AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 21, 2000
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MINNESOTA POWER, INC. MINNESOTA 41-0418150
(Exact name of registrant as (State or other jurisdiction of (I.R.S. Employer
specified in its charter) incorporation or organization) Identification No.)
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30 West Superior Street
Duluth, Minnesota 55802-2093
(218) 722-2641
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------
David G. Gartzke Philip R. Halverson, Esq. Robert J. Reger, Jr., Esq.
Senior Vice President-Finance Vice President, General Counsel Thelen Reid & Priest LLP
and Chief Financial Officer and Secretary 40 West 57th Street
30 West Superior Street 30 West Superior Street New York, New York 10019-4097
Duluth, Minnesota 55802-2093 Duluth, Minnesota 55802-2093 (212) 603-2000
(218) 722-2641 (218) 722-2641
(Names and addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
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It is respectfully requested that the Commission also send copies of all
notices, orders and communications to:
Michael Connolly, Esq.
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022-1200
(212) 735-8600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement as determined by
market conditions and other factors.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
========================================= =========================== =============================
TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM AGGREGATE AMOUNT OF REGISTRATION FEE
TO BE REGISTERED OFFERING PRICE (1)
- ----------------------------------------- --------------------------- -----------------------------
First Mortgage Bonds and Debt Securities $400,000,000 $105,600
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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The information in this prospectus is not complete and may be changed. Minnesota
Power, Inc. may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 20, 2000
PROSPECTUS
$400,000,000
MINNESOTA POWER, INC.
FIRST MORTGAGE BONDS
AND
DEBT SECURITIES
--------------------
Minnesota Power, Inc. intends to offer from time to time not to exceed
$400,000,000 aggregate principal amount of its first mortgage bonds and debt
securities. The first mortgage bonds will be secured by a mortgage that
constitutes a first mortgage lien on substantially all of the property of
Minnesota Power, Inc. The debt securities will be unsecured and will consist of
debentures, notes or other unsecured evidence of indebtedness. Minnesota Power,
Inc. will refer to the first mortgage bonds and the debt securities in this
prospectus collectively as the "Securities."
The Securities will be offered on terms to be decided at the time of sale.
Minnesota Power, Inc. will provide specific terms of the Securities, including
their offering prices, interest rates and maturities, in supplements to this
prospectus. The supplements may also add, update or change information contained
in this prospectus. You should read this prospectus and any supplement carefully
before you invest.
Minnesota Power, Inc. may offer these Securities directly or through
underwriters, agents or dealers. The supplements to this prospectus will
describe the terms of any particular plan of distribution, including any
underwriting arrangements. The "Plan of Distribution" section on page 17 of this
prospectus also provides more information on this topic.
Minnesota Power, Inc.'s principal executive offices are located at 30 West
Superior Street, Duluth, Minnesota 55802-2093, telephone number (218) 722-2641.
--------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 2000
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TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION............................................1
INCORPORATION BY REFERENCE.....................................................1
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995....................................................................1
MINNESOTA POWER, INC...........................................................3
USE OF PROCEEDS................................................................5
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES................................5
DESCRIPTION OF FIRST MORTGAGE BONDS............................................6
DESCRIPTION OF DEBT SECURITIES................................................10
PLAN OF DISTRIBUTION..........................................................17
EXPERTS.......................................................................18
LEGAL OPINIONS................................................................19
WHERE YOU CAN FIND MORE INFORMATION
Minnesota Power, Inc. ("Minnesota Power") files annual, quarterly and other
reports and other information with the Securities and Exchange Commission
("SEC"). You can read and copy any information filed by Minnesota Power with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can obtain additional information about the Public Reference
Room by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains an Internet site (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including Minnesota
Power. Minnesota Power also maintains an Internet site (http://www.mnpower.com).
Information contained on Minnesota Power's Internet site does not constitute
part of this prospectus.
