1
EXHIBIT 4(f)
--------------------------------------------------------------------------------
AVISTA CORPORATION
9.75% SENIOR NOTES DUE JUNE 1, 2008
-------------------
INDENTURE
Dated as of April 3, 2001
-------------------
CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION
Trustee
--------------------------------------------------------------------------------
2
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1).................................................... 7.10
(a)(2).................................................... 7.10
(a)(3).................................................... N.A.
(a)(4).................................................... N.A.
(a)(5).................................................... 7.10
(b)....................................................... 7.10
(c)....................................................... N.A.
311(a)....................................................... 7.11
(b)....................................................... 7.11
(c)....................................................... N.A.
312(a)....................................................... 2.05
(b)....................................................... 11.03
(c)....................................................... 11.03
313(a)....................................................... 7.06
(b)(1).................................................... N.A.
(b)(2).................................................... 7.07
(c)....................................................... 7.06;11.02
(d)....................................................... 7.06
314(a)....................................................... 4.03;11.02
(b)....................................................... N.A.
(c)(1).................................................... 11.04
(c)(2).................................................... 11.04
(c)(3).................................................... N.A.
(d)....................................................... N.A.
(e)....................................................... 11.05
(f)....................................................... N.A.
315(a)....................................................... 7.01
(b)....................................................... 7.05;11.02
(c)....................................................... 7.01
(d)....................................................... 7.01
(e)....................................................... 6.11
316(a) (last sentence)....................................... 2.09
(a)(1)(A)................................................. 6.05
(a)(1)(B)................................................. 6.04
(a)(2).................................................... N.A.
(b)....................................................... 6.07
(c)....................................................... 2.12
317(a)(1).................................................... 6.08
(a)(2).................................................... 6.09
(b)....................................................... 2.04
318(a)....................................................... 11.01
(b)....................................................... N.A.
(c)....................................................... 11.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
3
TABLE OF CONTENTS
Page
----
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions..................................................................1
Section 1.02. Other Definitions...........................................................20
Section 1.03. Incorporation by Reference of Trust Indenture Act...........................20
Section 1.04. Rules of Construction.......................................................21
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.............................................................21
Section 2.02. Execution and Authentication................................................22
Section 2.03. Registrar and Paying Agent..................................................23
Section 2.04. Paying Agent to Hold Money in Trust.........................................23
Section 2.05. Holder Lists................................................................23
Section 2.06. Transfer and Exchange.......................................................24
Section 2.07. Replacement Notes...........................................................34
Section 2.08. Outstanding Notes...........................................................35
Section 2.09. Treasury Notes..............................................................35
Section 2.10. Temporary Notes.............................................................35
Section 2.11. Cancellation................................................................35
Section 2.12. Defaulted Interest..........................................................36
ARTICLE 3.
REDEMPTION AND PURCHASE
Section 3.01. Notices to Trustee..........................................................36
Section 3.02. Selection of Notes to Be Redeemed or Purchased..............................36
Section 3.03. Notice of Redemption........................................................37
Section 3.04. Effect of Notice of Redemption..............................................37
Section 3.05. Deposit of Redemption Price.................................................37
Section 3.06. Notes Redeemed in Part......................................................38
Section 3.07. Optional Redemption.........................................................38
Section 3.08. Mandatory Redemption........................................................39
Section 3.09. Offer to Purchase by Application of Excess Proceeds.........................39
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes............................................................41
Section 4.02. Maintenance of Office or Agency.............................................41
Section 4.03. Reports.....................................................................41
Section 4.04. Compliance Certificate......................................................42
Section 4.05. Taxes.......................................................................43
Section 4.06. Stay, Extension and Usury Laws..............................................43
Section 4.07. Restricted Payments.........................................................43
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries..............46
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock..................47
i
4
Page
----
Section 4.10. Asset Sales.................................................................50
Section 4.11. Transactions with Affiliates................................................52
Section 4.12. Liens.......................................................................53
Section 4.13. Corporate Existence.........................................................53
Section 4.14. Offer to Repurchase Upon Change of Control..................................53
Section 4.15. Designation of Restricted and Unrestricted Subsidiaries.....................55
Section 4.16. Sale and Leaseback Transactions.............................................55
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets....................................56
Section 5.02. Successor Person Substituted................................................57
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default...........................................................57
Section 6.02. Acceleration................................................................58
Section 6.03. Other Remedies..............................................................59
Section 6.04. Waiver of Past Defaults.....................................................59
Section 6.05. Control by Majority.........................................................59
Section 6.06. Limitation on Suits.........................................................59
Section 6.07. Rights of Holders of Notes to Receive Payment...............................60
Section 6.08. Collection Suit by Trustee..................................................60
Section 6.09. Trustee May File Proofs of Claim............................................60
Section 6.10. Priorities..................................................................61
Section 6.11. Undertaking for Costs.......................................................61
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee...........................................................61
Section 7.02. Rights of Trustee...........................................................62
Section 7.03. Individual Rights of Trustee................................................63
Section 7.04. Trustee's Disclaimer........................................................63
Section 7.05. Notice of Defaults..........................................................63
Section 7.06. Reports by Trustee to Holders of the Notes..................................63
Section 7.07. Compensation and Indemnity..................................................64
Section 7.08. Replacement of Trustee......................................................65
Section 7.09. Successor Trustee by Merger, etc............................................65
Section 7.10. Eligibility; Disqualification...............................................66
Section 7.11. Preferential Collection of Claims Against Company...........................66
Section 7.12. Other Capacities............................................................66
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....................66
Section 8.02. Legal Defeasance and Discharge..............................................66
Section 8.03. Covenant Defeasance.........................................................67
Section 8.04. Conditions to Legal or Covenant Defeasance..................................67
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions....................................................69
Section 8.06. Repayment to Company........................................................70
ii
5
Page
----
Section 8.07. Reinstatement...............................................................70
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.........................................70
Section 9.02. With Consent of Holders of Notes............................................71
Section 9.03. Compliance with Trust Indenture Act.........................................72
Section 9.04. Revocation and Effect of Consents...........................................72
Section 9.05. Notation on or Exchange of Notes............................................72
Section 9.06. Trustee to Sign Amendments, etc.............................................72
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01. Satisfaction and Discharge..................................................73
Section 10.02. Application of Trust Money..................................................74
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls................................................74
Section 11.02. Notices.....................................................................74
Section 11.03. Communication by Holders of Notes with Other Holders of Notes...............75
Section 11.04. Certificate and Opinion as to Conditions Precedent..........................75
Section 11.05. Statements Required in Certificate or Opinion...............................76
Section 11.06. Rules by Trustee and Agents.................................................76
Section 11.07. No Personal Liability of Directors, Officers, Employees and Stockholders....76
Section 11.08. Obligation of the Company; Creditor's Claims................................77
Section 11.09. Governing Law...............................................................77
Section 11.10. No Adverse Interpretation of Other Agreements...............................77
Section 11.11. Successors..................................................................77
Section 11.12. Severability................................................................77
Section 11.13. Counterpart Originals.......................................................78
Section 11.14. Table of Contents, Headings, etc............................................78
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
iii
6
INDENTURE dated as of April 3, 2001 between Avista Corporation, a
Washington corporation (the "Company"), and Chase Manhattan Bank and Trust
Company, National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 9.750% Senior
Notes due June 1, 2008 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Additional Notes" means up to $200 million aggregate principal amount
of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.
"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,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" shall have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
-1-
7
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or Sale/Leaseback Transaction) in one or a series
of transactions by the Company or any Restricted Subsidiary to any Person other
than the Company or any Restricted Subsidiary of the Company, of:
(1) all or any of the Capital Stock of any Restricted Subsidiary of the
Company;
(2) all or substantially all of the assets of any operating unit, Facility,
division or line of business of the Company or any Restricted
Subsidiary; or
(3) any other property or assets or rights to acquire property or assets of
the Company or any Restricted Subsidiary of the Company outside of the
ordinary course of business of the Company or such Restricted
Subsidiary.
Notwithstanding the preceding, the following items shall not be deemed
to be Asset Sales:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $10.0 million;
(2) an issuance of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary of the Company
(3) any sale or lease of obsolete equipment or other assets that are no
longer being used by the Company or any of its Restricted Subsidiaries;
(4) any primary offering of Common Stock of Avista Communications, Avista
Advantage or Avista Labs, or any Subsidiary of any of them, provided
that the issuer of such Common Stock is operating substantially the same
business as is conducted by such issuer (or in case of a Subsidiary, all
or a portion of the same business as is conducted by the respective
parent company named above in this clause (4)) as of the date of this
Indenture;
(5) a Restricted Payment or Permitted Investment that is not prohibited by
Section 4.07; and
(6) any disposition of property or assets by a Restricted Subsidiary of the
Company to the Company or by the Company or a Restricted Subsidiary of
the Company to a Restricted Subsidiary of the Company.
"Attributable Debt" means, in respect of a Sale/Leaseback Transaction,
as of the time of determination, the present value discounted at the interest
rate assumed in making calculations in accordance with GAAP of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction, including any period for
which such lease has been extended or may be extended at the option of the
lessor.
"Avista Advantage" means Avista Advantage, Inc., as constituted on the
date hereof or any Restricted Subsidiary of the Company that succeeds to all or
substantially all of the business of Avista Advantage, as conducted on the date
hereof.
"Avista Communications" means Avista Communications, Inc., as
constituted on the date hereof or any Restricted Subsidiary of the Company that
succeeds to all or substantially all of the business of Avista Communications,
as conducted on the date hereof.
-2-
8
"Avista Energy" means Avista Energy, Inc., as constituted on the date
hereof or any Restricted Subsidiary of the Company that succeeds to all or
substantially all of the business of Avista Energy, as conducted on the date
hereof.
"Avista Labs" means Avista Laboratories, Inc., as constituted on the
date hereof or any Restricted Subsidiary of the Company that succeeds to all or
substantially all of the business of Avista Labs, as conducted on the date
hereof.
"Avista Power" means Avista Power, Inc., as constituted on the date
hereof or any Restricted Subsidiary of the Company that succeeds to all or
substantially all of the business of Avista Power, as conducted on the date
hereof.
"Avista-STEAG" means Avista-STEAG, LLC, as constituted on the date
hereof or any Restricted Subsidiary of the Company that succeeds to all or
substantially all of the business of Avista-STEAG, as conducted on the date
hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the corporation
or any duly authorized committee of such board of directors;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Board Resolution" means a copy of a resolution certified by the
Secretary or Assistant Secretary of the Company to have been duly adopted by the
Board of Directors of the Company and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents, however designated, of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of the Person.
"Cash Equivalents" means:
(1) United States dollars;
-3-
9
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than twelve months
from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
twelve months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding twelve months and overnight bank deposits,
in each case, issued or accepted by any financial institution organized
under the laws of the United States or any state thereof or the District
of Columbia that either (x) has a long-term deposit rating of at least
A-2 from Xxxxx'x and A from S&P or (y) is at least "adequately
capitalized" (as defined in the regulations of its primary federal
banking regulator) and (b) has Tier 1 Capital (as defined in such
regulations) of not less than $100,000,000;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Xxxxx'x or
S&P (or in their absence an equivalent rating from another nationally
recognized securities rating agency) and in each case maturing within
twelve months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the properties or
assets of the Company and its Restricted Subsidiaries taken as a whole
to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act);
(2) the adoption of a plan relating to the liquidation or dissolution of the
Company other than in a transaction that complies with the provisions of
Section 5.01 hereof;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above) becomes the Beneficial Owner, directly or indirectly, of
more than 35% of the Voting Stock of the Company, measured by voting
power rather than number of shares;
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or
(5) the Company consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding
Voting Stock of the Company or such other Person is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for
Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of
such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).
