THIS INSTRUMENT CONSTITUTES, AMONG OTHER THINGS, AN AMENDMENT TO A SECURITY
AGREEMENT WHICH CREATED A SECURITY INTEREST IN PERSONAL PROPERTY
XXXXXXXXX WATER CORPORATION
TO
CHEMICAL TRUST COMPANY OF CALIFORNIA
TRUSTEE
ELEVENTH SUPPLEMENTAL TRUST INDENTURE
DATED AS OF DECEMBER 8, 1992
CREATING FIRST MORTGAGE SERIES J 8.86% BONDS DUE 2023
THIS ELEVENTH SUPPLEMENTAL TRUST INDENTURE (the "ELEVENTH SUPPLEMENTAL
TRUST INDENTURE", is made and entered into as of the 8th day of December, 1992,
by and between XXXXXXXXX WATER CORPORATION, a corporation organized and
existing under the laws of the State of California (hereinafter called the
"CORPORATION"), party of the first part, and CHEMICAL TRUST COMPANY OF
CALIFORNIA (formerly known as Manufacturers Hanover Trust Company of
California), a corporation organized and existing under the laws of the State
of California (hereinafter called the "TRUSTEE"), party of the second part,
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 Eleventh Supplemental Trust Indenture, being
hereinafter referred to collectively as the "INDENTURE"), all upon the terms,
conditions and trusts therein specified; and
WHEREAS, there has been 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 has been 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 has been 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 has been 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
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 has been 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
-2-
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 has been issued under the Sixth Supplemental Trust Indenture
One Million Two Hundred Thousand Dollars ($1,200,000) principal amount of
Series F Bonds, and at the date hereof there is outstanding Eight Hundred and
Twenty-Eight Thousand Dollars ($828,000) principal amount thereof; and
WHEREAS, by that certain Seventh Supplemental Trust Indenture dated as of
November 1, 1975 (hereinafter referred to as the "SEVENTH 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 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 has been issued under the Seventh Supplemental
Trust Indenture One Million Six Hundred Thousand Dollars ($1,600,000) principal
amount of Series G Bonds, and at the date hereof there is outstanding Four
Hundred Thousand Dollars ($400,000) principal amount thereof; 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 has been issued under the Eighth Supplemental
Trust Indenture Two Million Dollars ($2,000,000) principal amount of Series H
Bonds, and at the date hereof there is outstanding One Million Four Hundred and
Fifty Thousand Dollars ($1,450,000) principal amount thereof; and
WHEREAS, by that certain Ninth Supplemental Trust Indenture dated as of
September 20, 1982 (hereinafter referred to as the "NINTH SUPPLEMENTAL TRUST
-3-
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 has been 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 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 the 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, the Corporation desires to issue under the Indenture a new series
of Bonds (hereinafter called the "SERIES J BONDS") secured by the Indenture, in
the principal amount of Four Million Dollars ($4,000,000), to be designated as
"FIRST MORTGAGE SERIES J BONDS OF 2023", which bonds are to mature January 1,
2023, are to bear interest at the rate of Eight and 86/100 percent (8.86%) per
annum, payable semi-annually on the first days of January and July of each
year, commencing on July 1, 1993, and are to be issued as coupon bonds of the
denomination of $100,000 each, registrable as to principal, and as registered
bonds without coupons, of the denomination of $100,000 or any multiple of
$100,000 that the Corporation may execute and deliver, in the manner set forth
in Article I of this Eleventh Supplemental Trust Indenture; and
WHEREAS, the Corporation desires to modify and amend Section 8 of Article
I of the Original Indenture, as heretofore modified, amended and supplemented,
in the manner set forth in Section 1 of Article II of this Eleventh
Supplemental Trust Indenture; and
WHEREAS, the Corporation desires to further modify and amend Subdivision
(a) of Section 16 of Article V of the Original Indenture, as heretofore
modified, amended and
-4-
supplemented, in the manner set forth in Section 2 of Article II of this
Eleventh Supplemental Trust Indenture; and
WHEREAS, the Corporation desires to modify and amend Subdivision (a) of
Section 18 of Article V of the Original Indenture, as heretofore modified,
amended and supplemented, in the manner set forth in Section 3 of Article II
of this Eleventh Supplemental Trust Indenture; and
WHEREAS, the Corporation desires to modify and amend Section 1 of
Article VIII of the Original Indenture, as heretofore modified, amended and
supplemented, in the manner set forth in Section 4 of Article II of this
Eleventh Supplemental Indenture; and
WHEREAS, the Corporation desires to further amend the Original
Indenture, as heretofore modified, amended and supplemented to add a new
Article XV thereto, as set forth in Article III of this Eleventh Supplemental
Trust Indenture; and
WHEREAS, the definitive coupon Series J Bonds, the interest coupons to
be attached thereto, the endorsement for registration of coupon bond, the
registered Series J Bonds, the assignment of registered Series J Bonds, and
the trustee's certification of Series J 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 COUPON SERIES J BOND. The coupon Series J Bond is to be in
substantially the following form, with necessary or appropriate variations,
omissions and insertions as permitted or required by the Indenture:
SERIES J $100,000
NO. JC-
DOMINGUEZ WATER CORPORATION
FIRST MORTGAGE SERIES J 8.86% BONDS OF 2023
DUE JANUARY 1, 2023
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 THE BEARER, OR,
IF REGISTERED, TO THE REGISTERED HOLDER OF THIS BOND, ONE HUNDRED THOUSAND
DOLLARS IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA ON THE FIRST DAY OF
JANUARY, 2023, TOGETHER WITH INTEREST THEREON FROM THE DATE HEREOF, UNTIL
PAYMENT OF SAID PRINCIPAL SUM, AT THE RATE OF EIGHT AND 86/100 PERCENT
(8.86%) PER ANNUM, PAYABLE SEMIANNUALLY IN LAWFUL MONEY OF THE UNITED STATES
ON THE FIRST DAYS OF JANUARY AND JULY OF EACH YEAR, COMMENCING WITH JULY,
1993. UNTIL MATURITY OF THIS BOND, SAID INTEREST SHALL BE PAYABLE ONLY UPON
PRESENTATION AND SURRENDER OF THE INTEREST COUPONS HERETO ATTACHED AS THEY
SEVERALLY MATURE.
THE PRINCIPAL HEREOF AND THE COUPONS ATTACHED HERETO ARE PAYABLE AT
THE
-5-
PRINCIPAL OFFICE OF THE CORPORATE TRUST DEPARTMENT OF CHEMICAL TRUST COMPANY
OF CALIFORNIA, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA.
