egress 

	
  

	
Affects:

	
See instrument for exact location 

 

	
271.

	
Easement, including terms and provisions contained therein:

 

	
  

	
Recording Information:

	
May 12, 1980, Book 494 Page 371 

	
  

	
In Favor of:

	
The Municipality of Anchorage 

	
  

	
For:

	
Sanitary sewer line 

	
  

	
Affects:

	
The West 20 feet 

 

	
272.

	
Memorandum of Understanding, including the terms and provisions thereof:

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
273.

	
[Intentionally deleted.]

  

Exhibit A - 38

  

 

	
274.

	
[Intentionally deleted.]

 

(Affects Parcel 28 and 28A, File Number 460870-42)

 

	
275.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
276.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 014-202-79-000

 

	
277.

	
Reservation of an easement for highway purposes as disclosed by Public Land Order No. 601, dated August 10, 1949 and amended by Public Land Order No. 757, dated October 10, 1959; Public Land Order No. 1613, dated April 7, 1958; and Department of the Interior Order No. 2665, dated October 16, 1951, Amendment No. 1, thereto, dated July 17, 1952 and Amendment No. 2, thereto, dated September 15, 1956, filed in the Federal Register.

 

	
278.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
April 24, 1952

	
  

	
Recording Information:

	
Book 71 Page 169

	
  

	
Affects:

	
Blanket Easement

 

	
279.

	
Easements as dedicated and shown on the plat of said subdivision.

 

	
280.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
281.

	
Slope easements as dedicated and reserved on the plat of said subdivision as follows;

 

"There shall be reserved adjacent to the dedicated streets shown hereon a slope reservation easement sufficient to contain cut and fill slopes of 1.5 feet horizontal for each 1 foot vertical (1.5 to 1) of cut or fill for the purpose of providing and maintaining the lateral support of the constructed streets. There is reserved to the grantors, their successors and assigns, the right to use such areas at any time upon providing and maintaining other adequate lateral support, as approved by the Municipality."

 

	
282.

	
The terms and provisions contained in the document entitled "Agreement to Provide Access" 

 

	
  

	
Recorded:

	
December 19, 2000

	
  

	
Recording No.:

	
Book 3737 Page 124

 

And amendments thereto,

 

	
  

	
Recorded:

	
October 6, 2004 

	
  

	
Recording No.:

	
Serial Number 2004-075521-0

  

Exhibit A - 39

  

 

	
283.

	
Any failure to comply with the terms and provisions of the Agreement to Provide Access referred to in Schedule A herein.

 

	
284.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
285.

	
[Intentionally deleted.]

 

	
286.

	
[Intentionally deleted.]

 

(Affects Parcel 29, File Number 460870-43)

 

	
287.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof. 

 

	
  

	
Recorded:

	
April 16, 1938 

	
  

	
Recording Information:

	
Book 32 Page 134

 

	
288.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No.: 010-231-29-000

  

Exhibit A - 40

  

 

	
289.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
February 11, 1952

	
  

	
Recording Information:

	
Volume 67 Page 353

	
  

	
Affects:

	
Blanket Easement

 

	
290.

	
Easements as dedicated and shown on the plat of said subdivision.

 

	
291.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
292.

	
[Intentionally deleted.]

 

	
293.

	
[Intentionally deleted.]

 

(Affects Parcel 30, File Number 460870-44)

 

	
294.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof. 

 

	
  

	
Recorded:

	
January 23, 1923 

	
  

	
Recording Information:

	
Vol. 1 Page 5

 

	
295.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 17N02W34A004

 

	
296.

	
Right of Way Easement, including the terms and provisions thereof, granted to Matanuska Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
August 27, 1958

	
  

	
Recording Information:

	
Book 21 Page 125

	
  

	
Affects:

	
Blanket Easement

 

	
297.

	
Any matters as shown on Record of Survey 2006-54.

 

	
298.

	
[Intentionally deleted.]

 

	
299.

	
[Intentionally deleted.]

  

Exhibit A - 41

  

 

(Affects Parcel 32, File Number 460870-47)

 

	
300.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof. 

 

	
  

	
Recorded:

	
November 14, 1942 

	
  

	
Recording Information:

	
Volume 80 Page 392

 

	
301.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

	
  

	
Tax Account No.: 010-032-39-000

 

	
302.

	
Right of Way Easement, including the terms and provisions thereof, granted to Chugach Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
June 20, 1952

	
  

	
Recording Information:

	
Volume 74 Page 42

	
  

	
Affects:

	
Blanket Easement

 

	
303.

	
Easement, including terms and provisions contained therein: 

 

	
  

	
Recording Information:

	
January 30, 1957, Book E-1 Page 58 

	
  

	
In Favor of:

	
City of Anchorage, a municipal corporation 

	
  

	
For:

	
Right of way for a telephone distribution system 

	
  

	
Affects:

	
Blanket Easement 

 

	
304.

	
Easement, including terms and provisions contained therein: 

 

	
  

	
Recording Information:

	
May 26, 1969, Misc. 173 Page 163 

	
  

	
In Favor of:

	
Greater Anchorage Area Borough 

	
  

	
For:

	
Temporary easement and right of way for completing construction of sewer of line 

	
  

	
Affects:

	
The West 20 feet 

 

	
305.

	
The terms and provisions contained in the document entitled "Notice of Availability of Water Service" 

 

	
  

	
Recorded:

	
January 16, 1978

	
  

	
Recording No.:

	
Book 264 Page 694

  

Exhibit A - 42

  

 

	
306.

	
Easement, including terms and provisions contained therein: 

 

	
  

	
Recording Information:

	
January 6, 1983, Book 831 Page 953 

	
  

	
In Favor of:

	
The Municipality of Anchorage, a municipal corporation 

	
  

	
For:

	
Right of way of underground street lighting circuits 

	
  

	
Affects:

	
See instrument for exact location 

 

	
307.

	
Easement, including terms and provisions contained therein: 

 

	
  

	
Recording Information:

	
August 31, 1994, Book 2700 Page 626 

	
  

	
In Favor of:

	
Anchorage, an Alaska municipal corporation 

	
  

	
For:

	
Public use 

	
  

	
Affects:

	
See instrument for exact location 

 

	
308.