-4-
10
"Clearstream" means Clearstream Banking, societe anonyme.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Commodity Price Protection Obligation" means any forward contract,
commodity swap, commodity option or other similar financial agreement or
arrangement relating to, or the value of which is dependent on, fluctuations in
commodity prices entered into in the ordinary course of business.
"Common Stock" of any Person means any class of Capital Stock of such
Person that has no preference, as to dividends or upon liquidation, over any
other class of Capital Stock of such Person and that is not convertible into or
exchangeable for any other class of Capital Stock or other securities of such
Person.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
(1) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(2) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt
issuance costs (other than those in existence on or created on the date
of this Indenture) and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(3) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period, and excluding amortization of power and
natural gas cost deferrals, to the extent such deferrals were previously
financed with Indebtedness permitted by clause (9) of the definition of
"Permitted Debt") and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and
its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; minus
(4) non-cash items increasing such Consolidated Net Income for such period
(including power and natural gas cost deferrals, but only to the extent
not financed with Indebtedness permitted by clause (9) of the definition
of "Permitted Debt") in each case, on a consolidated basis and
determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the net income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
-5-
11
(1) the net income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Wholly Owned
Subsidiary thereof;
(2) the net income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by the Restricted Subsidiary of that net income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the net income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the cumulative effect of a change in accounting principles shall be
excluded;
(5) all extraordinary or nonrecurring gains and losses (including without
limitation any one-time costs incurred in connection with acquisitions,
or regulatory disallowances or write-offs of regulatory assets) shall be
excluded; and
(6) any gain or loss realized upon the sale or other disposition of any
property, plant or equipment of the Company or its Restricted
Subsidiaries (including pursuant to any sale-and-leaseback arrangement)
which is not sold or otherwise disposed of in the ordinary course of
business and any gain or loss realized upon the sale or other
disposition by the Company or any Restricted Subsidiary of any Capital
Stock of any Person shall be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this Indenture;
or
(2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, restructured,
supplemented, replaced or refinanced in whole or in part from time to time,
including without limitation any amendment increasing the amount of Indebtedness
incurred or available to be borrowed thereunder, extending the maturity of any
Indebtedness incurred thereunder or contemplated thereby or deleting, adding or
substituting one or more parties thereto (whether or not with banks or other
institutional lenders).
"Currency Hedging Obligations" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against the fluctuations in currency values entered into in the ordinary
course of business and not for speculative purposes.
-6-
12
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Debt Rating" shall mean the rating assigned to the Notes by Moody's or
S&P, as the case may be.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction or series of related transactions.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale shall not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500.0 million or its equivalent
in foreign currency, whose debt is rated "A" or higher (or the equivalent rating
or higher), according to Moody's or S&P (or such similar equivalent rating by at
least one "nationally recognized statistical rating organization" (as defined in
Rule 436 under the Securities Act)), respectively, at the time as of which any
investment or rollover therein is made.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank S.A., N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
-7-
13
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture, other than amounts
outstanding under Credit Facilities, until such amounts are repaid.
"Facility" means retail electric and natural gas distribution and
storage facilities, electric transmission facilities and electric generation and
production facilities, and assets related to or used in the operation of such
facilities.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including,
without limitation, amortization of debt issuance costs (other than
those in existence on or created on the date of this Indenture) and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period (excluding interest capitalized
in connection with the construction of a new Facility or addition to a
Facility, in each case, to the extent such interest is capitalized
during the construction of such Facility); plus
(3) any interest expense actually paid on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and whether or
not in cash, on any series of preferred stock of such Person or any of
its Restricted Subsidiaries, other than dividends on Equity Interests
payable solely in Equity Interests of such Person (other than
Disqualified Stock) or to such Person or a Restricted Subsidiary of such
Person, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a
decimal; in each case, calculated on a consolidated basis and in
accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Subsidiaries incurs, assumes, Guarantees,
repays, repurchases or redeems any Indebtedness (other than ordinary working
capital borrowings) or issues, repurchases or redeems preferred stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date of the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
including the incurrence of the Indebtedness giving rise to the need to make
such calculation, then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom including
to refinance other Indebtedness as if the same had occurred at the beginning of
the applicable four-quarter reference period.
-8-
14
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or any of its
Subsidiaries, including through mergers or consolidations and including
any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
Calculation Date shall be given pro forma effect as if they had occurred
on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated on a pro forma
basis (calculated in accordance with Regulation S-X under the Securities
Act), but without giving effect to clause (3) of the proviso set forth
in the definition of "Consolidated Net Income";
(2) the consolidated interest expense attributable to interest on any
Indebtedness computed on a pro forma basis and (a) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation had been the applicable rate for the entire period and (b)
that was not outstanding during the period for which the computation is
being made but which bears, at the option of such Person, a fixed or
floating rate of interest, shall be computed by applying at the option
of such Person either the fixed or floating rate;
(3) the consolidated interest expense attributable to interest on any
working capital borrowings under a revolving credit facility computed on
a pro forma basis shall be computed based upon the average daily balance
of such working capital borrowings during the applicable period; and
(4) acquisitions and dispositions that have been made by any Person that has
become a Restricted Subsidiary of the Company or been merged with or
into the Company or any Restricted Subsidiary of the Company during the
four-quarter reference period, or subsequent to the four-quarter
reference period but prior to the Calculation Date, shall be calculated
on a pro forma basis, including all of the calculations referred to
above, assuming that such acquisitions and dispositions had occurred on
the first day of the reference period.
In addition, in calculating the Fixed Charge Coverage Ratio, discontinued
operations will be given pro forma effect as follows:
(1) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of on or prior to the Calculation Date, shall be excluded, and
(2) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of on or
prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the Company or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect (i) with respect to periodic reporting
requirements, from time to time, and (ii) otherwise on the date of this
Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
-9-
15
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means securities issued directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof).
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) representing banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) appears as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount; and
(2) the principal amount thereof, together with any interest thereon that is
more than 30 days past due, in the case of any other Indebtedness;
provided that for purposes of determining the amount
-10-
16
of any Indebtedness, if recourse with respect to such Indebtedness is
limited to such asset, the amount of such Indebtedness shall be limited
to the lesser of the fair market value of such asset or the amount of
such Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest in
a Global Note through a Participant.
"Initial Notes" means the first $400 million aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees of Indebtedness or other obligations), advances
or capital contributions (excluding commission, travel, entertainment, moving
and similar advances or loans to officers, directors, consultants and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. The term "Investment" shall exclude extensions
of trade credit on commercially reasonable terms in accordance with normal trade
terms. If the Company or any Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in the penultimate paragraph of
Section 4.07 hereof. The acquisition by the Company or any Subsidiary of the
Company of a Person that holds an Investment in a third Person shall be deemed
to be an Investment by the Company or such Subsidiary in such third Person in an
amount equal to the fair market value of the Investment held by the acquired
Person in such third Person in an amount determined as provided in the
penultimate paragraph of Section 4.07 hereof.
"Lancaster Project" means the 270 MW combined cycle project in Rathdrum,
Idaho, in which Avista Power owns an indirect 49% interest through its
wholly-owned subsidiary Avista Rathdrum, LLC.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, in the city in which the Corporate Trust
Office of the Trustee is located or at a place of payment are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
-11-
17
"Liquidated Damages" shall have the meaning assigned to such term in the
Registration Rights Agreement.
"Liquidity Condition Date" means the date on which the Company obtains
funding in cash from completed financing transactions, or contractual
entitlement to such funding on such date pursuant to definitive Credit
Facilities then in effect and available to be drawn pursuant to arrangements put
into effect (or amendments increasing the amount available under existing Credit
Facilities) after the date of this Indenture, in an aggregate amount that, when
added to the net proceeds of the offering of the Notes, is not less than $475
million.
"Marketable U.S. Securities" means: (i) any time deposit account, money
market deposit and certificate of deposit maturing not more that 365 days after
the date of acquisition issued by, or time deposit of, an Eligible Institution;
(ii) commercial paper maturing not more than 365 days after the date of
acquisition issued by a corporation (other than an Affiliate of the Company)
with a rating, at the time as of which any investment therein is made, of "P-1"
or higher according to Moody's or "A-1" or higher according to S&P (or such
similar equivalent rating by at least one "nationally recognized statistical
rating organization" (as defined in Rule 436 under the Securities Act)); (iii)
any banker's acceptances or money market deposit accounts issued or offered by
an Eligible Institution; (iv) repurchase obligations with a term of not more
than 7 days for Government Securities entered into with an Eligible Institution;
and (v) any fund investing exclusively in investments of the types described in
clauses (i) through (iv) above and/or Government Securities.
"Moody's" mean Xxxxx'x Investors Service, Inc., and its successors.
"Net Proceeds" means the aggregate cash proceeds and Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, any amounts that the
Company may be required by any regulatory authority to refund or repay to
customers in respect of or as a result of such Asset Sales, any amounts required
to be applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such Asset Sale and any reserve for adjustment
in respect of the sale price of such asset or assets established in accordance
with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness but excluding
any agreement to provide managerial support), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the
lender; and
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder
of any other Indebtedness (other than the Notes) of the Company or any
of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Non-U.S. Person" means a Person who is not a U.S. Person.
-12-
18
"Notes" has the meaning assigned to it in the preamble to this Indenture
and shall include Additional Notes and the Exchange Notes. The Initial Notes,
the Additional Notes and the Exchange Notes shall be treated as a single class
for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board,
any Vice-Chairman, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person and, if a partnership, any General Partner, and,
if a limited liability company, any Managing Member.
"Officer's Certificate" means a certificate signed on behalf of the
Company by an Officer of the Company, who (for purposes of the Officer's
Certificate required by Section 4.04(a)) must be the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, that meets the requirements of Section 11.05 hereof, to the extent
applicable.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof, to the extent applicable. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Peaker Turbine Project" means a 95 MW simple cycle project under
development at the date of this Indenture, in respect of which a letter of
intent has been signed for the purchase of the output of the facility for five
years under a capacity sales contract for a fixed price per kW-month, and at
such date expected to be located in southwest Washington and 100% owned by
Avista Power.
"Permitted Business" means the business of acquiring, developing,
constructing, expanding, managing, improving, owning and operating Facilities,
as well as any other activities reasonably related, complimentary or ancillary
to the foregoing activities (including acquiring and holding reserves),
including but not limited to investing in Persons engaged in one or more
Permitted Businesses.
"Permitted Debt" has the meaning set forth in Section 4.09 hereof.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of the
Company; provided, that prior to the Liquidity Condition Date, the
Company and its Restricted Subsidiaries will not make Investments in
Subsidiaries of the Company (other than Avista Energy or Avista Power)
exceeding $35 million in the aggregate; provided further that the
Company may nonetheless make reimbursement to a Subsidiary, pursuant to
the Tax Sharing Agreement as in effect on the date of this Indenture, in
an amount not to exceed the net tax benefit realized by the Company in
any period, as reflected in its consolidated federal income tax return,
by reason of losses incurred by such Subsidiary;
-13-
19
(2) any Investment in cash or Cash Equivalents or Marketable U.S.
