THIS INSTRUMENT CONSTITUTES, AMONG OTHER THINGS, AN AMENDMENT TO A SECURITY
AGREEMENT WHICH CREATED A SECURITY INTEREST IN PERSONAL PROPERTY
XXXXXXXXX WATER CORPORATION
TO
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
TRUSTEE
TWELFTH SUPPLEMENTAL TRUST INDENTURE
DATED AS OF DECEMBER 1, 1997
CREATING FIRST MORTGAGE SERIES K 6.94% BONDS DUE 2012
THIS TWELFTH SUPPLEMENTAL TRUST INDENTURE (the "TWELFTH
SUPPLEMENTAL TRUST INDENTURE"), is made and entered into as of the 1st day of
December, 1997, by and between XXXXXXXXX WATER CORPORATION, a corporation
organized and existing under the laws of the State of California (hereinafter
called the "CORPORATION"), and CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION (hereinafter called the "TRUSTEE"), with reference to
the following recitals:
RECITALS
WHEREAS, by that certain Trust Indenture dated as of August 1, 1954
(hereinafter referred to as the "ORIGINAL INDENTURE") between the Corporation
and Title Insurance and Trust Company (the "FORMER TRUSTEE"), which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on October 8, 1954, in Book 45791, Page 1, Official
Records of said County, the Corporation created its First Mortgage Series A
3-3/4% Bonds of 1954 (hereinafter called the "SERIES A BONDS"), and also
granted, bargained, sold, released, conveyed, confirmed, assigned,
transferred, pledged and set over unto the Former Trustee certain of its
properties, real and personal, in order, INTER ALIA, to secure the payment of
the principal of, and premium (if any) and interest on, all bonds at any time
issued and outstanding under the Original Indenture and all indentures
supplemental thereto (said Original Indenture and all indentures supplemental
thereto, including this Twelfth Supplemental Trust Indenture, being
hereinafter referred to collectively as the "INDENTURE"), all upon the terms,
conditions and trusts therein specified; and
WHEREAS, there was issued under the Original Indenture One Million
Dollars ($1,000,000) principal amount of Series A Bonds, none of which is
outstanding on the date hereof; and
WHEREAS, by that certain First Supplemental Trust Indenture dated
as of August 1, 1956 (hereinafter referred to as the "FIRST SUPPLEMENTAL
TRUST INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County
Recorder of the County of Los Angeles, State of California, on August 1,
1956, in Book 51901, Page 374, Official Records of said County, the
Corporation modified and amended certain provisions of the Original Indenture
and created its First Mortgage Series B 4% Bonds of 1976 (hereinafter called
the "SERIES B BONDS"), and there was issued under the First Supplemental
Trust Indenture Five Hundred Thousand Dollars ($500,000) principal amount of
Series B Bonds, none of which is outstanding on the date hereof; and
WHEREAS, by that certain Second Supplemental Trust Indenture dated
as of August 1, 1958 (hereinafter referred to as the "SECOND SUPPLEMENTAL
TRUST INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on August 7, 1958, in Book D-179, Page 936, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series C 5% Bonds of 1978
(hereinafter called the "SERIES C BONDS"), and there was issued under the
Second Supplemental Trust Indenture Seven Hundred Thousand Dollars ($700,000)
principal amount of Series C Bonds, none of which is outstanding on the date
hereof; and
WHEREAS, by that certain Third Supplemental Trust Indenture dated
as of May 1, 1961 (hereinafter referred to as the "THIRD SUPPLEMENTAL TRUST
INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on August 2, 1961, in Book S-942, Page 305, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series D, 5-1/2% Bonds of 1981
(hereinafter called the "SERIES D BONDS"), and there was issued under the
Third Supplemental Trust Indenture Seven Hundred and Fifty Thousand Dollars
($750,000) principal amount of Series D Bonds, none of which is outstanding
on the date hereof; and
WHEREAS, by that certain Fourth Supplemental Trust Indenture dated
as of
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March 1, 1962 (hereinafter referred to as the "FOURTH SUPPLEMENTAL TRUST
INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles
State of California, on May 22, 1962, in Book D-1622, Page 826, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented; and
WHEREAS, by that certain Fifth Supplemental Trust Indenture dated
as of August 1, 1966 (hereinafter referred to as the "FIFTH SUPPLEMENTAL
TRUST INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on October 17, 1966, as Instrument No. 160, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series E 6-1/8% Bonds of 1986
(hereinafter called the "SERIES E BONDS"), and there was issued under the
Fifth Supplemental Trust Indenture One Million Two Hundred Thousand Dollars
($1,200,000) principal amount of Series E Bonds, none of which is outstanding
on the date hereof; and
WHEREAS, by that certain Sixth Supplemental Trust Indenture dated
as of May 1, 1972 (hereinafter referred to as the "SIXTH SUPPLEMENTAL TRUST
INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on July 21, 1972, as Instrument No. 856, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series F 8% Bonds of 1997
(hereinafter called the "SERIES F BONDS"), and there was issued under the
Sixth Supplemental Trust Indenture One Million Two Hundred Thousand Dollars
($1,200,000) principal amount of Series F Bonds, none of which is outstanding
at the date hereof; and
WHEREAS, by that certain Seventh Supplemental Trust Indenture dated
as of November 1, 1975 (hereinafter referred to as the "SEVENTH SUPPLEMENTAL
TRUST
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INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on December 2, 1975 as Instrument No. 2557, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series G 10% Bonds of 1995
(hereinafter called the "SERIES G BONDS"), and there was issued under the
Seventh Supplemental Trust Indenture One Million Six Hundred Thousand Dollars
($1,600,000) principal amount of Series G Bonds, none of which is outstanding
at the date hereof; and
WHEREAS, by that certain Eighth Supplemental Trust Indenture dated
as of August 1, 1978 (hereinafter referred to as the "EIGHTH SUPPLEMENTAL
TRUST INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on August 31, 1978 as Instrument No. 78-964382, Official
Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series H 9-3/8% Bonds of 1998
(hereinafter called the "SERIES H BONDS"), and there was issued under the
Eighth Supplemental Trust Indenture Two Million Dollars ($2,000,000)
principal amount of Series H Bonds, none of which is outstanding at the date
hereof; and
WHEREAS, by that certain Ninth Supplemental Trust Indenture dated
as of September 20, 1982 (hereinafter referred to as the "NINTH SUPPLEMENTAL
TRUST INDENTURE"), between the Corporation and the Former Trustee, which was
recorded in the Office of the County Recorder of the County of Los Angeles,
State of California, on September 30, 1982 as Instrument No. 82-988617,
Official Records of said County, the Corporation modified and amended certain
provisions of the Original Indenture, as theretofore modified, amended and
supplemented, and created its First Mortgage Series I 16-3/4% Bonds of 1992
(hereinafter called the "SERIES I BONDS"), and there was issued under the
Ninth Supplemental Trust Indenture One Million Five Hundred Thousand Dollars
($1,500,000) principal amount of Series I Bonds, none of which is outstanding
on
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the date hereof; and
WHEREAS, by that certain Tenth Supplemental Trust Indenture dated
as of March 9, 1990 (hereinafter referred to as the "TENTH SUPPLEMENTAL TRUST
INDENTURE"), between the Corporation and Manufacturers Hanover Trust Company
of California as trustee, which was recorded in the Office of the County
Recorder of the County of Los Angeles, State of California, on July 24, 1990
as Instrument No. 00-0000000, Official Records of said County, the
Corporation modified and amended certain provisions of the Original
Indenture, as theretofore modified, amended and supplemented; and
WHEREAS, by that certain Eleventh Supplemental Trust Indenture
dated as of December 8, 1992 (hereinafter referred to as the "ELEVENTH
SUPPLEMENTAL TRUST INDENTURE"), between the Corporation and Chemical Trust
Company of California, as trustee, which was recorded in the Office of the
County Recorder of the County of Los Angeles, State of California, on
December 9, 1992 as Instrument No. 00-0000000, Official Records of said
County, the Corporation modified and amended certain provisions of the
Original Indenture, as theretofore modified, amended and supplemented and
created its First Mortgage Series J 8.86% Bonds of 2023 (hereinafter called
the "SERIES J BONDS"), and there has been issued under the Eleventh
Supplemental Trust Indenture Four Million Dollars ($4,000,000) principal
amount of Series J Bonds, all of which is outstanding on the date hereof; and
WHEREAS, the Corporation desires to issue under the Indenture a new
series of Bonds (hereinafter called the "SERIES K BONDS") secured by the
Indenture, in the principal amount of Five Million Dollars ($5,000,000), to
be designated as "FIRST MORTGAGE SERIES K 6.94% BONDS DUE 2012," which bonds
are to mature on December 1, 2012, are to bear interest at the rate of six
and ninety-four/100 percent (6.94%) per annum, payable semiannually in
arrears on the first days of December and June of each year, commencing on
June 1, 1998, and are to be issued as registered bonds without coupons, of
the denomination of $100,000 or any integral multiple of $100,000 that the
Corporation may execute and deliver, in the manner set forth in Article I of
this Twelfth Supplemental
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Trust Indenture.
WHEREAS, Registered Series K Bonds, the assignment of registered
Series K Bonds, and the Trustee's Certification of Series K Bonds, are to be
in substantially the following forms, respectively, with necessary or
appropriate variations, omissions and insertions as permitted or required by
the Indenture:
1. FORM OF REGISTERED SERIES K BONDS. The registered Series K
Bonds are to be in substantially the following form, with necessary or
appropriate variations, omissions and insertions as permitted or required by
the Indenture:
SERIES K
NO. KR-__ $____________
XXXXXXXXX WATER CORPORATION
REGISTERED FIRST MORTGAGE SERIES K 6.94% BONDS
DUE DECEMBER 1, 2012
XXXXXXXXX WATER CORPORATION, A CORPORATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA (HEREINAFTER CALLED THE
"CORPORATION"), FOR VALUE RECEIVED HEREBY PROMISES TO PAY TO
___________________________________, OR REGISTERED ASSIGNS, ______________
DOLLARS ($___________) IN LAWFUL MONEY OF THE UNITED STATES ON THE FIRST DAY
OF DECEMBER, 2012, TOGETHER WITH INTEREST THEREON FROM THE DATE HEREOF AT THE
RATE OF SIX AND 94/100 PERCENT (6.94%) PER ANNUM, PAYABLE SEMI-ANNUALLY IN
ARREARS IN LIKE LAWFUL MONEY ON THE FIRST DAY OF DECEMBER AND JUNE IN EACH
YEAR COMMENCING WITH JUNE, 1998. INTEREST WILL BE COMPUTED ON THE BASIS OF A
360-DAY YEAR OF TWELVE 30-DAY MONTHS.
