Exhibit 4(b)
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THIRTY-FOURTH SUPPLEMENTAL INDENTURE
Dated as of August 1, 1998
------------
TUCSON ELECTRIC POWER COMPANY
to
THE CHASE MANHATTAN BANK,
AS TRUSTEE
------------
Creating a New Issue of First Mortgage Bonds,
Collateral Series due 2008
------------
Supplemental to Indenture dated as of April 1, 1941, of
The Tucson Gas, Electric Light and Power Company (predecessor
to Tucson Electric Power Company), to The Chase National Bank
of the City of New York, as Trustee (predecessor to
The Chase Manhattan Bank).
====================================
THIRTY-FOURTH SUPPLEMENTAL INDENTURE, dated as of August 1,
1998, made by and between Tucson Electric Power Company
("Company"), a corporation organized and existing under the laws
of the State of Arizona, having its principal place of business
at 000 Xxxx Xxxxx Xxxxxx, in the City of Tucson, Arizona, party
of the first part, and The Chase Manhattan Bank, trustee
("Trustee"), a banking corporation organized and doing business
under the laws of the State of New York, having its principal
corporate trust office at 000 X. 00xx Xxxxxx, Xxx Xxxx, X.X., as
Trustee, party of the second part.
WHEREAS, The Tucson Gas, Electric Light and Power Company,
predecessor of the Company and herein called the "Predecessor
Company", heretofore executed and delivered to The Chase National
Bank of the City of New York, as Trustee ("Predecessor Trustee"),
its Indenture dated as of April 1, 1941 ("Original Indenture") to
secure its First Mortgage Bonds, issuable in series; and
WHEREAS, on March 31, 1955 The Chase National Bank of the
City of New York was merged into President and Directors of the
Manhattan Company under the name of The Chase Manhattan Bank, and
The Chase Manhattan Bank became the successor Trustee under the
Original Indenture as supplemented and amended; and
WHEREAS, on February 20, 1964 the Predecessor Company was
merged with and into the Company and the Company assumed and
agreed to pay the principal of and premium, if any, and interest
on all bonds then issued and outstanding under the Indenture,
also agreeing to perform and fulfill all the covenants and
conditions of the Indenture binding upon the Predecessor Company,
and also agreeing that the Company succeed and be substituted for
the Predecessor Company under the Indenture; and
WHEREAS, on September 9, 0000 Xxx Xxxxx Xxxxxxxxx Bank
became The Chase Manhattan Bank (National Association) and the
continuity of the business of The Chase Manhattan Bank including
its business of acting as corporate trustee, and its corporate
existence, was not affected, so that The Chase Manhattan Bank
(National Association) was vested with all the trusts, powers,
discretions, immunities, privileges and all other matters as were
vested in the Predecessor Trustee under the Indenture, with like
effect as if originally named as Trustee therein; and
WHEREAS, on July 14, 0000 Xxx Xxxxx Xxxxxxxxx Bank (National
Association) merged with and into Chemical Bank and the surviving
corporation was renamed The Chase Manhattan Bank, and The Chase
Manhattan Bank thereby became the successor Trustee under the
Indenture so that The Chase Manhattan Bank is vested with all the
trusts, powers, discretions, immunities, privileges and all other
matters as were vested in the Predecessor Trustee under the
Indenture, with like effect as if originally named as Trustee
therein; and
WHEREAS, the Company (or the Predecessor Company) has
heretofore executed and delivered to the Trustee (or the
Predecessor Trustee) the Original Indenture and the indentures
supplemental thereto, and has issued the series of bonds, set
forth below:
Indenture or Date
Supplemental --------- Series
Indenture of Bonds
------------ --------
Original Apr. 1, 1941 3 1/2% Series due 1966
1 First Oct. 1, 1946 None
Second Oct, 1, 1947 3 1/8% Series due 1977
2,4,5 Third Apr. 1, 1949 3 1/8% Series due 1979
4,5 Fourth Dec. 1, 1952 3 5/8% Series due 1982
4,5 Fifth Jan. 1, 1955 3 1/4% Series due 1985
4,5 Sixth Jan. 1, 1958 4 5/8% Series due 1988
1,4,5 Seventh Nov. 1, 1959 5 3/8% Series due 1989
1,4,5 Eighth Nov. 1, 1961 4.70% Series due 1991
6 Ninth Feb. 20, 1964 None
1,4,5 Tenth Feb. 1, 1965 4.55% Series due 1995
1,4,5 Eleventh Feb. 1, 1966 4 7/8% Series due 1996
2,3,4,5 Twelfth Nov. 1. 1969 8 1/2% Series due 1999
2 Thirteenth Jan. 20. 1970 None
2,4,5 Fourteenth Sept. 1, 1971 8 1/8% Series due 2001
4,5 Fifteenth Mar. 1, 1972 7.55% Series due 2002
4,5 Sixteenth May 1, 1973 7.65% Series due 2003
1,4,5 Seventeenth Nov. 1, 1975 10 1/2% Series due 2005
1 Eighteenth Nov. 1, 1975 Poll. Control Series A
Nineteenth July 1, 1976 Poll. Control Series B
1,2,4 Twentieth Oct. 1, 1977 8 1/2% Series due 2009
Twenty-First Nov. 1, 1977 Poll. Control Series C
Twenty-Second Jan. 1, 1978 Poll. Control Series D
Twenty-Third July 1, 1980 Poll. Control Series E
Twenty-Fourth Oct. 1, 1980 Poll. Control Series F
2 Twenty-Fifth Apr. 1, 1981 Poll. Control Series A
1 Twenty-Sixth Apr. 1, 1981 Poll. Control Series B
1,2 Twenty-Seventh Oct. 1, 1981 Poll. Control Series G
7 Twenty-Eighth June 1, 1990 12.22% Series due 2000
Twenty-Ninth Dec. 1, 1992 Poll. Control Series H
Thirtieth Dec. 1, 1992 Ind. Develop. Series C
Thirty-First May 1, 1996 Poll. Control Series I
Thirty Second May 1, 1996 Poll. Control Series J
8 Thirty-Third May 1, 1998 12.22% Exch. Series due
2000
Indenture or Principal Principal
Supplemental Amount Amount Out-
Indenture Issued standing
------------ --------- -----------
Original $ 3,500,000 None
1 First None None
Second 750,000 None
2,4,5 Third 3,500,000 None
4,5 Fourth 5,000,000 None
4,5 Fifth 3,500,000 None
4,5 Sixth 7,500,000 None
1,4,5 Seventh 7,500,000 None
1,4,5 Eighth 10,000,000 None
6 Ninth None None
1,4,5 Tenth 16,000,000 None
1,4,5 Eleventh 10,000,000 None
2,3,4,5 Twelfth 15,000,000 15,000,000
0 Xxxxxxxxxx Xxxx Xxxx
0,0,0 Fourteenth 25,000,000 25,000,000
4,5 Fifteenth 25,000,000 25,000,000
4,5 Sixteenth 40,000,000 40,000,000
1,4,5 Seventeenth 50,000,000 None
1 Eighteenth 15,700,000 None
Nineteenth 25,000,000 23,500,000
1,2,4 Twentieth 60,000,000 57,900,000
Twenty-First 32,500,000 None
Twenty-Second 40,000,000 40,000,000
Twenty-Third 16,300,000 None
Twenty-Fourth 100,000,000 None
2 Twenty-Fifth 126,000,000 None
1 Twenty-Sixth 163,000,000 None
1,2 Twenty-Seventh 100,000,000 None
7 Twenty-Eighth 96,000,000 31,872,000
Twenty-Ninth 3,561,644 None
Thirtieth 20,722,222.22 None
Thirty-First 18,347,124 None
Thirty Second 16,149,864 None
8 Thirty-Third 46,878,000 46,878,000
-------------------
1 Contains amendatory provisions relating to specific series.
2 Contains general amendatory provisions.
3 Contains general amendatory provisions required by the Trust
Indenture Act of 1939, as amended.