INCORPORATION BY REFERENCE
The SEC allows Minnesota Power to "incorporate by reference" the
information that Minnesota Power files with the SEC, which means that Minnesota
Power may, in this prospectus, disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. Minnesota Power is incorporating by
reference the documents listed below and any future filings Minnesota Power
makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, until Minnesota Power sells all of the Securities
described in this prospectus. Information that Minnesota Power files in the
future with the SEC will automatically update and supersede this information.
(1) Minnesota Power's Annual Report on Form 10-K for the year ended
December 31, 1999.
(2) Minnesota Power's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000.
(3) Minnesota Power's Current Reports on Form 8-K filed with the SEC on
June 20, 2000, June 28, 2000 and July 19, 2000.
You may request a copy of these documents, at no cost to you, by writing or
calling Shareholder Services, Minnesota Power, Inc., 30 West Superior Street,
Duluth, Minnesota 55802-2093, telephone number (218) 723-3974 or (800) 535-3056.
You should rely only on the information contained in, or incorporated by
reference in, this prospectus and the prospectus supplement. Minnesota Power has
not, and any underwriters, agents or dealers have not, authorized anyone else to
provide you with different information. Minnesota Power is not, and any
underwriters, agents or dealers are not, making an offer of these Securities in
any state where the offer is not permitted. You should not assume that the
information contained in this prospectus and the prospectus supplement is
accurate as of any date other than the date on the front of those documents.
SAFE HARBOR STATEMENT UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, Minnesota Power is hereby filing cautionary
statements identifying important factors that could cause Minnesota Power's
actual results to differ materially from those projected in forward-looking
statements (as that term is defined in the Private Securities Litigation Reform
Act of 1995) made by or on behalf of Minnesota Power which are made in this
prospectus or any supplement to this prospectus, in presentations, in response
to questions or otherwise. Any statements that express, or involve discussions
as to, expectations, beliefs, plans, objectives, assumptions or future events or
performance (often, but not always, through the use of words or phrases such as
"anticipates," "believes," "estimates," "expects," "intends," "plans,"
"projects," "will likely," "result," "will continue" or similar expressions) are
not statements of historical facts and may be forward-looking.
Forward-looking statements involve estimates, assumptions and uncertainties
and are qualified in their entirety by reference to, and are accompanied by, the
following important factors, which are difficult to predict, contain
uncertainties, are beyond the control of Minnesota Power and may cause actual
results to differ materially from those contained in those forward-looking
statements:
o prevailing governmental policies and regulatory actions, including
those of Congress, state legislatures, the Federal Energy Regulatory
Commission, the Minnesota Public Utilities Commission, the Florida
Public Service Commission, the North Carolina Utilities Commission and
the Public Service Commission of Wisconsin, with respect to allowed
rates of return, industry and rate structure, acquisition and disposal
of assets and facilities, operation and construction of plant
facilities, recovery of purchased power, and present or prospective
wholesale and retail competition (including but not limited to retail
wheeling and transmission costs);
o economic and geographic factors including political and economic
risks;
o changes in and compliance with environmental and safety laws and
policies;
o weather conditions;
o population growth rates and demographic patterns;
o competition for retail and wholesale customers;
o pricing and transportation of commodities;
o market demand, including structural market changes;
o changes in tax rates or policies or in rates of inflation;
o changes in project costs;
o unanticipated changes in operating expenses and capital expenditures;
o capital market conditions;
o competition for new energy development opportunities; and
o legal and administrative proceedings (whether civil or criminal) and
settlements that influence the business and profitability of Minnesota
Power.
Any forward-looking statement speaks only as of the date on which that
statement is made, and Minnesota Power undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which that statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of those factors, nor can it assess the impact of each
of those factors on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statement.
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MINNESOTA POWER, INC.
Minnesota Power, a multi-services company incorporated under the laws of
the State of Minnesota in 1906, has operations in four business segments:
(1) Electric Services, which include electric and gas services, coal
mining and telecommunications;
(2) Automotive Services, which include a network of vehicle auctions, a
finance company, an auto transport company, a vehicle remarketing
company and a company that provides field information services;
(3) Water Services, which include water and wastewater services; and
(4) Investments, which include a securities portfolio, intermediate-term
investments and real estate operations.