THE PRINCIPAL HEREOF AND THE INTEREST ON THIS BOND ARE PAYABLE
AT THE PRINCIPAL OFFICE OF CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL
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ASSOCIATION (HEREINAFTER CALLED THE "TRUSTEE"), WHICH PRINCIPAL OFFICE
(HEREINAFTER CALLED THE "PRINCIPAL OFFICE OF THE TRUSTEE") SHALL MEAN THE
PRINCIPAL CORPORATE TRUST OFFICE OF THE TRUSTEE DESIGNATED IN WRITING TO THE
CORPORATION AND THE REGISTERED HOLDER OF THIS BOND, WHICH PRINCIPAL OFFICE IS
CURRENTLY LOCATED AT 000 XXXXXXXXXX XXXXXX, XXXXX 0000, XXX XXXXXXXXX,
XXXXXXXXXX 00000. INTEREST HEREON SHALL BE PAID ON DECEMBER 1 AND JUNE 1 OF
EACH YEAR TO THE REGISTERED HOLDER OF THIS BOND WHO SHALL BE SUCH AT THE
CLOSE OF BUSINESS ON THE PREVIOUS NOVEMBER 24 AND MAY 24, RESPECTIVELY.
NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS PARAGRAPH TO THE CONTRARY,
PAYMENTS OF INTEREST DUE ON THIS BOND AND PAYMENTS OF ALL OR ANY PORTION OF
THE PRINCIPAL DUE ON THIS BOND MAY BE PAID BY AGREEMENT OF THE CORPORATION
WITH THE REGISTERED HOLDER, BY CHECK MAILED OR WIRE TRANSFER TO THE
REGISTERED OWNER WITHOUT PRESENTATION OR SURRENDER THEREOF TO THE TRUSTEE,
PROVIDED THAT SUCH AGREEMENT COMPLIES WITH SECTION 1 OF ARTICLE IV OF THE
INDENTURE.
THIS BOND IS ONE OF A SERIES OF REGISTERED BONDS OF SERIES K
OF AN AUTHORIZED ISSUE OF BONDS OF THE CORPORATION, DESIGNATED AS ITS "FIRST
MORTGAGE SERIES K 6.94% BONDS DUE 2012" OR THE "SERIES K BONDS", ALL ISSUED
AND TO BE ISSUED UNDER AND EQUALLY AND RATABLY SECURED BY THAT CERTAIN
INDENTURE DATED AS OF AUGUST 1, 1954, AND INDENTURES SUPPLEMENTAL THERETO
INCLUDING THE TWELFTH SUPPLEMENTAL TRUST INDENTURE DATED AS OF DECEMBER 1,
1997 (WHICH INSTRUMENTS ARE HEREIN COLLECTIVELY CALLED THE "INDENTURE") UNDER
WHICH THE TRUSTEE IS ACTING AS TRUSTEE, TO WHICH INDENTURE REFERENCE IS MADE
FOR A DESCRIPTION OF THE PROPERTY MORTGAGED, CONVEYED IN TRUST OR PLEDGED,
THE NATURE AND EXTENT OF THE SECURITY, THE RIGHTS OF THE HOLDERS OF ALL BONDS
IN RESPECT THEREOF, AND THE TERMS AND CONDITIONS SUBJECT TO WHICH ALL BONDS
ISSUED THEREUNDER ARE SECURED AND UPON WHICH ADDITIONAL BONDS HAVING LIKE
SECURITY MAY BE ISSUED. THE SERIES K BONDS ARE LIMITED TO AN AGGREGATE
AUTHORIZED PRINCIPAL AMOUNT OF FIVE MILLION DOLLARS ($5,000,000).
THIS BOND IS TRANSFERABLE BY THE REGISTERED HOLDER HEREOF IN
PERSON OR BY ITS ATTORNEY DULY AUTHORIZED, AT THE PRINCIPAL OFFICE OF THE
TRUSTEE, OR ITS SUCCESSORS IN TRUST, UPON SURRENDER AND CANCELLATION OF THIS
BOND, AND THEREUPON ONE OR MORE NEW REGISTERED BONDS, WITHOUT COUPONS, OF THE
SAME SERIES AND FOR THE SAME AGGREGATE PRINCIPAL AMOUNT
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WILL BE ISSUED TO THE TRANSFEREE IN EXCHANGE THEREFOR AS PROVIDED IN SAID
INDENTURE AND ON PAYMENT, IF THE CORPORATION SHALL SO REQUIRE, OF THE CHARGE
THEREIN AUTHORIZED.
THE OUTSTANDING SERIES K BONDS ARE SUBJECT TO REDEMPTION PRIOR
TO MATURITY IN WHOLE OR IN PART AT THE OPTION OF THE CORPORATION AT ANY TIME
IN THE MANNER AND UPON THE NOTICE PROVIDED IN ARTICLE IV OF THE INDENTURE, AT
100% OF THEIR PRINCIPAL AMOUNT AND ACCRUED INTEREST TO THE DATE OF
REDEMPTION, TOGETHER WITH A PREMIUM ON SAID PRINCIPAL AMOUNT SO TO BE
REDEEMED. ANY OPTIONAL REDEMPTION OF THE SERIES K BONDS BY THE CORPORATION
PURSUANT TO THE FOREGOING PROVISIONS OF THIS PARAGRAPH SHALL BE DEEMED TO BE
APPLIED FIRST TO THE AMOUNT OF PRINCIPAL SCHEDULED TO BE PAID ON THE MATURITY
DATE AND THEN TO THE REMAINING SCHEDULED PRINCIPAL PAYMENTS IN INVERSE
CHRONOLOGICAL ORDER. THE PREMIUM, IF ANY, SHALL BE DETERMINED BY THE
CORPORATION AND CONFIRMED BY THE REGISTERED HOLDER OF THIS BOND AND PROVIDED
IN WRITING TO THE TRUSTEE AS FOLLOWS:
(1) IF THE SERIES K BONDS ARE REDEEMED PRIOR TO DECEMBER 1,
2009, THE PREMIUM PAYABLE SHALL BE THE MAKE-WHOLE AMOUNT DETERMINED AS OF
FIVE BUSINESS DAYS PRIOR TO THE DATE OF SUCH REDEMPTION. IN CALCULATING THE
MAKE-WHOLE AMOUNT, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS SET FORTH:
"MAKE-WHOLE AMOUNT" SHALL MEAN IN CONNECTION WITH ANY
REDEMPTION OF THE SERIES K BONDS THE EXCESS, IF ANY, OF (a) THE
AGGREGATE PRESENT VALUE AS OF THE DATE OF SUCH REDEMPTION OF EACH
DOLLAR OF PRINCIPAL BEING REDEEMED (TAKING INTO ACCOUNT THE
APPLICATION OF SUCH REDEMPTION REQUIRED BY THE PRECEDING PROVISIONS
OF THIS PARAGRAPH) AND THE AMOUNT OF INTEREST (EXCLUSIVE OF
INTEREST ACCRUED TO THE DATE OF REDEMPTION) THAT WOULD HAVE BEEN
PAYABLE IN RESPECT OF SUCH DOLLAR IF SUCH REDEMPTION HAD NOT BEEN
MADE, DETERMINED BY DISCOUNTING SUCH AMOUNTS ON A SEMIANNUAL BASIS
AT THE REINVESTMENT RATE FROM THE RESPECTIVE DATES ON WHICH THEY
WOULD HAVE BEEN PAYABLE, OVER (b) 100% OF THE PRINCIPAL AMOUNT OF
THE OUTSTANDING SERIES K BONDS BEING REDEEMED. IF THE REINVESTMENT
RATE IS EQUAL TO OR HIGHER THAN 6.94%, THE MAKE-WHOLE AMOUNT SHALL
BE ZERO. FOR PURPOSES OF ANY DETERMINATION OF THE MAKE-WHOLE
AMOUNT:
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"REINVESTMENT RATE" SHALL MEAN THE SUM OF 0.25%, PLUS THE
ARITHMETIC MEAN OF THE YIELDS FOR THE TWO COLUMNS UNDER THE
HEADING "WEEK ENDING" PUBLISHED IN THE STATISTICAL RELEASE
UNDER THE CAPTION "TREASURY CONSTANT MATURITIES" FOR THE
MATURITY (ROUNDED TO THE NEAREST MONTH) CORRESPONDING TO THE
WEIGHTED AVERAGE LIFE TO MATURITY OF THE PRINCIPAL BEING
REDEEMED (TAKING INTO ACCOUNT THE REQUIRED APPLICATION OF SUCH
REDEMPTION). IF NO MATURITY EXACTLY CORRESPONDS TO SUCH
WEIGHTED AVERAGE LIFE TO MATURITY, YIELDS FOR THE TWO
PUBLISHED MATURITIES MOST CLOSELY CORRESPONDING TO SUCH
WEIGHTED AVERAGE LIFE TO MATURITY SHALL BE CALCULATED PURSUANT
TO THE IMMEDIATELY PRECEDING SENTENCE AND THE REINVESTMENT
RATE SHALL BE INTERPOLATED OR EXTRAPOLATED FROM SUCH YIELDS ON
A STRAIGHT-LINE BASIS, ROUNDING IN EACH OF SUCH RELEVANT
PERIODS TO THE NEAREST MONTH. FOR THE PURPOSES OF CALCULATING
THE REINVESTMENT RATE, THE MOST RECENT STATISTICAL RELEASE
PUBLISHED PRIOR TO THE DATE OF DETERMINATION OF THE MAKE-WHOLE
AMOUNT SHALL BE USED.
"STATISTICAL RELEASE" SHALL MEAN THE THEN MOST RECENTLY
PUBLISHED STATISTICAL RELEASE DESIGNATED "H.15(519)" OR ANY
SUCCESSOR PUBLICATION WHICH IS PUBLISHED WEEKLY BY THE FEDERAL
RESERVE SYSTEM AND WHICH ESTABLISHES YIELDS ON ACTIVELY TRADED
UNITED STATES GOVERNMENTAL SECURITIES ADJUSTED TO CONSTANT
MATURITIES OR, IF SUCH STATISTICAL RELEASE IS NOT PUBLISHED AT
THE TIME OF ANY DETERMINATION HEREUNDER, THEN SUCH OTHER
REASONABLY COMPARABLE INDEX WHICH SHALL BE DESIGNATED BY THE
HOLDERS OF 66-2/3% IN AGGREGATE PRINCIPAL AMOUNT OF THE
OUTSTANDING SERIES K BONDS.