Securities;
(3) any Investment by the Company or any Subsidiary of the Company in a
Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company; or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with
Section 4.10 hereof;
(5) any Investment in exchange for the issuance of Equity Interests other
than Disqualified Stock of the Company;
(6) Hedging Obligations;
(7) Investments in any of the Notes;
(8) Indebtedness of the Company or a Restricted Subsidiary of the Company
described under clause (5) of the definition of "Permitted Debt";
(9) Investments in existence on the date of this Indenture or made pursuant
to a legally binding written commitment in existence on the date of this
Indenture;
(10) Guarantees of Indebtedness of a Restricted Subsidiary of the Company
given by the Company or another Restricted Subsidiary of the Company, in
each case, in accordance with the terms of this Indenture;
(11) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and worker's compensation, performance and
other similar deposits provided to third parties in the ordinary course
of business;
(12) Hedging Obligations, Currency Hedging Obligations and Commodity Price
Protection Obligations permitted by this Indenture that are entered into
in the ordinary course of business;
(13) Investments representing Capital Stock or obligations issued to the
Company or any Restricted Subsidiary of the Company (i) in settlement of
claims against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor (including
customers and suppliers) of the Company or such Restricted Subsidiary,
or (ii) as a result of an Asset Sale in which the Capital Stock of
Avista Communications, Avista Advantage or Avista Labs is exchanged for
Capital Stock or other securities of another Person, upon completion of
which the subject or transferee Person is not a Subsidiary of the
Company;
(14) Investments in the Lancaster Project and the Peaker Turbine Project in
an aggregate amount not to exceed $40 million;
(15) Investments by the Company or any Restricted Subsidiary in Avista-STEAG,
LLC; and
-14-
20
(16) loans or advances, or performance guarantees in support of Avista Energy
or Avista Power to customers or suppliers in the ordinary course of
business.
"Permitted Liens" means:
(1) Liens securing Indebtedness and other Obligations of the Company and its
Restricted Subsidiaries under Credit Facilities (to the extent that such
Indebtedness and Obligations under such Credit Facilities were permitted
by the terms of this Indenture to be incurred);
(2) Liens in favor of the Company or a Restricted Subsidiary of the Company;
(3) Liens on assets or Equity Interests of a Person existing at the time
such Person is merged with or into or consolidated with the Company or
any Restricted Subsidiary of the Company; provided that such Liens were
in existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Restricted Subsidiary;
(4) Liens on assets existing at the time of acquisition thereof by the
Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds, performance bids, tenders or contracts,
statutory and common law landlord's liens or other obligations of a like
nature incurred in the ordinary course of business;
(6) Liens existing on the date of this Indenture;
(7) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(8) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions,
renewals or replacements) as a whole, or in part, of any Indebtedness
secured by any Lien referred to in the foregoing clauses (3), (4), or
(6), provided, however, that (x) such new Lien shall be limited to all
or part of the same assets that secured the original Lien (plus
improvements on such property) and (y) the Indebtedness secured by such
Lien at such time is not increased (other than by an amount necessary to
pay fees and expenses, including premiums, related to the refinancing,
refunding, extension, renewal or replacement of such Indebtedness);
(9) any Lien securing Indebtedness permitted to be incurred under Hedging
Obligations or otherwise incurred to hedge interest rate risk or risks
of commodity price fluctuations;
(10) Liens securing Indebtedness relating to governmental obligations the
interest on which is not included in gross income for purposes of
federal income taxation pursuant to Section 103 of the Internal Revenue
Code of 1986, as amended (or any successor provision of law), for the
purpose of financing or refinancing, in whole or in part, costs of
acquisition or construction of property to be used by the Company, to
the extent that the Lien which secures such secured Indebtedness is
required either by applicable law or by the issuer of such governmental
obligations or is otherwise necessary in order to establish or maintain
such exclusion from gross income;
-15-
21
(11) any Lien securing Capital Lease Obligations or other Indebtedness
incurred pursuant to clause (8) of the definition of "Permitted Debt";
and
(12) any Lien securing Indebtedness permitted to be incurred pursuant to
clause (9) of the definition of "Permitted Debt."
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, restructure,
supplement, defease or refund other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, restructured, supplemented, defeased or
refunded (plus all accrued interest thereon and the amount of all
expenses and premiums incurred in connection therewith);
(2) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(3) Indebtedness is incurred by the Company if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded was
Indebtedness of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, government, governmental subdivision or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Rating Condition" means any period of time when (i) Xxxxx'x and S&P
have issued credit ratings of the Company's senior unsecured debt of at least
Baa2 and BBB, respectively, in each case with a stable or improving outlook and
(ii) no Default has occurred and is continuing under this Indenture.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement, dated as of April 3, 2001, by and among the Company and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for each redemption pursuant to this Indenture.
-16-
22
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a permanent global Note in the form of
Exhibit A hereto bearing the Global Note Legend, the Private Placement Legend
and the Regulation S Global Note Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee that will be issued in a
denomination equal to the outstanding principal amount of the Notes sold in
reliance on Regulation S.
"Regulation S Global Note Legend" means the legend set forth in Section
2.06(g)(iv) to be placed on all Global Notes issued under this Indenture and
sold or transferred in reliance on Regulation S except as otherwise permitted by
the provisions of this Indenture.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Institutional Trust Services department of the Trustee (or
any successor group of the Trustee) 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 to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means any Subsidiary of the referent Person that
is not an Unrestricted Subsidiary.
"RTO Transaction" means an Asset Sale entered into in connection with
the formation of a regional transmission organization pursuant to or in a manner
consistent with regulatory requirements applicable to the Company.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned as of the date of this Indenture or thereafter acquired whereby the
Company or a Restricted Subsidiary transfers such property to a Person and
leases it back from such Person, other than leases for a term of not more than
36 months or between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries.
"S&P" means Standard & Poor's, and its successors.
"SEC" or "Commission" means the Securities and Exchange Commission.
-17-
23
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, or any redemption or similar payment in
respect of Disqualified Stock, the date on which such payment was scheduled to
be paid in the original documentation governing such Indebtedness or
Disqualified Stock, and shall not include any contingent obligations to repay,
redeem or repurchase any such interest or principal, or make such redemption or
other payment, prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Tax Sharing Agreement" means the Tax Sharing Agreement among the
Company and its Subsidiaries as in effect on the date of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary or its nominee, representing Notes that do not bear the
Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
-18-
24
(2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the
terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are not
Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a Board
Resolution giving effect to such designation and an Officer's Certificate
certifying that such designation complied with the preceding conditions and was
permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09
hereof, the Company shall be in default of such Section 4.09. The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary, which designation shall be evidenced to the
Trustee by filing with the Trustee a Board Resolution giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the following conditions and was permitted by Section 4.07 hereof;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing (i) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payment or principal or redemption or similar payment, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (ii) the sum of all such payments.
"Wholly Owned Subsidiary" of any specified Person means a Subsidiary of
such Person all of the outstanding capital stock or other ownership interests of
which (other than directors' qualifying shares) will at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
-19-
25
Section 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"..................................... 4.11
"Agent Members"............................................. 2.06
"Applicable Premium" ....................................... 3.09
"Asset Sale Offer".......................................... 3.10
"Authentication Order"...................................... 2.02
"Calculation Date".......................................... 1.01
"Change of Control Offer"................................... 4.14
"Change of Control Payment"................................. 4.14
"Change of Control Payment Date"............................ 4.14
"Comparable Treasury Issue"................................. 3.07
"Comparable Treasury Price"................................. 3.07
"Covenant Defeasance"....................................... 8.03
"Discount Rate"............................................. 3.07
"DTC"....................................................... 2.03
"Event of Default".......................................... 6.01
"Excess Proceeds"........................................... 4.10
"H.15(519).................................................. 3.07
"H.15 Daily Update"......................................... 3.07
"incur"..................................................... 4.09
"Independent Investment Banker"............................. 3.07
"Legal Defeasance".......................................... 8.02
"Offer Amount".............................................. 3.09
"Offer Period".............................................. 3.09
"Paying Agent".............................................. 2.03
"Present Value"............................................. 3.07
"Purchase Date"............................................. 3.09
"Reference Treasury Dealer"................................. 3.07
"Reference Treasury Dealer Quotation"....................... 3.07
"Registrar"................................................. 2.03
"Relevant Security"......................................... 3.07
"Restricted Payments"....................................... 4.07
"Treasury Yield"............................................ 3.07
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
-20-
26
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company and any successor or other
obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or rules adopted
by the SEC from time to time;
(g) 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; and
(h) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Each Global Note issued hereunder shall represent such
of the outstanding Notes as shall be specified therein and each shall provide
that it shall represent the aggregate principal amount of outstanding Notes from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate,
-21-
27
to reflect exchanges and redemptions. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the aggregate principal amount
of outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof. The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(c) 144A Global Notes. Notes offered and sold to QIBs in reliance on
Rule 144A shall be issued initially in the form of one or more Global Notes in
definitive fully registered form without interest coupons with the Global Notes
Legend and Private Placement Legend endorsed thereon, which shall be deposited
on behalf of the purchasers of the Notes represented thereby with the Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided.
(d) Regulation S Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of one or more Global Notes
in definitive fully registered form without interest coupons with the Global
Notes Legend, the Private Placement Legend and the Regulation S Global Note
Legend endorsed thereon, which shall be deposited on behalf of the purchaser of
the Notes represented thereby with the Custodian, and registered in the name of
the Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.
(e) The Company shall use commercially reasonable efforts to cause the
Depositary to agree that beneficial interests in the Regulation S Global Notes
shall be credited to or through accounts maintained by designated agents holding
on behalf of Euroclear or Clearstream through and including the 40th day after
the later of the commencement of the Notes offering and the closing of the Notes
offering (such period through and including such 40th day, the "Restricted
Period"), termination of which to be evidenced to the Trustee by an Officer's
Certificate, unless transferred to a person that takes delivery through a 144A
Global Note in accordance with the transfer and certification requirements set
for in this Indenture.
(f) Euroclear and Clearstream Procedures Applicable. The Company and the
Trustee contemplate that transfers of beneficial interests in the Regulation S
Global Notes that are held by Participants through Euroclear or Clearstream will
be subject to the Applicable Procedures of such organizations, as in effect from
time to time.
Section 2.02. Execution and Authentication.
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If the Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, or does not hold such office on the date of
the Notes, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
an authorized signatory of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such
-22-
28
amount except as provided in Section 2.07 hereof. Prior to authenticating any
Additional Notes, the Company shall deliver to the Trustee an Officer's
Certificate stating that such issuance is permitted by Section 4.09.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange and an office or agency
where Notes may be presented for payment. The Company shall designate one Person
to keep a register of the Notes ("Registrar") and of their transfer and
exchange, and one Person to pay the principal of and premium or interest or
Liquidated Damages, if any, on the Notes on behalf of the Company ("Paying
Agent"). The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Trustee will
initially act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another Person as
Registrar or Paying Agent, the Trustee shall continue to act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, or any Liquidated Damages
payable with respect thereto, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, on or before each due date
of the principal of and premium or interest or Liquidated Damages, if any, on
the Notes, it shall segregate and hold in a separate trust fund for the benefit
of the Holders all money held by it as Paying Agent and shall promptly notify
the Trustee of any failure by the Company (or any other obligor on such Notes)
to make any required payment on such Notes. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If
-23-
29
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders which may be conclusively relied on by the Trustee and the Company shall
otherwise comply with TIA Section 312(a); provided that as long as the Trustee
is the Registrar, no list need be furnished.
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary, (ii)
the Company in its sole discretion determines that the Global Notes (in whole
but not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee or (iii) a Default or Event of Default has
occurred and is continuing to occur with respect to the Notes. Upon the
occurrence of any of the preceding events in (i) through (iii) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The Company and the Trustee contemplate that, and the Depositary, by its
acceptance of a Global Note, shall be deemed to have agreed to use all
commercially reasonable efforts to ensure that, and each Person which holds a
beneficial interest in a Global Note, by its purchase and acceptance thereof,
shall be deemed to have agreed that, the transfer and exchange of beneficial
interests in the Global Notes will be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures.