	
Easement, including terms and provisions contained therein: 

 

	
  

	
Recording Information:

	
August 31, 1994, Book 2700 Page 627 

	
  

	
In Favor of:

	
Anchorage, an Alaska municipal corporation 

	
  

	
For:

	
Slope 

	
  

	
Affects:

	
See instrument for exact location 

 

	
309.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
310.

	
[Intentionally deleted.]

 

	
311.

	
[Intentionally deleted.]

 

(Affects Parcel 33, File Number 460870-49)

 

	
312.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
313.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 010-022-30-000 (Lot 29N)

Tax Account No.: 010-022-31-000 (Lot 30N)

Tax Account No.: 010-022-32-000 (Lot 31N)

Tax Account No.: 010-022-33-000 (Lot 32N)

  

Exhibit A - 43

  

 

	
314.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
315.

	
[Intentionally deleted.]

 

	
316.

	
[Intentionally deleted.]

 

(Affects Parcel 34, File Number 460870-11)

 

	
317.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
318.

	
Taxes due the Municipality of Anchorage are EXEMPT for 2010.

Tax Account No.: 075-153-42-000 (Lot 19)

Tax Account No.: 075-153-43-000 (Lot 20)

Tax Account No.: 075-153-44-000 (Lot 21)

 

	
319.

	
Memorandum of Understanding, including the terms and provisions thereof: 

 

	
  

	
Dated:

	
March 15, 2001

	
  

	
Recorded:

	
March 20, 2001, Book 3792 Page 160

	
  

	
Executed by:

	
State of Alaska, Department of Administration and Chugach Electric Association, Inc.

 

	
320.

	
Resolution No. 2000-111 (S) for Sanitary Sewer Improvements in Old Girdwood Lateral Sewer Special Improvement District Special Assessment District Number (LID) 60-9, including the terms, provisions and assessments therein, 

 

	
  

	
Recorded:

	
April 23, 2001

	
  

	
Recording Information:

	
Book 3818 Page 491

 

	
321.

	
[Intentionally deleted.]

 

	
322.

	
[Intentionally deleted.]

 

(Affects Parcel 31, File Number 460870-45)

 

	
323.

	
Reservations or exceptions in patents or in acts authorizing the issuance thereof.

 

	
324.

	
Taxes due the Matanuska-Susitna Borough are EXEMPT for 2010.

Tax Account No.: 6661B02L028

  

Exhibit A - 44

  

 

	
325.

	
Right of Way Easement, including the terms and provisions thereof, granted to Matanuska Electric Association, Inc., and its assigns and/or successors in interest, to construct, operate and maintain an electric transmission an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
August 27, 1958

	
  

	
Recording Information:

	
Book 21 Page 125

	
  

	
Affects:

	
Blanket Easement

 

	
326.

	
Reservation of all oil, gas and mineral rights as reserved in an instrument 

 

	
  

	
Recorded:

	
December 27, 1974

	
  

	
Recording Information:

	
Book 92 Page 268

 

And amendments thereto,

 

	
  

	
Recorded:

	
January 20, 1975

	
  

	
Recording Information:

	
Book 92 Page 973

 

Note: Title to the mineral estate, as it pertains to said subject property, has not been further searched and assurance thereto is not covered under this Policy. 

 

	
327.

	
The effect of the notes which appear on the plat of said subdivision.

 

	
328.

	
Easements as dedicated and shown on the plat of said subdivision.

 

Vacation Resolution Serial number 2007-193-Vac and amendments thereto,

 

	
  

	
Recorded:

	
November 30, 2007

	
  

	
Recording Information:

	
Serial Number 2007-030493-0

 

	
329.

	
Covenants, conditions, restrictions and/or easement; but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, family status, or national origin to the extent such covenants, conditions or restrictions violate Title 42, Section 3604(c), of the United States Codes: 

 

	
  

	
Recording Information:

	
December 10, 1975, Book 108 Page 482

 

And amendments thereto,

 

	
  

	
Recorded:

	
May 13, 1981

	
  

	
Recording Information:

	
Book 233 Page 455

  

Exhibit A - 45

  

 

And amendments thereto,

 

	
  

	
Recorded:

	
January 8, 1982

	
  

	
Recording Information:

	
Book 252 page 892

 

And amendments thereto,

 

	
  

	
Recorded:

	
February 8, 1982

	
  

	
Recording Information:

	
Book 255 Page 49

 

And amendments thereto,

 

	
  

	
Recorded:

	
July 29, 1982

	
  

	
Recording Information:

	
Book 269 Page 606

 

And amendments thereto,

 

	
  

	
Recorded:

	
December 13, 1982

	
  

	
Recording Information:

	
Book 285 Page 939

 

And amendments thereto,

 

	
  

	
Recorded:

	
October 25, 1996

	
  

	
Recording Information:

	
Book 870 Page 814

 

And amendments thereto,

 

	
  

	
Recorded:

	
December 30, 2003

	
  

	
Recording Information:

	
2003-038698-0

 

	
  

	
And Re-Recorded:

	
January 28, 2004

	
  

	
Recording Information:

	
2004-002308-0

 

And amendments thereto,

 

	
  

	
Recorded:

	
June 30, 2005

	
  

	
Recording Information:

	
2005-016992-0

  

Exhibit A - 46

  

 

	
330.

	
Right of Way Easements, including the terms and provisions thereof, granted to Matanuska Electric Association, Inc., and it's assigns and/or successor's in interest, to construct, operate and maintain an electric transmission and/or telephone distribution line or system by instrument 

 

	
  

	
Recorded:

	
May 11, 1976

	
  

	
Recording Information:

	
Book 116 page 15

	
  

	
Affects:

	
See Document (Various Locations)

 

	
331.

	
The terms and provisions contained in the document entitled "Notice of Annual Assessments" 

 

	
  

	
Recorded:

	
July 21, 1997

	
  

	
Recording No.:

	
Book 903 Page 529

 

And amendments thereto,

 

	
  

	
Recorded:

	
July 19, 2002

	
  

	
Recording Information:

	
2002-015138-0

 

And amendments thereto,

 

	
  

	
Recorded:

	
February 11, 2004

	
  

	
Recording Information:

	
2004-003529-0

 

	
332.