4 Incorporates covenant regarding replacement reserve (Section
9, Article IV, of Original Indenture).
5 Contains (or incorporates) Covenant regarding distributions
on and acquisitions of stock (Article V of Third
Supplemental Indenture).
6 Contains assumption provisions.
7 Contains modified covenant regarding distributions on and
acquisitions of stock and negative covenants regarding
liens, businesses other than the Utility Business and
Investments.
8 Contains modified covenant regarding distributions on and
acquisitions of stock and negative covenants regarding
businesses other than the Utility Business and a limitation
on the aggregate principal amount of bonds which may be
issued under the Indenture.(the Original Indenture, the
Supplemental Indentures listed above and this Supplemental
Indenture being herein collectively referred to as the
"Indenture"); and
WHEREAS, the Predecessor Company covenanted in and by the
Original Indenture to execute and deliver such further
instruments and do such further acts as may be necessary or
proper to carry out more effectually the purposes of the Original
Indenture and to make subject to the lien thereof property
acquired after the execution and delivery of the Original
Indenture; and
WHEREAS, the Company proposes to create a new series of
First Mortgage Bonds, to mature August 1, 2008, to be designated
as First Mortgage Bonds, Collateral Series due 2008 (hereinafter
sometimes called the "Bonds" or "Bonds of the 2008 Series"), and
to be issued and delivered to the trustee under the 1998
Indenture (as hereinafter defined) as the basis for the
authentication and delivery under the 1998 Indenture of G series
of securities, all as hereinafter provided, and to vary in
certain respects the provisions contained in Article V of the
Original Indenture, to the extent that such provisions apply to
the Bonds; and
WHEREAS, the Company, pursuant to the provisions of the
Original Indenture, has, by appropriate corporate action, duly
resolved and determined to execute this Supplemental Indenture
for the purpose of providing for the creation of said Bonds of
the 2008 Series and of specifying the form, provisions and
particulars thereof as in said Original Indenture provided or
permitted and of giving to the Bonds of the 2008 Series the
protection and security of the Indenture, and of further
confirming the lien of the Indenture upon the additional
properties hereinafter described; and
WHEREAS, the text of the Bonds of the 2008 Series is to be
substantially in the form set forth on Exhibit A to this
Supplemental Indenture; and
WHEREAS, all acts and proceedings required by law and by the
charter and by-laws of the Company, including all action
requisite on the part of its shareholders, directors and officers
necessary to make the Bonds of the 2008 Series, 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 this Supplemental Indenture a valid, binding
and legal indenture supplemental to the Original Indenture, in
accordance with its and their terms, have been done and taken;
and the execution and delivery of this Supplemental Indenture
have been in all respects duly authorized;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That
Tucson Electric Power Company, the Company herein named, in
consideration of the premises and of One Dollar ($1.00) to it
duly paid by the Trustee at or before the ensealing and delivery
of these presents, the receipt whereof is hereby acknowledged,
and in order to secure the payment of the principal of and
interest and premium, if any, on all bonds from time to time
outstanding under the Indenture, according to the terms of said
bonds and of the coupons, if any, attached thereto, and to
further secure the performance and observance of all the
covenants and conditions contained in said bonds and in the
Indenture (except any covenant of the Company with respect to the
refund or reimbursement of taxes, assessments or other
governmental charges on account of the ownership of the bonds of
any series or the income derived therefrom, for which the holders
of the bonds shall look only to the Company and not to the
property hereby mortgaged or pledged), has granted, bargained,
sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over and confirmed, and by these presents doth
grant, bargain, sell, release, convey, assign, transfer,
mortgage, pledge, set over and confirm unto THE CHASE MANHATTAN
BANK, as Trustee, and its successor or successors in the trust
and its assigns forever, with the same force and effect and
subject to the same reservations, exceptions, limitations,
restrictions, servitudes, easements, rights and privileges as
contained in the original Indenture and to "permitted
encumbrances" as defined in the Original Indenture, as though
specifically described in the granting clauses of the Original
Indenture, all and singular the premises, property, assets,
rights and franchises of the Company (except as in the Original
Indenture expressly excepted), whether now or hereafter owned,
constructed or acquired, of whatever character and wherever
situated, including, among other things (but reference to or
enumeration of any particular kinds, classes or items or property
shall not be deemed to exclude from the operation and effect of
the Indenture any kind, class or item not so referred to or
enumerated), all right, title and interest of the Company in and
to all plants for the generation of electricity by water, steam
and/or other power; all power houses, gas plants, gas holders,
substations, transmission lines, distributing systems; all
offices, buildings and structures, and the equipment thereof; all
machinery, engines, boilers, dynamos, machines, regulators,
meters, transformers, generators and motors; all appliances
whether electrical, gas or mechanical, conduits, cables and
lines; all mains and pipes, service pipes, fittings, valves and
connections, poles, wires, tools, implements, apparatus,
furniture, and chattels; all municipal franchises and other
franchises; all lines for the transmission and/or distribution of
electric current, or gas, including towers, poles, wires, cables,
pipes, conduits, street lighting systems and all apparatus for
use in connection therewith; all real estate, lands, leaseholds;
all easements, servitudes, licenses, permits, rights, powers,
franchises, privileges, rights of way and other rights in or
relating to real estate or the occupancy of the same and all the
right, title and interest of the Company in and to all other
property of any kind or nature appertaining to and/or used and/or
occupied and/or enjoyed in connection with any property
hereinbefore described; it being the intention of the parties
that all property of every kind, real, personal or mixed, other
than excepted property, which may be acquired by the Company
after the date hereof, shall, immediately upon the acquisition
thereof by the Company, to the extent of such acquisition, and
without any further conveyance or assignment, become and be
subject to the direct lien on the Indenture as fully and
completely as though now owned by the Company and specifically
described in the Indenture.
TOGETHER WITH all and singular the tenements, hereditaments
and appurtenances belonging or in any wise appertaining to the
aforesaid premises, property, assets, rights and franchises or
any part thereof, with the reversion and reversions, remainder
and remainders, and all the estate, right, title and interest and
claim whatsoever, at law as well as in equity, which the Company
now has or may hereafter acquire in and to the aforesaid
premises, property, assets, rights and franchises and every part
and parcel thereof.