"WEIGHTED AVERAGE LIFE TO MATURITY" OF THE PRINCIPAL
AMOUNT OF THE SERIES K BONDS BEING REDEEMED SHALL MEAN, AS OF
THE TIME OF ANY DETERMINATION THEREOF, THE NUMBER OF YEARS
OBTAINED BY DIVIDING THE THEN REMAINING DOLLAR-YEARS OF SUCH
PRINCIPAL BY THE AGGREGATE AMOUNT OF SUCH PRINCIPAL. THE TERM
"REMAINING DOLLAR-YEARS" OF SUCH PRINCIPAL SHALL MEAN
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THE AMOUNT OBTAINED BY (1) MULTIPLYING (i) THE REMAINDER OF
(A) THE AMOUNT OF PRINCIPAL THAT WOULD HAVE BECOME DUE ON EACH
SCHEDULED PAYMENT DATE IF SUCH REDEMPTION HAD NOT BEEN MADE,
LESS (B) THE AMOUNT OF PRINCIPAL ON THE SERIES K BONDS
SCHEDULED TO BECOME DUE ON SUCH DATE AFTER GIVING EFFECT TO
THE SUCH REDEMPTION AND THE REQUIRED APPLICATION THEREOF, BY
(ii) THE NUMBER OF YEARS (CALCULATED TO THE NEAREST
ONE-TWELFTH) WHICH WILL ELAPSE BETWEEN THE DATE OF
DETERMINATION AND SUCH SCHEDULED PAYMENT DATE, AND (2)
TOTALLING THE PRODUCTS OBTAINED IN (1).
(2) IF THE SERIES K BONDS ARE REDEEMED AT ANY TIME ON OR
AFTER DECEMBER 1, 2009, THE PREMIUM SHALL BE THE FOLLOWING PERCENTAGE, AS
APPLICABLE, OF THE PRINCIPAL AMOUNT SO REDEEMED:
1.487% IF REDEEMED ON OR AFTER DECEMBER 1, 2009 AND BEFORE DECEMBER 1, 2010;
0.992% IF REDEEMED ON OR AFTER DECEMBER 1, 2010 AND BEFORE DECEMBER 1, 2011;
AND
0.496% IF REDEEMED ON OR AFTER DECEMBER 1, 2011 AND BEFORE DECEMBER 1, 2012.
THE OUTSTANDING SERIES K BONDS ARE SUBJECT TO MANDATORY
REDEMPTION, AT PAR AND WITHOUT PREMIUM, THROUGH THE MANDATORY PAYMENTS MADE
BY THE CORPORATION TO THE SERIES K SINKING FUND AS PROVIDED IN SECTION 6 OF
ARTICLE I OF THE TWELFTH SUPPLEMENTAL TRUST INDENTURE. THE OUTSTANDING
SERIES K BONDS ARE ALSO SUBJECT TO REDEMPTION BY THE CORPORATION, AT PAR AND
WITHOUT PREMIUM, IN THE EVENT OF THE CONDEMNATION OF SUBSTANTIALLY ALL OF THE
CORPORATION'S PROPERTY IN AN EMINENT DOMAIN PROCEEDING, OR UPON A COURT
ORDERED SALE OF SUBSTANTIALLY ALL OF THE CORPORATION'S PROPERTY, THROUGH THE
PROCEEDS THEREOF OR OTHERWISE. FURTHER, THE SERIES K BONDS ARE SUBJECT TO
REDEMPTION BY THE CORPORATION, AT PAR AND WITHOUT PREMIUM, PURSUANT TO THE
SERIES K BONDHOLDER'S RIGHTS TO REQUIRE REPURCHASE SET FORTH IN ARTICLE III
OF THE TWELFTH SUPPLEMENTAL TRUST INDENTURE.
ALL SERIES K BONDS REDEEMED BY THE CORPORATION SHALL BE SO
REDEEMED ON
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A PRO-RATA BASIS CALCULATED WITH REFERENCE TO THE PRINCIPAL AMOUNT OF THE
HOLDINGS THEREOF.
ALL SERIES K BONDS REDEEMED AS PROVIDED IN THE INDENTURE SHALL
BE CANCELLED AND SHALL NOT BE REISSUED.
IN CASE AN EVENT OF DEFAULT (AS DEFINED IN THE INDENTURE)
SHALL OCCUR, THE PRINCIPAL OF THIS BOND IF IT BE THEN OUTSTANDING MAY BE
DECLARED AND BECOME DUE AND PAYABLE AS PROVIDED IN THE INDENTURE.
AS PROVIDED IN THE INDENTURE, THE RIGHTS AND OBLIGATIONS OF
THE CORPORATION AND THE HOLDERS OF ALL BONDS ISSUED THEREUNDER, INCLUDING
WITHOUT LIMITATION, THE SERIES K BONDS, MAY BE MODIFIED OR ALTERED FROM
TIME-TO-TIME BY ANY INDENTURE OR INDENTURES SUPPLEMENTAL THERETO, EXECUTED BY
THE CORPORATION AND THE TRUSTEE AND CONSENTED TO BY THE HOLDERS OF
THREE-FOURTHS IN PRINCIPAL AMOUNT OF ALL SUCH BONDS OUTSTANDING; PROVIDED,
HOWEVER, THAT NO SUCH MODIFICATION OR ALTERATION SHALL BE MADE WHICH WOULD
(i) REDUCE THE PRINCIPAL OF, OR PREMIUM ON, OR THE RATE OF INTEREST ON ANY
SUCH BONDS, (ii) POSTPONE THE MATURITY DATE FIXED IN THE INDENTURE OR IN ANY
SUCH BONDS OR COUPONS FOR THE PAYMENT OF THE PRINCIPAL OF OR ANY INSTALLMENT
OF INTEREST ON ANY SUCH BONDS, (iii) REDUCE THE PERCENTAGE OF THE PRINCIPAL
AMOUNTS OF SUCH BONDS, THE CONSENT OF THE HOLDERS OF WHICH IS REQUIRED FOR
THE AUTHORIZATION OF ANY SUCH CHANGE OR ADDITION, (iv) MODIFY WITHOUT THE
CONSENT OF THE TRUSTEE THE RIGHTS, DUTIES OR IMMUNITY OF THE TRUSTEE, (v)
CREATE OR PERMIT ANY DISCRIMINATION OR DISTINCTION BETWEEN ANY OF THE BONDS
OF ANY ONE SERIES ISSUED UNDER THE INDENTURE OR, EXCEPT AS THEREIN PROVIDED
OR PERMITTED, BETWEEN BONDS OF DIFFERENT SERIES ISSUED UNDER THE INDENTURE,
OR (vi) MODIFY OR ALTER ANY OF THE TERMS AND PROVISIONS OF THE INDENTURE
RELATING, AMONG OTHER THINGS, TO THE SINKING FUNDS OR REDEMPTION PROVISIONS
PROVIDED FOR A PARTICULAR SERIES OF BONDS.
THE OFFER AND SALE OF THE BONDS WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR UNDER ANY STATE
SECURITIES LAWS AND THE BONDS ARE BEING SOLD IN RELIANCE ON EXEMPTIONS
THEREFROM; THE BONDS MAY NOT BE RESOLD OR
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OTHERWISE TRANSFERRED (INCLUDING, WITHOUT LIMITATION, BY HYPOTHECATION)
UNLESS SUCH RESALE OR TRANSFER IS ITSELF REGISTERED OR EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT; THE BONDS MAY NOT BE RESOLD OR
OTHERWISE TRANSFERRED TO AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF THE
EMPLOYMENT RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (ERISA) EXCEPT
AS MAY BE EXPRESSLY PROVIDED IN THE INDENTURE.
THIS BOND SHALL NOT BECOME VALID OR OBLIGATORY FOR ANY PURPOSE
UNLESS AND UNTIL THE TRUSTEE UNDER THE INDENTURE SHALL HAVE SIGNED THE
TRUSTEE'S CERTIFICATE ENDORSED HEREON.
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IN WITNESS WHEREOF, XXXXXXXXX WATER CORPORATION HAS CAUSED
THIS BOND TO BE EXECUTED IN ITS CORPORATE NAME BY ITS PRESIDENT OR VICE
PRESIDENT AND ITS CORPORATE SEAL TO BE HERETO AFFIXED, ATTESTED BY ITS
ASSISTANT SECRETARY OR ASSISTANT SECRETARY.
DATED:
-----------------------------
XXXXXXXXX WATER CORPORATION,
A CALIFORNIA CORPORATION
BY:
-------------------------------
XXXXX X. XXXXX, PRESIDENT
ATTEST:
--------------------------
-------------------, SECRETARY
(CORPORATE SEAL)
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2. FORM OF ASSIGNMENT OF REGISTERED BOND. The assignment of
registered Series K Bond is to be in substantially the following form, with
necessary or appropriate variations, omissions and insertions as permitted or
required by the Indenture:
FOR VALUE RECEIVED, THE UNDERSIGNED REGISTERED HOLDER OF THE
WITHIN BOND HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO _____________________
THE WITHIN BOND AND HEREBY IRREVOCABLY AUTHORIZES THE TRUSTEE THEREIN NAMED,
OR ANY SUCCESSOR TRUSTEE, TO TRANSFER THE SAME ON THE REGISTRY BOOKS KEPT FOR
THAT PURPOSE.
DATED: , 19
------------------ ---
------------------------
IN THE PRESENCE OF:
------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THIS BOND IN EVERY PARTICULAR WITHOUT ALTERATION,
ENLARGEMENT OR ANY CHANGE WHATEVER.
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3. FORM OF TRUSTEE'S CERTIFICATION. The Trustee's Certificate
regarding Series K Bonds is to be in substantially the following form, with
necessary or appropriate variations, omissions and insertions as permitted or
required by the Indenture:
TRUSTEE'S CERTIFICATE
IT IS HEREBY CERTIFIED THAT THIS BOND IS ONE OF THE BONDS
MENTIONED AND DESCRIBED IN THE INDENTURE HEREIN REFERRED TO.