	
The terms and provisions contained in the document entitled "Architectural Control Committee Rules and Regulations" 

 

	
  

	
Recorded:

	
March 16, 2000

	
  

	
Recording No.:

	
Book 1059 Page 982

 

And amendments thereto,

 

	
  

	
Recorded:

	
January 23, 2004

	
  

	
Recording Information:

	
2004-001881-0

 

	
333.

	
Subject to any unpaid dues or assessments now due or owing the Settlers bay Homeowners Association.

 

	
334.

	
Uniform Common Interest Ownership Act, including the terms, conditions and provisions provided therein, and in any supplements or amendments thereof, of the State of Alaska.

 

	
335.

	
[Intentionally deleted.]

 

	
336.

	
[Intentionally deleted.]

  

Exhibit A - 47

  

 

EXHIBIT B

 

CONTRACTS

 

	
1.

	
Modified Agreement for the Sale and Purchase of Electric Power and Energy by and among Chugach Electric Association, Inc., Matanuska Electric Association, Inc., and Alaska Electric Generation and Transmission Cooperative, Inc. dated April 5, 1989.

	
2.

	
First Amendment to Modified Agreement for the Sale and Purchase of Electric Power and Energy dated April 5, 1989 by and among Chugach Electric Association, Inc., Matanuska Electric Association, Inc., and Alaska Electric Generation and Transmission Cooperative, Inc. effective February 10, 1995.

	
3.

	
Second Amendment to Modified Agreement for the Sale and Purchase of Electric Power and Energy dated April 5, 1989 by and among Chugach Electric Association, Inc., Matanuska Electric Association, Inc. and Alaska Electric Generation and Transmission Cooperative, Inc. filed with the Regulatory Commission of Alaska on July 28, 2008.

	
4.

	
Agreement for Sale of Electric Power and Energy between Chugach Electric Association, Inc., Alaska Electric Generation and Transmission Cooperative, Inc., and Homer Electric Association, Inc., signed by the parties on September 25, 27, and 10, 1985, respectively.

	
5.

	
2006 Agreement for the Sale and Purchase of Electric Power and Energy between Chugach Electric Association, Inc., and the City of Seward effective February 27, 2007.

	
6.

	
Amendment No. 1 to the 2006 Agreement for the Sale and Purchase of Electric Power and Energy between Chugach Electric Association, Inc. and the City of Seward effective February 27, 2007.

  

Exhibit B - 1

  

 

	
7.

	
Order on Offer of Settlement and Issuing New License between Chugach Electric Association, Inc. and the Federal Energy Regulatory Commission dated effective August 24, 2007.

	
8.

	
Agreement for the Sale and Purchase of Natural Gas between Chugach Electric Association, Inc. and ARCO Alaska, Inc. dated April 21, 1989.

	
9.

	
Amendment No. 1 to Agreement for the Sale and Purchase of Natural Gas between Chugach Electric Association, Inc. and ARCO Alaska, Inc., dated August 1, 1990.

	
10.

	
Letter Agreement dated April 23, 1999, regarding Chugach Electric Association Inc.’s consent to the assignment to ARCO Beluga, Inc. of the Agreement for the Sale and Purchase of Natural Gas between Chugach Electric Association, Inc. and ARCO Alaska, Inc.

	
11.

	
Amendment No. 2 to Agreement for the Sale and Purchase of Natural Gas between Chugach Electric Association, Inc. and ARCO Beluga, Inc., dated May 6, 1999.

	
12.

	
Agreement for the Sale and Purchase of Supplemental Natural Gas between Chugach Electric Association, Inc. and ARCO Alaska, Inc. dated October 3, 1991.

	
13.

	
Agreement for the Sale and Purchase of Natural Gas between Chugach Electric Association, Inc. and ConocoPhillips Alaska, Inc. and ConocoPhillips, Inc. (collectively, ConocoPhillips) effective August 21, 2009.

	
14.

	
Agreement for the Sale and Purchase of Natural Gas between Chugach Electric Association, Inc. and Marathon Alaska Production, LLC (MAP) effective May 17, 2010.

	
15.

	
Gas Transportation Agreement by and among Chugach Electric Association, Inc., Alaska Pipeline Company and ENSTAR Natural Gas Company dated December 7, 1992.

  

Exhibit B - 2

  

 

	
16.

	
Transportation Agreement between Chugach Electric Association, Inc. and Beluga Pipeline Company dated effective October 1, 2010.

	
17.

	
Transportation Agreement for Interruptible Transportation of Natural Gas between Chugach Electric Association, Inc. and Kenai Nikiski Pipeline dated effective October 1, 2010.

	
18.

	
Engineering, Procurement and Construction Contract between Chugach Electric Association, Inc. and SNC-Lavalin Constructors, Inc. dated effective June 18, 2010.

	
19.

	
Bradley Lake Agreement for the Sale and Purchase of Electric Power by and among Chugach Electric Association, Inc., the Alaska Power Authority, Golden Valley Electric Association, Inc., the Municipality of Anchorage, the City of Seward, the Alaska Electric Generation and Transmission Cooperative, Inc., Homer Electric Association, Inc. and Matanuska Electric Association, Inc. dated December 8, 1987.

  

Exhibit B - 3

  

 

EXHIBIT C

CERTAIN EXCEPTED PROPERTY

 

 

Baxter Lake Substation Addition

Legal:  Tract D-1, Foxhall South Subdivision, Plat 92-13

Anchorage Recording District, Third Judicial District, State of Alaska

 

Huffman Substation Addition

Legal:  Lot 1A, Block 1, West Addition-Knik Heights Subdivision, Plat 75-140

On file in the office of the District Recorder, Anchorage Recording District, Third Judicial District, State of Alaska

 

Patricia Subdivision

Legal:  Lot 15, Block 3, Patricia Subdivision, Plat 69-54

Anchorage Recording District, Third Judicial District, State of Alaska

 

Patricia Subdivision

Legal:  Lot 19, Block 2, Patricia Subdivision, Plat 69-54

Anchorage Recording District, Third Judicial District, State of Alaska

 

Former Tudor Substation Site

Legal:  Lot 12, Block 2, O.H. Fast Subdivision, Plat P-156

Anchorage Recording District, Third Judicial District, State of Alaska

 

Wonder Park Site

Legal:  Tract 2, Wonder Park School Subdivision, Plat 69-221

Anchorage Recording District, Third Judicial District, State of Alaska

 

Former Fairview Substation Site

Legal:  Lot 4, Block 18D, Anchorage Townsite Subdivision of Block 18-Third Add.