And the Company, for itself and its successors, does hereby
covenant and agree to and with the Trustee and its successors in
the trust under the Indenture, for the benefit of those who shall
hold the bonds and coupons, or any of them, to be issued
hereunder and thereunder, as follows:
ARTICLE I.
CREATION AND DESCRIPTION OF BONDS OF THE 2008 SERIES.
SECTION 1. A new series of bonds to be issued under and
secured by the Indenture is hereby created, to be designated as
First Mortgage Bonds, Collateral Series due 2008. The Bonds of
the 2008 Series shall be limited to an aggregate principal amount
of One Hundred Forty Million Dollars ($140,000,000), excluding
any Bonds of the 2008 Series which may be authenticated in
exchange for or in lieu of or in substitution for or on transfer
of other Bonds of the 2008 Series pursuant to any provisions of
the Original Indenture or of this Supplemental Indenture. Said
Bonds shall be substantially in the form set forth in Exhibit A
to this Supplemental Indenture.
All Bonds of the 2008 Series shall mature August 1, 2008.
The Bonds of the 2008 Series shall not bear interest. The
principal of the Bonds shall be payable at the office or agency
of the Company in the Borough of Manhattan, The City of New York,
or in the City of Tucson, upon presentation thereof, in coin or
currency of the United States of America which at the time of
payment shall be legal tender for the payment of public and
private debts.
The Bonds of the 2008 Series shall be issued and delivered
by the Company to Bank of Montreal Trust Company, as trustee
under the Indenture, to be dated as of August 1, 1998, as
supplemented (the "1998 Indenture"), of the Company to such
trustee (the "1998 Indenture Trustee"), as the basis for the
authentication and delivery of securities under the 1998
Indenture. As provided in the 1998 Indenture, the Bonds of the
2008 Series, when so issued and delivered, will be registered in
the name of the 1998 Indenture Trustee or its nominee and will be
owned and held by the 1998 Indenture Trustee, subject to the
provisions of the 1998 Indenture, for the benefit of the holders
of all securities from time to time outstanding under the 1998
Indenture, and the Company shall have no interest therein. The
Bonds of the 2008 Series shall not be transferable except as
required to effect transfer to any successor trustee under the
1998 Indenture.
Anything herein to the contrary notwithstanding, any payment
by the Company under the 1998 Indenture of the principal of the
securities which shall have been authenticated and delivered
under the 1998 Indenture on the basis of the delivery to the 1998
Indenture Trustee of Bonds of the 2008 Series (other than by the
application of the proceeds of a payment in respect of such Bonds
of the 2008 Series) shall, to the extent thereof, be deemed to
satisfy and discharge the obligation of the Company, if any, to
make a payment of principal of such Bonds of the 2008 Series
which is then due.
The Trustee shall be entitled to presume that the obligation
of the Company to pay the principal of the Bonds of the 2008
Series as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, shall have been fully
satisfied and discharged unless and until it shall have received
a written notice from the 1998 Indenture Trustee, signed by an
authorized officer thereof, stating that the principal of
specified Bonds of the 2008 Series has become due and payable and
has not been fully paid, and specifying the amount of funds
required to make such payment.
Each Bond shall be dated as provided in SECTION 4 of Article
II of the Original Indenture and the Bonds of the 2008 Series
shall be issued in fully registered form only, in denominations
of $1,000 and multiplies thereof.
The Bonds of the 2008 Series shall be registrable and
exchangeable at the office or agency of the Company in the
Borough of Manhattan, The City of New York in the manner and upon
the terms set forth in SECTION 5 of Article II of the Original
Indenture, without payment of any charge.
SECTION 2. The Bonds of the 2008 Series may be executed by
the Company and delivered to the Trustee and, upon compliance
with all applicable provisions and requirements of the Original
Indenture in respect thereof, shall be authenticated by the
Trustee and delivered (without awaiting the filing or recording
of the Supplemental Indenture) in accordance with the written
order or orders of the Company.
ARTICLE II.
REDEMPTION OF THE BONDS OF THE 2008 SERIES
SECTION 1. The Bonds of the 2008 Series shall be redeemable
prior to maturity at the option of the Company, as a whole at any
time, or in part from time to time, upon at least 30 days' prior
notice, all as provided in the Indenture, at the principal amount
of Bonds so to be redeemed.
SECTION 2. In the event that all or substantially all of the
electric utility properties of the Company at the time subject to
the lien of the Indenture shall be sold, taken by eminent domain
or otherwise disposed of, as an entirety or substantially as an
entirety, and shall be released from the lien of the Indenture,
the entire award or other cash proceeds of such sale, taking or
other disposition, together with any other Available Moneys (as
defined in SECTION 11 of Article VII of the Original Indenture),
if any, then held by the Trustee, shall, to the extent and in the
manner provided in SECTION 11 of Article VII of the Original
Indenture, be applied to the pro rata payment or redemption of
the bonds of all series then outstanding under the Indenture, all
as more fully provided in the Original Indenture, and the Bonds
of the 2008 Series shall, in such event, become subject to such
redemption or payment. All such redemptions of the Bonds of the
2008 Series shall be at a redemption price equal to the principal
amount thereof.
SECTION 3. All of the provisions of Article V of the
Original Indenture, other than SECTIONs 2 and 3 thereof and the
fourth paragraph of SECTION 4 thereof, shall be applicable to the
redemption of Bonds of the 2008 Series; and the "Available
Moneys", as defined in SECTION 11 of Article VII of the Original
Indenture, apportioned to Bonds of the 2008 Series, shall be
applied by the Trustee to the payment of the redemption price
thereof, or if such apportioned Available Moneys are insufficient
for such full payment, then, upon notice similar to that provided
in the fourth paragraph of said SECTION 11 in respect of the
bonds referred to therein, first to the payment of the unpaid
interest accrued to the date fixed for payment and the balance to
the payment of the then applicable redemption price (exclusive of
such interest), to the extent that such moneys shall suffice, pro
rata, as provided in SECTION 11 of Article VII of the Original
Indenture, upon presentation and stamping in a manner similar to
that provided by SECTION 11 of Article VII of the Original
Indenture for the bonds referred to therein and the coupons
appurtenant thereto. Until the full amount then due and owing
on all Bonds of the 2008 Series shall have been paid, no such
partial payment shall discharge the obligation of the Company on
such Bonds, except to the extent of such partial payment; and the
balance of principal, if any, remaining after such payment shall
thereafter constitute the unpaid obligation of the Company upon
the Bonds of the 2008 Series.
SECTION 4. The holder of each and every Bond of the 2008
Series issued hereunder hereby agrees to accept payment thereof
prior to maturity on the terms and conditions provided for in
this Article II.
ARTICLE III.