(UNAUDITED)
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------- ------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
BASIC AND DILUTED EARNINGS PER SHARE OF
COMMON STOCK
Before Capital Re and ACE Transactions $ 1.24 $ 1.35 $ 1.49 $ 0.67 $ 0.91
Capital Re and ACE Transactions (a). - - (0.52) (0.35) 0.44
---------- --------- --------- ---------- ----------
Total............................ $ 1.24 $ 1.35 $ 0.97 $ 0.32 $ 1.35
========== ========= ========= ========== ==========
NET INCOME
Electric Services................... $ 43.1 $ 47.4 $ 45.0 $ 19.6 $ 20.0
Automotive Services................. 14.0 25.5 39.9 21.6 26.6
Water Services...................... 8.2 7.5 12.2 5.7 6.5
Investments......................... 32.1 29.6 26.8 9.3 21.7
Corporate Charges................... (19.8) (21.5) (19.7) (9.3) (10.6)
---------- --------- --------- ---------- ----------
Net Income before Capital Re and ACE 77.6 88.5 104.2 46.9 64.2
Transactions.....................
Capital Re and ACE Transactions (a). - - (36.2) (24.1) 30.4
---------- --------- --------- ---------- ----------
$ 77.6 $ 88.5 $ 68.0 $ 22.8 $ 94.6
========== ========= ========= ========== ==========
(a) In May 2000 Minnesota Power sold its investment in ACE Limited ("ACE")
common stock, which resulted in an after-tax gain of $30.4 million, or
$0.44 per share. The ACE shares were received in December 1999 upon
completion of ACE's merger with Capital Re Corporation ("Capital Re").
During 1999 Minnesota Power recorded an aggregate $36.2 million, or $0.52
per share after-tax non-cash charge in connection with the valuation and
exchange of its investment in Capital Re stock for the ACE shares,
including a $24.1 million, or $0.35 per share charge in the second quarter.
ELECTRIC SERVICES
Electric Services generate, transmit, distribute and market electricity. In
addition, Electric Services include coal mining, telecommunications,
engineering, operating and maintenance services, and economic development
projects in and near Minnesota Power's service area. As of June 30, 2000,
Minnesota Power was supplying retail electric service to 130,000 customers in
153 cities, towns and communities, and outlying rural areas of northeastern
Minnesota. Minnesota Power's wholly owned subsidiary, Superior Water, Light and
Power Company, was providing electric, natural gas, and water services to 14,000
electric customers, 11,000 natural gas customers and 10,000 water customers in
northwestern Wisconsin as of June 30, 2000.
BNI Coal, Ltd., another wholly owned subsidiary of Minnesota Power, owns
and operates a lignite mine in North Dakota. Two electric generating
cooperatives, Minnkota Power Cooperative, Inc. and Square Butte Electric
Cooperative, presently consume virtually all of BNI Coal's production of lignite
coal under cost-plus coal supply agreements extending to 2027. Under an
agreement with Square Butte, Minnesota Power purchases approximately 71 percent
3
of the output from the Square Butte unit which is capable of generating up to
455 MW. Minnkota Power has an option to extend its coal supply agreement to
2042.
Other wholly owned subsidiaries of Minnesota Power within the Electric
Services business segment include:
o Electric Outlet, Inc., doing business as Electric Odyssey, which is a
retail, catalog and e-commerce merchandiser that sells unique products
for the home, office and travel;
o Minnesota Power Telecom, Inc., which provides high capacity fiber
optic based communication services to businesses and communities
across Minnesota and in Wisconsin;
o Rainy River Energy Corporation, which holds ownership and power
purchase positions in merchant generation, as well as provides
engineering, operating and maintenance services to new and existing
generating facilities; and
o Upper Minnesota Properties, Inc., which has invested in affordable
housing projects located in Minnesota Power's service territory.