Plat C-10A, Anchorage Recording District, Third Judicial District, State of Alaska

 

Girdwood Substation Addition

Legal:  Lot 22, Block 3, Girdwood Townsite, U.S. Survey 1177

Statutory Warranty Deed Recorded at Book 2867 Page 304

Anchorage Recording District, Third Judicial District, State of Alaska

 

Bernice Lake Repeater Site

 

Legal:  That portion of the SE1/4 of Section 24, T8N, R11W, S.M., Alaska, lying northwesterly of the centerline of the north Kenai Road, as shown on the State of Alaska Department of Public Works, Division of Highways Right-of-Way Plat for the Project No. S0490 (3), Sheet 8 of 10, dated July 1961, as described in the Warranty Deed recorded at Book 208 Page 189 in the Kenai Recording District, Third Judicial District, State of Alaska

  

Exhibit C - 1

  

International South Addition

Legal:  The West One-half of the Northeast One-quarter of the Northwest One-quarter (W 1⁄2 of the NE 1⁄4 of the NW 1/4) of Section 1, Township 12 North, Range 4 West, Seward Meridian; Records of the Anchorage Recording District, Third Judicial District, State of Alaska.

Excepting therefrom that portion conveyed to State of Alaska, Department of Transportation and Public Facilities by Trustee’s Deed recorded August 23, 1979 in Book 429 at Page 596.

 

The specific equipment described as collateral in the UCC financing statements filed with the Alaska Department of Natural Resources, under the following filing numbers:

2008-654537-5, 2008-669161-5, 2009-678314-3, 2009-680741-2, 2010-692590-8, 2010-693742-2, 2010-694402-3, 2010-697798-3, 2010-697895-9 and 2010-707193-4.

 

 

Exhibit C - 2ex4_19.htm

Exhibit 4.19

 

After Recording Return to:

Davis Wright Tremaine, LLP

1201 Third Avenue, Suite 2200

Seattle, WA  98101

Attention:  Donald E. Percival

 

FIRST SUPPLEMENTAL INDENTURE

(to that certain Second Amended and Restated Indenture of Trust,

dated as of January 20, 2011)

Dated as of January 20, 2011

between

CHUGACH ELECTRIC ASSOCIATION, INC.,

5601 Electron Drive, Anchorage, Alaska 99519,

TRUSTOR

AND

U.S. BANK NATIONAL ASSOCIATION,

1420 Fifth Avenue, 7th Floor, Seattle, Washington 98101

Attn:  Corporate Trust Services,

TRUSTEE

FIRST MORTGAGE OBLIGATIONS

THIS INSTRUMENT CONSTITUTES A DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING COVERING REAL AND PERSONAL PROPERTY (INCLUDING AFTER-ACQUIRED PROPERTY) OF A TRANSMITTING UTILITY, AND CONTAINS A FUTURE ADVANCE PROVISION

 

  

  

  

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of January 20, 2011, is between CHUGACH ELECTRIC ASSOCIATION, INC., an Alaska electric cooperative, as Trustor (hereinafter called the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Trustee (hereinafter called the “Trustee”).

WHEREAS, the Company has heretofore executed and delivered to the Trustee a Second Amended and Restated Indenture of Trust, dated as of January 20, 2011 (the “Original Indenture”), for the purpose of providing for the authentication and delivery of Obligations (capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Original Indenture) by the Trustee from time to time under the Original Indenture (the Original Indenture, as heretofore, hereby and hereafter supplemented being sometimes referred to as the “Indenture”) which is filed of record as shown on Exhibit A hereto;

WHEREAS, the Board of Directors of the Company has authorized and approved actions necessary for the Company to establish a new series of Obligations to be designated the First Mortgage Bonds, 2011 Series A, which, as provided herein, shall consist of an aggregate principal amount of Ninety Million Dollars ($90,000,000) of 2011 Series A Bonds due March 15, 2031 and an aggregate principal amount of One Hundred Eighty-Five Million Dollars ($185,000,000) of 2011 Series A Bonds due March 15, 2041.  (collectively, the “2011 Series A Bonds”); such 2011 Series A Bonds being issued pursuant to this First Supplemental Indenture to the parties set forth in Schedule A of the Bond Purchase Agreement described below (and their successors or assigns of the 2011 Series A Bonds, each individually, a “2011 Series A Holder” or collectively, the “2011 Series A Holders”) to secure the Company’s obligations under the Bond Purchase Agreement, dated as of January 21, 2011, between the Company and the original 2011 Series A Holders (the “Bond Purchase Agreement”), and the Company has complied or will comply with all provisions required to issue Obligations provided for in the Indenture;

WHEREAS, the Company desires to execute and deliver this First Supplemental Indenture, in accordance with the provisions of the Indenture, for the purpose of (i) providing for the creation and designation of the 2011 Series A Bonds as Obligations and specifying the form and provisions of the 2011 Series A Bonds;

WHEREAS, Section 13.1 of the Indenture provides that, without the consent of the Holders of any of the Obligations at the time Outstanding, the Company, when authorized by a Board Resolution, and the Trustee, may enter into supplemental indentures for the purposes of and subject to the conditions set forth in such Section 13.1, and this First Supplemental Indenture is permitted pursuant to provisions of Section 13.1(c);

WHEREAS, Sections 5.2 and 5.4 of the Indenture provides that the Company may enter into this First Supplemental Indenture when authorized by a Board Resolution, and the Trustee shall authenticate and deliver the 2011 Series A Bonds upon delivery of a Company Request as provided under the Indenture and satisfaction of all other conditions precedent thereto under the Indenture; and