Beneficial interests in the Restricted Global Notes shall be subject to
restrictions on transfer comparable to those set forth herein with respect to
the Restricted Global Notes to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest
in the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided,
however, that prior to the expiration of the Restricted Period,
transfers of beneficial interests in the Regulation S Global Note may
not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
-24-
30
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase or (B) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
-25-
31
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
If any such transfer or exchange is effected at a time when an
Unrestricted Global Note has not yet been issued, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the aggregate principal amount of beneficial
interests transferred or exchanged pursuant to subparagraph (A), (B), (C) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a
-26-
32
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof; or
(E) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof;
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Note in the appropriate principal amount. Any
Restricted Definitive Note issued in exchange for a beneficial interest
in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not
(1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not
bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
-27-
33
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a Definitive Note that does not
bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive Note,
then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(iii) shall be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
-28-
34
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(a)
thereof; or
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof;
the Trustee shall cancel the Restricted Definitive Note and increase or
cause to be increased the aggregate principal amount of, in each such
case, the appropriate Restricted Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
-29-
35
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest in an Unrestricted Global Note is effected pursuant to subparagraphs
(ii) or (iii) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue, and upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate, one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an
-30-
36
exchange, or the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant
to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered and accepted for exchange in
the Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes tendered and accepted for exchange in the Exchange Offer; provided that
each Person tendering beneficial interests or Restricted Definitive Notes shall
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
-31-
37
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend
in substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT AND (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to
this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."; and
(iii) DTC Global Note Legend. Each Global Note to be held by DTC
shall also bear the following legend:
"UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
-32-
38
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(iv) Regulation S Global Note Legend. The Regulation S Global
Note shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933
(THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS THIS
SECURITY IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee (at the direction of the Registrar) or by the Depositary (at the
direction of the Registrar) to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee (at the direction of the Registrar)
or by the Depositary (at the direction of the Registrar) to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05
hereof).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(iv) The Registrar shall not be required (A) to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in
-33-
39
part or (C) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary. Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depositary or a Custodian or
under such Global Note, and the Depositary may be treated by the
Company, the Trustee and any Agent as the absolute owner of such Note
for all purposes whatsoever and none of the Company, the Trustee or any
Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in any Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any Agent from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the
exercise of the rights of an owner of a beneficial interest in any
Global Note.
(vi) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company, or
if the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the requirements of the Company and the Trustee are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.
Every replacement Note shall be an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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 Notes.
-34-
40
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and any other Notes described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section 3.02
hereof and the Company shall deliver to the Trustee prior to any selection of
Notes for redemption an Officer's Certificate setting forth the numbers and
principal amounts of the Notes that are so held.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a Redemption Date or maturity date, money
sufficient to pay all principal and interest payable on that redemption or
maturity date with respect to the Notes (or portions thereof), then on and after
that date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee knows are so owned shall be
so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes in accordance with its customary procedures (subject to the
record retention requirement of the Exchange Act). Certification of the
disposition of all canceled Notes shall be delivered to the Company. The
-35-
41
Trustee shall provide the Company with a list of all Notes that have been
cancelled from time to time as requested by the Company. The Company may not
issue new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PURCHASE
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee), an Officer's Certificate
or Certificates setting forth (i) the Redemption Date, (ii) the principal amount
of Notes to be redeemed and (iii) the information contemplated in the first
paragraph of Section 2.08 hereof; provided, however, that in the event of a
partial redemption, the Company shall furnish such Officer's Certificate or
Certificates to the Trustee at least 45 days but no more than 60 days before the
contemplated Redemption Date.
Section 3.02. Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate,
subject, in the case of purchases, to Section 3.09(h). In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 15 nor more than 60 days prior to the
Redemption Date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
-36-
42
Section 3.03. Notice of Redemption.
At least 15 days but no more than 60 days prior to the Redemption Date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
All notices shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price, or if not then ascertainable, the manner of
calculation thereof;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed;
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes; and
(i) any other information deemed by the Company to be necessary,
desirable or appropriate.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
Redemption Date, an Officer's Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
Redemption Date at the Redemption Price. A notice of redemption may not be
conditional. Such notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice.
Section 3.05. Deposit of Redemption Price.
Prior to 11:00 a.m. (New York City time) on the Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the Redemption Price of and accrued interest on all Notes or portions
thereof to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the
-37-
43
Company in excess of the amounts necessary to pay the Redemption Price of, and
accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the Redemption Date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest payment date, then any accrued and unpaid interest that is due on or
prior to the Redemption Date shall be paid to the Person in whose name such Note
was registered at the close of business on the related record date. If any Note
called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the Redemption Date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in this clause (a) of this Section 3.07, the
Company shall not have the option to redeem the Notes prior to maturity. At any
time, the Company may on any one or more occasions redeem up to 100% of the
aggregate principal amount of Notes issued under this Indenture at a Redemption
Price equal to the greater of (i) of 100% of the principal amount of the Notes
being redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal of and interest on the Notes being redeemed discounted to
the date of redemption on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at a discount rate equal to the Treasury Yield plus 50
basis points, plus, for (i) or (ii) above, whichever is applicable, accrued
interest on such notes to the date of redemption.
(b) (i) "Treasury Yield" means, with respect to any Redemption Date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
(ii) "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of such Notes to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Notes.
(iii) "Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such Redemption
Date, as set forth in the H.15 Daily Update of the Federal Reserve Bank
of New York or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, the
Reference Treasury Dealer Quotation for such Redemption Date.
-38-
44
(iv) "H.15(519)" means the weekly statistical release entitled
"Statistical Release H.15 (519)", or any successor publication,
published by the Board of Governors of the Federal Reserve System.
(v) "H.15 Daily Update" means the daily update of H.15(519)
available through the worldwide website of the Board of Governors of the
Federal Reserve System or any successor site or publication.
(vi) "Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the
Company and reasonably acceptable to the Trustee.
(vii) "Reference Treasury Dealer Quotation" means, with respect
to the Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount and quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
Redemption Date).
(viii) "Reference Treasury Dealer" means a primary U.S.
Government securities dealer in New York City appointed by the Company
and reasonably acceptable to the Trustee.
(c) Unless the Company defaults in payment of the Redemption Price, from
and after the Redemption Date, the Notes or portions thereof called for
redemption shall cease to bear interest, and the holders thereof shall have no
right in respect to such Notes except the right to receive the Redemption Price
thereof.
(d) Promptly after the calculation thereof, the Company shall give the
Trustee written notice of the Redemption Price and the Trustee shall have no
responsibility for the calculation thereof.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make any mandatory redemption or
sinking fund payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid on such interest payment date to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
-39-
45
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for purchase shall continue
to accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for purchase pursuant to the Asset Sale Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000
only;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer their interests in Global Notes by book-entry transfer, to the Company,
a depositary (the "depositary"), if appointed by the Company, or a Paying Agent
at the address specified in the notice at least three days before the Purchase
Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for purchase, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officer's Certificate stating that such Notes or
portions thereof were accepted for purchase by the Company in accordance with
the terms of this Section 3.09 and that the Asset Sale Offer has been made in
accordance with the provisions of Sections 3.09 and 4.10 of this Indenture. The
Company, the depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five Business Days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, and the Trustee, upon written request
from the Company shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount
-40-
46
equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 11:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the interest rate on the Notes to the extent lawful;
it shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York or at the Corporate Trust Office of the Trustee, an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York or at the Corporate Trust Office of the Trustee
for such purposes. The Company shall give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03. Reports.
(a) Whether or not required by the Commission, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, within the time
periods specified in the Commission's rules and regulations:
-41-
47
(1) all quarterly and annual financial information that would be required to
be contained in a filing with the Commission on Forms 10-Q and 10-K,
including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information
only, a report on the annual financial statements by the Company's
certified independent accountants; and
(2) all current reports that the Company will be required to file with the
Commission on Form 8-K.
(b) The Company shall at all times comply with TIA Section 314(a).
(c) In addition, following the consummation of the Exchange Offer
contemplated by the Registration Rights Agreement, whether or not required by
the rules and regulations of the Commission, the Company shall file a copy of
all of the information and reports referred to in clauses (a)(1) and (a)(2)
above with the Commission for public availability within the time periods
specified in the Commission's rules and regulations (unless the Commission will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Company has also agreed
that, for so long as any Notes remain outstanding, it will furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year (which currently ends on December 31), an Officer's
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, premium, if any, or interest, if any,
on the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) hereof shall be accompanied by
a written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
-42-
48
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07. Restricted Payments.
Unless the Rating Condition is satisfied, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on
account of the Company's Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to
direct or indirect Holders of any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or dividends or distributions to the Company or a
Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any Person
that beneficially owns, directly or indirectly, a majority of the
Capital Stock of the Company;
(3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is
subordinated in right of payment to the Notes, except a payment of a
scheduled installment of interest or principal at the Stated Maturity
thereof or a refinancing thereof within one year of the final maturity
date thereof; or
(4) make any Restricted Investment (all such payments and other actions set
forth in these clauses (1) through (4) being collectively referred to as
"Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would
occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
-43-
49
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof (assuming for this purpose that such additional
Indebtedness bore interest at the same rate per annum as the Notes); and
(3) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Subsidiaries after the
date of this Indenture (excluding Restricted Payments permitted by
clauses (2) through (7) and (9) of the next succeeding paragraph), is
less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing prior to the date of this Indenture to the end
of the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the
Company since the date of this Indenture as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or upon the exercise of any
options, warrants or other rights to purchase Capital Stock (other than
Disqualified Capital Stock) of the Company or from the issuance or sale
of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity Interests
(or Disqualified Stock or debt securities) sold to a Subsidiary of the
Company), plus
(c) 100% of the net reduction in any Restricted Investment that
was made after the date of this Indenture resulting from payments of
interest on Indebtedness, dividends, repayment of loans or advances, or
other transfers of assets, in each case to the Company or any Restricted
Subsidiary, and the cash return of capital with respect to any
Restricted Investment (less the cost of disposition, if any), plus
(d) to the extent that any Unrestricted Subsidiary of the Company
is redesignated as a Restricted Subsidiary after the date of this
Indenture, the fair market value of the Company's Investment in such
Subsidiary as of the date of such redesignation, plus
(e) any amount which previously qualified as a Restricted Payment
on account of any Guarantee entered into by the Company or any
Restricted Subsidiary; provided that such Guarantee has not been called
upon and the obligation arising under such Guarantee no longer exists;
less
(f) the after-tax amount of any power and natural gas cost
deferrals for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing prior to the date of
this Indenture to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment; plus
(g) the after-tax amount of any amortization of power and natural
gas deferrals for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing prior to the date of
this Indenture to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment.