THE TRUSTEE
The Trustee hereby accepts the trusts created by this
Supplemental Indenture upon the terms and conditions in the
Original Indenture as modified and amended and in this
Supplemental Indenture set forth. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the
validity or sufficiency of this Supplemental Indenture or of the
due execution hereof by the Company, or for or in respect of the
recitals contained herein, all of which recitals are made by the
Company solely. In general, each and every term and condition
contained in Article XII of the Original Indenture shall apply to
this Supplemental Indenture with the same force and effect as if
the same were herein set forth in full, with such omissions,
variations and modifications thereof as may be appropriate to
make the same conform to this Supplemental Indenture.
ARTICLE IV.
MISCELLANEOUS PROVISIONS
SECTION 1. Subdivision (9) of SECTION 6 of Article III of
the Original Indenture is hereby amended to read as follows:
(9) An Engineer's Certificate, made and dated not more
than 10 days prior to the date of such application, stating
that the signers have no knowledge of and do not believe
that there have been, since the close of the period covered
by the Engineer's Certificate specified in subdivision (3)
above, property retirements in an amount which (after
reduction of such amount by amounts of the character
referred to in Clause (D) of subdivision 3 in respect of
such property retirements) exceeds the amount of property
additions since the close of such period by more than the
amount of the unapplied balance of property additions
calculated to be remaining upon the granting of the
application (before any reduction of such unapplied balance
of property additions by any amount of net property
additions applied to the withdrawal of cash deposited with
the Trustee in connection with such property retirements).
SECTION 2. SECTION 1 of Article VIII of the Original
Indenture is hereby amended to:
(a) insert ";or" at the end of clause (f) therein; and
(b) add immediately following clause (f) the following:
"(g) so long as the trustee under the Indenture,
dated as of August 1, 1998 as the same may be amended
and supplemented (the '1998 Indenture'), from the
Company to Bank of Montreal Trust Company, trustee (the
'1998 Indenture Trustee'), shall hold any bond
outstanding hereunder which were delivered to the 1998
Indenture Trustee as the basis for the authentication
and delivery of securities under the 1998 Indenture
which remain outstanding thereunder, an 'Event of
Default' under the 1998 Indenture; provided, however,
that, anything in this Indenture to the contrary
notwithstanding, the waiver or cure of such 'Event of
Default' and the rescission and annulment of the
consequences thereof shall constitute a cure of the
corresponding default under this Indenture and a
rescission and annulment of the consequences thereof."
SECTION 3. The holders of the Bonds of the 2008 Series
shall be deemed to have consented to the execution and delivery
of a supplemental indenture containing one or more, or all, of
the amendments to the Original Indenture set forth on Exhibit B
to this Supplemental Indenture.
SECTION 4. Subject to the variations contained in Article
II of this Supplemental Indenture and the amendments heretofore
made or contemplated in this Article IV, the Original Indenture,
as heretofore modified, amended and supplemented, is in all
respect ratified and confirmed, and the Original Indenture, this
Supplemental Indenture and all other indentures supplemental to
the Original Indenture shall be read, taken and construed as one
and the same instrument. Neither the execution of this
Supplemental Indenture nor anything herein contained shall be
construed to impair the lien of the Indenture on any of the
property subject thereto, and such lien shall remain in full
force and effect as security for all Bonds now outstanding or
hereinafter issued under the Indenture. All terms defined in
Article I of the Original Indenture, as heretofore supplemented
and amended, shall, for all purposes of this Supplemental
Indenture, have the meanings in said Article I specified, unless
the context otherwise requires.
SECTION 5. If the date for making any payment or the last
date for performance of any act or the exercising of any right,
as provided in this Supplemental Indenture, shall be a legal
holiday or a day on which banking institutions in The City of New
York are authorized by law to remain closed, such payment may be
made or act performed or right exercised on the next succeeding
day not a legal holiday or a day on which such banking
institutions are authorized by law to remain closed, with the
same force and effect as if done on the nominal date provided in
this Supplemental Indenture, and no interest shall accrue for the
period after such nominal date.
SECTION 6. This Supplemental Indenture may be executed in
any number of counterparts, and all said counterparts executed
and delivered, each as an original, shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, Tucson Electric Power Company has caused
its corporate name to be hereunto affixed, and this instrument to
be signed by its President or a Vice President, and its corporate
seal to be hereunto affixed and attested by its Secretary or an
Assistant Secretary for and in its behalf; and The Chase
Manhattan Bank has caused its corporate name to be hereunto
affixed, and this instrument to be signed by its President, a
Vice President or any Assistant Vice President and its corporate
seal to be hereunto affixed and attested by its Secretary or a
Trust Officer, for and in its behalf, all as of the day and year
first above written.
Tucson Electric Power
Company
Attest: By:
----------------------- ---------------------------
Assistant Secretary Vice President
Signed, sealed and delivered
by Tucson Electric Power
Company in the presence of:
The Chase Manhattan Bank,
as Trustee
-----------------------------
Attest: By:
----------------------- ---------------------------
Trust Officer Assistant Vice President
Signed, sealed and delivered
by The Chase Manhattan Bank
in the presence of:
-----------------------------
STATE OF ARIZONA )
): ss.:
COUNTY OF PIMA )
On this 31st day of July, 1998, before me personally
appeared Xxxxx X. Xxxxxx, who acknowledged himself to be a Vice
President and duly authorized agent of Tucson Electric Power
Company, an Arizona corporation, and that he, as such Vice
President being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the
name of the corporation by himself as a Vice President.
The foregoing instrument was also acknowledged before me by
said Xxxxx X. Xxxxxx, Vice President of Tucson Electric Power
Company, an Arizona corporation, on behalf of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
-------------------------------
Notary Public
My commission expires:
STATE OF NEW YORK )
): ss.:
COUNTY OF NEW YORK )
On this 3rd day of August, 1998, before me personally
appeared , such officer acknowledged
himself to be a and duly authorized
agent of The Chase Manhattan Bank, a corporation, and that he, as
such officer being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the
name of the corporation by himself as such officer.
The foregoing instrument was also acknowledged before me by
said , a of The
Chase Manhattan Bank, a corporation, on behalf of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
-------------------------------
Notary Public
My commission expires:
EXHIBIT A
[Form of Bond]
This bond is not transferable, except to a
successor trustee under the 1998 Indenture
(as defined herein)
No. $
------------------------- ------------------
TUCSON ELECTRIC POWER COMPANY
FIRST MORTGAGE BOND, COLLATERAL SERIES DUE 2008
DUE AUGUST 1, 2008
TUCSON ELECTRIC POWER COMPANY, a corporation of the State of
Arizona (hereinafter sometimes called the Company), for value
received, promises to pay to
, or registered assigns,
the principal sum of
DOLLARS
on August 1, 2008, in coin or currency of the United States of
America which at the time of payment shall be legal tender for
the payment of public and private debts, at the office or agency
of the Company in the Borough of Manhattan, The City of New York,
or in the City of Tucson. This bond shall not bear interest.