  

1

  

WHEREAS, all acts and proceedings required by law and by the Articles of Incorporation and Bylaws of the Company necessary to secure the payment of the principal of and interest on the 2011 Series A Bonds, to make the 2011 Series A Bonds issued under the Indenture, when executed by the Company, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligations of the Company, and to constitute under the Indenture a valid and binding lien for the security of the 2011 Series A Bonds, in accordance with its terms, have been done and taken, and the execution and delivery of this First Supplemental Indenture has been in all respects duly authorized;

NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSES, that, to secure the payment of the principal of (and premium, if any) and interest on the Outstanding Secured Obligations, including, when issued, the 2011 Series A Bonds, to confirm the lien of the Indenture upon the Trust Estate, including property purchased, constructed or otherwise acquired by the Company since the date of execution of the Original Indenture, to secure performance of the covenants therein and herein contained, to confirm the terms and conditions on which the 2011 Series A Bonds are secured, and in consideration of the premises thereof and hereof, the Company by these presents does grant, bargain, sell, alienate, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set over and confirm to the Trustee, and its successors and assigns in the trust created thereby and hereby, in trust, all property, rights, privileges and franchises (other than Excepted Property and Excluded Property) of the Company, whether now owned or hereafter acquired, of the character described in the Granting Clauses of the Indenture, including all such property, rights, privileges and franchises acquired since the date of execution of the Original Indenture, including, without limitation, all of those fee and leasehold interests in real property, if any, which may hereafter be constructed or acquired by it, but subject to all exceptions, reservations and matters of the character therein referred to, and expressly excepting and excluding from the lien and operation of the Indenture all properties of the character specifically excepted as “Excepted Property” or “Excludable Property” in the Indenture to the extent contemplated thereby.

PROVIDED, HOWEVER, that if, upon the occurrence of an Event of Default under the Indenture, the Trustee, or any separate trustee or co-trustee appointed under Section 10.14 of the Indenture or any receiver appointed pursuant to statutory provision or order of court, shall have entered into possession of all or substantially all of the Trust Estate, all the Excepted Property described or referred to in paragraphs (a) through (g), inclusive, of “Excepted Property” in the Indenture then owned or thereafter acquired by the Company, shall immediately, and, in the case of any Excepted Property described or referred to in paragraphs (h) through (k), inclusive, of “Excepted Property” in the Indenture, upon demand of the Trustee or such other trustee or receiver, become subject to the lien of the Indenture to the extent permitted by law, and the Trustee or such other trustee or receiver may, to the extent permitted by law, at the same time likewise take possession thereof, and whenever all Events of Default shall have been cured and the possession of all or substantially all of the Trust Estate shall have been restored to the Company, such Excepted Property shall again be excepted and excluded from the lien of the Indenture to the extent and otherwise as hereinabove set forth and as set forth in the Indenture.

  

2

  

The Company may, however, pursuant to Granting Clause Third of the Indenture, subject to the lien of the Indenture any Excepted Property, whereupon the same shall cease to be Excepted Property.

TO HAVE AND TO HOLD all said property, rights, privileges and franchises hereby and hereafter (by a Supplemental Indenture or otherwise) granted, bargained, sold, alienated, remised, released, conveyed, assigned, transferred, mortgaged, hypothecated, pledged, set over or confirmed as aforesaid, or intended, agreed or covenanted so to be, together with all the tenements, hereditaments and appurtenances thereto appertaining (said properties, rights, privileges and franchises, including any cash and securities hereafter deposited or required to be deposited with the Trustee (other than any such cash which is specifically stated in the Indenture not to be deemed part of the Trust Estate) being part of the Trust Estate), unto the Trustee, and its successors and assigns in the trust herein created, forever.

SUBJECT, HOWEVER, to (i) Permitted Encumbrances, (ii) to the extent permitted by Section 14.6 of the Indenture, as to property hereafter acquired, (a) any duly recorded or perfected Prior Lien that may exist thereon at the date of the acquisition thereof by the Company, and (b) purchase money mortgages, other purchase money liens, chattel mortgages, security agreements, conditional sales agreements or other title retention agreements created by the Company at the time of acquisition thereof, and (iii) defects of title to and encumbrances on property as shown on Exhibit A of the Indenture and existing on the date hereof.

BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and proportionate benefit and security of the Holders from time to time of all the Outstanding Secured Obligations without any priority of any such Obligation over any other such Obligation and for the enforcement of the payment of such Obligations in accordance with their terms.

UPON CONDITION that, until the happening of an Event of Default and subject to the provisions of Article 6 and not in limitation of the rights elsewhere provided in this Indenture, the Company shall be permitted and have the right to possess, use, operate and enjoy the Trust Estate, except cash, securities and other personal property deposited, or required to be deposited, with the Trustee and to explore for, mine, extract, produce and dispose of coal, ore, gas, oil and other minerals or natural resources, to harvest standing timber and to collect, receive and use the rents, issues, profits, revenues and other income, products and proceeds of the Trust Estate or the operation of the property constituting part of the Trust Estate.

  

3

  

AND IT IS HEREBY COVENANTED AND DECLARED that the 2011 Series A Bonds are to be authenticated and delivered and the Trust Estate is to be held and applied by the Trustee, subject to the covenants, conditions and trusts set forth herein and in the Indenture, and the Company does hereby covenant and agree to and with the Trustee, for the equal and proportionate benefit of all Holders of the Outstanding Secured Obligations, as follows:

ARTICLE I

DEFINITIONS

 

Section 1.1           Definitions.

All words and phrases defined in the Indenture shall have the same meaning in this First Supplemental Indenture, including any exhibit hereto, except as otherwise appears herein and in this Article or unless the context clearly requires otherwise.  In addition, the following terms have the following meaning in this First Supplemental Indenture unless the context clearly requires otherwise.

“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York, Seattle, Washington, or the city in which the principal corporate trust office of the Trustee is located are required or authorized to be closed.

“Closing Date” means January 21, 2011.

“Default Rate” means with respect to any 2011 Series A Bond, that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of such 2011 Series A Bond or (ii) 2% over the rate of interest publicly announced by Bank of America, N.A. in New York, New York or its successor, as its “prime” rate.