-44-
50
So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied
with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition
of any subordinated Indebtedness of the Company or of any Equity
Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition will be excluded from clause
(3) (b) of the preceding paragraph for purposes of calculating the
amount of Restricted Payments that may be made under this Section 4.07;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness;
(4) the repurchase, redemption, retirement, refinancing, acquisition for
value or payment of any Disqualified Stock in exchange for, or out of
the net cash proceeds of the substantially concurrent issuance of new
Disqualified Stock of the Company; provided that any such new
Disqualified Stock:
(a) shall have an aggregate liquidation preference that does not
exceed the aggregate liquidation preference of the amount so refinanced;
(b) shall have a Weighted Average Life to Maturity greater than
the remaining Weighted Average Life to Maturity of the Disqualified
Capital Stock being refinanced; and
(c) shall have a Stated Maturity later than the Stated Maturity
of the Disqualified Stock being refinanced;
(5) the repurchase of any subordinated Indebtedness of the Company at a
purchase price not greater than 101% of the principal amount of such
subordinated Indebtedness in the event of a Change of Control pursuant
to a provision similar to Section 4.14 hereof; provided that prior to
consummating any such repurchase, the Company has made the Change of
Control Offer required by this Indenture and has repurchased all Notes
validly tendered for payment in connection with such Change of Control
Offer;
(6) the repurchase of any subordinated Indebtedness of the Company at a
purchase price not greater than 100% of the principal amount of such
Indebtedness in the event of an Asset Sale pursuant to a provision
similar to Section 4.10 hereof; provided that prior to consummating any
such repurchase, the Company has made the Asset Sale Offer required by
this Indenture and has repurchased all Notes validly tendered for
payment in connection with such Asset Sale Offer;
(7) repurchases of Capital Stock (or warrants or options convertible into or
exchangeable for such Capital Stock) deemed to occur upon exercise of
stock options to the extent that shares of such Capital Stock (or
warrants or options convertible into or exchangeable for such Capital
Stock) represent a portion of the exercise price of such options;
-45-
51
(8) the declaration and payment of regular quarterly cash dividends in
respect of the Company's common stock in a per share amount not to
exceed 105% of the quarterly dividend for the immediately preceding
calendar quarter, and in respect of the Company's preferred stock in an
aggregate amount not to exceed $2.5 million per calendar quarter;
provided that the aggregate amount of such cash dividends will be
included as Restricted Payments for purposes of determining the amount
of Restricted Payments that may be made pursuant to clause (3) of the
preceding paragraph; or
(9) other Restricted Payments by the Company or any Restricted Subsidiary in
an aggregate amount not to exceed $10 million since the date of this
Indenture.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.07 shall be determined by the Board of Directors of the Company
pursuant to a Board Resolution.
For purposes of calculating compliance with the covenants set forth in
this Section 4.07, if at any time the Rating Condition shall not be satisfied,
then the Rating Condition shall be deemed not to have been satisfied since the
date of this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
Unless the Rating Condition is satisfied, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to
the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or
pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.
However, the preceding restrictions shall not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness and Indebtedness under Credit Facilities, as in
effect on the date of this Indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
restructurings (including rate increases), replacements or refinancings
thereof, provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, restructurings,
replacement or refinancings are not materially more restrictive, taken
as a whole, with respect to such dividend and other payment restrictions
than those contained in such Indebtedness, as in effect on the date of
this Indenture;
(2) this Indenture, the Notes and Exchange Notes;
(3) applicable law or any requirement of any regulatory body;
-46-
52
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired, provided
that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Indenture to be incurred;
(5) customary non-assignment provisions of (a) any leases governing a
leasehold interest, (b) any supply, license or other agreement entered
into in the ordinary course of business of the Company or any of its
Restricted Subsidiaries or (c) any security agreement relating to a Lien
incurred pursuant to clause (10) of the definition of "Permitted Liens";
(6) purchase money obligations for property acquired in the ordinary course
of business that impose restrictions on the property so acquired of the
nature described in clause (3) of the preceding paragraph;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary or assets that restricts distributions by that Subsidiary or
of such assets pending such sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are not materially more restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(9) Liens securing Indebtedness that limit the right of the debtor to
dispose of the assets subject to such Lien; and
(10) provisions with respect to the disposition or distribution of assets or
property in asset sale agreements entered into in the ordinary course of
business.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
Unless the Rating Condition is satisfied, the Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any Indebtedness (including Acquired Debt), and the Company shall not
issue any Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Debt) or issue Disqualified
Stock, and the Company's Restricted Subsidiaries may incur Indebtedness or issue
preferred stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock or Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
This Section 4.09 shall not prohibit the incurrence of any of the
following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness and letters of credit under one or more Credit Facilities
in an aggregate principal amount at any one time
-47-
53
outstanding under this clause (1) (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of
the Company and its Restricted Subsidiaries thereunder) equal to $600
million outstanding at any one time, less principal repayments of term
loans and permanent commitment reductions with respect to revolving
loans and letters of credit under any Credit Facility (in each case,
other than in connection with an amendment, refinancing, refunding,
replacement, renewal or modification) made after the date of this
Indenture;
(2) the incurrence by the Company or any of its Restricted Subsidiaries of
the Existing Indebtedness;
(3) the incurrence by the Company of Indebtedness represented by the Notes
to be issued on the date of this Indenture and the issuance of the
Exchange Notes to be issued in exchange for those Notes pursuant to the
Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace, Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to
be incurred under the first paragraph of this Section 4.09 or clauses
(2), (3), (8), (11), or (12) of this paragraph;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Restricted Subsidiaries; provided, however, that:
(a) if the Company is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior payment in full
in cash of all Obligations with respect to the Notes; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
the Company or a Restricted Subsidiary thereof and (ii) any sale or
other transfer of any such Indebtedness to a Person that is not either
the Company or a Restricted Subsidiary thereof, shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or
such Restricted Subsidiary, as the case may be, that was not permitted
by this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of:
(a) Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(b) Currency Hedging Obligations relating to Indebtedness of the
Company or any Restricted Subsidiary and/or to obligations to purchase
or sell assets or properties; provided that such Currency Hedging
Obligations do not increase the Indebtedness or other obligations of the
Company or any Restricted Subsidiary other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(c) Commodity Price Protection Obligations; provided that such
Commodity Price Protection Obligations do not increase the amount of
Indebtedness or other obligations of the Company or any Restricted
Subsidiary other than as a result of fluctuations in commodity prices or
by reason of fees, indemnities and compensation payable thereunder; and
-48-
54
(d) the Guarantee by any Restricted Subsidiary of the Company of
Indebtedness of the Company if such Restricted Subsidiary guarantees the
Notes by executing a guarantee and supplemental indenture to this
Indenture;
(7) the Guarantee by the Company or any Subsidiary of the Company of
Indebtedness of a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this Section 4.09;
(8) Indebtedness of the Company or any Restricted Subsidiary of the Company
represented by Capital Lease Obligations, or preferred stock of a
Restricted Subsidiary issued, or Indebtedness of the Company or a
Restricted Subsidiary incurred or assumed (i) to finance capital
expenditures or (ii) in connection with the acquisition or development
of real property, plant or equipment or the Capital Stock of a
Restricted Subsidiary that owns such property, plant or equipment in
each case incurred for the purpose of financing all or any part of the
purchase price of such property, plant or equipment or Capital Stock, in
each case, in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding pursuant to this clause (8),
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(8), not to exceed $275 million;
(9) Indebtedness incurred to finance power and natural gas cost deferrals
pursuant to, and in accordance with, state statutory or public utility
commission authorization, in an amount not to exceed the amount of the
deferrals so financed;
(10) Indebtedness of the Company or any of its Restricted Subsidiaries
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided however, that such Indebtedness is
extinguished within five Business Days of incurrence;
(11) shares of preferred stock of a Restricted Subsidiary of the Company
issued to the Company or another Restricted Subsidiary of the Company;
provided that any subsequent transfer of any Capital Stock or any other
event that results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such
shares of preferred stock (except to the Company or another Restricted
Subsidiary of the Company) shall be deemed, in each case, to be an
issuance of preferred stock that was not permitted by this clause (11);
and
(12) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness (including under a Credit Facility) in an
aggregate principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (12), not to exceed $25 million.
In addition, the Company shall not incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to any
other Indebtedness of the Company unless such Indebtedness is also contractually
subordinated in right of payment to the Notes pursuant to terms no less
favorable to the Holders of the Notes; provided, however, that no Indebtedness
of the Company shall be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Company solely by virtue of being
unsecured.
-49-
55
For purposes of determining compliance with this Section 4.09:
(1) in the event that an item of proposed Indebtedness meets the criteria of
more than one of the categories of Permitted Debt described in clauses
(1) through (12) above, or is entitled to be incurred pursuant to the
first paragraph of this Section 4.09, the Company shall be permitted to
classify such item of Indebtedness on the date of its incurrence in any
manner that complies with this Section 4.09;
(2) Indebtedness under Credit Facilities outstanding on the date of this
Indenture shall be deemed to have been incurred on the date of this
Indenture in reliance on the exception provided by clause (1) of the
definition of "Permitted Debt";
(3) the accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock shall not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of
this Section 4.09; provided, in each such case, that the amount thereof
is included in Fixed Charges of the Company as accrued; and
(4) for purposes of determining compliance with any dollar-denominated
restriction on the incurrence of Indebtedness denominated in a foreign
currency, the dollar-equivalent principal amount of such Indebtedness
incurred pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such Indebtedness was
incurred.
Notwithstanding the foregoing, the Company shall not incur or suffer to
exist, or permit any of its Restricted Subsidiaries or Unrestricted Subsidiaries
to incur or suffer to exist, any Obligations with respect to an Unrestricted
Subsidiary that would violate the provisions set forth in the definition of
Unrestricted Subsidiary. Specifically, without limiting the generality of the
foregoing, if an Unrestricted Subsidiary incurs Indebtedness that is not
Non-Recourse Debt or any Indebtedness of an Unrestricted Subsidiary ceases to be
Non-Recourse Debt, such Unrestricted Subsidiary shall then cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date.
Section 4.10. Asset Sales.
Unless the Rating Condition is satisfied, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of, as determined by the Company's Board of Directors
and evidenced by a resolution of such Board of Directors set forth in an
Officer's Certificate delivered to the Trustee before or a reasonable
time after such Asset Sale; and
(2) at least 75% of the consideration received in such Asset Sale by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this provision, each of the following shall
be deemed to be cash:
(a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated in right of payment to the Notes) that
-50-
56
are assumed by the transferee or purchaser of any such assets or a third
party on behalf of the transferee or purchaser pursuant to an agreement
that releases the Company or such Restricted Subsidiary from further
liability; and
(b) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted by
the Company or such Restricted Subsidiary into cash (to the extent of
the cash received in that conversion, sale or exchange).
Within 360 days after the receipt of any Net Proceeds from an Asset Sale
that is consummated at a time when the Rating Condition is not satisfied, the
Company may apply those Net Proceeds:
(1) to repay Indebtedness (other than intercompany Indebtedness) of the
Company or a Restricted Subsidiary of the Company and to correspondingly
reduce commitments if such Indebtedness constitutes revolving credit
borrowings;
(2) to make capital expenditures; or
(3) to acquire other long-term assets that are used or useful in a Permitted
Business.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest Net Proceeds
in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are consummated at a time when
the Rating Condition is not satisfied that are not applied or invested as
provided above in the preceding paragraph shall constitute "Excess Proceeds."