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
BY:
---------------------------------
(AUTHORIZED OFFICER)
WHEREAS, Section 1 of Article X of the Original Indenture provides,
in substance, that the Corporation and the Trustee may enter into indentures
supplemental thereto for the purposes, among others, of creating and setting
forth the particulars of any new series of bonds and providing the terms and
conditions of the issue of the bonds of any series not expressly provided for
in the Original Indenture; and
WHEREAS, the Board of Directors of the Corporation, at a meeting
thereof duly convened and held, has duly authorized the execution and
delivery of this Twelfth Supplemental Trust Indenture for the purpose of
creating said new series of bonds to be designated "FIRST MORTGAGE SERIES K
6.94% BONDS DUE 2012," and of providing the particulars, terms and conditions
thereof; and
WHEREAS, all things necessary to make said Five Million Dollars
($5,000,000) principal amount of Series K Bonds, when duly executed by the
Corporation and authenticated and delivered by the Trustee for issue, the
valid, binding and legal obligation of the Corporation entitled to the
benefits and security of the Indenture, and to
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make this Twelfth Supplemental Trust Indenture a valid, binding and legal
instrument in accordance with its terms, have been done and performed, and
the issue of the Series K Bonds, as herein provided, has been in all respects
duly authorized;
NOW, THEREFORE, BE IT RESOLVED THAT the Corporation, in
consideration of the premises, the mutual covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and in order to (i) declare the terms and conditions
upon and subject to which the Series K Bonds will and are to be issued and
secured, (ii) create the Series K Bonds, and (iii) further secure the payment
of the principal of, and premium (if any) and interest on, all bonds at any
time issued and outstanding under the Indenture according to their tenor and
effect, and the performance and observance by the Corporation of all the
covenants and conditions in the Indenture and in the bonds contained (and
without in any way limiting the generality or effect of the Original
Indenture or any of the supplemental indentures thereto, but confirming the
lien of the Indenture), has executed and delivered this Twelfth Supplemental
Trust Indenture and does hereby grant, bargain, sell, release, convey,
confirm, assign, transfer, pledge and set over unto the Trustee, its
successors and assigns forever, all and singular, the properties specifically
described and mentioned or enumerated in Exhibit A attached hereto, reference
to which Exhibit for a more specific description and enumeration of the
property therein described and enumerated is hereby made and which Exhibit is
incorporated herein with the same force and effect as if the same were here
set forth.
TO HAVE AND TO HOLD in trust, nevertheless, with power of
sale, for the equal and proportionate benefit and security of all holders of
the bonds and interest obligations issued hereunder and secured by the
Indenture, and to secure the payment of such bonds and interest thereon, when
payable, in accordance with the provisions of the Indenture, and under and
subject to the provisions and conditions and for the uses therein set forth.
IT IS HEREBY COVENANTED, DECLARED AND AGREED by and
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between the parties hereto that the Series K Bonds be issued, authenticated
and delivered upon and subject to the covenants and conditions as stated in
the Indenture, including this Twelfth Supplemental Trust Indenture; and the
Corporation, for itself and its successors, does hereby covenant and agree to
and with the Trustee and its successors in trust, for the benefit of those
who from time to time shall hold or own any Series K Bonds at any time issued
and outstanding under the Indenture, as follows:
ARTICLE I.
CREATION, AUTHENTICATION AND ISSUANCE AND PROVISIONS
RELATING TO FORM OF SERIES K BONDS
SECTION 1. There is hereby created, for issuance under the
Indenture, and to be secured thereby a series of bonds, to be designated
"FIRST MORTGAGE SERIES K 6.94% BONDS DUE 2012" (being the "SERIES K BONDS"
herein referred to) and to be in the aggregate principal amount of Five
Million Dollars ($5,000,000). No Series K Bonds in addition to said Five
Million Thousand Dollars ($5,000,000) principal amount shall be authenticated
and delivered by the Trustee except in exchange for, in lieu of, or in
substitution for, other Series K Bonds pursuant to Article I of the Indenture.
SECTION 2. The registered Series K Bonds shall bear interest
from the date of issuance at the rate of Six and 94/100 percent (6.94%) per
annum, payable semi-annually on the first day of December and June of each
year, commencing in June, 1998 and shall be substantially of the tenor and
purport recited above. The Series K Bonds shall mature December 1, 2012, and
shall be issued as registered bonds without coupons in denominations of
$100,000 and any integral multiple of $100,000 which the Corporation may
execute and deliver. The Series K Bonds shall be dated as provided in Section
2 of Article I of the Indenture.
SECTION 3. All Series K Bonds shall be numbered KR-1 and
upward.
SECTION 4. The Series K Bonds are subject to redemption prior
to maturity
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in whole or in part at the option of the Corporation at any time in the
manner and upon the notice provided in Article IV of the Indenture, at 100%
of the principal amount thereof and interest accrued thereon to the date
fixed for redemption, together with a premium on said principal amount so to
be redeemed. Any optional redemption of the Series K Bonds by the Corporation
pursuant to the foregoing provisions of this Section 4 shall be deemed to be
applied first to the amount of principal scheduled to be paid on the maturity
date and then to the remaining scheduled principal payments in inverse
chronological order. The premium, if any, shall be determined by the
Corporation and confirmed by the Bondholder and provided in writing to the
Trustee as follows:
(1) If the Series K Bonds are redeemed prior to December 1,
2009, the premium payable shall be the Make-Whole Amount determined as of
five business days prior to the date of such redemption. In calculating the
Make-Whole Amount, the following terms shall have the meanings set forth:
"Make-Whole Amount" shall mean in connection with any
redemption of the Series K Bonds the excess, if any, of (a) the
aggregate present value as of the date of such redemption of each
dollar of principal being redeemed (taking into account the
application of such redemption required by the preceding provisions
of this Section 4) and the amount of interest (exclusive of
interest accrued to the date of redemption) that would have been
payable in respect of such dollar if such redemption had not been
made, determined by discounting such amounts on a semiannual basis
at the Reinvestment Rate from the respective dates on which they
would have been payable, over (b) 100% of the principal amount of
the outstanding Series K Bonds being redeemed. If the Reinvestment
Rate is equal to or higher than 6.94%, the Make-Whole Amount shall
be zero. For purposes of any determination of the Make-Whole
Amount:
"Reinvestment Rate" shall mean the sum of 0.25%, plus the
arithmetic mean of the yields for the two columns under the
heading "Week Ending" published in the Statistical Release
under the caption "Treasury
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Constant Maturities" for the maturity (rounded to the nearest
month) corresponding to the Weighted Average Life to
Maturityof the principal being redeemed (taking into account
the required application of such redemption). If no maturity
exactly corresponds to such Weighted Average Life to
Maturity, yields for the two published maturities most
closely corresponding to such Weighted Average Life to
Maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated from such yields on a
straight-line basis, rounding in each of such relevant
periods to the nearest month. For the purposes of calculating
the Reinvestment Rate, the most recent Statistical Release
published prior to the date of determination of the
Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the
Federal Reserve System and which establishes yields on
actively traded United States Governmental Securities
adjusted to constant maturities or, if such statistical
release is not published at the time of any determination
hereunder, then such other reasonably comparable index which
shall be designated by the holders of 66-2/3% in aggregate
principal amount of the outstanding Series K Bonds.
"Weighted Average Life to Maturity" of the principal
amount of the Series K Bonds being redeemed shall mean, as of
the time of any determination thereof, the number of years
obtained by dividing the then Remaining Dollar-Years of such
principal by the aggregate amount of such principal. The
term "Remaining Dollar-Years" of such principal shall mean
the amount obtained by (1) multiplying (i) the remainder of
(A) the amount of principal that would have become due on
each scheduled payment date if such redemption had not been
made, less (B) the amount of principal on the Series K Bonds
scheduled to become due on such date after giving
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effect to the such redemption and the required application
thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) which will elapse between the date of
determination and such scheduled payment date, and (2)
totalling the products obtained in (1).
(2) If the Series K Bonds are redeemed at any time on or
after December 1, 2009, the premium shall be the following percentage, as
applicable of the principal amount so redeemed:
1.487% if redeemed on or after December 1, 2009 and before December
1, 2010;
0.992% if redeemed on or after December 1, 2010 and before December
1, 2011; and
0.496% if redeemed on or after December 1, 2011 and before December
1, 2012.
The outstanding Series K Bonds are subject to mandatory
redemption, at par and without premium, through the mandatory payments made
by the Corporation to the Series K Sinking Fund as provided in Section 6 of
Article I of this Twelfth Supplemental Trust Indenture. The outstanding
Series K Bonds are also subject to redemption by the Corporation, at par and
without premium, in the event of the condemnation of substantially all of the
Corporation's property in an eminent domain proceeding, or upon a court
ordered sale of substantially all of the Corporation's property, through the
proceeds thereof or otherwise. Further, the Series K Bonds are subject to
redemption by the Corporation, at par and without premium, pursuant to the
Series K Bondholder's Rights to Require Repurchase set forth in Article II of
the Twelfth Supplemental Trust Indenture.
All Series K Bonds redeemed by the Corporation shall be so
redeemed on a pro-rata basis calculated with reference to the principal
amount of the holdings thereof.
All Series K Bonds redeemed as provided herein shall be
cancelled and shall not be reissued.
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SECTION 5. The Corporation hereby appoints the Trustee as
registrar and its agent for the registration of Series K Bonds. The books
for such registration shall be kept at the office of the registrar and when
said registrar shall make such registration of Series K Bonds, it shall
promptly inform the Corporation by mail of such action.
SECTION 6.
(a) The Corporation covenants and agrees to create and
maintain a sinking fund for the purpose of retiring the Series K Bonds (which
sinking fund shall be designated as the "SERIES K SINKING FUND") and for such
purpose, to deposit with the Trustee, or its successor in trust, for the
redemption and retirement of Series K Bonds, on or before one (1) business
day (each a "SINKING FUND PAYMENT DATE") prior to December 1, in each year
through 2011, commencing on the first business day prior to December 1, 2006,
an amount of money sufficient to redeem on the following December 1 (each
such day being a "REDEMPTION DATE"), Seven Hundred Thousand Dollars
($700,000) of the principal amount of Series K Bonds plus accrued interest
thereon to the date of such Redemption Date, and one payment of Eight Hundred
Thousand Dollars ($800,000) on December 1, 2012, plus accrued interest
thereon to the date of such final Sinking fund payment.