Minnesota Power has large power contracts to sell power to eleven
industrial customers (five taconite producers, four paper and pulp mills, and
two pipeline companies) each requiring 10 megawatts or more of generating
capacity. These contracts require the payment of minimum monthly demand charges
that cover the fixed costs associated with having capacity available to serve
each of these customers, including a return on common equity. Each contract
continues past the contract termination date unless the required four-year
advance notice of cancellation has been given.
AUTOMOTIVE SERVICES
Automotive Services includes several subsidiaries which are integral parts
of the vehicle redistribution business. ADESA Corporation, a wholly owned
subsidiary of Minnesota Power, is the second largest vehicle auction network in
North America. Headquartered in Indianapolis, Indiana, ADESA owns, or leases,
and operates 45 vehicle auction facilities in the United States and Canada
through which used cars and other vehicles are sold to franchised automobile
dealers and licensed used car dealers. Sellers at ADESA's auctions include
domestic and foreign auto manufacturers, car dealers, automobile fleet/lease
companies, banks and finance companies.
Other subsidiaries of Minnesota Power within the Automotive Services
business segment include:
o Automotive Finance Corporation, which provides inventory financing for
wholesale and retail automobile dealers who purchase vehicles from
ADESA auctions, independent auctions, other auction chains and other
outside sources;
o Great Rigs Incorporated, which is one of the nation's largest used
automobile transport carriers with over 150 automotive carriers, the
majority of which are leased;
o PAR, Inc., which provides customized remarketing services to various
fleet operations; and
o AutoVIN, Inc., 90 percent owned, which provides professional field
information service to the automotive industry, including vehicle
condition reporting, inventory verification auditing, program
compliance auditing and facility inspection.
WATER SERVICES
Water Services include Florida Water Services Corporation, Heater
Utilities, Inc., Instrumentation Services, Inc., Vibration Correction Services,
Inc., and Americas' Water Service Corporation, each a wholly owned subsidiary of
Minnesota Power. Florida Water, the largest investor owned water supplier in
Florida, owns and operates water and wastewater treatment facilities within that
state. As of June 30, 2000, Florida Water served 148,000 water customers and
4
72,000 wastewater customers, and maintained 151 water and wastewater facilities
throughout Florida. As of June 30, 2000, Heater Utilities, which provides water
and wastewater treatment services in North Carolina, served 43,000 water
customers and 5,000 wastewater treatment customers. Instrumentation Services and
Vibration Correction Services provide predictive maintenance and instrumentation
consulting services to water and wastewater utilities throughout the
southeastern part of the United States as well as Texas and Minnesota. Americas'
Water Service offers contract management, operations and maintenance services
for water and wastewater treatment facilities to governments and industries.
INVESTMENTS
Investments consist of an actively traded securities portfolio,
intermediate-term investments and real estate operations. As of June 30, 2000,
Minnesota Power had approximately $113.7 million invested in a trading and
available-for-sale securities portfolio. Since 1985 Minnesota Power has invested
$27.9 million in venture capital funds that seek long-term capital appreciation
by making investments in companies developing advanced technologies to be used
by the electric utility industry. In addition, through subsidiaries, Minnesota
Power owns Cape Coral Holdings, Inc. and 80 percent of Lehigh Acquisition
Corporation, real estate companies that own various real estate properties and
operations in Florida.
USE OF PROCEEDS
Unless otherwise stated in the prospectus supplement, Minnesota Power will
add the net proceeds from sales of the Securities to its general funds.