THIS BOND IS ONE OF A SERIES OF COUPON BONDS AND REGISTERED BONDS
OF SERIES J OF AN AUTHORIZED ISSUE OF BONDS OF THE CORPORATION, DESIGNATED AS
ITS "FIRST MORTGAGE SERIES J 8.86% BONDS OF 2023" OR THE "SERIES J BONDS",
ALL ISSUED UNDER AND EQUALLY AND RATABLY SECURED BY THAT CERTAIN INDENTURE,
DATED AS OF AUGUST 1, 1954 AND INDENTURES SUPPLEMENTAL THERETO INCLUDING THE
ELEVENTH SUPPLEMENTAL TRUST INDENTURE, DATED AS OF DECEMBER 8, 1992 (WHICH
INSTRUMENTS ARE HEREINAFTER COLLECTIVELY CALLED THE "INDENTURE"), DULY
EXECUTED BY THE CORPORATION AND DELIVERED TO CHEMICAL TRUST COMPANY OF
CALIFORNIA, 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 J BONDS ARE LIMITED TO AN AGGREGATE
AUTHORIZED AMOUNT OF FOUR MILLION DOLLARS ($4,000,000).
THE OUTSTANDING SERIES J BONDS ARE SUBJECT TO REDEMPTION PRIOR TO
MATURITY IN WHOLE OR IN PART BY THE CORPORATION ON JANUARY 1 OF ANY YEAR
AFTER AND INCLUDING JANUARY 1, 1994 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 IN THE EVENT THAT SAID SERIES J BONDS
ARE REDEEMED OTHER THAN (i) THROUGH THE MANDATORY PAYMENTS MADE BY THE
CORPORATION TO THE SERIES J SINKING FUND (AS DEFINED IN SECTION 6(a) OF
ARTICLE I OF THE ELEVENTH SUPPLEMENTAL TRUST INDENTURE), (ii) PURSUANT TO THE
SERIES J BONDHOLDER'S RIGHTS TO REQUIRE REPURCHASE SET FORTH IN ARTICLE XV OF
THE ORIGINAL INDENTURE, AS HERETOFORE AND BY THE ELEVENTH SUPPLEMENTAL TRUST
INDENTURE, MODIFIED, AMENDED AND SUPPLEMENTED, AND (iii) 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 (IN ANY OF WHICH EVENTS SAID BONDS ARE REDEEMABLE
WITHOUT PREMIUM). THE PREMIUM, IF ANY, SHALL BE DETERMINED AS FOLLOWS:
(1) IF THE SERIES J BONDS ARE REDEEMED ON OR PRIOR TO JANUARY 1,
2013, THE PREMIUM SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING
PROCEDURE:
(a) THE AVERAGE TERM TO MATURITY THEREOF WILL BE CALCULATED
BY WEIGHING EACH REMAINING PRINCIPAL PAYMENT BY ITS TERM FROM THE
PREPAYMENT DATE;
(b) THE U.S. TREASURY YIELDS TO CONSTANT MATURITIES, AS
-6-
PUBLISHED BY THE FEDERAL RESERVE, WILL BE DETERMINED FOR THE TERMS JUST
BEFORE AND JUST AFTER THE AVERAGE TERM TO MATURITY THEREOF USING THE
LATEST ONE WEEK MOVING AVERAGE ENDING THE DATE ON WHICH THE PREPAYMENT
IS MADE;
(c) A DISCOUNT RATE WILL BE CALCULATED BY ADDING 50 BASIS POINTS
TO AN INTERPOLATED RATE BETWEEN THE TWO U.S. TREASURY YIELDS FOR THE
AVERAGE TERM TO MATURITY THEREOF. IF THE ANNUAL DISCOUNT RATE IS LARGER
THAN OR EQUAL TO THE ANNUAL COUPON, THE PREMIUM WILL BE ZERO. OTHERWISE,
THE ANNUAL DISCOUNT RATE WILL BE DIVIDED BY TWO TO PRODUCE A SEMIANNUAL
DISCOUNT RATE;
(d) THE SEMIANNUAL DISCOUNT RATE WILL BE USED TO CALCULATE THE NET
PRESENT VALUE OF ALL THE REMAINING SCHEDULED INTEREST AND PRINCIPAL
PAYMENTS.
THE EXCESS OF THIS NET PRESENT VALUE OVER THE OUTSTANDING PAR AMOUNT OF THE
SERIES J BONDS BEING SO REDEEMED WILL BE THE PREMIUM.
(2) IF THE SERIES J BONDS ARE REDEEMED AT ANY TIME AFTER JANUARY
1, 2013, THE PREMIUM SHALL BE THE FOLLOWING PERCENTAGE, AS APPLICABLE, OF THE
PRINCIPAL AMOUNT SO REDEEMED:
.02749655 IF REDEEMED AFTER JANUARY 1, 2013 AND BEFORE JANUARY 1, 2014;
.02444138 IF REDEEMED ON OR AFTER JANUARY 1, 2014 AND BEFORE JANUARY 1, 2015;
.02138621 IF REDEEMED ON OR AFTER JANUARY 1, 2015 AND BEFORE JANUARY 1, 2016;
.01833103 IF REDEEMED ON OR AFTER JANUARY 1, 2016 AND BEFORE JANUARY 1, 2017;
.01527586 IF REDEEMED ON OR AFTER JANUARY 1, 2017 AND BEFORE JANUARY 1, 2018;
.01222069 IF REDEEMED ON OR AFTER JANUARY 1, 2018 AND BEFORE JANUARY 1, 2019;
.00916552 IF REDEEMED ON OR AFTER JANUARY 1, 2019 AND BEFORE JANUARY 1, 2020;
.00611034 IF REDEEMED ON OR AFTER JANUARY 1, 2020 AND BEFORE JANUARY 1, 2021;
.00305517 IF REDEEMED ON OR AFTER JANUARY 1, 2021 AND BEFORE JANUARY 1, 2022;
AND AT PAR IF REDEEMED THEREAFTER.
THE OUTSTANDING SERIES J 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 J BONDS ARE SUBJECT TO REDEMPTION BY THE CORPORATION, AT PAR AND
WITHOUT PREMIUM, PURSUANT TO THE SERIES J BONDHOLDER'S RIGHTS TO REQUIRE
REPURCHASE SET FORTH IN ARTICLE XV OF THE ORIGINAL INDENTURE, AS HERETOFORE
AND BY THIS ELEVENTH SUPPLEMENTAL TRUST INDENTURE, MODIFIED, AMENDED AND
SUPPLEMENTED.