(b) The Trustee shall at any time when there shall be in the
Series K Sinking Fund an amount of money sufficient to redeem not less than
One Hundred Thousand Dollars ($100,000) in principal amount of the Series K
Bonds, use and apply the moneys in the Series K Sinking Fund for the purpose
of redeeming Series K Bonds on the next Redemption Date in the manner and to
the extent provided in Article IV of the Indenture.
SECTION 7. Anything elsewhere contained in this Twelfth
Supplemental Trust Indenture or in the Original Indenture as heretofore
modified, amended and supplemented to the contrary notwithstanding, none of
the terms and provisions of this
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Article I shall be in any manner modified or altered without the consent of
the holders of all Series K Bonds then outstanding having been first received
from the holders thereof, by their votes at a meeting of Series K bondholders
called by the Trustee on such notice as the Trustee shall deem sufficient, or
by an instrument or instruments in writing signed by all such bondholders of
Series K Bonds and filed with the Trustee.
ARTICLE II
MODIFICATION AND AMENDMENT OF INDENTURE
SECTION 1. Subdivision (a) of Section 16 of Article V of the
Original Indenture, as heretofore modified, amended and supplemented, is
hereby further modified and amended to read as follows:
"SECTION 16. (a) THE CORPORATION COVENANTS AND AGREES THAT
IT WILL NOT DECLARE OR PAY DIVIDENDS, INCLUDING DIVIDENDS IN THE
FORM AND AMOUNTS CONTEMPLATED BY SECTION 6(b)(ii) OF ARTICLE XV
HEREOF ON, OR PURCHASE, REDEEM, OR OTHERWISE ACQUIRE, SHARES OF ITS
COMMON STOCK, EXCEPT OUT OF
(i) NET INCOME (AS HEREINAFTER DEFINED IN SUBDIVISION
(b) OF THIS SECTION 16) ACCRUED SUBSEQUENT TO DECEMBER 31,
1992, PLUS
(ii) THREE MILLION DOLLARS ($3,000,000)."
ARTICLE III
COVENANTS AND AGREEMENTS RELATING
TO
SERIES K BONDS
The Original Indenture, as heretofore modified, amended and
supplemented, is hereby further amended to add the following new Article XVI
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immediately following Article XV thereof:
ARTICLE XVI
COVENANTS AND AGREEMENTS RELATING
TO
SERIES K BONDS
SECTION 1. RIGHTS TO REQUIRE REPURCHASE.
(a) LEVERAGE.
(i) IF AT ANY TIME THE INDEBTEDNESS OF PARENT, CALCULATED AS
OF THE LAST DAY OF EACH FISCAL QUARTER OF PARENT, EXCEEDS 60%
OF THE SUM OF (A) SHAREHOLDERS' EQUITY OF PARENT PLUS (B)
INDEBTEDNESS OF PARENT, THEN THE BONDHOLDER SHALL HAVE THE
RIGHT, AT THE BONDHOLDER'S SOLE OPTION, TO REQUIRE THE
CORPORATION TO PREPAY IN WHOLE THE AGGREGATE OUTSTANDING
PRINCIPAL AMOUNT OF THE BONDHOLDER'S SERIES K BONDS, TOGETHER
WITH INTEREST THEREON TO THE DATE ON WHICH SAID BONDS ARE
PAID IN FULL AND WITHOUT ANY PREMIUM.
(ii) PARENT AND THE CORPORATION SHALL PROMPTLY AT THE END OF
EACH FISCAL QUARTER OF PARENT JOINTLY CALCULATE (A) THE
INDEBTEDNESS OF PARENT AND (B) 60% OF THE SUM OF
SHAREHOLDERS' EQUITY OF PARENT PLUS INDEBTEDNESS OF PARENT
FOR PURPOSES OF THIS PARAGRAPH (a) OF THIS SECTION 1, AND
SHALL WITHIN THIRTY (30) DAYS AFTER THE END OF EACH FISCAL
QUARTER DELIVER TO THE BONDHOLDER AND THE TRUSTEE A WRITTEN
REPORT DETAILING THE DETERMINATION OF THE FOREGOING ITEMS AND
THE CALCULATIONS WITH RESPECT THERETO.
(b) NON-UTILITY LINES OF BUSINESS.
(i) IF AT ANY TIME (A) THE CONSOLIDATED NON-UTILITY ASSETS
OF PARENT, CALCULATED AS OF THE LAST DAY OF EACH FISCAL
QUARTER OF PARENT, EXCEED 30% OF THE ASSETS OF PARENT AND ITS
SUBSIDIARIES, INCLUDING THE CORPORATION (SUCH
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EVENT BEING HEREIN REFERRED TO AS A "NON-UTILITY EXCESS") AND
SUCH NON-UTILITY EXCESS CONTINUES FOR A PERIOD OF EIGHT (8)
CONSECUTIVE FISCAL QUARTERS OF PARENT (SUCH PERIOD BEING
HEREIN REFERRED TO AS A "NON-UTILITY EXCESS PERIOD") AND (B)
THE RONA DURING THE NON-UTILITY EXCESS PERIOD, CALCULATED AS
OF THE LAST DAY OF THE NON-UTILITY EXCESS PERIOD, IS LESS
THAN THE ROA FOR THE SAME PERIOD, THEN THE BONDHOLDER SHALL
HAVE THE RIGHT, AT THE BONDHOLDER'S SOLE OPTION, TO REQUIRE
THE CORPORATION TO PREPAY IN WHOLE 50% OF THE OUTSTANDING
PRINCIPAL AMOUNT OF THE BONDHOLDER'S SERIES K BONDS, TOGETHER
WITH INTEREST THEREON TO THE DATE OF SUCH PREPAYMENT OF SAID
SERIES K BONDS AND WITHOUT ANY PREMIUM; PROVIDED, FURTHER,
THAT (C) IF THE NON-UTILITY EXCESS REFERRED TO IN CLAUSE (A)
ABOVE SHALL RE-OCCUR AT ANY TIME AND CONTINUE FOR A PERIOD OF
AT LEAST FOUR (4) ADDITIONAL CONSECUTIVE FISCAL QUARTERS OF
PARENT (THE "ADDITIONAL NON-UTILITY EXCESS PERIOD") AND (D)
THE RONA DURING THE ADDITIONAL NON-UTILITY EXCESS PERIOD AND
THE FOUR (4) FISCAL QUARTERS IMMEDIATELY PRECEDING THE
ADDITIONAL NON-UTILITY EXCESS PERIOD, CALCULATED AS OF THE
LAST DAY OF THE ADDITIONAL NON-UTILITY EXCESS PERIOD, IS LESS
THAN THE ROA FOR THE SAME PERIOD, THEN THE BONDHOLDER SHALL
HAVE THE RIGHT, AT THE BONDHOLDER'S SOLE OPTION, TO REQUIRE
THE CORPORATION TO PREPAY IN WHOLE THE REMAINING 50% OF THE
OUTSTANDING PRINCIPAL AMOUNT OF THE BONDHOLDER'S SERIES K
BONDS, TOGETHER WITH INTEREST THEREON TO THE DATE OF SUCH
PREPAYMENT AND WITHOUT ANY PREMIUM.
(ii) PARENT AND THE CORPORATION SHALL PROMPTLY AT THE END OF
EACH FISCAL QUARTER OF PARENT JOINTLY CALCULATE THE
NON-UTILITY ASSET RATIO AND, IN THE EVENT OF THE EXISTENCE OF
A NON-UTILITY EXCESS, RONA AND ROA, FOR PURPOSES OF THIS
PARAGRAPH (b) OF THIS SECTION 1, AND SHALL WITHIN THIRTY (30)
DAYS AFTER THE END OF EACH FISCAL QUARTER DELIVER TO THE
BONDHOLDER AND THE TRUSTEE A WRITTEN REPORT DETAILING THE
DETERMINATION OF THE FOREGOING ITEMS AND THE CALCULATIONS
WITH RESPECT THERETO.
(c) BONDHOLDER'S ELECTION TO REQUIRE REPURCHASE. IN THE
EVENT THAT,
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PURSUANT TO SUBSECTION (a) OR (b) OF SECTION 1 OF THIS ARTICLE XVI,
THE BONDHOLDER HAS THE RIGHT TO REQUIRE THE CORPORATION TO
REPURCHASE SOME OR ALL OF THE SERIES K BONDS AND THE BONDHOLDER
DESIRES TO EXERCISE ANY SUCH RIGHT, THEN THE BONDHOLDER SHALL
PROVIDE THE TRUSTEE AND THE CORPORATION WITH WRITTEN NOTICE OF SUCH
ELECTION WITHIN SIXTY (60) DAYS OF THE BONDHOLDER'S RECEIPT OF THE
WRITTEN REPORT FROM THE CORPORATION (PURSUANT TO SUBSECTION (a) OR
(b) OF SECTION 1 OF THIS ARTICLE XVI, AS APPROPRIATE) UPON WHICH
THE BONDHOLDER HAS BASED ITS RIGHT TO REQUIRE REPURCHASE. SAID
NOTICE SHALL SPECIFY THE PRINCIPAL AMOUNT OF THE SERIES K BONDS TO
BE REPURCHASED. THE CORPORATION SHALL PROMPTLY DEPOSIT WITH THE
TRUSTEE THE NECESSARY FUNDS TO REPURCHASE THE SERIES K BONDS
(PRINCIPAL PLUS ACCRUED INTEREST THEREON UNTIL THE "REPURCHASE
DATE") DESIGNATED IN SUCH NOTICE AS THOSE TO BE REPURCHASED WITH
INSTRUCTIONS TO THE TRUSTEE TO USE SUCH FUNDS FOR SUCH REPURCHASE.