This bond is one of an issue of bonds of the Company, issued
and to be issued in one or more series under and equally and
ratably secured (except as any sinking, amortization,
improvement, renewal or other fund, established in accordance
with the provisions of the indenture hereinafter mentioned, may
afford additional security for the bonds of any particular
series) by a certain mortgage and deed of trust (which, together
with all indentures supplemental thereto, including the Thirty-
Fourth Supplemental Indenture, dated as of August 1, 1998, is
hereinafter called the "Indenture"), dated as of April 1, 1941,
made by The Tucson Gas, Electric Light and Power Company (Tucson
Electric Power Company, successor by merger) to The Chase
National Bank of the City of New York (The Chase Manhattan Bank,
successor by merger), now The Chase Manhattan Bank, as Trustee
(hereinafter called the "Trustee"), to which Indenture reference
is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security provided by the
Indenture, the rights and limitations of rights of the Company,
the Trustee and the holders of said bonds with respect to the
security provided by the Indenture, the powers, duties and
immunities of the Trustee, the terms and conditions upon which
said bonds are and are to be secured, and the circumstances under
which additional bonds may be issued, to all of which provisions
the holder, by accepting this bond, assents. To the extent
permitted by and as provided in the Indenture, the rights and
obligations of the Company and the rights of the holders of said
bonds may be changed and modified, with the consent of the
Company, by the affirmative vote of the holders of at least 75%
in aggregate principal amount of the bonds then outstanding
(excluding bonds disqualified from voting by reason of the
Company's interest therein as provided in the Indenture), or by
the affirmative vote of the holders of at least 75% in aggregate
principal amount of the bonds of any one or more series then
outstanding and entitled to vote and affected by such
modification or alteration in case one or more but less than all
of the series of bonds then outstanding under the Indenture are
so affected, or in either case by the written consent of the
holders of such percentage of bonds; provided, that without the
--------
consent of the holder hereof no such modification or alteration
shall be made which will permit the extension of the time of
payment of the principal of or the interest on this bond or a
reduction in the principal amount hereof, or premium, if any, or
rate of interest hereon or any other modification of the terms of
payment of such principal, premium or interest or will deprive
the holder of any lien provided by the Indenture upon the
mortgaged property or reduce the percentage of bonds required for
the aforesaid action under the Indenture. The Company has
reserved the right to amend the Indenture without any consent or
other action by holders of any series of bonds created after
July 31, 1976 (including this series) so as to change 75% in the
foregoing sentence to 60%. This bond is one of a series of bonds
designated as the First Mortgage Bonds, Collateral Series due
2008 of the Company.
The bonds of this series are being issued and delivered by
the Company to Bank of Montreal Trust Company, as trustee under
the Indenture, dated as of August 1, 1998, as supplemented (the
"1998 Indenture"), of the Company to such trustee (the "1998
Indenture Trustee"), as the basis for the authentication and
delivery of securities under the 1998 Indenture. As provided in
the 1998 Indenture, the bonds of this series are to be registered
in the name of the 1998 Indenture Trustee or its nominee and will
be owned and held by the 1998 Indenture Trustee, subject to the
provisions of the 1998 Indenture, for the benefit of the holders
of all securities from time to time outstanding under the 1998
Indenture, and the Company shall have no interest therein. The
bonds of this series shall not be transferable except as required
to effect transfer to any successor trustee under the 1998
Indenture.
Anything herein to the contrary notwithstanding, any payment
by the Company under the 1998 Indenture of the principal of the
securities which shall have been authenticated and delivered
under the 1998 Indenture on the basis of the delivery to the 1998
Indenture Trustee of bonds of this series (other than by the
application of the proceeds of a payment in respect of such bonds
of this series) shall, to the extent thereof, be deemed to
satisfy and discharge the obligation of the Company, if any, to
make a payment of principal of such bonds of this series which is
then due.
The bonds of this series are redeemable prior to maturity at
the option of the Company, as a whole at any time, or in part
from time to time, upon at least 30 days' prior notice (which may
be conditioned upon the deposit of the redemption moneys with the
Trustee before the redemption date), all as provided in the
Indenture, at the principal amount of bonds so to be redeemed.
In the event that all or substantially all of the electric
utility properties of the Company at the time subject to the lien
of the Indenture shall be sold, taken by eminent domain or
otherwise disposed of, as an entirety or substantially as an
entirety, and shall be released from the lien of the Indenture,
the entire award or other cash proceeds of such sale, taking or
other disposition, together with certain moneys, if any, then
held by the Trustee, shall, to the extent and in the manner
provided in the Indenture, be applied to the pro rata payment or
redemption of the bonds of all series then outstanding under the
Indenture, all as more fully provided therein, and this bond
shall, in such event, become subject to such redemption or
payment. Any such redemption of this bond shall be at a
redemption price equal to its principal amount.
The principal of this bond may become or be declared due and
payable before the maturity hereof, on the conditions, in the
manner and at the times set forth in the Indenture, upon the
happening of a default as therein provided.
This bond is non-transferable except as required to effect
transfer to any successor trustee under the 1998 Indenture, any
such transfer to be made, at the office or agency of the Company
in the Borough of Manhattan, The City of New York upon surrender
and cancellation of this bond, and upon any such transfer a new
bond of this series, for the same aggregate principal amount,
will be issued to the transferee in exchange herefor. The Company
and the Trustee may deem and treat the person in whose name this
bond is registered as the absolute owner hereof for the purpose
of receiving payment and for all other purposes. This bond,
alone or with other bonds of this series, may in like manner be
exchanged at such office or agency for one or more new bonds of
this series of the same aggregate principal amount, all as
provided in the Indenture.
No recourse shall be had for the payment of the principal of
this bond, or for any claim based hereon or otherwise in respect
hereof or of the Indenture, against any incorporator,
shareholder, director or officer, as such, past, present or
future, of the Company or of any predecessor or successor
corporation, either directly or through the Company or any
predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or by any legal or equitable proceeding
or otherwise howsoever (including, without limiting the
generality of the foregoing, any proceeding to enforce any
claimed liability of shareholders of the Company, based upon any
theory of disregarding the corporate entity of the Company or
upon any theory that the Company was acting as the agent or
instrumentality of the shareholders); all such liability being,
by the acceptance hereof and as a part of the consideration for
the issuance hereof, expressly waived and released by every
holder hereof, and being likewise waived and released by the
terms of the Indenture under which this bond is issued, as more
fully provided in said Indenture.
This bond shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have
been signed by The Chase Manhattan Bank, or its successor, as
Trustee under said Indenture.
IN WITNESS WHEREOF, the Company has caused this bond to be
signed in its name by the manual or facsimile signature of its
President or one of its Vice Presidents, and its corporate seal,
or a facsimile thereof, to be impressed or imprinted hereon and
attested by the manual or facsimile signature of its Secretary or
one of its Assistant Secretaries.