Minnesota Power uses its general funds for general corporate purposes,
including, without limitation, acquisitions made by or on behalf of Minnesota
Power or its subsidiaries, to repay short-term borrowings and to redeem or
repurchase outstanding long-term debt obligations. Minnesota Power will
temporarily invest any proceeds that it does not need to use immediately in
short-term instruments.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
Minnesota Power has calculated ratios of earnings to fixed charges as
follows:
YEAR ENDED DECEMBER 31,
------------------------------------------
SIX MONTHS ENDED
----------------
1995 1996 1997 1998 1999 JUNE 30, 2000
---- ---- ---- ---- ---- -------------
1.90 2.12 2.46 2.65 2.76 4.89
Minnesota Power has calculated supplemental ratios of earnings to fixed
charges as follows:
YEAR ENDED DECEMBER 31,
------------------------------------------
SIX MONTHS ENDED
----------------
1995 1996 1997 1998 1999 JUNE 30, 2000
---- ---- ---- ---- ---- -------------
1.73 1.93 2.26 2.39 2.45 4.28
The supplemental ratio of earnings to fixed charges includes Minnesota
Power's obligation under a contract with Square Butte which extends through
2027, pursuant to which Minnesota Power is entitled to approximately 71 percent
of the output of a 455-megawatt coal-fired generating unit. Minnesota Power is
obligated to pay its pro rata share of Square Butte's costs based on output
entitlement from the unit. Minnesota Power's payment obligation is suspended if
Square Butte fails to deliver any power, whether produced or purchased, for a
period of one year. Square Butte's fixed costs consist primarily of debt
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service. Variable operating costs include the price of coal purchased from BNI
Coal under a long-term contract.
DESCRIPTION OF FIRST MORTGAGE BONDS
General. The first mortgage bonds are to be issued under Minnesota Power's
Mortgage and Deed of Trust, dated as of September 1, 1945, with Irving Trust
Company (now The Bank of New York) and Richard H. West (Douglas J. MacInnes,
successor), as mortgage trustees ("Mortgage Trustee" or "Mortgage Trustees"), as
supplemented by twenty supplemental indentures (herein collectively referred to
as the "Mortgage"), all of which are exhibits to the registration statement. The
statements herein with respect to the first mortgage bonds offered by this
prospectus and the Mortgage are merely an outline and do not purport to be
complete. They make use of terms defined in the Mortgage and are qualified in
their entirety by express reference to the cited articles and sections of the
Mortgage. All first mortgage bonds issued or to be issued under the Mortgage,
including the first mortgage bonds offered by this prospectus, are referred to
herein as "First Mortgage Bonds."
Reference is made to a prospectus supplement relating to each series of
First Mortgage Bonds offered by this prospectus for the following specific terms
of that series, among others:
o the designation of the series of First Mortgage Bonds and aggregate
principal amount of the First Mortgage Bonds;
o the percentage or percentages of their principal amount at which the
series will be issued;
o the date or dates on which the series will mature;
o the rate or rates at which the series will bear interest;
o the times at which such interest will be payable; and
o redemption terms or other specific terms.
Form and Exchanges. The First Mortgage Bonds offered by this prospectus
will be issued in definitive fully registered form without coupons in
denominations of $1,000 and multiples thereof and will be transferable and
exchangeable without charge (except for stamp taxes, if any, or other
governmental charges) at The Bank of New York, in The City of New York.
Interest, Maturity and Payment. Reference is made to the prospectus
supplement for the interest rate or rates of the First Mortgage Bonds offered by
this prospectus and the dates on which such interest is payable. Principal and
interest are payable at The Bank of New York, in The City of New York.
Redemption and Purchase of First Mortgage Bonds. The First Mortgage Bonds
may be redeemable mandatorily or at the option of Minnesota Power upon 30 days
notice at predetermined prices. If the First Mortgage Bonds are redeemable,
Minnesota Power may use certain deposited cash and/or proceeds of released
property to effect the redemption. Reference is made to the prospectus
supplement for the redemption terms of the First Mortgage Bonds offered by this
prospectus.
If at the time notice of redemption is given the redemption moneys are not
on deposit with The Bank of New York, as Mortgage Trustee, the redemption may be
made subject to their receipt before the date fixed for redemption.
Cash deposited under any provisions of the Mortgage (with certain
exceptions) may generally be applied to the purchase of First Mortgage Bonds of
any series. (See Mortgage, Article X.)
6
Sinking or Improvement Fund. Reference is made to the prospectus supplement
concerning whether or not the First Mortgage Bonds offered by this prospectus
are entitled to the benefit of a sinking or improvement fund or other provision
for amortization prior to maturity. None of the currently outstanding First
Mortgage Bonds has sinking fund or improvement fund provisions.