-7-
ALL SERIES J 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 J BONDS REDEEMED AS PROVIDED IN SAID INDENTURE SHALL BE
CANCELLED AND NOT REISSUED.
COUPON SERIES J BONDS SHALL BE FREELY EXCHANGEABLE FOR REGISTERED
SERIES J BONDS, AND REGISTERED SERIES J BONDS SHALL BE FREELY EXCHANGEABLE
FOR BOTH REGISTERED OR COUPON SERIES J BONDS, IN EITHER CASE FOR ONE OR MORE
AUTHORIZED DENOMINATIONS AND IN THE SAME AGGREGATE PRINCIPAL AMOUNT.
THIS BOND SHALL PASS BY DELIVERY UNLESS REGISTERED AS TO PRINCIPAL
IN THE NAME OF THE OWNER ON REGISTERS KEPT FOR THE PURPOSE BY CHEMICAL TRUST
COMPANY OF CALIFORNIA, OR ITS SUCCESSOR IN TRUST, SAID REGISTRY BEING NOTED
HEREON AS PROVIDED IN THE INDENTURE. AFTER SUCH REGISTRATION, NO TRANSFER
SHALL BE VALID UNLESS MADE ON SAID REGISTER BY THE REGISTERED HOLDER IN
PERSON OR BY ATTORNEY DULY AUTHORIZED AND SIMILARLY NOTED HEREON, BUT THIS
BOND MAY BE DISCHARGED FROM REGISTRY BY BEING IN LIKE MANNER TRANSFERRED TO
BEARER, AND THEREUPON TRANSFERABILITY BY DELIVERY SHALL BE RESTORED, BUT THIS
BOND MAY AGAIN AND FROM TIME-TO-TIME BE REGISTERED IN THE NAME OF THE HOLDER
OR TRANSFERRED TO BEARER AS BEFORE. SUCH REGISTRATION, HOWEVER, SHALL NOT
AFFECT THE NEGOTIABILITY OF THE COUPONS WHICH SHALL CONTINUE TO BE
TRANSFERABLE BY DELIVERY NOTWITHSTANDING THE REGISTRATION HEREOF.
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 J 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 AMOUNT 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
-8-
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.
THIS COUPON BOND, TOGETHER WITH ALL MATURED AND UNPAID AND ALL
UNMATURED COUPONS THERETO BELONGING, MAY BE EXCHANGED FOR A REGISTERED BOND
OR BONDS WITHOUT COUPONS OF THE SAME SERIES OF AUTHORIZED DENOMINATIONS, FOR
THE SAME AGGREGATE PRINCIPAL AMOUNT IN EACH CASE, AS PROVIDED IN THE
INDENTURE.
THE OFFER AND SALE OF THE BONDS WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1993 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 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.
-9-
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 HEREUNTO AFFIXED, ATTESTED BY ITS SECRETARY OR
ASSISTANT SECRETARY, AND THE INTEREST COUPONS HERETO ANNEXED TO BE EXECUTED
BY THE FACSIMILE SIGNATURE OF ITS SECRETARY AS OF THE 8TH DAY OF DECEMBER,
1992.
XXXXXXXXX WATER CORPORATION, A CALIFORNIA CORPORATION
BY:
-------------------------------------
X.X. XXXXXX, PRESIDENT
ATTEST:
--------------------------------------------
XXXXX XXXXXXXX, SECRETARY
(CORPORATE SEAL)
2. FORM OF INTEREST COUPON. The interest coupon is to be in
substantially the following form, with necessary or appropriate variations,
omissions and insertions as permitted or required by the Indenture:
NO. JC- $
------ -------------
ON THE FIRST DAY OF __________, 19___ (UNLESS THE BOND
HEREINAFTER MENTIONED SHALL HAVE BEEN CALLED FOR EARLIER
REDEMPTION), UPON SURRENDER OF THIS COUPON XXXXXXXXX WATER
CORPORATION WILL PAY TO THE BEARER HEREOF, AT THE PRINCIPAL
OFFICE OF CHEMICAL TRUST COMPANY OF CALIFORNIA IN THE CITY OF
LOS ANGELES, STATE OF CALIFORNIA, ___________________________
DOLLARS ($__________) IN LAWFUL MONEY OF THE UNITED STATES,
BEING SIX MONTHS' INTEREST THEN DUE ON ITS FIRST MORTGAGE SERIES
J 8.86% BONDS OF 2023, DATED DECEMBER __, 1992, NO. JC-________.
---------------------------------
SECRETARY
-10-
3. FORM OF ENDORSEMENT FOR REGISTRATION OF COUPON BOND. The endorsement
for registration of coupon bonds is to be in substantially the following form,
with necessary or appropriate variations, omissions and insertions as permitted
or required by the Indenture:
THIS BOND MAY BE REGISTERED AS TO PRINCIPAL BY THE OWNER AT THE
PRINCIPAL OFFICE OF THE CHEMICAL TRUST COMPANY OF CALIFORNIA IN THE CITY OF LOS
ANGELES, STATE OF CALIFORNIA.
NOTICE: NO WRITING ON THIS REGISTRATION FORM EXCEPT BY AN OFFICER OR
AGENT OF THE TRUSTEE.
DATE OF REGISTRY IN WHOSE NAME REGISTERED REGISTRAR
-------------------------------- -------------------------
-------------------------------- -------------------------
-------------------------------- -------------------------
4. FORM OF REGISTERED SERIES J BOND. The registered Series J Bond is to
be in substantially the following form, with necessary or appropriate
variations, omissions and insertions as permitted or required by the Indenture:
SERIES J
NO. JR- $
-------- -----------
XXXXXXXXX WATER CORPORATION
REGISTERED FIRST MORTGAGE SERIES J 8.86% BONDS
OF 2023 DUE JANUARY 1, 2023
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 OF THE FIRST DAY OF
JANUARY, 2023, TOGETHER WITH INTEREST THEREON FROM THE DATE HEREOF AT THE
RATE OF EIGHT AND 86/100 PERCENT (8.86%) PER ANNUM, PAYABLE SEMI-ANNUALLY IN
LIKE LAWFUL MONEY ON THE FIRST DAYS OF JANUARY AND JULY IN EACH YEAR
COMMENCING WITH JULY, 1993.