“Make-Whole Amount” is defined in Section 2.9.

  

4

  

ARTICLE II

THE 2011 SERIES A BONDS AND

CERTAIN PROVISIONS RELATING THERETO

Section 2.1           Authentication and Terms of the 2011 Series A Bonds.  Pursuant to the provisions of Article 5 of the Original Indenture, there has been established a series of Obligations known as and entitled the “First Mortgage Bonds, 2011 Series A.”

The aggregate principal amount of the 2011 Series A Bonds which may be authenticated and delivered and Outstanding at any one time is limited to Two Hundred Seventy Five Million Dollars ($275,000,000.00).  The 2011 Series A Bonds shall consist of an aggregate principal amount of Ninety Million Dollars ($90,000,000) of 2011 Series A Bonds due March 15, 2031 and an aggregate principal amount of One Hundred Eighty Five Million Dollars ($185,000,000) of 2011 Series A Bonds due March 15, 2041.  The 2011 Series A Bonds shall originally be registered in the names of the 2011 Series A Holders, and shall be dated the date of authentication.

The 2011 Series A Bonds due March 15, 2031 shall bear interest from their date of issuance, payable semi-annually on March 15 and September 15 of each year commencing on September 15, 2011, at the rate of 4.2%.  The 2011 Series A Bonds due March 15, 2041 shall bear interest from their date of issuance, payable semi-annually on March 15 and September 15 of each year commencing on September 15, 2011, at a rate of 4.75%.  Interest on the 2011 Series A Bonds shall be computed on the basis of a 360-day year of twelve 30-day months.

The principal of, premium (including the Make-Whole Amount), if any, and interest on the 2011 Series A Bonds shall be paid to the 2011 Series A Holders thereof in immediately available funds as described in such Bonds.  Any payment of principal of or premium (including the Make-Whole Amount, if any) or interest on any 2011 Series A Bond that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any 2011 Series A Bond is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

If the Company fails to make any payment with respect to the 2011 Series A Bonds when due, then such payment shall be due and payable on demand, and shall accrue interest from the date due until the date paid at the Default Rate.

  

5

  

Section 2.2           Form of the 2011 Series A Bonds. The 2011 Series A Bonds shall each be a bond substantially in the form of Exhibit B hereto, and the Trustee’s authentication certificate to be executed on the 2011 Series A Bonds shall be substantially in the form attached thereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted in the Indenture.

Section 2.3           Required Prepayments.

(a)           On March 15, 2012 and on each March 15th thereafter to and including March 15, 2030, the Company will prepay a portion of the aggregate principal amount of the 2011 Series A Bonds due March 15, 2031 at par and without payment of any premium (including the Make-Whole Amount), provided that upon any partial prepayment of such 2011 Series A Bonds pursuant to Section 2.4 or partial purchase of such 2011 Series A Bonds permitted by Section 2.8, the principal amount of each required prepayment of such 2011 Series A Bonds becoming due under this Section 2.3(a) on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of such 2011 Series A Bonds is reduced as a result of such prepayment or purchase.  The aggregate principal amount of the 2011 Series A Bonds due March 15, 2031 to be prepaid and the dates of such prepayments, as well as the principal amount payable on the maturity date, are set forth below:

	
Date

	 	
Amount

	 
	
March 15, 2012

	 	$	4,500,000	 
	
March 15, 2013

	 	$	4,500,000	 
	
March 15, 2014

	 	$	4,500,000	 
	
March 15, 2015

	 	$	4,500,000	 
	
March 15, 2016

	 	$	4,500,000	 
	
March 15, 2017

	 	$	4,500,000	 
	
March 15, 2018

	 	$	4,500,000	 
	
March 15, 2019

	 	$	4,500,000	 
	
March 15, 2020

	 	$	4,500,000	 
	
March 15, 2021

	 	$	4,500,000	 
	
March 15, 2022

	 	$	4,500,000	 
	
March 15, 2023

	 	$	4,500,000	 
	
March 15, 2024

	 	$	4,500,000	 
	
March 15, 2025

	 	$	4,500,000	 
	
March 15, 2026

	 	$	4,500,000	 
	
March 15, 2027

	 	$	4,500,000	 
	
March 15, 2028

	 	$	4,500,000	 
	
March 15, 2029

	 	$	4,500,000	 
	
March 15, 2030

	 	$	4,500,000	 
	
March 15, 2031(1)

	 	$	4,500,000	 
	(1) The final maturity date of 2011 Series A Bonds due 2031.	 	 	 	 

 

  

6

  

(b)           On March 15, 2012 and on each March 15th thereafter to and including March 15, 2040, the Company will prepay a portion of the aggregate principal amount of the 2011 Series A Bonds due March 15, 2041 at par and without payment of any premium (including the Make-Whole Amount), provided that upon any partial prepayment of such 2011 Series A Bonds pursuant to Section 2.4 or partial purchase of such 2011 Series A Bonds permitted by Section 2.8, the principal amount of each required prepayment of such 2011 Series A Bonds becoming due under this Section 2.3(b) on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of such 2011 Series A Bonds is reduced as a result of such prepayment or purchase.  The aggregate principal amount of the 2011 Series A Bonds due March 15, 2041 to be prepaid and the dates of such prepayments, as well as the principal amount payable on the maturity date, are set forth below:

	
Date

	 	
Amount

	 
	