Replacement Fund. The First Mortgage Bonds offered by this prospectus are
not entitled to the benefit of any replacement fund.
Special Provisions for Retirement of First Mortgage Bonds. If, during any
12 month period, mortgaged property is disposed of by order of or to any
governmental authority resulting in the receipt of $5 million or more as
proceeds, Minnesota Power (subject to certain conditions) must apply such
proceeds, less certain deductions, to the retirement of First Mortgage Bonds.
(See Mortgage, Section 64.) Reference is made to the prospectus supplement for
information concerning whether the First Mortgage Bonds offered by this
prospectus are redeemable for this purpose and, if so, at what redemption
prices.
Security. The First Mortgage Bonds offered by this prospectus and any other
First Mortgage Bonds now or hereafter issued under the Mortgage will be secured
by the Mortgage, which constitutes, in the opinion of General Counsel for
Minnesota Power, a first lien on all of the electric generating plants and other
materially important physical properties of Minnesota Power and substantially
all other properties described in the Mortgage as owned by Minnesota Power,
subject to
o leases of minor portions of Minnesota Power's property to others for
uses which, in the opinion of such counsel, do not interfere with
Minnesota Power's business,
o leases of certain property of Minnesota Power not used in its electric
utility business, and
o excepted encumbrances, minor defects and irregularities,
but such counsel has not examined title to or passed upon title to reservoir
lands, easements or rights of way, any property not costing in excess of
$25,000, or lands or rights held for flowage, flooding or seepage purposes, or
riparian rights. There are excepted from the lien:
o cash and securities;
o merchandise, equipment, materials or supplies held for sale or other
disposition;
o aircraft, automobiles and other vehicles, and materials and supplies
for repairing and replacing the same;
o timber, minerals, mineral rights and royalties; and
o receivables, contracts, leases and operating agreements.
The Mortgage contains provisions that impose the lien of the Mortgage on
property acquired by Minnesota Power after the date of the Mortgage, other than
the excepted property, subject to pre-existing liens. However, if Minnesota
Power consolidates or merges with or conveys or transfers all or substantially
all of the mortgaged property to another corporation, the lien created by the
Mortgage will generally not cover the property of the successor company, other
than the property it acquires from Minnesota Power and improvements,
replacements and additions to that property. (See Mortgage, Section 87.)
The Mortgage provides that the Mortgage Trustees shall have a lien upon the
mortgaged property, prior to the First Mortgage Bonds, for the payment of their
reasonable compensation, expenses and disbursements and for indemnity against
certain liabilities. (See Mortgage, Section 96.)
7
No stocks or properties of subsidiaries are subject to the Mortgage.
Issuance of Additional First Mortgage Bonds. The maximum principal amount
of First Mortgage Bonds which may be issued under the Mortgage is not limited.
First Mortgage Bonds of any series may be issued from time to time on the basis
of:
(1) 60 percent of property additions after adjustments to offset
retirements;
(2) retirement of First Mortgage Bonds or qualified lien bonds; and
(3) deposit of cash.
With certain exceptions in the case of (2) above, the issuance of First
Mortgage Bonds requires adjusted net earnings before income taxes for 12 out of
the preceding 15 months of at least twice the annual interest requirements on
all First Mortgage Bonds at the time outstanding, including the additional
issue, and on all indebtedness of prior rank. Such adjusted net earnings are
computed after provision for retirement and depreciation of property equal to
$750,000 plus, for each of the 12 calendar months selected for the net earnings
test, 1/12th of 2 percent of the net additions to depreciable mortgaged property
made after June 30, 1945 and prior to the beginning of the calendar year within
which that calendar month is included. It is expected that the First Mortgage
Bonds offered by this prospectus will be issued upon the basis of the retirement
of First Mortgage Bonds or property additions.
Property additions generally include electric, gas, steam or hot water
property acquired after June 30, 1945, but may not include securities, aircraft,
automobiles or other vehicles, or property used principally for the production
or gathering of natural gas. There was available, as of June 30, 2000, unfunded
net property additions of approximately $77 million.