THE PRINCIPAL HEREOF AND THE INTEREST ON THIS BOND ARE PAYABLE AT THE
PRINCIPAL OFFICE OF THE CHEMICAL TRUST COMPANY OF CALIFORNIA IN THE CITY OF LOS
ANGELES, STATE OF CALIFORNIA. INTEREST HEREON SHALL BE PAID ON JANUARY 1 AND
JULY 1 OF EACH YEAR TO THE REGISTERED HOLDER OF THIS BOND WHO SHALL BE SUCH AT
XXX XXXXX XX
-00-
XXXXXXXX XX THE PREVIOUS DECEMBER 24 AND JUNE 24, RESPECTIVELY.
THIS BOND IS ONE OF A SERIES OF COUPON BONDS AND REGISTERED BONDS OF
SERIES J OF AN AUTHORIZED ISSUE OF BONDS OF THE CORPORATION, DESIGNATED AS ITS
"FIRST MORTGAGE SERIES J 8.86% BONDS OF 2023" OR THE "SERIES J 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 ELEVENTH SUPPLEMENTAL TRUST INDENTURE DATED AS OF DECEMBER __,
1992 (WHICH INSTRUMENTS ARE HEREIN COLLECTIVELY CALLED THE "INDENTURE"), DULY
EXECUTED BY CHEMICAL TRUST COMPANY OF CALIFORNIA, 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 J BONDS ARE
LIMITED TO AN AGGREGATE AUTHORIZED AMOUNT OF FOUR MILLION DOLLARS ($4,010,000).
THIS BOND IS TRANSFERABLE BY THE REGISTERED HOLDER HEREOF IN PERSON
OR BY ITS ATTORNEY DULY AUTHORIZED, AT THE OFFICE OF CHEMICAL TRUST COMPANY OF
CALIFORNIA IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, 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 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.
THIS BOND MAY BE EXCHANGED FOR ONE OR MORE COUPON BONDS OF THE SAME
SERIES OF AUTHORIZED DENOMINATIONS FOR THE SAME AGGREGATE PRINCIPAL AMOUNT WITH
ALL MATURED AND UNPAID AND ALL UNMATURED COUPONS THERETO BELONGING, IN EACH
CASE AS PROVIDED IN SAID INDENTURE.
THE OUTSTANDING BONDS OF SERIES J ARE SUBJECT TO REDEMPTION PRIOR TO
MATURITY IN PART BY THE CORPORATION ON JANUARY 1 OF ANY YEAR AFTER AND
INCLUDING JANUARY 1, 1994 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 IN THE EVENT THAT SAID SERIES J BONDS ARE REDEEMED OTHER THAN (i)
THROUGH THE MANDATORY PAYMENTS MADE BY THE CORPORATION TO THE SERIES J SINKING
FUND (AS DEFINED IN SECTION 6(a) OF ARTICLE I OF THE ELEVENTH SUPPLEMENTAL
TRUST INDENTURE), (ii) PURSUANT TO THE SERIES J BONDHOLDER'S RIGHTS TO REQUIRE
REPURCHASE SET FORTH IN ARTICLE XV OF THE ORIGINAL INDENTURE, AS HERETOFORE AND
BY THE ELEVENTH SUPPLEMENTAL TRUST INDENTURE, MODIFIED, AMENDED AND
SUPPLEMENTED, AND (iii) IN THE EVENT OF THE CONDEMNATION OF SUBSTANTIALLY ALL
OF THE
-12-
CORPORATION'S PROPERTY IN AN EMINENT DOMAIN PROCEEDING OR UPON A COURT
ORDERED SALE OF SUBSTANTIALLY ALL OF THE CORPORATION'S PROPERTY (IN ANY OF
WHICH EVENTS SAID BONDS ARE REDEEMABLE WITHOUT PREMIUM). THE PREMIUM, IF
ANY, SHALL BE DETERMINED AS FOLLOWS:
(1) IF THE SERIES J BONDS ARE REDEEMED ON OR PRIOR TO JANUARY 1,
2013, THE PREMIUM SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING
PROCEDURE:
(a) THE AVERAGE TERM TO MATURITY THEREOF WILL BE CALCULATED BY
WEIGHING EACH REMAINING PRINCIPAL PAYMENT BY ITS TERM FROM THE PREPAYMENT
DATE;
(b) THE U.S. TREASURY YIELDS TO CONSTANT MATURITIES, AS
PUBLISHED BY THE FEDERAL RESERVE, WILL BE DETERMINED FOR THE TERMS JUST
BEFORE AND JUST AFTER THE AVERAGE TERM TO MATURITY THEREOF USING THE
LATEST ONE WEEK MOVING AVERAGE ENDING THE DATE ON WHICH THE PREPAYMENT IS
MADE;
(c) A DISCOUNT RATE WILL BE CALCULATED BY ADDING 50 BASIS
POINTS TO AN INTERPOLATED RATE BETWEEN THE TWO U.S. TREASURY YIELDS FOR
THE AVERAGE TERM TO MATURITY THEREOF. IF THE ANNUAL DISCOUNT RATE IS
LARGER THAN OR EQUAL TO THE ANNUAL COUPON, THE PREMIUM WILL BE ZERO.
OTHERWISE, THE ANNUAL DISCOUNT RATE WILL BE DIVIDED BY TWO TO PRODUCE A
SEMIANNUAL DISCOUNT RATE;
(d) THE SEMIANNUAL DISCOUNT RATE WILL BE USED TO CALCULATE THE
NET PRESENT VALUE OF ALL THE REMAINING SCHEDULED INTEREST AND PRINCIPAL
PAYMENTS.
THE EXCESS OF THIS NET PRESENT VALUE OVER THE OUTSTANDING PAR AMOUNT OF THE
SERIES J BONDS BEING SO REDEEMED WILL BE THE PREMIUM.
(2) IF THE SERIES J BONDS ARE REDEEMED AT ANY TIME AFTER JANUARY 1,
2013, THE PREMIUM SHALL BE THE FOLLOWING PERCENTAGE, AS APPLICABLE, OF THE
PRINCIPAL AMOUNT SO REDEEMED:
.02749655 IF REDEEMED AFTER JANUARY 1, 2013 AND BEFORE JANUARY 1, 2014;
.02444138 IF REDEEMED ON OR AFTER JANUARY 1, 2014 AND BEFORE JANUARY 1,
2015;
.02138621 IF REDEEMED ON OR AFTER JANUARY 1, 2015 AND BEFORE JANUARY 1,
2016;
.01833103 IF REDEEMED ON OR AFTER JANUARY 1, 2016 AND BEFORE JANUARY 1,
2017;
.01527586 IF REDEEMED ON OR AFTER JANUARY 1, 2017 AND BEFORE JANUARY 1,
2018;
.01222069 IF REDEEMED ON OR AFTER JANUARY 1, 2018 AND BEFORE JANUARY 1,
2019;
.00916552 IF REDEEMED ON OR AFTER JANUARY 1, 2019 AND BEFORE JANUARY 1,
2020;
.00611034 IF REDEEMED ON OR AFTER JANUARY 1, 2020 AND BEFORE JANUARY 1,
2021;
.00305517 IF REDEEMED ON OR AFTER JANUARY 1, 2021 AND BEFORE JANUARY 1,
2022;
-13-
AND AT PAR IF REDEEMED THEREAFTER.