Dated
-------------------
TUCSON ELECTRIC POWER COMPANY
By
---------------------------------
President
Attest:
--------------------------
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:
-------------------------------
EXHIBIT B
MODIFICATIONS OF THE ORIGINAL INDENTURE
1. (a) The modification of the introductory paragraph to the
definition of "property additions" contained in Section 4 of
Article I of the Original Indenture to read as follows:
"'Property additions' shall mean any new or additional
property (including separate and distinct units, plants,
systems and properties), and improvements, extensions or
additions to or about the property of the Company, in every
case properly chargeable to the utility plant accounts of
the Company, purchased, constructed or otherwise acquired by
the Company and used or useful or to be used in the Utility
Business; provided, however, that"
;and
(b) The modification of subdivision (b) in the definition of
"property additions" contained in Section 4 of Article I of the
Original Indenture by:
(i) deleting the period at the end of clause (7) of
said subdivision (b) and replacing such period by a semi-
colon; and
(ii) adding to said subdivision (b) a new clause (8)
reading as follows:
"(8) Any property (other than space satellites) which
is located outside the territorial limits of the United
States of America and its coastal waters and the Dominion
of Canada and its coastal waters [and the United Mexican
States and its coastal waters]. 'Space satellites',
shall mean any form of space satellites, space stations
and other analogous facilities (including without
limitation solar power satellites, stations and other
analogous facilities), whether or not in the Earth's
atmosphere."
;and
(c) The modification of the definition of "Utility
Business" contained in Section 2 of Article I of the Original
Indenture to read as follows:
--------------------
* Note: The holders of the Bonds of the 2008 Series
shall be deemed to have consented to the modification described
in paragraph l(b) whether or not the bracketed language is
contained therein.
"'Utility Business' shall mean the business of producing,
generating, manufacturing, transporting, transmitting,
distributing or supplying energy or fuel in any form, including
without limitation electricity, gas (natural or artificial) or
solar or geothermal energy, or water or steam, for any and all
purposes."
;and
(d) The modification of Clause (A) of subdivision 3 of
Section 6 of Article III of the Original Indenture to read as
follows:
"(A) showing the amount, if any, of the unapplied balance
of property additions included in the most recent
certificate, if any, theretofore filed with the Trustee,
whether pursuant to this subdivision (3), or pursuant to
Section 9 of this Article, or pursuant to Section 9 of
Article VII;"
(e) The modification of Clause (E) of subdivision 3 of
Section 6 of Article III of the Original Indenture to read as
follows:
"(E) showing the amount of the net property additions
available as a basis for the authentication and delivery of
bonds pursuant to Section 4 of this Article, which amount
shall be determined as follows: To the amount shown in
Clause (A) of this subdivision (3), there shall be added the
amount of the cost or fair value, whichever shall be the
less (such cost and/or fair value to be in all cases taken
at the lowest amounts shown by any of the certificates
delivered pursuant to this Section) of the property
additions included in Clause (B) of this subdivision (3);
and from the aggregate amount so arrived at there shall be
deducted the amount by which the aggregate amount of the
property retirements shown pursuant to Clause (C) of this
subdivision (3) shall exceed the aggregate of the amounts
shown pursuant to Clause (D) of this subdivision (3);"
2. The modification of Sections 2 and 5 of Article I of the
Original Indenture by deleting the words "and verified" following
the word "signed" from the definitions of "engineer's
certificate", "Treasurer's certificate" and "net earnings
certificate".
3. The deletion of all of the following, and any and all
references thereto, which shall be in force and effect at the
date of any meeting or meetings of bondholders under the Original
Indenture: Article V of the supplemental indentures to the
Original Indenture dated, respectively, as of April 1, 1949,
December 1, 1952, January 1, 1955, January 1, 1958, November 1,
1959, November 1, 1961, February 1, 1965, February 1, 1966,
November 1, 1969, September 1, 1971, March 1, 1972, May 1, 1973
and November 1, 1975.
4. (a) The deletion of all of the following, and any and
all references thereto, which shall be in force and effect at the
date of any meeting or meetings of bondholders under the Original
Indenture: Section 9 of Article IV of the Original Indenture,
Article III of the supplemental indenture to the Original
Indenture, dated as of October 1, 1947, and Article IV of the
supplemental indentures to the Original Indenture, dated,
respectively, as of April 1, 1949, December 1, 1952, January 1,
1955, January 1, 1958, November 1, 1959, November 1, 1961,
February 1, 1965, February 1, 1966, November 1, 1969, September
1, 1971, March 1, 1972, May 1, 1973, November 1, 1975 and October
1, 1977;
or, in the alternative
(b) The modification of the first two paragraphs of Section
9 of Article IV of the Original Indenture to read as follows:
"Section 9. So long as any of the bonds of the Series due
1966 shall remain outstanding (unless and except to the extent
that a regulatory body having jurisdiction shall direct a lesser
amount), the Company will (subject to the provisions of Section 4
of Article XI) for each calendar year, charge against income or
earned surplus and credit to replacement reserve in respect of
its property pertaining to the Utility Business or other reserve
for the write-down or write-off of such property, amounts which
shall aggregate not less than (a) ten per centum (10%) of
its gross operating revenues from the Utility Business during
such year remaining after deducting from such gross operating
revenues (i) an amount equal to the cost to the Company during
each such year of fuel in any form used or to be used in the
Utility Business, including the cost of acquisition and
transportation thereof, and (ii) an amount equal to the cost to
the Company during such year of electricity and gas purchased for
resale or exchange, less (b) the amounts expended during such
year for maintenance of the property of the Company pertaining to
the Utility Business.
--------------------
* Note: The holders of the Bonds of the 2008 Series
shall be deemed to have consented to the modification described
in paragraph 4(b) either with the percentage shown above or with
any higher percentage.
Within two calendar months after December 31 of each
year, the Company shall file with the Trustee a Treasurer's
certificate stating:
(a) The amount of its gross operating revenues from
the Utility Business during the next preceding year
remaining after deducting from such gross revenues (i)
the cost during such year of fuel in any form used or to
be used in the Utility Business, including the cost of
acquisition and transportation thereof, and (ii) the cost
during such year of electricity and gas purchased for
resale or exchange;
(b) The amounts expended by the Company during said
year for maintenance of the property of the Company
pertaining to the Utility Business;
(c) The amounts charged against income or earned
surplus and credited to replacement reserve in respect of
its property pertaining to the Utility Business or other
reserve for the write down or write-off of such property,
by the Company during such year; and
(d) That the Company has complied, if such be the
case, with the covenant in this Section 9 contained."
or, in the alternative
(c) The modification of the first two paragraphs of Section
9 of Article IV of the Original Indenture to read as follows:
"Section 9. So long as any of the bonds of the Series
due 1966 shall remain outstanding (unless and except to
the extent that a regulatory body having jurisdiction
shall direct a lesser amount), the Company will (subject
to the provisions of Section 4 of Article XI) for each
calendar year, charge against income or earned surplus
and credit to replacement reserve in respect of its
property pertaining to the Utility Business or other
reserve for the write-down or write-off of such property,
amounts which shall aggregate not less than the lower of
(a)(i) two per centum (2%) of the cost of the
depreciable property of the Company subject to the lien
of this Indenture less (ii) the amounts expended during
each such year for maintenance of the property of the
Company pertaining to the Utility Business or (b)(i) ten
per centum (10%) of its gross operating revenues
from the Utility Business, during such year remaining
after deducting from such gross operating revenues (A) an
amount equal to the cost to the Company during such year,
of fuel in any form used or to be used in the Utility
Business, including the cost of acquisition and
transportation thereof, and (B) an amount equal to the
cost to the Company during such year of electricity and
gas purchased for resale or exchange less (ii) the
amounts expended during each such year for maintenance of
the property of the Company pertaining to the Utility
Business.