ANY SUCH SERIES K BONDS SHALL BE REPURCHASED WITHIN TEN (10) DAYS
(THE "REPURCHASE DATE") OF RECEIPT BY THE TRUSTEE OF THE NECESSARY
FUNDS TO REPURCHASE THE SAME. FROM AND AFTER THE REPURCHASE DATE
(UNLESS THE CORPORATION SHALL FAIL TO DEPOSIT WITH THE TRUSTEE THE
NECESSARY FUNDS TO REPURCHASE THE SERIES K BONDS AS HEREIN
PROVIDED), NO FURTHER INTEREST SHALL ACCRUE UPON ANY OF SUCH SERIES
K BONDS SO TO BE REPURCHASED AND, ANYTHING IN SUCH SERIES K BONDS
OR IN THE INDENTURE TO THE CONTRARY NOTWITHSTANDING SHALL BECOME
AND BE NULL AND VOID. THE SUM DUE FOR PRINCIPAL AND PREMIUM ON
EACH SUCH SERIES K BOND TO BE REPURCHASED SHALL BE PAYABLE TO THE
REGISTERED HOLDER OF SUCH BONDS. IN NO CASE, HOWEVER, SHALL THE
CORPORATION BE REQUIRED TO MAKE PAYMENT EXCEPT UPON THE SURRENDER
TO THE TRUSTEE OF SUCH SERIES K BONDS. ANY ELECTION BY THE
BONDHOLDER NOT TO EXERCISE ITS RIGHT TO REQUIRE REPURCHASE
HEREUNDER SHALL NOT BE DEEMED A CONTINUING WAIVER OR A WAIVER OF
ANY FUTURE RIGHT TO REQUIRE REPURCHASE PURSUANT TO THE TERMS HEREOF.
(d) DEFINITIONS. FOR PURPOSES OF THIS SECTION 1 OF ARTICLE
XVI, NOTWITHSTANDING ANY OTHER PROVISION IN THE ORIGINAL INDENTURE,
AS HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED, THE FOLLOWING
TERMS SHALL HAVE THE MEANINGS SET FORTH BELOW:
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"ASSETS" SHALL MEAN THE AGGREGATE AMOUNT OF ALL ASSETS OF ANY
PERSON AS DETERMINED ON A CONSOLIDATED BASIS, IF APPLICABLE, IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
"CONSOLIDATED NET EARNINGS", WITH RESPECT TO ANY PERSON AND
FOR ANY PERIOD SHALL MEAN THE CONSOLIDATED GROSS REVENUES OF SUCH
PERSON FOR SUCH PERIOD LESS ALL OPERATING AND NON-OPERATING
EXPENSES OF SUCH PERSON FOR SUCH PERIOD, INCLUDING ALL CHARGES OF A
PROPER CHARACTER (INCLUDING CURRENT AND DEFERRED TAXES ON INCOME,
PROVISION FOR TAXES ON UNREMITTED FOREIGN EARNINGS WHICH ARE
INCLUDED IN GROSS REVENUES, AND CURRENT ADDITIONS TO RESERVES,
[BUT NOT INCLUDING IN GROSS REVENUES ANY GAINS (NET OF EXPENSES AND
TAXES APPLICABLE THERETO) OR LOSSES RESULTING FROM THE SALE,
CONVERSION OR OTHER DISPOSITION OF CAPITAL ASSETS (I.E., ASSETS
OTHER THAN CURRENT ASSETS), ANY GAINS OR LOSSES RESULTING FROM THE
WRITE UP OR WRITE DOWN OF ASSETS, AS THE CASE MAY BE, ANY EQUITY OF
SUCH PERSON IN UNREMITTED EARNINGS OF ANY CORPORATION WHICH IS NOT A
SUBSIDIARY, ANY EARNINGS OF ANY PERSON ACQUIRED BY SUCH PERSON THROUGH
PURCHASE, MERGER OR CONSOLIDATION OR OTHERWISE FOR ANY YEAR PRIOR TO
THE YEAR OF ACQUISITION, OR ANY DEFERRED CREDIT REPRESENTING THE
EXCESS OF EQUITY OF ANY SUBSIDIARY AT THE DATE OF ACQUISITION OVER
THE COST OF THE INVESTMENT IN SUCH SUBSIDIARY]; ALL DETERMINED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
"CONSOLIDATED NON-UTILITY ASSETS" SHALL MEAN THE AGGREGATE
AMOUNT OF ALL ASSETS OF THE NON-UTILITY SUBSIDIARIES AS DETERMINED
ON A CONSOLIDATED BASIS IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
"DWR LOANS" SHALL MEAN CONTRACTS WITH THE STATE OF CALIFORNIA
DEPARTMENT OF WATER RESOURCES FOR LOANS UNDER THE CALIFORNIA SAFE
DRINKING WATER BOND LAW OF 1976.
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"INDEBTEDNESS OF PARENT" SHALL MEAN LIABILITY OF PARENT FOR
MONEY BORROWED DIRECTLY BY PARENT, DETERMINED WITHOUT GIVING EFFECT
TO ANY PRINCIPLES OF CONSOLIDATION, AND ALL INDEBTEDNESS OF OTHERS
WITH RESPECT TO WHICH PARENT HAS BECOME LIABLE BY WAY OF A
GUARANTEE.
"NON-UTILITY ASSET RATIO" SHALL MEAN, ON ANY DATE AS OF WHICH
THE AMOUNT THERETO IS TO BE DETERMINED, THE PRODUCT OF THE
CONSOLIDATED NON-UTILITY ASSETS DIVIDED BY THE ASSETS OF THE PARENT
AND ITS SUBSIDIARIES, INCLUDING THE CORPORATION."
"NON-UTILITY SUBSIDIARY" SHALL MEAN ANY DIRECT OR INDIRECT
SUBSIDIARY OF THE PARENT WHICH IS ENGAGED, DIRECTLY OR INDIRECTLY,
IN ANY LINE OR LINES OF BUSINESS OTHER THAN PERMITTED LINES OF
BUSINESS.
"PERMITTED LINES OF BUSINESS" SHALL MEAN THE WATER AND UTILITY
LINES OF BUSINESS IN WHICH THE CORPORATION IS ENGAGED ON THE DATE
OF THE ISSUANCE OF THE SERIES K BONDS.
"RONA" (RETURN ON NON-UTILITY ASSETS) SHALL MEAN THE PRODUCT
OF CONSOLIDATED NET EARNINGS OF THE NON-UTILITY SUBSIDIARIES
DIVIDED BY CONSOLIDATED NON-UTILITY ASSETS.
"ROA" (RETURN ON ASSETS) SHALL MEAN THE PRODUCT OF
CONSOLIDATED NET EARNINGS OF THE CORPORATION DIVIDED BY THE ASSETS
OF THE CORPORATION.
"SHAREHOLDERS' EQUITY" SHALL MEAN, ON ANY DATE AS OF WHICH THE
AMOUNT THEREOF IS TO BE DETERMINED, THE EXCESS OF (i) THE ASSETS OF
THE PARENT, AT SUCH DATE, OVER (ii) THE TOTAL LIABILITIES OF THE
PARENT, AT SUCH DATE, IN EACH CASE AS WOULD BE REFLECTED ON A BALANCE
SHEET PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
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SECTION 2. CORPORATE EXISTENCE. EXCEPT AS OTHERWISE
PERMITTED UNDER ARTICLE IX OF THE ORIGINAL INDENTURE, AS HERETOFORE
AMENDED, MODIFIED AND SUPPLEMENTED, THE CORPORATION WILL DO OR
CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE AND KEEP IN FULL
FORCE AND EFFECT ITS CORPORATE EXISTENCE AND THE CORPORATE OR OTHER
EXISTENCE OF EACH OF ITS SUBSIDIARIES IN ACCORDANCE WITH THE
RESPECTIVE ORGANIZATIONAL DOCUMENTS OF THE CORPORATION AND EACH
SUBSIDIARY AND THE MATERIAL RIGHTS (CHARTER AND STATUTORY),
LICENSES AND FRANCHISES OF THE CORPORATION AND EACH SUBSIDIARY;
PROVIDED, HOWEVER, THAT THE CORPORATION SHALL NOT BE REQUIRED TO
PRESERVE, WITH RESPECT TO ITSELF, ANY SUCH RIGHT, LICENSE OR
FRANCHISE, AND WITH RESPECT TO ANY SUBSIDIARY, ANY SUCH CORPORATE
EXISTENCE, RIGHT, LICENSE OR FRANCHISE, IF IN THE JUDGMENT OF THE
BOARD OF DIRECTORS OF THE CORPORATION OR SUCH SUBSIDIARY, AS THE
CASE MAY BE, (i) SUCH PRESERVATION OR EXISTENCE IS NOT DESIRABLE IN
THE CONDUCT OF BUSINESS OF THE CORPORATION OR SUCH SUBSIDIARY AND
(ii) THE LOSS OF SUCH RIGHT, LICENSE OR FRANCHISE OR THE
DISSOLUTION OF SUCH SUBSIDIARY IS NOT ADVERSE IN ANY MATERIAL
RESPECT TO THE BONDHOLDER.
SECTION 3. SEC REPORTS. AT ALL TIMES WHEN PARENT IS
REQUIRED TO FILE INFORMATION AND DOCUMENTS WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"),
PARENT SHALL FILE ALL SUCH REQUIRED INFORMATION AND DOCUMENTS WITH
THE SEC. IF THE PARENT IS NOT SUBJECT TO THE REQUIREMENTS OF SUCH
SECTION 13 OR 15(d) OF THE EXCHANGE ACT, THE CORPORATION (AT ITS
OWN EXPENSE) SHALL DELIVER TO THE TRUSTEE, WITHIN FIVE DAYS AFTER
IT WOULD HAVE BEEN REQUIRED TO FILE SUCH INFORMATION WITH THE SEC,
FINANCIAL STATEMENTS, INCLUDING ANY NOTES THERETO AND WITH RESPECT
TO ANNUAL REPORTS, AN AUDITORS' REPORT BY AN ACCOUNTING FIRM OF
ESTABLISHED NATIONAL REPUTATION, AND A "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," BOTH
COMPARABLE TO THAT WHICH THE CORPORATION WOULD HAVE BEEN REQUIRED
TO INCLUDE IN SUCH ANNUAL REPORTS, INFORMATION, DOCUMENTS OR OTHER
REPORTS IF THE CORPORATION WAS SUBJECT TO THE REQUIREMENTS OF
SECTION 13 OR 15(d) OF THE EXCHANGE ACT.