THE OUTSTANDING SERIES J 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 J BONDS ARE SUBJECT TO REDEMPTION BY THE CORPORATION, AT PAR AND
WITHOUT PREMIUM, PURSUANT TO THE SERIES J BONDHOLDER'S RIGHTS TO REQUIRE
REPURCHASE SET FORTH IN ARTICLE XV OF THE ORIGINAL INDENTURE, AS HERETOFORE
AND BY THIS ELEVENTH SUPPLEMENTAL TRUST INDENTURE, MODIFIED, AMENDED AND
SUPPLEMENTED.
ALL SERIES J 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 J BONDS REDEEMED AS PROVIDED IN THE INDENTURE SHALL BE
CANCELLED AND SHALL NOT BE REISSUED. THIS BOND MAY BE PARTIALLY REDEEMED
WITHOUT PRESENTATION TO THE TRUSTEE FOR ENDORSEMENT, IF THE REQUIREMENTS SET
FORTH IN SECTION 1 OF ARTICLE IV OF THE INDENTURE ARE MET.
COUPON SERIES J BONDS SHALL BE FREELY EXCHANGEABLE FOR REGISTERED
SERIES J BONDS, AND REGISTERED SERIES J BONDS SHALL BE FREELY EXCHANGEABLE
FOR BOTH REGISTERED OR COUPON SERIES J BONDS, IN EITHER CASE FOR ONE OR MORE
AUTHORIZED DENOMINATIONS AND IN THE SAME AGGREGATE PRINCIPAL AMOUNT.
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 J 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)
-14-
MODIFY WITHOUT THE CONSENT OF THE TRUSTEE THE RIGHTS, DUTIES OR
IMMUNITY OF THE TRUSTEE, (v) CREATE OR PERMIT ANY DISCRIMINATION OF 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 "1993 ACT") OR UNDER ANY STATE
SECURITIES LAWS AND THE BONDS ARE BEING SOLD IN RELIANCE ON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE 1993 ACT; THE BONDS MAY NOT BE RESOLD OR
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.
-15-
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 SECRETARY OR ASSISTANT
SECRETARY.
DATED: DECEMBER __, 1992
XXXXXXXXX WATER CORPORATION,
A CALIFORNIA CORPORATION
BY:
-----------------------------------
X.X. XXXXXX, PRESIDENT
ATTEST:
----------------------------------
XXXXX XXXXXXXX, SECRETARY
(Corporate Seal)
5. FORM OF ASSIGNMENT OF REGISTERED BOND. The assignment of registered
Series J 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.
-16-
6. FORM OF TRUSTEE'S CERTIFICATION. The Trustee's Certificate regarding
Series J 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.
CHEMICAL TRUST COMPANY
OF CALIFORNIA
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
Eleventh Supplemental Trust Indenture for the purpose of creating said new
series of bonds to be designated "FIRST MORTGAGE SERIES J 8.86% BONDS OF 2023,"
and of providing the particulars, terms and conditions thereof; and
WHEREAS, all things necessary to make said Four Million Dollars
($4,000,000) principal amount of Series J 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 make this Eleventh 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 J Bonds, as herein
provided, has been in all respects duly authorized; and
WHEREAS, in accordance with and pursuant to Section 3 of Article XII of
the Original Indenture, the requisite consent in writing signed by the holders
of not less than three-fourths (3/4) of the principal amount of the Series F
Bonds, Series G Bonds and Series H Bonds outstanding at the date hereof (said
bonds being the only bonds outstanding under the Indenture on the date hereof),
has been heretofore received by
-17-
the Corporation and filed with the Trustee, authorizing and assenting to the
execution and delivery of this Eleventh Supplemental Trust Indenture,
including the provisions hereof amending the Original Indenture, as
heretofore modified, amended and supplemented, all as hereinafter set forth.
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 J Bonds will and are to be issued and secured, (ii)
create the Series J Bonds, (iii) amend the Original Indenture, as heretofore
modified, amended and supplemented and (iv) 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 Eleventh Supplemental Trust Indenture.
IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the
parties hereto that certain provisions of the Original Indenture, as heretofore
modified, amended and supplemented, be further modified and amended as
hereinafter set forth, and that the Series J Bonds be issued, authenticated and
delivered upon and subject to the covenants and conditions as stated in the
Indenture, including this Eleventh 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 bonds at any time issued and outstanding
under the Indenture, including the Series J Bonds, as follows:
ARTICLE I
CREATION, AUTHENTICATION AND ISSUANCE AND PROVISIONS
RELATING TO FORM OF SERIES J 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 J, 8.86% BONDS OF 2023" (being the "SERIES J BONDS" herein
referred to) and to be in the aggregate principal amount of Four Million
Dollars ($4,000,000). No Series J Bonds in addition to said Four Million
Thousand Dollars ($4,000,000) principal amount shall be authenticated and
delivered by the Trustee except in exchange for, in lieu of, or in substitution
for, other Series J Bonds pursuant to Article I of the Indenture.
-18-
SECTION 2. The coupon Series J Bonds and the registered Series J
Bonds without coupons shall bear interest from the date of issuance at the rate
of Eight and 86/100 percent (8.86%) per annum, payable semi-annually on the
first days of January and July of each year, and shall be respectively
substantially of the tenor and purport recited above. The Series J Bonds shall
mature January 1, 2023, and shall be issued as coupon bonds in the denomination
of $100,000 each, registrable as to principal, and as registered bonds without
coupons in denominations of $100,000 and any multiple of $100,000 which the
Corporation may execute and deliver. Coupon Series J Bonds and registered
Series J Bonds without coupons shall be dated as provided in Section 2 of
Article I of the Indenture. Coupon Series J Bonds shall be freely exchangeable
for registered Series J Bonds, and registered Series J Bonds shall be freely
exchangeable for both registered or coupon Series J Bonds, in either case for
one or more authorized denominations and in the same aggregate principal
amount.
SECTION 3. All coupon Series J Bonds shall be numbered JC-1 and
upward, and registered Series J Bonds shall be numbered JR-1 and upward.