March 15, 2012

	 	$	6,166,667	 
	
March 15, 2013

	 	$	6,166,667	 
	
March 15, 2014

	 	$	6,166,667	 
	
March 15, 2015

	 	$	6,166,667	 
	
March 15, 2016

	 	$	6,166,667	 
	
March 15, 2017

	 	$	6,166,667	 
	
March 15, 2018

	 	$	6,166,667	 
	
March 15, 2019

	 	$	6,166,667	 
	
March 15, 2020

	 	$	6,166,667	 
	
March 15, 2021

	 	$	6,166,667	 
	
March 15, 2022

	 	$	6,166,667	 
	
March 15, 2023

	 	$	6,166,667	 
	
March 15, 2024

	 	$	6,166,667	 
	
March 15, 2025

	 	$	6,166,667	 
	
March 15, 2026

	 	$	6,166,667	 
	
March 15, 2027

	 	$	6,166,667	 
	
March 15, 2028

	 	$	6,166,667	 
	
March 15, 2029

	 	$	6,166,667	 
	
March 15, 2030

	 	$	6,166,667	 
	
March 15, 2031

	 	$	6,166,667	 
	
March 15, 2032

	 	$	6,166,667	 
	
March 15, 2033

	 	$	6,166,667	 
	
March 15, 2034

	 	$	6,166,667	 
	
March 15, 2035

	 	$	6,166,667	 
	
March 15, 2036

	 	$	6,166,667	 
	
March 15, 2037

	 	$	6,166,667	 
	
March 15, 2038

	 	$	6,166,667	 
	
March 15, 2039

	 	$	6,166,667	 

  

7

  

	
Date

	 	
Amount

	 
	
March 15, 2040

	 	$	6,166,667	 
	
March 15, 2041(1)

	 	$	6,166,657	 
	

(1) The final maturity date of 2011 Series A Bonds due 2041.

	 	 	 	 

 

Section 2.4           Optional Prepayments and Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the 2011 Series A Bonds, in an amount not less than 3% of the aggregate principal amount of the 2011 Series A Bonds then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount.  The Company will give each 2011 Series A Holder written notice of each optional prepayment under this Section 2.4 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the 2011 Series A Bonds to be prepaid on such date, the principal amount of each 2011 Series A Bond held by such 2011 Series A Holder to be prepaid (determined in accordance with Section 2.5), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by an Officer’s Certificate as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each 2011 Series A Holder an Officer’s Certificate specifying the calculation of such Make-Whole Amount as of the specified prepayment date.  The Company shall contemporaneously deliver a copy of such notice and Officer’s Certificate to the Trustee.

Section 2.5           Allocation of Partial Prepayments. In the case of each partial prepayment of the 2011 Series A Bonds, the principal amount of the 2011 Series A Bonds to be prepaid shall be allocated among all of the 2011 Series A Bonds at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

Section 2.6           Payment of Make-Whole Amount Upon Acceleration.  Upon the occurrence of an Event of Default, if the outstanding principal amount of the 2011 Series A Bonds shall have been declared or otherwise become due and payable immediately pursuant to and in accordance with the Indenture then, in addition to paying each 2011 Series A Holder the entire unpaid principal amount of its 2011 Series A Bonds and all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate), the Company shall calculate and pay to each 2011 Series A Holder (to the full extent permitted by applicable law) an amount equal to the Make-Whole Amount determined in respect of such principal amount.  The Company acknowledges that each 2011 Series A Holder has the right to maintain its investment in the 2011 Series A Bonds free from repayment by the Company (except as herein and in the Indenture specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the 2011 Series A Bonds are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

  

8

  

Section 2.7           Maturity; Surrender, Etc. In the case of each prepayment of 2011 Series A Bonds pursuant to this Article II, the principal amount of each 2011 Series A Bond to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any 2011 Series A Bond paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no 2011 Series A Bond shall be issued in lieu of any prepaid principal amount of any 2011 Series A Bond.

Section 2.8           Purchase of 2011 Series A Bonds. The Company will not, and will not permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding 2011 Series A Bonds except (a) upon the payment or prepayment of the 2011 Series A Bonds in accordance with the terms of the Original Indenture and the 2011 Series A Bonds or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the Holders of all 2011 Series A Bonds at the time outstanding upon the same terms and conditions.  Any such offer shall provide each 2011 Series A Holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 30 Business Days.  If the Holders of more than 51% of the principal amount of the 2011 Series A Bonds then outstanding accept such offer, the Company shall promptly notify the remaining 2011 Series A Holders of such fact and the expiration date for the acceptance by 2011 Series A Holders of such offer shall be extended by the number of days necessary to give each such remaining 2011 Series A Holder at least 10 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all 2011 Series A Bonds acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of 2011 Series A Bonds pursuant to any provision of this First Supplemental Indenture and no 2011 Series A Bonds may be issued in substitution or exchange for any such 2011 Series A Bonds.

Section 2.9           Make Whole Amount.

“Make-Whole Amount.  The term “Make-Whole Amount” means, with respect to any 2011 Series A Bond, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such 2011 Series A Bond over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount with respect to any 2011 Series A Bond, the following terms have the following meanings:

  

9

  

“Called Principal” means, with respect to any 2011 Series A Bond, the principal of such 2011 Series A Bond that is to be prepaid pursuant to Section 2.4 or has become or is declared to be immediately due and payable pursuant to the Indenture, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any 2011 Series A Bond, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the 2011 Series A Bonds is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any 2011 Series A Bond, the sum of 0.50% plus the yield to maturity implied by (i) the yields reported as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  

In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable actively traded U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable actively traded U.S. Treasury security with the maturity closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable 2011 Series A Bond.

  

10

  

“Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any 2011 Series A Bond, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date; provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the 2011 Series A Bonds, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 2.4 above.

“Settlement Date” means, with respect to the Called Principal of any 2011 Series A Bond, the date on which such Called Principal is to be prepaid pursuant to Section 2.4 or has become or is declared to be immediately due and payable pursuant to the Indenture, as the context requires.

Section 2.10         Use of Proceeds.  The Company shall use the proceeds of the loan evidenced by the 2011 Series A Bonds to repay indebtedness and for general corporate purposes.

ARTICLE III

OUTSTANDING SECURED OBLIGATIONS

Section 3.1           Principal Amount Presently To Be Outstanding.  The Obligations Outstanding under the Indenture as of the date hereof consist of: $150,000,000 aggregate principal amount of New Bonds, 2001 Series A; $120,000,000 aggregate principal amount of New Bonds, 2002 Series A; $37,301,818.50 aggregate principal amount of the 2011 CoBank Note and $275,000,000 aggregate principal amount of First Mortgage Bonds, 2011 Series A to be issued pursuant to this First Supplemental Indenture upon compliance by the Company with the provisions of Sections 5.1 and 5.2 of the Indenture.