Within five days of the date that the aggregate amount of Excess Proceeds
exceeds $15 million, the Company shall make an Asset Sale Offer to all Holders
of Notes (and all holders of other Indebtedness that is pari passu with the
Notes containing provisions similar to those set forth in this Indenture
relating to the Notes with respect to offers to purchase or redeem with the
proceeds of sales of assets) to purchase the maximum principal amount of Notes
and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of
principal amount (or 100% of the accreted value thereof, in the case of
Indebtedness sold at a discount) plus accrued and unpaid interest, and
Liquidated Damages thereon, if any, to the date of purchase, and will be payable
in cash. If any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
other Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Company shall give the Trustee an Officer's Certificate
stating the portions of the Excess Proceeds allocable on a pro rata basis to
such other Indebtedness and to the Notes, and the Trustee shall select the Notes
to be purchased on a pro rata basis based on the principal amount of Notes
tendered. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
Notwithstanding the foregoing,
(1) the Company may (i) dispose of all or any portion of its
transmission assets in one or more RTO Transactions, or (ii) effect, or permit
any Restricted Subsidiary to effect, an Asset Sale in which the Capital Stock of
Avista Communications, Avista Advantage or Avista Labs (provided such Person is
operating substantially the same business as at the date of this Indenture) is
exchanged for Capital Stock or other securities of another Person if, upon
completion thereof, the subject or transferee Person is no longer a Subsidiary
of the Company; provided, however, that if the Rating Condition is not
-51-
57
satisfied at the time of such transaction, the Company shall apply any Net
Proceeds therefrom in accordance with the foregoing provisions; provided,
further, that if the Company or any Restricted Subsidiary thereafter disposes of
any Capital Stock or other securities or ownership interest in the subject or
transferee Person received in, or retained subsequent to, any such transaction,
any cash realized therefrom shall be treated as Net Proceeds from an Asset Sale
and applied in accordance with the foregoing provisions; and
(2) these provisions shall not apply to any Asset Sale which constitutes
a transfer, conveyance, sale, lease or other disposition of all or substantially
all of the Company's properties or assets pursuant to Section 5.01 of this
Indenture.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 3.09 or
this Section 4.10, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
Section 3.09 or this Section 4.10 by virtue of such conflict.
Section 4.11. Transactions with Affiliates.
Unless the Rating Condition is satisfied, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"),
unless:
(1) the terms of such Affiliate Transaction or series of related Affiliate
Transactions are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that would be obtainable in a
comparable transaction or series of related transactions in arm's-length
dealings with an unrelated third party; and
(2) the Company delivers to the Trustee (i) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10 million, a resolution of its
Board of Directors set forth in an Officer's Certificate certifying that
such Affiliate Transaction complies with clause (l) above and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of its Board of Directors and (ii) with respect to
any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $25 million, shall have
received a written opinion of a nationally recognized investment
banking, accounting or appraisal firm stating that such transaction or
series of transactions is fair to the Holders from a financial point of
view.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of the prior paragraph:
(1) any employment, compensation or indemnification arrangement entered into
by the Company or any of its Restricted Subsidiaries in the ordinary
course of business with employees, directors, officers or consultants;
(2) loans or advances to officers, directors, consultants and employees in
the ordinary course of business or guarantees in respect thereof or
otherwise made on their behalf (including any payments on such
guarantees);
-52-
58
(3) any redemption of Capital Stock held by employees upon, death,
disability or termination of employment at a price not in excess of the
fair market value thereof;
(4) the grant of stock options or similar rights to employees and directors
of the Company;
(5) payment of reasonable directors fees;
(6) transactions between or among the Company and/or its Restricted
Subsidiaries; and
(7) Restricted Payments and Permitted Investments that are permitted by the
provisions of Section 4.07 hereof.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any consensual Lien of any kind securing Indebtedness or trade
payables (other than Permitted Liens) upon any of their property or assets, now
owned or hereafter acquired, unless all payments due under this Indenture and
the Notes are secured on an equal and ratable basis with the obligations so
secured until such time as such obligations are no longer secured by a Lien;
provided, however, that the Company and its Restricted Subsidiaries may incur
other Liens to secure Indebtedness or trade payables as long as the sum of (x)
the amount of outstanding Indebtedness and trade payables secured by Liens
incurred pursuant to this proviso plus (y) the Attributable Debt with respect to
all outstanding leases in connection with Sale/Leaseback Transactions entered
into pursuant to the second paragraph of Section 4.16 hereof, does not exceed
$25 million.
Section 4.13. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
Section 4.14. Offer to Repurchase Upon Change of Control.
(a) In the event of a Change of Control, the Company shall make an offer
(a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of that Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(the "Change of Control Payment"). Within ten days following any Change of
Control, the Company shall mail a notice to each Holder stating: (1) that the
Change of Control Offer is being made pursuant to this Section 4.14 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Note not tendered will continue to accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after
-53-
59
the Change of Control Payment Date; (5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to surrender
the Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, or transfer their interests in Global Notes by
book-entry transfer, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Change of
Control Payment Date; (6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the certificate number of the Note in respect of which such notice of
withdrawal is being submitted, the principal amount of Notes delivered for
purchase by the Holder as to which such notice of withdrawal is being submitted,
and a statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of this Indenture,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.14 and
all other provisions of this Indenture applicable to a Change of Control Offer
made by the Company by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(1) accept for payment all Notes or portions of Notes properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions of Notes properly tendered;
and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officer's Certificate stating the aggregate principal
amount of Notes or portions of Notes being purchased by the Company and
stating that the Change of Control Offer has been made in accordance
with the provisions of this Section 4.14.
The Paying Agent shall promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered by such Holder, if any; provided that each new Note shall
be in a principal amount of $1,000 or an integral multiple of $1,000. The
Company shall publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
Notwithstanding anything to the contrary in this Section 4.14, the
Company shall not be obligated to repurchase Notes pursuant to a Change of
Control Offer in the event it has exercised its right to redeem all of the Notes
pursuant to this Indenture on or prior to the date on which the Change of
Control Offer is required to be consummated.
In addition, the Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.14 and all other provisions of this
Indenture
-54-
60
applicable to a Change of Control Offer made by the Company and purchases all
Notes properly tendered and not withdrawn under such Change of Control Offer.
Section 4.15. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary so designated
shall be deemed to be an Investment made as of the time of such designation and
shall either reduce the amount available for Restricted Payments under the first
paragraph of Section 4.07 hereof or reduce the amount available for future
Investments under one or more clauses of the definition of Permitted
Investments, or both, as the Company shall determine. That designation shall be
permitted only if such Investment would be permitted at that time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would
not cause a Default.
Section 4.16. Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction with respect to any
property owned on the date of this Indenture or thereafter acquired unless:
(1) the Company or such Restricted Subsidiary would be entitled to create a
Lien on such property securing Indebtedness in an amount at least equal
to the Attributable Debt with respect to such transaction without
equally and ratably securing the Notes pursuant to Section 4.12 hereof;
(2) the Net Proceeds of the sale are at least equal to the fair market value
(as determined by the Board of Directors of the Company) of the property
sold and the Company or such Restricted Subsidiary applies an amount in
cash equal to the Net Proceeds of such sale to the retirement, within
180 days of the effective date of any such arrangement, of Indebtedness
of the Company or a Restricted Subsidiary or purchases other property
having a fair market value at least equal to the fair market value of
the assets or property sold in such transactions; or
(3) such Sale/Leaseback Transaction is between the Company and any of its
Restricted Subsidiaries or between any Restricted Subsidiaries of the
Company.
In addition to the transactions permitted pursuant to the preceding
paragraph, the Company or any Restricted Subsidiary may enter into any other
Sale/Leaseback Transaction as long as the sum of:
(a) the Attributable Debt with respect to such Sale/Leaseback
Transaction and all other Sale/Leaseback Transactions entered into
pursuant to this proviso, plus
(b) the amount of outstanding Indebtedness secured by Liens
incurred pursuant to the final proviso to Section 4.12 hereof,
does not exceed $25 million.
-55-
61
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
Person); or (2) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; unless:
(1) either:
(a) the Company is the surviving Person; or
(b) the Person formed by or surviving any such consolidation or merger
or to which such sale, assignment, transfer, conveyance or other disposition
shall have been made is either (i) a corporation organized or existing under the
laws of the United States, any state thereof or the District of Columbia or (ii)
a partnership or limited liability company organized or existing under the laws
of the United States, any state thereof or the District of Columbia, that in the
case contemplated in this clause (ii) has at least one Restricted Subsidiary
that is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia which corporation becomes a
co-issuer of the Notes pursuant to a supplemental Indenture in form reasonably
satisfactory to the Trustee;
(2) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes
all the obligations of the Company under the Notes, this Indenture and
the Registration Rights Agreement pursuant to agreements in form
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of Default
exists;
(4) either:
(a) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness either
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof (assuming for this purpose that such
additional Indebtedness bore interest at the same rate per annum as the
Notes) or because the Rating Condition is then satisfied; or
(b) on the date of such transaction after giving pro forma effect
thereto and any related financing transactions, as if the same had
occurred at the beginning of the applicable four-quarter period, the pro
forma Fixed Charge Coverage Ratio of the surviving Person (if other than
the Company) will exceed the actual Fixed Charge Coverage Ratio of the
Company as of such date; and
(5) the Company delivers to the Trustee an Officer's Certificate (attaching
the arithmetic computations to demonstrate compliance with clause (4))
and an Opinion of Counsel, in each
-56-
62
case stating that such consolidation, merger or transfer and such
supplemental indenture complies with this provision and that all
conditions precedent provided for herein relating to such transaction
have been complied with. Such Opinion of Counsel shall not be an expense
of the Trustee.
In addition, the Company shall not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor Person formed by
such consolidation or into or with which the Company is merged or to which such
sale, assignment, transfer, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, conveyance or other disposition, the provisions of
this Indenture referring to the "Company" shall refer instead to the successor
Person and not to the Company), 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 and thereafter, the predecessor Person
shall be relieved of all obligations and covenants under this Indenture and the
Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes and such default continues for a
period of 30 days;
(b) the Company defaults in the payment when due of principal of, or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company or any of its Restricted Subsidiaries fails to comply
with Section 4.10, 4.14 or 5.01.