SECTION 4. The Series J Bonds are subject to redemption prior to
maturity in whole or in part by the Corporation on January 1 of any year after
and including January 1, 1994 at the office of the Trustee in the City of Los
Angeles, State of California, 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 in the event that said
Series J Bonds are redeemed OTHER THAN (i) through the mandatory payments made
by the corporation to the Series J Sinking Fund (as defined in Section 6(a)
below), (ii) pursuant to the Series J Bondholder's Rights to Require Repurchase
set forth in Article XV of the Original Indenture, as heretofore and by this
Eleventh Supplemental Trust Indenture, modified, amended and supplemented, and
(iii) 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 (in any of which events
said bonds are redeemable without premium). The premium, if any, shall be
determined as follows:
(1) If the Series J Bonds are redeemed on or prior to January 1,
2013, the premium shall be determined in accordance with the following
procedure:
(a) The average term to maturity of the Series J Bonds thereof
will be calculated by weighing each remaining principal payment by its
term from the prepayment date;
(b) The U.S. Treasury yields to constant maturities, as
published by the Federal Reserve, will be determined for the terms just
before
-19-
and just after the average term to maturity thereof using the
latest one week moving average ending the date on which the prepayment is
made;
(c) A discount rate will be calculated by adding 50 basis
points to an interpolated rate between the two U.S. Treasury yields for
the average term to maturity of the Series J Bonds. If the annual
discount rate is larger than or equal to the annual coupon of the Series J
Bonds, the premium will be zero. Otherwise, the annual discount rate will
be divided by two to produce a semiannual discount rate;
(d) The semiannual discount rate will be used to calculate the
net present value of all the remaining scheduled interest and principal
payments.
The excess of this net present value over the outstanding par amount of the
Series J Bonds being so redeemed will be the premium.
(2) If the Series J Bonds are redeemed at any time after January 1,
2013, the premium shall be the following percentage, as applicable of the
principal amount so redeemed:
.02749655 if redeemed after January 1, 2013 and before January 1, 2014;
.02444138 if redeemed on or after January 1, 2014 and before January 1,
2015;
.02138621 if redeemed on or after January 1, 2015 and before January 1,
2016;
.01833103 if redeemed on or after January 1, 2016 and before January 1,
2017;
.01527586 if redeemed on or after January 1, 2017 and before January 1,
2018;
.01222069 if redeemed on or after January 1, 2018 and before January 1,
2019;
.00916552 if redeemed on or after January 1, 2019 and before January 1,
2020;
.00611034 if redeemed on or after January 1, 2020 and before January 1,
2021;
.00305517 if redeemed on or after January 1, 2021 and before January 1,
2022;
and at par if redeemed thereafter.
The outstanding Series J 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 J Bonds are subject to redemption by the Corporation, at par and
without premium, pursuant to the Series J Bondholder's Rights to Require
Repurchase set forth in Article XV of the Original Indenture, as heretofore and
by this Eleventh Supplemental Trust Indenture, modified, amended and
supplemented.
All Series J Bonds redeemed by the Corporation shall be so redeemed
on
-20-
a pro-rata basis calculated with reference to the principal amount of the
holdings thereof.
All Series J Bonds redeemed as provided herein shall be cancelled and
shall not be reissued.
SECTION 5. The Corporation hereby appoints the Trustee as registrar
and its agent for the registration of Series J 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 J 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 J Bonds (which sinking fund
shall be designated as the "SERIES J SINKING FUND") and for such purpose, to
deposit with the Trustee, or its successor in trust, for the redemption and
retirement of Series J Bonds, on or before fifteen (15) business days (each a
"SINKING FUND PAYMENT DATE") prior to January 1, in each year, commencing on
the day fifteen (15) business days prior to January 1, 2004, an amount of money
sufficient to redeem on the following January 1 (each such day being a
"REDEMPTION DAY"), Two Hundred Thousand Dollars ($200,000) of the principal
amount of Series J Bonds plus accrued interest thereon to the date of such
Sinking Fund Payment Date.
(b) In addition to the mandatory Series J Sinking Fund payments
provided for above, the Corporation shall have the noncumulative right from
time-to-time to make optional prepayments, at par, on any Sinking Fund Payment
Date after and including January 1, 2004 in an amount up to Two Hundred
Thousand Dollars ($200,000); PROVIDED, HOWEVER, that the total optional
prepayments made by the Corporation under this provision shall not exceed
$1,000,000 in the aggregate, and all such payments shall be applied to the last
maturing installment. Any optional prepayments made by the Corporation under
this provision shall be in addition to and shall not be applied as credits
against the required Series J Sinking Fund payments.
(c) The Trustee shall at any time when there shall be in the Series
J Sinking Fund an amount of money sufficient to redeem not less than One
Thousand Dollars ($1,000) in principal amount of the Series J Bonds, use and
apply the moneys in the Series J Sinking Fund for the purpose of redeeming
Series J Bonds on the next Redemption Date in the manner and to the extent
provided in Article IV of the Indenture.
(d) Series J Bonds shall be subject to purchase, redemption or
-21-
retirement from the General Sinking Fund as provided in the Indenture.
SECTION 7. Anything elsewhere contained in this Eleventh
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 Article I shall be in any manner modified or
altered without the consent of the holders of all Series J Bonds then
outstanding having been first received from the holders thereof, by their votes
at a meeting of Series J 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 J Bonds and filed with the
Trustee.
-22-
ARTICLE II
MODIFICATION AND AMENDMENT OF INDENTURE
SECTION 1. Section 8 of Article I of the Original Indenture, as
heretofore modified, amended and supplemented, is hereby further modified and
amended to read as follows:
"SECTION 8. UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE
TRUSTEE OF THE LOSS, THEFT, MUTILATION OR DESTRUCTION OF ANY BOND,
AND IN THE CASE OF ANY SUCH LOSS, THEFT OR DESTRUCTION, UPON DELIVERY
OF A BOND OF INDEMNITY IN SUCH FORM AND AMOUNT AS SHALL BE REASONABLY
SATISFACTORY TO THE TRUSTEE, OR IN THE EVENT OF SUCH MUTILATION, UPON
SURRENDER AND CANCELLATION OF THE BOND, THE CORPORATION SHALL
EXECUTE, AND UPON ITS REQUEST, THE TRUSTEE SHALL AUTHENTICATE AND
DELIVER TO THE HOLDER THEREOF, A NEW BOND, OF LIKE TENOR, IN LIEU OF
SUCH LOST, STOLEN, DESTROYED OR MUTILATED BOND. IF ANY HOLDER OF A
BOND, WHICH IS AN "INSTITUTIONAL HOLDER", IS THE OWNER OF ANY SUCH
LOST, STOLEN OR DESTROYED BOND, THEN THE AFFIDAVIT OF AN AUTHORIZED
OFFICER OF SUCH OWNER, SETTING FORTH THE FACT OF LOSS, THEFT OR
DESTRUCTION AND OF ITS OWNERSHIP OF THE BOND AT THE TIME OF SUCH
LOSS, THEFT OR DESTRUCTION SHALL BE ACCEPTED AS SATISFACTORY EVIDENCE
THEREOF AND NO FURTHER INDEMNITY SHALL BE REQUIRED AS A CONDITION TO
THE EXECUTION AND DELIVERY OF A NEW BOND OTHER THAN THE WRITTEN
AGREEMENT OF SUCH OWNER TO INDEMNIFY THE CORPORATION AND THE TRUSTEE.