--------------------
* Note: The Trustee shall vote in favor of, or
consent to, the modification described in paragraph 4(c) with the
percentages shown above or with any higher percentage in either
instance or both instances.
Within two calendar months after December 31 of each
year, the Company shall file with the Trustee a
Treasurer's certificate stating:
(a) The cost of the depreciable property of the
Company subject to the lien of this Indenture;
(b) The amount of its gross operating revenues from
the Utility Business during the next preceding year
remaining after deducting from such gross revenues (i)
the cost during such year of fuel in any form used or
to be used in the Utility Business, including the cost
of acquisition and transportation thereof, and (ii) the
cost during such year of electricity and gas purchased
for resale or exchange;
(c) The amounts expended by the Company during said
year for maintenance of the property of the Company
pertaining to the Utility Business;
(d) The amounts charged against income or earned
surplus and credited to replacement reserve in respect
of its property pertaining to the Utility Business or
other reserve for the write down or write-off of such
property, by the Company during such year; and
(e) That the Company has complied, if such be the
case, with the covenant in this Section 9 contained".
5. The modification of clause (e) in subdivision (7) of
Section 6 of Article III of the Original Indenture to read as
follows:
"(e) that the Company has corporate authority and all
necessary permission from governmental authorities to
acquire and own such property additions;"
6. The modification of Clause (A) of Section 5 of Article I
of the Original Indenture by inserting after the term "gross
operating revenues" the parenthetical phrase "(whether or not
collected by the Company subject to refund at a future date)".
7. The modification of Clause (A) of Section 5 of Article I
of the Original Indenture by inserting after the term "net non-
operating income", the first time it appears, the parenthetical
phrase "(which shall be deemed to include, without limitation, an
amount equal to the total amount of the allowance for funds used
during construction, or any similar or analogous amount, included
in the utility plant accounts of the Company as part of the cost
of construction)".
8. The modification of Clause (A) of Section 5 of Article I
of the Original Indenture by changing the percentage set forth in
the proviso thereto from 15% to 25% or any percentage less than
25%.
9. The modification of Section 5 of Article III of the
Company Mortgage to read as follows:
"Section 5. No bonds shall be authenticated and delivered
upon the basis of property additions unless as shown by a net
earnings certificate the net earnings of the Company for the
period therein referred to shall have been in the aggregate
either (a) at least equivalent to two times the annual interest
requirements as shown by such net earnings certificate or (b) at
least equivalent to fifteen per centum (15%) of the
aggregate principal amount of bonds and other indebtedness the
annual interest requirements in respect of which are shown in
such net earnings certificate."
10. The modification of the first paragraph of Section 6 of
Article IV of the Original Indenture to read as follows:
--------------------
* Note: The holders of the Bonds of the 2008 Series
shall be deemed to have consented to the modification described
in paragraph 9 either with the percentage shown above or with any
higher percentage.
"Section 6. That it will keep the mortgaged property
insured against fire and other risks to the extent usually
insured against by companies owning and operating similar
property, by reputable insurance companies or, at the Company's
election, with respect to all or any part of the property, by
means of an adequate insurance fund set aside and maintained by
it out of its own earnings or in conjunction with other companies
through an insurance fund, trust or other agreement (the adequacy
of such insurance fund, trust or other agreement, to be evidenced
by a certificate to be filed with the Trustee of an independent
actuary or other qualified person selected by the Company and
satisfactory to the Trustee). Any insurance policy may contain
deductible provisions in a dollar amount per occurrence equal to
the deductible amount usually contained in insurance policies or
other arrangements for insurance of other companies owning and
operating similar property, provided that the dollar amount of
such deductible provisions may in any event be at least equal to
5% of the aggregate principal amount of bonds outstanding
hereunder. Any loss from fire and such other risks, except any
loss of merchandise, materials and supplies and except any other
loss less than an amount equal to 5% of the aggregate
principal amount of bonds outstanding hereunder, shall be made
payable to the Trustee as its interest may appear, unless
required by the terms of any prior lien to be paid to the trustee
or other holder thereof, as evidenced by an opinion of counsel.
If the Company shall insure such property in whole or in part
through an insurance fund, trust or other agreement, it hereby
covenants and agrees to pay to the Trustee the amount of all
losses, except in respect of any particular loss less than
5% of the aggregate principal amount of bonds outstanding
hereunder, to the extent that such amounts shall not be payable
by insurance companies, and the amounts so required to be paid to
the Trustee (as well as the amounts of all losses permitted to be
retained by the Company because not in excess of 5% of the
aggregate principal amount of bonds outstanding hereunder) shall
be deemed to constitute proceeds of insurance for all purposes of
this Indenture. All moneys received by the Trustee as proceeds
of insurance against loss or damage shall be held and applied as
hereinafter provided. On or prior to September 15 in each year,
and at any other time upon the written request of the Trustee,
the Company will furnish to the Trustee a Treasurer's certificate
stating in substance that the Company has complied with all the
terms and conditions of this Section, containing a detailed
statement of the insurance then in effect upon the property of
the Company on a date therein specified (which date shall be
within 30 days of the filing of such certificate) and, except in
respect of property insured by means of an insurance fund, trust
or other agreement as permitted by this Section, showing the
numbers of the policies of insurance in effect and the names of
the issuing companies, the amounts of such policies, the
deductible provisions of such policies and the property covered
by such policies; and, in case any of the property shall at the
time be insured by means of an insurance fund, trust or other
agreement, as permitted by this Section, the Company shall, at
the time of furnishing each such Treasurer's certificate, also
furnish to the Trustee a certificate, as described above, with
respect to the adequacy of such insurance fund, trust or other
arrangement. Subject to the provisions of Section 2 of Article
XII hereof, the Trustee shall be entitled to accept any such
Treasurer's certificate, and, if required, any such other
certificate above described, as satisfactory evidence of
compliance by the Company with the provisions of this Section,
and shall be under no duty with respect to any such Treasurer's
certificate or any such other certificate, except to exhibit the
same to any bondholder upon request."
--------------------
* Note: The holders of the Bonds of the 2008 Series
shall be deemed to have consented to the modification contained
in paragraph 10 either with the percentages shown above or, in
any instance, a lower percentage.