  

11

  

ARTICLE IV

MISCELLANEOUS

Section 4.1           Supplemental Indenture.  The First Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Indenture, and shall form a part thereof, and the Indenture, as hereby supplemented, modified, and amended, is hereby confirmed.  Except to the extent inconsistent with the express terms of this First Supplemental Indenture and the 2011 Series A Bonds, all of the provisions, terms, covenants and conditions of the Indenture shall be applicable to the 2011 Series A Bonds to the same extent as if specifically set forth herein.

Section 4.2           Trustee Obligations Under the Bond Purchase Agreement.  The Trustee is not a party to the Bond Purchase Agreement and all obligations of the Trustee relating to the 2011 Series A Bonds are set forth in the Indenture, including this First Supplemental Indenture.

Section 4.3           Recitals.  All Recitals in this First Supplemental Indenture are made by the Company only and not by the Trustee and are incorporated herein; and all of the provisions contained in the Original Indenture, in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect hereof as fully and with like effect as if set forth herein in full.

Section 4.4           Successors and Assigns.  Whenever in this First Supplemental Indenture any of the parties hereto is named or referred to, this shall, subject to the provisions of Articles 10 and 12 of the Indenture, be deemed to include the successors and assigns of such party, and all the covenants and agreements contained in this First Supplemental Indenture by or on behalf of the Company, or by or on behalf of the Trustee, shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed or not.

Section 4.5           No Rights, Remedies, Etc.  Nothing in this First Supplemental Indenture, expressed or implied, is intended, or shall be construed, to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the Holders of the Outstanding Secured Obligations, any right, remedy or claim under or by reason of this First Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this First Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the Holders of Outstanding Secured Obligations.

Section 4.6           Severability.  Any provision of this First Supplemental Indenture held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

  

12

  

Section 4.7           Governing Law.  This First Supplemental Indenture shall be construed in accordance with and governed by the law of the State of Alaska.

Section 4.8           Counterparts.  This First Supplemental Indenture may be executed in several counterparts, each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts, or as many of them as the Company and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.

Section 4.9           Security Agreement; Mailing Address.  To the extent permitted by applicable law, this First Supplemental Indenture shall be deemed to be a security agreement and financing statement whereby the Company grants to the Trustee a security interest in all of the Trust Estate that is personal property or fixtures under the Uniform Commercial Code.

The mailing address of the Company, as debtor, is:

Chugach Electric Association, Inc.

5601 Electron Drive

Anchorage, Alaska  99519

and the mailing address of the Trustee, as secured party, is:

U.S. Bank National Association

1420 Fifth Avenue, 7th Floor

Seattle, Washington  98101

Attn: Corporate Trust Services

Additionally, this First Supplemental Indenture shall, if appropriate, be an amendment to the financing documents previously filed in connection with the Original Indenture.  The Company is authorized to execute and file as appropriate instruments under the Uniform Commercial Code to either create a security interest or amend any security interest heretofore created.

[Remainder of page intentionally left blank; signature pages follow.]

  

13

  

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year first above written.

	  	
CHUGACH ELECTRIC ASSOCIATION, INC.,

	  	
an Alaska electric cooperative

	  	  	  	  
	  	  	  	  
	  	
By:

	
/s/ Michael R. Cunningham

	  	  	
Name:

	
Michael R. Cunningham

	  	  	
Title:

	
Sr. Vice President and

	  	  	  	
Chief Financial Officer

	
STATE OF ALASKA

	
)

	  	) ss.
	
THIRD JUDICIAL DISTRICT

	
)

On this 17th  day of January, 2011, before me, a Notary Public in and for the State of Alaska, personally appeared Michael R. Cunningham, to me known to be the Sr. Vice President and Chief Financial Officer of Chugach Electric Association, Inc., the electric cooperative that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said electric cooperative for the uses and purposes therein mentioned and on oath stated that s/he was authorized to execute said instrument on behalf of said electric cooperative.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written.

	  	
Thomas M. Schulman

	  	Print name:  	/s/ Thomas M. Schulman
	  	
Notary Public in and for the State of Alaska,

	  	
residing at Anchorage, Alaska

	  	My commission expires:  	
10-10-11

 

 

First Supplemental Indenture to Second Amended and Restated Indenture of Trust 

- Company Signature Page

  

  

  

 

	  	
U.S. BANK NATIONAL ASSOCIATION,

	  	
a national banking association,

	  	
as Trustee

	  	  	  	  
	  	  	  	  
	  	
By:

	
/s/ Thomas Zrust

	  	  	
Name:

	
Thomas Zrust

	  	  	
Title:

	
Vice President

	
STATE OF WASHINGTON

	
)

	  	) ss.
	
COUNTY OF KING

	
)

On this   14th  day of            January           , 2011, before me, a Notary Public in and for the State of Washington, personally appeared Thomas Zrust_________________, to me known to be the             Vice President              of U.S. Bank National             .Association            , the national banking association that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said national banking association for the uses and purposes therein mentioned and on oath stated that s/he was authorized to execute said instrument on behalf of said national banking association.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written.

	  	
/s/ Kim J. Kropp

	  	Print name:  	Kim J. Kropp	
  

	  	
Notary Public in and for the State of 

	 	Washington, residing at Sammamish
	  	My commission expires:  	
 12/19/2011

 

First Supplemental Indenture to Second Amended and Restated Indenture of Trust 

- Trustee Signature Page

  

  

  

EXHIBIT A

SCHEDULE OF RECORDING INFORMATION

	
Document

	
Type of Filing

	
Location for Filing with Secretary of State

	
Amendment Filing No.

	
Initial Filing NO.

	
Document No.

	
Date Filed

	
Indenture

 

 

	  	  	  	  	  	  

 

 

Exhibit A

 

  

  

  

EXHIBIT B

FORM OF 2011 SERIES A BONDS

 

 

Exhibit B

 

  

  

  

See the Form of 2011 Series A Bond (Tranche A) due March 15, 2031 filed as Exhibit 4.21 and the Form of the 2011 Series A Bond (Tranche B) due March 15, 2041 filed as Exhibit 4.22 to this 2010 Form 10-K Annual Report

 

 

B-1

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