SECTION 4. CONFLICTING AGREEMENTS. THE CORPORATION WILL NOT,
AND WILL NOT PERMIT ANY SUBSIDIARY TO, ENTER INTO ANY AGREEMENT OR
INSTRUMENT THAT BY ITS TERMS EXPRESSLY (a) PROHIBITS THE CORPORATION
FROM OPTIONALLY OR MANDATORILY REDEEMING THE SERIES K BONDS IN
ACCORDANCE WITH THE ORIGINAL INDENTURE, AS HERETOFORE AMENDED,
MODIFIED AND SUPPLEMENTED, OR OTHERWISE IN ACCORDANCE WITH THE TERMS
OF THE SERIES K BONDS OR (b) REQUIRES THAT THE PROCEEDS RECEIVED FROM
THE SALE OF ANY COLLATERAL BE APPLIED TO REPAY, REDEEM OR OTHERWISE
RETIRE ANY INDEBTEDNESS OF ANY PERSON OTHER THAN THE INDEBTEDNESS
REPRESENTED BY THE SERIES K BONDS; PROVIDED, HOWEVER, THAT THE
PROVISIONS OF THIS SECTION 4 OF ARTICLE XVI SHALL NOT APPLY TO DWR
LOANS AND SHALL NOT APPLY TO AGREEMENTS OR INSTRUMENTS ENTERED INTO BY
ANY SUBSIDIARY, WHICH SUBSIDIARY IS ACQUIRED OR OTHERWISE BECOMES A
SUBSIDIARY FOR THE PURPOSES OF THIS ARTICLE XVI SUBSEQUENT TO THE DATE
OF THE ISSUANCE OF THE SERIES K BONDS AND WHICH AGREEMENT OR
INSTRUMENT IS IN EXISTENCE AS OF THE DATE SUCH SUBSIDIARY IS ACQUIRED
OR OTHERWISE BECOMES A SUBSIDIARY FOR THE PURPOSES OF THIS ARTICLE
XVI.
SECTION 5. WAIVER OF STAY, EXTENSION OR USURY LAWS. THE
CORPORATION COVENANTS (TO THE EXTENT THAT IT MAY LAWFULLY DO SO) THAT
IT WILL NOT AT ANY TIME INSIST UPON, PLEAD OR IN ANY MANNER WHATSOEVER
CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY STAY OR EXTENSION LAW
OR ANY USURY LAW OR OTHER LAW, WHICH WOULD PROHIBIT OR FORGIVE THE
CORPORATION FROM PAYING ALL OR ANY PORTION OF THE PRINCIPAL OF,
PREMIUM, IF ANY, OR INTEREST ON THE SERIES K BONDS AS CONTEMPLATED
HEREIN, WHENEVER ENACTED, NOW OR AT ANY TIME HEREAFTER IN FORCE, OR
WHICH MAY AFFECT THE COVENANTS OR THE PERFORMANCE OF THE ORIGINAL
INDENTURE, AS HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED, AND (TO
THE EXTENT THAT IT MAY LAWFULLY DO SO) THE CORPORATION HEREBY
EXPRESSLY WAIVES ALL BENEFIT OR ADVANTAGE OF ANY SUCH LAW, AND
COVENANTS THAT IT WILL NOT HINDER, DELAY OR IMPEDE THE EXECUTION OF
ANY POWER HEREIN GRANTED TO THE TRUSTEE, BUT WILL SUFFER AND PERMIT
THE EXECUTION OF
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EVERY SUCH POWER AS THOUGH NO SUCH LAW HAD BEEN ENACTED.
SECTION 6. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) SUBJECT TO THE PROVISIONS OF PARAGRAPHS (b) AND (c) BELOW,
THE CORPORATION SHALL NOT, AND SHALL NOT PERMIT, CAUSE OR SUFFER ANY
SUBSIDIARY TO, MAKE ANY LOANS, ADVANCES OR INVESTMENTS TO OR IN ANY
AFFILIATE OF THE CORPORATION (OTHER THAN TO OR IN A SUBSIDIARY) OR
ENTER INTO OR MATERIALLY AMEND ANY AGREEMENT RELATING TO THE SALE,
PURCHASE, LEASE, TRANSFER OR OTHER DISPOSITION OF ANY ASSETS, PROPERTY
OR SERVICES FROM OR TO ANY AFFILIATE OF THE CORPORATION (OTHER THAN
FROM OR TO A SUBSIDIARY) UNLESS (i) SUCH TRANSACTION OR SERIES OF
TRANSACTIONS IS ON TERMS THAT ARE NO LESS FAVORABLE TO THE CORPORATION
OR SUCH SUBSIDIARY, AS THE CASE MAY BE, THAN WOULD BE AVAILABLE IN A
COMPARABLE TRANSACTION WITH AN UNRELATED THIRD PARTY, (ii) SUCH
TRANSACTION RELATES TO AND IS IN FURTHERANCE OF A THEN EXISTING LINE
OF BUSINESS OF THE CORPORATION OR SUCH SUBSIDIARY, AS THE CASE MAY BE,
OR IS IN THE ORDINARY COURSE OF BUSINESS AND (iii) WITH RESPECT TO A
SINGLE TRANSACTION INVOLVING AGGREGATE PAYMENTS IN EXCESS OF
TWENTY-FIVE PERCENT (25%) OF SHAREHOLDERS' EQUITY AS OF THE DATE THE
DETERMINATION IS TO BE MADE: (1) THE BOARD OF DIRECTORS APPROVES SUCH
TRANSACTION, AND (2) THE CORPORATION RECEIVES AN OPINION OR REPORT
FROM A NATIONALLY RECOGNIZED INVESTMENT BANKING FIRM, VALUATION FIRM,
ACCOUNTING FIRM OR REAL ESTATE APPRAISAL FIRM (A "VALUATION FIRM")
THAT SUCH TRANSACTION IS FAIR TO THE CORPORATION OR SUCH SUBSIDIARY,
AS THE CASE MAY BE, FROM A FINANCIAL POINT OF VIEW. WITH RESPECT TO
ANY TRANSACTION TO WHICH CLAUSE (iii) APPLIES, THE BOARD OF DIRECTORS
OF THE CORPORATION, IN ITS DISCRETION, SHALL SELECT THE VALUATION
FIRM, TAKING INTO ACCOUNT THE NATURE OF THE TRANSACTION AND THE
ASSETS, PROPERTY OR SERVICES INVOLVED.
(b) THE RESTRICTIONS SET FORTH IN PARAGRAPH (a) ABOVE SHALL NOT
APPLY TO PAYMENTS MADE OR OTHER ARRANGEMENTS CONTEMPLATED BY THE
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FOLLOWING:
(i) A TRANSACTION OR SERIES OF RELATED TRANSACTIONS
INVOLVING AGGREGATE PAYMENTS LESS THAN $50,000;
(ii) DIVIDENDS PERMITTED PURSUANT TO ARTICLE V, SECTION 16
OF THE ORIGINAL INDENTURE, AS HERETOFORE AMENDED, MODIFIED AND
SUPPLEMENTED. DIVIDENDS SHALL INCLUDE, WITHOUT LIMITATION, THE
DIFFERENCE, IF ANY, BETWEEN: (1) THE AGGREGATE PAYMENTS WHICH
THE CORPORATION OR THE SUBSIDIARY, AS THE CASE MAY BE, WOULD
RECEIVE FROM AN UNRELATED THIRD PARTY IN A COMPARABLE TRANSACTION
(AS DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS; PROVIDED,
HOWEVER, THAT ANY TRANSACTION INVOLVING AGGREGATE PAYMENTS IN
EXCESS OF TWENTY-FIVE PERCENT (25%) OF SHAREHOLDERS' EQUITY AS OF
THE DATE THE DETERMINATION IS TO BE MADE, THE DETERMINATION
REQUIRED BY THIS CLAUSE (1) SHALL BE MADE BY A VALUATION FIRM)
AND (2) THE AGGREGATE PAYMENTS WHICH THE CORPORATION OR THE
SUBSIDIARY, AS THE CASE MAY BE, WILL RECEIVE IN THE TRANSACTION
WITH THE AFFILIATE; OR
(iii) THE PAYMENT IN RESPECT OF PENSION FUNDING
REQUIREMENTS RELATING TO CERTAIN NONCONTRIBUTORY DEFINED BENEFIT
RETIREMENT PLANS SPONSORED BY THE CORPORATION OR AN AFFILIATE IN
WHICH EMPLOYEES OR LEASED EMPLOYEES OF THE CORPORATION ARE THEN
ACTIVELY PARTICIPATING AND ACCRUING BENEFITS CONSISTENT WITH PAST
PRACTICE.
(c) THE RESTRICTIONS SET FORTH IN PARAGRAPH (a) ABOVE SHALL NOT
APPLY TO ANY TRANSACTIONS WITH AN AFFILIATE OF THE CORPORATION OR A
SUBSIDIARY, AS THE CASE MAY BE, IF, AND AT SUCH TIME AS, THE ASSETS OF
SAID AFFILIATE ARE SUBJECT TO THE LIEN OF THE ORIGINAL INDENTURE, AS
HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED.
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(d) THE PROVISIONS OF THIS SECTION SHALL BE IN ADDITION TO AND
SHALL IN NO WAY SUPERSEDE OR MODIFY SECTIONS 2 AND 3 OF ARTICLE VII,
OR ANY OTHER PROVISIONS, OF THE ORIGINAL INDENTURE, AS HERETOFORE
AMENDED, MODIFIED AND SUPPLEMENTED.
SECTION 7. RESTRICTIONS ON CAPITAL STOCK AND SUBSIDIARY
DISTRIBUTIONS. THE CORPORATION SHALL NOT, AND SHALL NOT PERMIT ANY
SUBSIDIARY TO, DIRECTLY OR INDIRECTLY, CONTINGENTLY OR OTHERWISE,
ISSUE ANY CAPITAL STOCK (OTHER THAN TO THE CORPORATION OR TO
WHOLLY-OWNED SUBSIDIARY) OR, IN THE CASE OF ANY SUBSIDIARY, TO DECLARE
OR PAY DIVIDENDS OR DISTRIBUTIONS ON, OR PURCHASE, REDEEM OR OTHERWISE
ACQUIRE OR RETIRE FOR VALUE, ANY CAPITAL STOCK OF A SUBSIDIARY (OTHER
THAN CAPITAL STOCK OWNED BY THE CORPORATION OR BY A WHOLLY-OWNED
SUBSIDIARY).