(d) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
30 days after written notice to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding;
(e) there shall have occurred either (i) a default by the Company or any
Restricted Subsidiary under any instrument or instruments under which there may
be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed of the Company or any of its Restricted Subsidiaries (other than
the Notes) having an outstanding principal amount of $25 million or more that
has caused the holders thereof to declare such Indebtedness to be due and
payable prior to its maturity or (ii) a default by the Company or any Restricted
Subsidiary in the payment at maturity of the principal amount under any such
instrument, and such unpaid portion exceeds $25 million and is not paid, or such
default is not cured or waived, within any grace period applicable thereto,
unless such acceleration is rescinded or annulled or
-57-
63
such Indebtedness is discharged within 20 days of the Company or a Restricted
Subsidiary becoming aware of such default, provided, however, that this clause
(e) shall not apply to any default on Non-Recourse Debt;
(f) a final judgment or order for the payment of money is rendered by a
court or courts of competent jurisdiction against the Company, or any Restricted
Subsidiary of the Company that is a Significant Subsidiary, in an amount in
excess of $25 million and such judgment or judgments remain undischarged, and
there is any period of 30 consecutive days following entry of the final judgment
or order in excess of $25 million during which a stay of enforcement of such
final judgment or order, by reason of a pending appeal or otherwise, is not in
effect;
(g) the Company or any Restricted Subsidiary of the Company that is a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary of the Company that is a Significant Subsidiary in an
involuntary case;
(ii) appoints a custodian of the Company or any Restricted
Subsidiary of the Company that is a Significant Subsidiary or for all or
substantially all of the property of the Company or any Restricted
Subsidiary of the Company that is a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary of the Company that is a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof with respect to the Company or any
Restricted Subsidiary of the Company that is a Significant Subsidiary) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the then outstanding Notes by notice
to the Company and the Trustee, may declare all the Notes to be due and payable
immediately. Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof occurs with respect to the Company or
any Restricted Subsidiary of the Company that is a Significant Subsidiary, all
outstanding Notes shall be due and payable immediately without further action or
notice. The Holders of a majority in aggregate principal
-58-
64
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest, Liquidated Damages
or premium that has become due solely because of the acceleration) have been
cured or waived.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and accrued interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or such Holder, then, and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Company, the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
-59-
65
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed or provided for in the Note (including in connection with a redemption
or an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest 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.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and 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 the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian 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
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. 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
-60-
66
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order, subject to applicable law:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, interest and Liquidated Damages,
if any, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal, premium, if
any, interest and Liquidated Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders of Notes pursuant to this
Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
-61-
67
(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. However, the Trustee shall be under a duty to examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit. If the Trustee shall determine to make
such further inquiry or investigation, it shall (subject to applicable legal
requirement) be entitled to examine the books, records and premises of the
Company during normal business hours, personally or by an attorney or agent.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. 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 from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder either
directly or by or through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
-62-
68
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) 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 unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights and duties. The Trustee is also subject to
Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, the Notes, the Registration
Rights Agreement or the Offering, it shall not be accountable for the Company's
use of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication. The Trustee shall not be charged with knowledge
or notice of any Default or Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless the Trustee has received written
notice thereof from the Company or any Holder. The Trustee may conclusively
assume that the Rating Condition has not been satisfied unless it has received
from the Company written notice that the Rating Condition has been satisfied,
which notice the Company agrees to give to the Trustee promptly after the Rating
Condition has been satisfied. Thereafter, the Trustee may conclusively assume
that the Rating Condition has been satisfied unless it has received from the
Company written notice that the Rating Condition has not been satisfied, which
notice the Company shall give to the Trustee promptly after the Rating Condition
is no longer satisfied.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and (i) if it
is actually known to a Responsible Officer of the Trustee or (ii) written notice
of such Event of Default is given to the Trustee by the Company or any of the
obligor on the Notes, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
No later than November 15 beginning with the November 15, 2001, and for
so long as Notes remain outstanding, the Trustee shall mail to the Holders of
the Notes a brief report dated as of the
-63-
69
preceding September 15 that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
such September 15, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA Section 313(d). The Company
shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services rendered
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the reasonable compensation for
its services, except any such expense, disbursement or advance as may arise from
its gross negligence, willful misconduct or bad faith. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel. The Trustee shall provide the Company reasonable notice of
any expenditure not in the ordinary course of business so long as there is no
default by the Company or Event or Default under this Indenture; provided that
prior approval by the Company of any such expenditure shall not be a requirement
for the making of such expenditure nor for reimbursement by the Company thereof.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (other than taxes applicable to the Trustee's
compensation hereunder) incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, or in
connection herewith, except to the extent any such loss, liability or expense
may be attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
resignation or removal of the Trustee, the satisfaction and discharge of this
Indenture and any rejection or termination under any Bankruptcy Law.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
-64-
70
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may, on behalf of itself and others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee; provided that such corporation shall be eligible under TIA Section
310(a) and this Article 7.
-65-
71
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has (or is a subsidiary of a bank holding company that has)
a combined capital and surplus of at least $100 million as set forth in its (or
in such bank holding company's) most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b). The Trustee shall not be deemed to have a conflicting
interest under the TIA by virtue of being a trustee under the Trust Indentures
dated as of September 1, 0000 xxxxxxx Xxxx xx Xxxxxxx, Xxxxxxx and the Trustee,
under which $66,700,000 aggregate principal amount of Pollution Control Revenue
Refunding Bonds (Avista Corporation Colstrip Project) Series 1999A and
$17,000,000 aggregate principal amount of Pollution Control Revenue Refunding
Bonds (Avista Corporation Colstrip Project) Series 1999B were issued, the
payment of which Bonds are supported by payments made by the Company under Loan
Agreements dated as of September 1, 1999 and assigned to the Trustee.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Section 7.12. Other Capacities.
All references in this Indenture to the Trustee shall be deemed to refer
to the Trustee in its capacity as Trustee and in its capacities as Agent, to the
extent acting under such capacities, and every provision of this Indenture
relating to the conduct or affecting the liability or offering protection,
immunity or indemnity to the Trustee shall be deemed to apply with the same
force and effect to the Trustee acting in its capacities as any Agent.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer's Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes (or, in
the case of Legal Defeasance, a specified principal amount thereof) upon
compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes, or such
specified principal amount thereof, on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, or such specified
-66-
72
principal amount thereof, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes, and any
Liquidated Damages payable with respect thereto, when such payments are due, (b)
the Company's obligations with respect to such Notes under Article 2 and Section
4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and (d)
this Article Eight. Subject to compliance with this Article Eight, the Company
may exercise its option under this Section 8.02 notwithstanding the prior
exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.14, 4.15 and 4.16 hereof and clause (4) of Section 5.01 hereof
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(f) hereof shall not constitute Events of Default; provided
that Section 6.01(d) shall not constitute an Event of Default to the extent it
relates to defaults under those covenants with respect to which Covenant
Defeasance has occurred.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee, in trust, for the benefit of the Holders of the
Notes (or, in the case of Legal Defeasance, a specified principal amount
thereof), cash in United States dollars, non-callable Government Securities, or
a combination thereof, in such amounts or carrying such principal and interest,
as applicable, as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants to pay the principal of, premium, if any,
and interest on the Notes (or, in the case of Legal Defeasance, such specified
principal amount thereof), and any Liquidated Damages payable with respect
thereto, on the
-67-
73
stated maturity date or on the applicable Redemption Date, as the case may be,
and the Company must specify whether the Notes (or, in the case of Legal
Defeasance, such specified principal amount thereof) are being defeased to
maturity or to a particular Redemption Date;
(b) In connection with a Legal Defeasance election under Section 8.02
hereof, the Company shall have delivered to the Trustee:
(i) an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change
in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes subject to Legal Defeasance will not
recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred; or
(ii) (A) an instrument wherein the Company, notwithstanding the
satisfaction and discharge of its Indebtedness in respect of the Notes,
or a portion of the principal amount thereof, shall assume the
obligation (which shall be absolute and unconditional) to irrevocably
deposit with the Trustee such additional sums of money, if any, or
additional Government Securities, if any, or any combination thereof, at
such time or times, as shall be necessary, together with the money
and/or Government Securities theretofore so deposited, to pay when due
the principal of and premium, if any, and interest due and to become due
on such Notes or portions thereof; provided, however, that such
instrument may state that the obligation of the Company to make
additional deposits as aforesaid shall arise only upon the delivery to
the Company by the Trustee of a notice asserting the deficiency and
showing the calculation thereof and shall continue only until the
Company shall have delivered to the Trustee a further opinion of an
independent public accountant of nationally recognized standing to the
effect that no such deficiency exists and showing the calculation of the
sufficiency of the deposits then held by the Trustee; and (B) an opinion
of recognized tax counsel in the United States reasonably acceptable to
the Trustee to the effect that the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of a Covenant Defeasance election under Section 8.03
hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article 8 concurrently with
such incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof is concerned,
at any time in the period ending on the 91st day after the date of deposit;
-68-
74
(e) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material agreement or
instrument (other than this Indenture) to which the Company or any of it
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that (assuming that no Holder of any Notes would be
considered an insider of the Company under applicable bankruptcy or insolvency
law) after the 123rd day following the deposit, the trust funds will not
constitute a "voidable preference" under Section 547 of the Bankruptcy Code;
(g) the Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Opinions of Counsel required to be delivered under this Section 8.04 may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
-69-
75
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note 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 its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 hereof, the Company, and the Trustee, at
any time and from time to time, may amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes by a successor to the Company pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof;
-70-
76
(g) to evidence and provide for the acceptance of the appointment of a
successor trustee under this Indenture.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including Sections 3.09, 4.10
and 4.14 hereof), and the Notes with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture directly affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. However, without the consent of each Holder affected, an
amendment or waiver under this Section 9.02 may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note;
(c) reduce the rate of or change the time for payment of interest on any
Note;
-71-
77
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or interest on the Notes; and
(g) make any change in the amendment and waiver provisions of Section
9.01 or 9.02.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until its Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
11.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture. Such Opinion of Counsel shall not be an expense of
the Trustee.
-72-
78
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01. Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for
whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the
Trustee for cancellation;
(b) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal,
premium, if any, and interest to the date of such deposit and any
Liquidated Damages thereon;
(c) a Legal Defeasance has been effected with respect to all Notes
that have not been so delivered;
(2) no Default or Event of Default shall have occurred and be continuing on
the date Legal Defeasance has been effected or shall occur as a result
of such Legal Defeasance and Legal Defeasance will not result in a
breach or violation of, or constitute a default under, any other
material instrument to which the Company is a party or by which the
Company is bound;
(3) the Company has paid or caused to be paid all sums payable by it under
this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the
Notes at the maturity of the Notes.
In addition, the Company must deliver an Officer's Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Opinions of Counsel required to be delivered under this Section 10.01
may have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, if a
deposit has been made pursuant to sub-clause (b) of clause (1) of this Section
10.01 or if Legal Defeasance shall have been effected pursuant to sub-clause (c)
of clause (1) of this Section 10.01, the provisions of Section 10.02 and Section
8.06 hereof shall survive.
-73-
79
Section 10.02. Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited
with the Trustee pursuant to Section 10.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and premium, if
any, and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 10.01 hereof 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, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
10.01 hereof; provided that (a) if the Company has made any payment of principal
of, premium, if any, or interest on any Notes following the reinstatement of its
obligations, the Trustee or Paying Agent shall promptly pay any such amount to
the Holder of such Notes, and the Company shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money or Government
Securities held by the Trustee or Paying Agent and (b) the Trustee or Paying
Agent shall return all such money and U.S. Government Securities to the Company
promptly after receiving a request therefor at any time, if such reinstatement
of the Company's obligations has occurred and continues to be in effect.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the duties imposed by TIA Section
318(c) shall control.
Section 11.02. Notices.
Any notice or communication by the Company or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Avista Corporation
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Treasurer
If to the Trustee:
Chase Manhattan Bank and Trust Company,
National Association
101 California, Xxxxx 0000
-00-
00
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Institutional Trust Services
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery (except that a
notice of change of address and a Notice to the Trustee shall not be deemed to
have been given until actually received by the addressee).
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
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 regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice of any event to a Holder of a
Global Note, such notice shall be sufficiently given if given to the Depositary
for such Note (or its designee), pursuant to its applicable procedures, not
later than the latest date (if any), and not earlier than the earliest date (if
any), prescribed for the giving of such notice.
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
-75-
81
(a) an Officer's Certificate in form reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 11.05 hereof)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee
(which shall include the statements set forth in Section 11.05 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied;
except that, in the case of any such application or request as to which the
furnishing of such documents, certificates and/or opinions is specifically
required by any provision of this Indenture relating to such particular request,
no additional certificates or opinions shall be required.
Opinions of Counsel required to be delivered under this Section 11.04
may have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(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 such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied and such other opinions as the
Trustee may reasonably require.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders, subject to the consent of the Company. The Registrar or Paying Agent
may make reasonable rules and set reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of
-76-
82
the consideration for issuance of the Notes. Upon an Event of Default, Holders
of the Notes shall have recourse only to the assets of the Company.
Section 11.08. Obligation of the Company; Creditor's Claims.
The Company and the Trustee on behalf of the Holders acknowledge and
agree that (A) the Notes are obligations of the Company only, without recourse
to any of its officers or directors or to holders of its capital stock or any of
their Affiliates other than the Company, and that, in the event of
(i) a bankruptcy, receivership, liquidation, dissolution,
reorganization, marshalling or similar case or proceeding of the Company
or in which the Subsidiaries of the Company are debtors; and
(ii) a substantive consolidation of the Company and its
Subsidiaries, or any of them;
the Holders (or the Trustee on behalf of the Holders) will have no rights in or
to the assets of the Subsidiaries of the Company or in any distribution
therefrom that was made in violation of a Credit Facility, until such time as
the indebtedness created and evidenced thereby has been irrevocably paid in full
in cash,
(B) the holders of indebtedness under a Credit Facility are
relying, and, have been deemed to rely, on the acknowledgement and agreement set
forth in clause (A) preceding in extending indebtedness under a Credit Facility.