THE HOLDER OF THE BOND SHALL BE RESPONSIBLE FOR THE REASONABLE COSTS
AND EXPENSES ASSOCIATED WITH THE AUTHENTICATION AND DELIVERY OF THE
NEW BOND PURSUANT TO THIS SECTION 8 OF ARTICLE I. FOR PURPOSES OF
THIS SECTION 8, "INSTITUTIONAL HOLDER" SHALL MEAN A BANK AS DEFINED
IN SECTION 3(a)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), WHETHER ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY; AN
INSURANCE COMPANY AS DEFINED IN SECTION 2(13) OF THE ACT; AN
INVESTMENT COMPANY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF
1940 OR A BUSINESS DEVELOPMENT COMPANY AS DEFINED IN SECTION 2(a)
(48) OF THAT ACT; A SMALL BUSINESS INVESTMENT COMPANY LICENSED BY THE
SMALL BUSINESS ADMINISTRATION; OR AN EMPLOYEE BENEFIT PLAN, INCLUDING
AN INDIVIDUAL RETIREMENT ACCOUNT, WHICH IS SUBJECT TO THE PROVISIONS
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, IF THE
INVESTMENT DECISION IS MADE BY A PLAN FIDUCIARY, AS DEFINED IN
SECTION 3(21) OF SUCH ACT, WHICH IS EITHER A BANK, INSURANCE COMPANY,
OR REGISTERED INVESTMENT ADVISER.
SECTION 2. Subdivision (a) of Section 16 of Article V of the
Original
-23-
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
(OTHER THAN STOCK DIVIDENDS OR DIVIDENDS OF SHARES OF STOCK OF HYDRO-
METRIC SERVICE CORPORATION) 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, 1991, PLUS
(ii) THREE MILLION DOLLARS ($3,000,000)."
SECTION 3. Section 18(a) of Article V of the Original Indenture, as
heretofore modified, amended and supplemented, is hereby further modified and
amended to read as follows:
"(a) PERMIT ANY SUBSIDIARY TO INCUR OR GUARANTEE ANY
INDEBTEDNESS, OTHER THAN (i) INCUR "CURRENT DEBT" IN THE ORDINARY
COURSE OF THE SUBSIDIARY'S BUSINESS, (ii) INCUR INDEBTEDNESS TO THE
CORPORATION OR (iii) INCUR INDEBTEDNESS PURSUANT TO A "DWR LOAN."
FOR PURPOSES OF THIS SUBDIVISION (a) OF THIS SECTION 18 OF ARTICLE V,
"CURRENT DEBT" SHALL MEAN ANY AND ALL INDEBTEDNESS HAVING A MATURITY
DATE OF LESS THAN ONE (1) YEAR FROM ITS CREATION, AND "DWR LOAN"
SHALL MEAN A CONTRACT WITH THE STATE OF CALIFORNIA DEPARTMENT OF
WATER RESOURCES (OR ANY SUCCESSOR ENTITY) FOR LOAN(S) UNDER THE
CALIFORNIA SAFE DRINKING WATER BOND LAW OF 1976, AS THE SAME MAY BE
AMENDED FROM TIME-TO-TIME"
SECTION 4. Section 1 of Article VIII of the Original Indenture, as
heretofore modified, amended and supplemented, is hereby further modified and
amended by adding at the end thereof a new paragraph (g) to read as follows:
"(g) ANY ACCELERATION OF THE MATURITY UPON DEFAULT OF ANY
"INDEBTEDNESS" OF THE CORPORATION OR ANY SUBSIDIARY OF THE
CORPORATION WHICH IS OUTSTANDING IN AN AGGREGATE PRINCIPAL AMOUNT OF
AT LEAST $500,000 FOR BORROWED MONEY SHALL OCCUR AND BE CONTINUING;
OR ANY FAILURE OF THE CORPORATION OR ANY OF ITS SUBSIDIARIES TO PAY
ANY PRINCIPAL OF,
-24-
OR PREMIUM, IF ANY, AND ACCRUED INTEREST ON ANY SUCH INDEBTEDNESS WHEN
THE SAME BECOME DUE AND PAYABLE AT FINAL MATURITY OR OTHERWISE. FOR
PURPOSES HEREOF, "INDEBTEDNESS" SHALL MEAN LIABILITY FOR MONEY BORROWED
DIRECTLY BY THE CORPORATION OR A SUBSIDIARY, AS THE CASE MAY BE,
WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONSOLIDATION, AND ALL
INDEBTEDNESS OF OTHERS WITH RESPECT TO WHICH THE CORPORATION OR A
SUBSIDIARY, AS THE CASE MAY BE, HAS BECOME LIABLE BY WAY OF A
GUARANTEE."
ARTICLE III
COVENANTS AND AGREEMENTS RELATING
TO
SERIES J BONDS
The Original Indenture, as heretofore modified, amended and
supplemented, is hereby further amended to add the following new Article XV
immediately following Article XIV thereof:
ARTICLE XV
COVENANTS AND AGREEMENTS RELATING
TO
SERIES J 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 J
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.
-25-
(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 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 J BONDS, TOGETHER WITH INTEREST THEREON TO THE DATE OF SUCH
PREPAYMENT OF SAID SERIES J 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 J 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,
PURSUANT TO SUBSECTION (a) OR (b) OF SECTION 1 OF THIS ARTICLE XV, THE
BONDHOLDER HAS THE RIGHT TO REQUIRE THE CORPORATION TO REPURCHASE SOME OR
ALL OF THE SERIES J
-26-
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 XV, AS APPROPRIATE)
UPON WHICH THE BONDHOLDER HAS BASED ITS RIGHT TO REQUIRE REPURCHASE.