SECTION 8. SALE OF STOCK AND DEBT OF SUBSIDIARIES. THE
CORPORATION SHALL NOT SELL OR OTHERWISE DISPOSE OF, OR PART WITH
CONTROL OF, ANY SHARES OF CAPITAL STOCK OR DEBT OF ANY SUBSIDIARY
EXCEPT TO ANOTHER WHOLLY-OWNED SUBSIDIARY, AND EXCEPT THAT ALL SHARES
OF CAPITAL STOCK AND DEBT OF ANY SUBSIDIARY MAY BE SOLD AS AN ENTIRETY
PROVIDED THAT AT THE TIME OF SUCH SALE, SUCH SUBSIDIARY SHALL NOT OWN,
DIRECTLY OR INDIRECTLY, ANY SHARES OF CAPITAL STOCK OR DEBT OF ANY
OTHER SUBSIDIARY (UNLESS ALL OF THE SHARES OF CAPITAL STOCK AND DEBT
OF SUCH OTHER SUBSIDIARY ARE SIMULTANEOUSLY BEING SOLD AND SUCH SALE
OTHERWISE COMPLIES WITH THE TERMS OF THE ORIGINAL INDENTURE, AS
HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED), AND (b) SUCH SALE
WOULD BE PERMITTED BY THE TERMS OF THE ORIGINAL INDENTURE, AS
HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED; PROVIDED, HOWEVER, THAT
THE PROVISIONS OF THIS SECTION 8 OF ARTICLE XVI SHALL NOT APPLY TO DWR
LOANS AND SHALL NOT APPLY TO AGREEMENTS OR INSTRUMENTS ENTERED INTO BY
ANY SUBSIDIARY, WHICH SUBSIDIARY IS ACQUIRED OR OTHERWISE BECOMES A
SUBSIDIARY FOR THE PURPOSES OF THIS ARTICLE XVI SUBSEQUENT TO THE DATE
OF THE
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ISSUANCE OF THE SERIES K BONDS AND WHICH AGREEMENT OR INSTRUMENT IS IN
EXISTENCE AS OF THE DATE SUCH SUBSIDIARY IS ACQUIRED OR OTHERWISE
BECOMES A SUBSIDIARY FOR THE PURPOSES OF THIS ARTICLE XVI.
SECTION 9. INSPECTION. THE CORPORATION WILL PERMIT THE
TRUSTEE OR THE BONDHOLDER AND THEIR REPRESENTATIVES TO VISIT AND
INSPECT, UNDER THE CORPORATION'S GUIDANCE AND AT THE SOLE AND ASSUMED
RISK OF THE VISITING PERSON, ANY OF THE PROPERTIES OF THE CORPORATION
OR ANY OF ITS AFFILIATES, TO EXAMINE ALL THEIR BOOKS OF ACCOUNT,
RECORDS AND REPORTS AND PAPERS AND TO DISCUSS THEIR RESPECTIVE
AFFAIRS, FINANCES AND ACCOUNTS WITH THEIR RESPECTIVE OFFICERS AND
INDEPENDENT ACCOUNTANTS (AND BY THIS PROVISION THE CORPORATION
AUTHORIZES SUCH ACCOUNTANTS TO DISCUSS SUCH AFFAIRS, FINANCES AND
ACCOUNTS), ALL AT SUCH REASONABLE TIMES AND AS OFTEN AS MAY REASONABLY
BE REQUESTED, UPON REASONABLE PRIOR NOTICE THEREOF TO THE CORPORATION.
ALL COSTS AND EXPENSES OF THE CORPORATION'S OFFICERS, ACCOUNTANTS AND
COUNSEL INCURRED IN CONNECTION WITH ANY SUCH VISIT, INSPECTION,
EXAMINATION OR DISCUSSION SHALL BE BORNE BY THE CORPORATION, AND ALL
COSTS AND EXPENSES INCURRED BY THE TRUSTEE OR THE BONDHOLDER OR THEIR
RESPECTIVE REPRESENTATIVES IN CONNECTION WITH ANY SUCH VISITS,
INSPECTIONS, EXAMINATIONS AND DISCUSSIONS SHALL BE BORNE BY THE
TRUSTEE OR THE BONDHOLDER, AS THE CASE MAY BE; PROVIDED, HOWEVER, ALL
COSTS AND EXPENSES INCURRED BY THE TRUSTEE OR THE BONDHOLDER OR THEIR
RESPECTIVE REPRESENTATIVES IN CONNECTION WITH ANY SUCH VISITS,
INSPECTIONS, EXAMINATIONS AND DISCUSSIONS THAT TAKE PLACE DURING THE
EXISTENCE OF A DEFAULT OR AN EVENT OF DEFAULT, SHALL BE BORNE BY THE
CORPORATION AND NOT BY THE TRUSTEE OR THE BONDHOLDER OR THEIR
RESPECTIVE REPRESENTATIVES.
SECTION 10. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE XVI,
NOTWITHSTANDING ANY OTHER PROVISION IN THE ORIGINAL INDENTURE, AS
HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SET FORTH BELOW:
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"AFFILIATE" SHALL MEAN (i) ANY PERSON DIRECTLY OR INDIRECTLY
CONTROLLING, CONTROLLED BY OR UNDER DIRECT OR INDIRECT COMMON CONTROL
WITH, THE CORPORATION OR (ii) ANY OTHER PERSON THAT OWNS, DIRECTLY OR
INDIRECTLY, FIVE PERCENT OR MORE OF ANY CLASS OR SERIES OF SUCH
PERSON'S, OR THE PARENT OF SUCH PERSON'S, CAPITAL STOCK OR ANY
OFFICER, DIRECTOR OR AFFILIATE OF ANY SUCH PERSON OR, WITH RESPECT TO
ANY OTHER NATURAL PERSON, ANY PERSON HAVING A RELATIONSHIP WITH SUCH
OTHER PERSON BY BLOOD, MARRIAGE OR ADOPTION NOT MORE REMOTE THAN FIRST
COUSIN. A PERSON SHALL BE DEEMED TO CONTROL A CORPORATION IF SUCH
PERSON POSSESSES, DIRECTLY OR INDIRECTLY, THE POWER TO DIRECT OR CAUSE
THE DIRECTION OF THE MANAGEMENT AND POLICIES OF SUCH CORPORATION,
WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR
OTHERWISE.
"BONDHOLDER" SHALL MEAN ANY OF THE HOLDER(S) OF THE SERIES K
BONDS, FROM TIME-TO-TIME.
"INDEBTEDNESS" SHALL MEAN, WITH RESPECT TO ANY PERSON, LIABILITY
OF THAT PERSON FOR MONEY BORROWED DIRECTLY BY THAT PERSON, DETERMINED
WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONSOLIDATION, AND ALL
INDEBTEDNESS OF OTHERS WITH RESPECT TO WHICH THAT PERSON HAS BECOME
LIABLE BY WAY OF A GUARANTEE.
"PARENT" SHALL MEAN XXXXXXXXX SERVICES CORPORATION, A CALIFORNIA
CORPORATION, AND THE PARENT CORPORATION OF THE CORPORATION.
"PERSON" SHALL MEAN AND INCLUDE AN INDIVIDUAL, A PARTNERSHIP, A
JOINT VENTURE, CORPORATION, A TRUST, AN UNINCORPORATED ORGANIZATION
AND A GOVERNMENT OR ANY DEPARTMENT OR AGENCY THEREOF.
"PREMISES" SHALL MEAN ALL REAL PROPERTY OWNED, LEASED OR
OTHERWISE UTILIZED BY THE CORPORATION IN THE CONDUCT OF ITS BUSINESS
OR OTHERWISE.
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"SHAREHOLDERS' EQUITY" SHALL MEAN, WITH RESPECT TO ANY PERSON, ON
ANY DATE AS OF WHICH THE AMOUNT THEREOF IS TO BE DETERMINED, THE
EXCESS OF (i) THE TOTAL ASSETS OF SUCH PERSON, AT SUCH DATE, OVER (ii)
THE TOTAL LIABILITIES OF SUCH PERSON, AT SUCH DATE, IN EACH CASE AS
WOULD BE REFLECTED ON A BALANCE SHEET PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
"SUBSIDIARY" SHALL MEAN ANY CORPORATION OR ENTITY UNDER THE LAWS
OF ANY JURISDICTION, THAT AT LEAST A MAJORITY OF THE TOTAL COMBINED
VOTING POWER OF ALL CLASSES OF VOTING STOCK OF WHICH SHALL, AT THE
TIME AS OF WHICH ANY DETERMINATION IS BEING MADE, BE OWNED BY THE
CORPORATION EITHER DIRECTLY OR THROUGH OTHER SUBSIDIARIES.
ARTICLE IV
PARTICULAR COVENANTS OF THE CORPORATION
AND MISCELLANEOUS
SECTION 1. The Corporation covenants and agrees that it will
cause this Twelfth Supplemental Trust Indenture to be duly and properly filed
for record and recorded in the Office of the County Recorder of Los Angeles
County and of each county in which it has or shall acquire real property,
with all convenient speed, so that due and legal notice of its terms will be
given, and that it will be properly and legally filed and recorded and
indexed, and that an appropriate financing statement, fixture filing and
other statements will be filed in such public offices as may be necessary to
establish of record the lien of the Indenture upon the properties described
herein against all persons whomsoever.
SECTION 2. This Twelfth Supplemental Trust Indenture shall be
construed in connection with and as part of the Original Indenture, as
heretofore modified, amended and supplemented, and whenever in said Original
Indenture as heretofore modified,
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amended and supplemented, the words "THIS INDENTURE" are used, they shall be
construed to mean and include this Twelfth Supplemental Trust Indenture in
addition to all other supplemental indentures.
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed by their Presidents or Vice Presidents, respectively, as of the
day and year first above written.
XXXXXXXXX WATER CORPORATION,
a California corporation
-------------------------------
Xxxxx X. Xxxxx, President
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
By:
-------------------------------
Title:
---------------------------
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XXXXX XX XXXXXXXXXX )
) SS.
COUNTY OF LOS ANGELES )
On _______________________, 1997, before me,___________________,
Notary Public, personally appeared Xxxxx X. Xxxxx, proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------
Signature of Notary
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XXXXX XX XXXXXXXXXX )
) SS.
COUNTY OF SAN FRANCISCO)
On ____________________, 1997, before me, ___________________,
Notary Public, personally appeared _____________ and _______________, proved
to me on the basis of satisfactory evidence to be the persons whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their authorized capacities, and that by their signatures on the
instrument the persons, or the entity upon behalf of which the persons acted,
executed the instrument.
WITNESS my hand and official seal.
------------------------------
Signature of Notary
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