Section 11.09. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 11.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 11.11. Successors.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
Section 11.12. Severability.
In case any provision in this Indenture or in the Notes 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.
-77-
83
Section 11.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[The remainder of this page is intentionally left blank.]
-78-
84
SIGNATURES
Dated as of April __, 2001
AVISTA CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
-----------------------------------
Name:
Title:
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
Attest:
-----------------------------------
Authorized Signatory
Date:
-79-
85
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP/CINS______________
9.75% Senior Note due June 1, 2008
No. ___ $________________
AVISTA CORPORATION
promises to pay to [CEDE & CO.]* or registered assigns,
the principal sum of __________________________________________ Dollars [or such
other principal amount as is set forth in the Schedule of Exchanges of Interests
in the Global Note attached hereto]*
on June 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on December 1, 2001.
Record Dates: Close of business on May 15 and November 15 (whether or not a
Business Day).
Dated:
AVISTA CORPORATION
By:
--------------------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
CHASE MANHATTAN BANK AND TRUST COMPANY
NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------
Authorized Signatory
--------------------------------------------------------------------------------
--------
* Insert in Global Notes only.
A-1
86
[Back of Note]
9.75% Senior Note due June 1, 2008
[Insert the Private Placement Legend, Global Note Legend, DTC Global Note
Legend, and Regulation S Global Note Legend, as applicable]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Avista Corporation, a Washington corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate of 9.75% per annum from April 3, 2001 until maturity. The Company will pay
interest and Liquidated Damages semi-annually in arrears on June 1 and December
1 of each year (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from the
date of original issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be December 1, 2001. If and
to the extent required by Section 2(c) of the Registration Rights Agreement, the
Company shall pay Liquidated Damages with respect to the Notes, payable on each
Interest Payment Date. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the foregoing rate of interest; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the May 15th or November
15th (whether or not a Business Day) next preceding the Interest Payment Date,
even if such Notes are canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal,
premium, if any, and interest, and any Liquidated Damages, at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest and any
Liquidated Damages may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, and provided that payment by wire transfer
of immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages on, all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent at least 15 days prior to the payment date. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Chase Manhattan Bank and Trust
Company, National Association, the Trustee under the Indenture, will act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of April 3, 2001 ("Indenture") between the Company and the Trustee. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as
A-2
87
amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling to the extent permitted by law. The Notes are obligations of the
Company limited to $600 million in aggregate principal amount, of which $400
million are Initial Notes and up to $200 million may be issued as Additional
Notes. The Holder of this Note, by its acceptance hereof, shall be deemed to
have consented and agreed to all terms and provisions of the Indenture and,
further, in the event that such Holder shall not be the sole beneficial owner of
this Note, shall be deemed to have agreed to use all commercially reasonable
efforts to cause all direct and indirect beneficial owners of this Note to have
knowledge of the terms and provisions of the Indenture and of this Note and to
comply therewith, including particularly, but without limitation, any provisions
or restrictions in the Indenture regarding the transfer or exchange of such
beneficial interests and any legend set forth on this Note.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in this paragraph (a) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to maturity. At any
time, the Company may on any one or more occasions redeem up to 100% of the
aggregate principal amount of the Notes at a Redemption Price equal to the
greater of (i) 100% of the principal amount of the Notes being redeemed or (ii)
the sum of the present values of the remaining scheduled payments of principal
of and interest on the Notes being redeemed discounted to the date of redemption
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at a discount rate equal to the Treasury Yield plus 50 basis points,
plus, for (i) or (ii) above, whichever is applicable, accrued interest on such
notes to the date of redemption. Notice of redemption shall be given not less
than 15 days nor more than 60 days prior to the date fixed for redemption (the
"Redemption Date").
(b) (i) "Treasury Yield" means, with respect to any Redemption Date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
(ii) "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of such Notes to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Notes.
(iii) "Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such Redemption
Date, as set forth in the H.15 Daily Update of the Federal Reserve Bank
of New York or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, the
Reference Treasury Dealer Quotation for such Redemption Date.
(iv) "H.15(519)" means the weekly statistical release entitled
"Statistical Release H.15 (519)", or any successor publication,
published by the Board of Governors of the Federal Reserve System.
A-3
88
(v) "H.15 Daily Update" means the daily update of H.15(519)
available through the worldwide website of the Board of Governors of the
Federal Reserve System or any successor site or publication.
(vi) "Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the
Company and reasonably acceptable to the Trustee.
(vii) "Reference Treasury Dealer Quotation" means, with respect
to the Reference Treasury Dealer and any Redemption Date, the average,
as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount and quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
Redemption Date).
(viii) "Reference Treasury Dealer" means a primary U.S.
Government securities dealer in New York City appointed by the Company
and reasonably acceptable to the Trustee.
(c) Unless Avista Corp. defaults in payment of the Redemption Price,
from and after the Redemption Date, the Notes or portions thereof called for
redemption will cease to bear interest, and the Holders thereof will have no
right in respect to such Notes except the right to receive the Redemption Price
thereof.
6. MANDATORY REDEMPTION.
The Company shall not be required to make any mandatory redemption or
sinking fund payments with respect to the Notes.
7. REPURCHASE AT THE OPTION OF HOLDERS.
(a) In the event of a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to each Holder to repurchase all
or any part (equal to $1,000 or an integral multiple of $1,000) of that Holder's
Notes at a purchase price in cash equal to 101% of the aggregate principal
amount of Notes plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase (the "Change of Control Payment"). Within ten
days following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within
five days of each date on which the aggregate amount of Excess Proceeds exceeds
$15 million, the Company shall commence an offer to all Holders of Notes (as
"Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount (or 100% of the accreted value
thereof, in the case of Indebtedness sold at a discount) plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes and other
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such remaining Excess
Proceeds for any purpose not otherwise prohibited by the Indenture. If the
aggregate principal amount of Notes and other Indebtedness tendered pursuant to
an Asset Sale Offer exceeds the amount of Excess Proceeds, the Company shall
allocate such Excess Proceeds on a pro rata basis between such other
Indebtedness and the Notes, and the Trustee shall select the Notes to be
purchased on a pro rata basis based upon the
A-4
89
principal amount of Notes tendered. Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 15
days but not more than 60 days before the Redemption Date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the Redemption Date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a purchase or, or tender offer or exchange offer for, Notes) and
any existing default or compliance with any provision of the Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes). Without the consent of any Holder of a Note, the Indenture, or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations
to Holders of the Notes in case of a merger or consolidation or sale of all or
substantially all of the Company's assets, to make any change that would provide
any additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to provide for the
issuance of Additional Notes in accordance with the limitations set forth in the
Indenture and to evidence and provide the acceptance of the appointment of a
successor trustee under the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect,
to the Notes; (ii) default in payment when due of principal of, or premium, if
any, on the Notes when the same becomes due and payable at maturity, upon
redemption (including in connection with an offer to purchase) or otherwise,
(iii) failure by the Company or any of its Restricted Subsidiaries to comply
with the provisions contained in Sections 4.10, 4.14 and 5.01, (iv) default in
performance of any other covenants in the Indenture or in the Notes for 30 days
after written notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount on the Notes then
outstanding; (v) there shall have occurred either (a) a default by the Company
or any Restricted Subsidiary under any instrument or instruments
A-5
90
under which there is or may be secured or evidenced any Indebtedness of the
Company or any Restricted Subsidiary (other than the Notes) having an
outstanding principal amount of $25 million or more that has caused the holders
thereof to declare such Indebtedness to be due and payable prior to its maturity
or (b) a default by the Company or any Restricted Subsidiary in the payment at
maturity of the principal under any such instrument, and such unpaid portion
exceeds $25 million and is not paid, or such default is not cured or waived,
within any grace period applicable thereto, unless such acceleration is
rescinded or annulled or such Indebtedness is discharged within 20 days of the
Company or a Restricted Subsidiary becoming aware of such default provided,
however, that this clause (v) shall not apply to any default on Non-Recourse
Debt; (vi) any final judgment or order for the payment of money shall be
rendered against the Company, or any Restricted Subsidiary that is a Significant
Subsidiary, in an amount in excess of $25 million and shall not be discharged,
and there shall be any period of 30 consecutive days following entry of the
final judgment or order in excess of $25 million during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; and (vii) certain events of bankruptcy or
insolvency with respect to the Company or any Restricted Subsidiary that is a
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture. Upon becoming aware of any Default or Event of Default, the Company
is required to deliver to the Trustee a statement specifying such Default or
Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes. Upon an Event of Default, Holders of the Notes shall have recourse
only to the assets of the Company.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
X-0
00
00. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Exchange and
Registration Rights Agreement dated as of April 3, 2001, between the Company and
the parties named on the signature pages thereof (the "Registration Rights
Agreement") or, in the case of Additional Notes, Holders of Restricted Global
Notes and Restricted Definitive Notes shall have the rights set forth in one or
more registration rights agreements, if any, between the Company and the other
parties thereto, relating to rights given by the Company to the purchasers of
any Additional Notes collectively, the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. LEGAL DEFEASANCE. As provided in the Indenture and subject to
certain limitations therein set forth, the Company may, at its option and at any
time, elect to have all of its obligations discharged with respect to this Note
or any portion of the principal amount of this Note, if there has been
irrevocably deposited with the Trustee, in trust, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient to pay the principal of, premium if any, and interest on this
Note or such portion of this Note, as the case may be, and any Liquidated
Damages payable with respect thereto.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Avista Corporation
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
A-7
92
EXHIBIT C
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
----------------------------------
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
----------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*:
--------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
93
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased ($1,000 or an integral multiple thereof):
$_______________
Date:
---------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
----------------------
Signature Guarantee*:
-------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
94
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Amount Principal Amount Note following officer of
of this Global of this Global such decrease Trustee or
Date of Exchange Note Note or increase Note Custodian
-------------------- ---------------- ---------------- ---------------- --------------
* This schedule should be included only if the Note is issued in global form.
A-10
95
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Avista Corporation
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: 9.75% Senior Notes due June 1, 2008
Reference is hereby made to the Indenture, dated as of April 3, 2001
(the "Indenture"), between Avista Corporation, as issuer (the "Company"), and
Chase Manhattan Bank and Trust Company, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the
B-1
96
Securities Act, (iii) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note, and/or the Definitive Note and in the Indenture and the Securities
Act.
3. CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act.
4. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR AN UNRESTRICTED DEFINITIVE NOTE.
(a) CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
B-2
97
(c) CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for the
benefit of the Trustee and the Registrar and the benefit of the Company.
-----------------------------------
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
Dated:
-----------------------
B-3
98
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP _________), or
(ii) Regulation S Global Note (CUSIP _________), or
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP _________), or
(ii) Regulation S Global Note (CUSIP _________), or
(iii) Unrestricted Global Note (CUSIP _________), or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
99
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Avista Corporation
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: 9.75% Senior Notes due June 1, 2008
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of April 3, 2001
(the "Indenture"), between Avista Corporation, as issuer (the "Company"), and
Chase Manhattan Bank and Trust Company, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note for
a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for
C-1
100
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED
DEFINITIVE NOTE. In connection with the Owner's Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, Regulation S Global Note with an equal principal amount, the
Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer and (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Note and in the Indenture and the Securities Act.
C-2
101
This certificate and the statements contained herein are made for the
benefit of the Trustee and the Registrar and the benefit of the Company.
-----------------------------------
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
Dated:
-----------------------
C-3