SAID NOTICE SHALL SPECIFY THE PRINCIPAL AMOUNT OF THE SERIES J BONDS TO
BE REPURCHASED. THE CORPORATION SHALL PROMPTLY DEPOSIT WITH THE
TRUSTEE THE NECESSARY FUNDS TO REPURCHASE THE SERIES J 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 J 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 J BONDS AS HEREIN PROVIDED), NO FURTHER INTEREST SHALL ACCRUE
UPON ANY OF SUCH SERIES J BONDS SO TO BE REPURCHASED AND, ANYTHING IN
SUCH SERIES J BONDS OR IN ANY COUPONS PERTAINING THERETO OR IN THE
INDENTURE TO THE CONTRARY NOTWITHSTANDING, ANY COUPONS FOR INTEREST
PERTAINING TO ANY SUCH COUPON BONDS AND MATURING AFTER SAID REPURCHASE
DATE SHALL BECOME AND BE NULL AND VOID. THE SUM DUE FOR PRINCIPAL AND
PREMIUM ON EACH SUCH SERIES J BOND TO BE REPURCHASED SHALL BE PAYABLE
TO THE BEARER OF SUCH BONDS UNLESS IT SHALL HAVE BEEN REGISTERED. IF
SAID SERIES J BONDS SHALL HAVE BEEN REGISTERED AS TO PRINCIPAL ONLY,
SUCH PAYMENT SHALL BE MADE TO THE HOLDERS OF SAID BONDS REGISTERED AS
TO PRINCIPAL, OR IF THE BOND SHALL BE A REGISTERED BOND THEN SUCH
PAYMENT SHALL BE MADE TO THE REGISTERED HOLDER OF SUCH REGISTERED BOND,
BUT IN NO CASE SHALL THE CORPORATION BE REQUIRED TO MAKE PAYMENT EXCEPT
UPON THE SURRENDER TO THE TRUSTEE OF SUCH SERIES J BONDS AND OF ALL
COUPONS, IF ANY, FOR INTEREST ON THE COUPON BONDS UNMATURED AS OF THE
REPURCHASE DATE. 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 XV,
NOTWITHSTANDING ANY OTHER PROVISION IN THE ORIGINAL INDENTURE, AS
HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SET FORTH BELOW:
"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.
-27-
"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.
"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.
-28-
"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 J 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.
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 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"), THE PARENT (AT ITS OWN
EXPENSE) SHALL FILE WITH THE SEC AND SHALL DELIVER TO THE TRUSTEE
WITHIN FIVE DAYS AFTER IT FILES THEM WITH THE SEC COPIES OF THE
ANNUAL REPORTS AND OF THE INFORMATION, DOCUMENTS AND OTHER REPORTS
(OR COPIES OF SUCH PORTIONS OF ANY OF THE FOREGOING AS
-29-
THE SEC MAY BY RULES AND REGULATIONS PRESCRIBE) TO BE FILED PURSUANT TO
SECTIONS 13 OR 15(d) OF THE EXCHANGE ACT. 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
SUCH 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 J
BONDS IN ACCORDANCE WITH THE ORIGINAL INDENTURE, AS HERETOFORE
AMENDED, MODIFIED AND SUPPLEMENTED, OR OTHERWISE IN ACCORDANCE WITH
THE TERMS OF THE SERIES J 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 J BONDS; PROVIDED, HOWEVER,
THAT THE PROVISIONS OF THIS SECTION 4 OF ARTICLE XV 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 XV SUBSEQUENT
TO THE DATE OF THE ISSUANCE OF THE SERIES J 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 XV.
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 J 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
-30-
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 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
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
-31-
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.
(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).
-32-
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 XV 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 XV SUBSEQUENT
TO THE DATE OF THE ISSUANCE OF THE SERIES J 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 XV.
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
-33-
BY THE TRUSTEE OR THE BONDHOLDER OR THEIR RESPECTIVE REPRESENTATIVES.
SECTION 10. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE XV,
NOTWITHSTANDING ANY OTHER PROVISION IN THE ORIGINAL INDENTURE, AS
HERETOFORE AMENDED, MODIFIED AND SUPPLEMENTED, THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SET FORTH BELOW:
"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 J
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.
"SHAREHOLDERS' EQUITY" SHALL MEAN, WITH RESPECT TO ANY PERSON,
ON ANY DATE AS OF WHICH THE AMOUNT THEREOF IS TO BE DETERMINED, THE
EXCESS
-34-
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 Eleventh 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 Eleventh 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, amended and supplemented, the words "THIS
INDENTURE" are used, they shall be construed to mean and include this Eleventh
Supplemental 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, and to be attested
by their Secretaries or Assistant Secretaries, respectively, as of the day and
year first above written.
XXXXXXXXX WATER CORPORATION,
a California corporation
By:
------------------------------------
Title:
---------------------------------
-35-
(Corporate Seal)
Attest:
--------------------------------
Secretary
CHEMICAL TRUST COMPANY
OF CALIFORNIA, a California corporation
By:
------------------------------
Title:
---------------------------
(Corporate Seal)
Attest:
------------------------------------
Secretary
-00-
XXXXX XX XXXXXXXXXX )
) SS.
COUNTY OF LOS ANGELES )
On this ____ day of December, 1992, before me, the undersigned, a
Notary Public in and for the State of California, personally appeared X. X.
Xxxxxx, known to me to be the President, and Xxxxx Xxxxxxxx, known to me to be
the Secretary, of XXXXXXXXX WATER CORPORATION, the corporation that executed
the within instrument, known to me to be the persons who executed the within
instrument on behalf of said corporation herein named, and acknowledged to me
that said corporation executed the within instrument pursuant to its bylaws or
a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
---------------------------------
Notary Public in and for
the State of California
My Commission Expires:
-----------
(Notarial Seal)
-00-
XXXXX XX XXXXXXXXXX )
) SS.
COUNTY OF LOS ANGELES )
On this ____ day of December, 1992, before me, the undersigned, a
Notary Public in and for the State of California, personally appeared
_____________, known to me to be the Assistant Vice President and Assistant
Secretary of CHEMICAL TRUST COMPANY OF CALIFORNIA, the corporation that
executed the within instrument, known to me to be the person who executed the
within instrument on behalf of said corporation herein named, and acknowledged
to me that said corporation executed the within instrument pursuant to its
bylaws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
---------------------------------
Notary Public in and for
the State of California
My Commission Expires:
------------
(Notarial Seal)
-38-