11. The modification of Section 4 of Article VII of the
Original Indenture to read as follows:
"Section 4. Unless a default as defined in Section 1 of
Article VIII hereof shall have happened and shall be continuing,
the Trustee shall, whenever from time to time requested by the
Company, and after being furnished with a certificate and opinion
of counsel that all conditions precedent to the release in this
Section provided for have been complied with, and without
requiring compliance with any of the foregoing provisions of
Section 3 of this Article (but subject to the requirements of
Section 19 of Article IV hereof), release from the lien hereof
any property (except cash, obligations or other personal property
deposited or pledged or required to be deposited or pledged with
the Trustee) which, as set forth in the certificate or opinion of
an engineer, appraiser, or other expert furnished to the Trustee
pursuant to Section 19 of Article IV hereof, is of a value not
exceeding, in the aggregate in any period of 12 consecutive
calendar months the greater of the sum of $25,000 or 1% of the
aggregate principal amount of bonds at the time outstanding. The
Company covenants that it will forthwith deposit with the Trustee
the consideration received by it from the disposition of any
property so released, to be held and applied as a part of the
mortgaged property, in the manner provided in Section 9 of this
Article, or with the trustee or other holder of a prior lien, if
required by the terms thereof, as evidenced by an opinion of
counsel."
12. The modification of the first proviso of Section 5 of
Article IV of the Original Indenture to read as follows:
"provided, however, that nothing in this Section 5
contained shall require the Company to observe or conform to
any requirement of governmental authority or to pay, or
cause to be paid or discharged, or make provision for, any
such tax, assessment, lien or charge, (a) so long as the
validity thereof shall be contested in good faith and by
appropriate proceedings or (b) with respect to any such
requirement of governmental authority, so long as the
Company shall be in good faith doing all things
technologically and economically feasible and prudent on its
part to observe or conform to such requirement, unless, in
any case, any part of the mortgaged property will thereby be
lost or forfeited;"
13. (a) The modification of the first sentence of Section 3
of Article VII of the Original Indenture to read as follows:
"Section 3. The Company shall have the right (in addition
to the rights conferred by Sections 2, 4 and 5 of this
Article) at any time and from time to time, unless a default
as defined in Section 1 of Article VIII hereof shall have
happened and shall be continuing, to sell, dispose of or
exchange any part of the mortgaged property (other than any
cash, obligations or other personal property deposited or
pledged with or required to be deposited or pledged with the
Trustee) the ownership of which by the Company shall no
longer be desirable in the judicious management and
maintenance of the mortgaged property or in the conduct of
the business of the Company, or which the Company shall have
been directed to sell or dispose of by order of any
governmental authority having jurisdiction in the premises,
or shall desire to sell or dispose of in reasonable
anticipation of the making of such an order."
; and
(b) The modification of Clause (C)(1) of Section 3 of
Article VII of the Original Indenture to read as follows:
"(1) that the Company has sold, disposed of or exchanged
or has contracted to sell, dispose of or exchange the
property so to be released for a consideration described, in
reasonable detail, in said certificate, and either (a) that
such sale or exchange is desirable in the conduct of the
business of the Company, and that the ownership by the
Company of the property to be released is no longer
desirable in the judicious management and maintenance of the
mortgaged property or in the conduct of the business of the
Company, or (b) that such sale or disposition is made to
comply with an order or orders of a designated governmental
authority having jurisdiction to require such sale or
disposition, or in reasonable anticipation of the making of
such an order;".
14. The amendment of Section 2 of Article I of the Original
Indenture to add thereto a definition of the term "fair value"
substantially to the following effect:
"Fair value", with respect to property, shall mean the
fair value of such property as may be determined by
reference to (a) the amount which would be likely to be
obtained in an arm's-length transaction with respect to such
property between an informed and willing buyer and an
informed and willing seller, under no compulsion,
respectively, to buy or sell, (b) the amount of investment
with respect to such property which, together with a
reasonable return thereon, would be likely to be recovered
through ordinary business operations or otherwise, (c) the
cost, accumulated depreciation and replacement cost with
respect to such property and/or (d) any other relevant
factors; provided, however, that (x) the fair value of
property shall be determined without deduction for any prior
liens on such property (except as otherwise provided in
clause (2) of subparagraph (C) of Section 3 of Article VII
and (y) the fair value to the Company of property additions
shall not reflect any reduction relating to the fact that
such property additions may be of less value to a person
which is not the owner or operator of the mortgaged property
or any portion thereof than to a person which is such owner
or operator. Fair value may be determined, without physical
inspection, by the use of accounting and engineering records
and other data maintained by the Company or otherwise
available to the engineer certifying the same.
15. The amendment of Section 2 of Article I of the Original
Indenture to add thereto definitions of the terms "purchase money
mortgage" and "purchase money obligations" substantially to the
following effect:
"Purchase money mortgage" means, with respect to any
property being acquired or disposed of by the Company or
being released from the lien of this Indenture, a lien on
such property which
(a) is taken or retained by the transferor of such
property to secure all or part of the purchase price
thereof;
(b) is granted to one or more persons other than the
transferor which, by making advances or incurring an
obligation, give value to enable the grantor of such lien
to acquire rights in or the use of such property;
(c) is granted to any other person in connection with
the release of such property from the lien of this
Indenture on the basis of the deposit with the Trustee or
the trustee or other holder of a prior lien of
obligations secured by such lien on such property (as
well as any other property subject thereto);
(d) is held by a trustee or agent for the benefit of
one or more persons described in clause (a), (b) and/or
(c) above, provided that such lien may be held, in
addition, for the benefit of one or more other persons
which shall have theretofore given, or may thereafter
give, value to or for the benefit or account of the
grantor of such lien for one or more other purposes; or
(e) otherwise constitutes a purchase money mortgage or
a purchase money security interest under applicable law;
and, without limiting the generality of the foregoing, for
purposes of this Indenture, the term shall be deemed to
include any lien described above whether or not such lien
(x) shall permit the issuance or other incurrence of
additional indebtedness secured by such lien on such
property, (y) shall permit the subjection to such lien of
additional property and the issuance or other incurrence of
additional indebtedness on the basis thereof and/or (z)
shall have been granted prior to the acquisition,
disposition or release of such property, shall attach to or
otherwise cover property other than the property being
acquired, disposed of or released and/or shall secure
obligations issued prior and/or subsequent to the issuance
of the obligations delivered in connection with such
acquisition, disposition or release. The term "purchase
money obligation" shall mean an obligation secured by a
purchase money mortgage.
16. The amendment of clause (b) in subdivision (1) of
Section 9 of Article VII or the Original Indenture to read as
follows:
(b) in an amount equal to 166 2/3% of the principal
amount of bonds to the authentication and delivery of
which the Company shall be entitled under the provisions
of Section 7 of Article III hereof.
17. The amendment of the first paragraph of Section 3 of
Article VII of the Original Indenture to:
(i) to delete therefrom the proviso in the second
sentence of such paragraph or to provide that such proviso
may be disregarded upon specified conditions; or
(ii) to delete from such proviso the phrase "15% of";
or
(iii) to change the term 15% in such proviso therein to
any higher percentage not exceeding one hundred per centum
(100%).
18. The amendment of Section 7 of Article III of the
Original Indenture change the semi-colon at the end of clause (4)
in the first paragraph thereof to a period and to delete the
remainder of said first paragraph.