Minnesota Power has the right to amend the Mortgage without any consent or
other action by holders of any series of First Mortgage Bonds, including the
holders of First Mortgage Bonds offered by this prospectus, so as to include
nuclear fuel as well as similar or analogous devices or substances as property
additions.
The Mortgage contains certain restrictions upon the issuance of First
Mortgage Bonds against property subject to liens and upon the increase of the
amount of such liens. (See Mortgage, Sections 4-8, 20-30, and 46; Fifth
Supplemental, Section 2.)
Release and Substitution of Property. Property may be released upon the
basis of:
(1) deposit of cash or, to a limited extent, purchase money mortgages;
(2) property additions, after adjustments in certain cases to offset
retirement and after making adjustments for qualified lien bonds
outstanding against property additions; and/or
(3) waiver of the right to issue First Mortgage Bonds without applying any
earnings test.
Cash may be withdrawn upon the bases stated in (2) and (3) above.
When property released is not funded property, property additions used to
effect the release may again, in certain cases, become available as credits
under the Mortgage, and the waiver of the right to issue First Mortgage Bonds to
effect the release may, in certain cases, cease to be effective as such a
waiver. Similar provisions are in effect as to cash proceeds of such property.
The Mortgage contains special provisions with respect to qualified lien bonds
pledged, and disposition of moneys received on pledged prior lien bonds. (See
Mortgage, Sections 5, 31, 32, 37, 46-50, 59-63, 100 and 118.)
Dividend Covenant. Minnesota Power covenants that it will not declare or
pay dividends, other than dividends payable in common stock, on or make any
other distributions on or acquire, unless without cost to it, any of its common
stock unless
8
o the provisions for depreciation and retirement of property during the
period beginning September 1, 1945 to the date of the proposed
payment, distribution or acquisition, plus
o earned surplus of Minnesota Power, including current net income
available to be transferred to earned surplus, remaining:
(1) after such payment, distribution or acquisition; and
(2) after deducting any remainder of the amount of earned surplus of
Minnesota Power as of August 31, 1945, after deducting from such
amount the charges to earned surplus subsequent to August 31,
1945, other than charges occasioned by dividends (other than
dividends payable in common stock) on its common stock or
occasioned by other distributions on or acquisitions of its
common stock and other than charges to earned surplus with
corresponding credits to reserve for depreciation and retirement
of property;
shall be at least equal to
o $1,000,000 plus, for each calendar year 1947 through 1996, $750,000
plus 2 percent of net additions to depreciable mortgaged property made
after June 30, 1945 through that calendar year. (See Mortgage, Section
39.) None of Minnesota Power's retained earnings as of June 30, 2000
were restricted as a result of such provisions.
Modification of the Mortgage. The rights of bondholders may be modified
with the consent of the holders of 70 percent of the First Mortgage Bonds and,
if less than all series of First Mortgage Bonds are affected, the consent also
of the holders of 70 percent of the First Mortgage Bonds of each series
affected. Minnesota Power has reserved the right without any consent or other
action by the holders of any series of First Mortgage Bonds, including the
holders of First Mortgage Bonds offered by this prospectus, to amend the
Mortgage so as to substitute 66-2/3 percent for 70 percent in the foregoing
provisions. In general, no modification of the terms of payment of principal and
interest, no modification of the obligations of Minnesota Power under Section 64
and no modification affecting the lien or reducing the percentage required for
modification, is effective against any bondholder without his consent. (See
Mortgage, Article XIX; Fifth Supplemental, Section 3.)
Defaults and Notice Thereof. Defaults are defined as being:
o default in payment of principal;
o default for 60 days in payment of interest or of installments of funds
for retirement of First Mortgage Bonds;
o certain defaults with respect to qualified lien bonds and certain
events in bankruptcy, insolvency or reorganization; and
o default of 90 days after notice in other covenants. (See Mortgage,
Section 65.)
The Mortgage Trustees may withhold notice of default, except in payment of
principal, interest or funds for retirement of First Mortgage Bonds, if they
think it is in the interest of the bondholders. (See Mortgage, Section 66.)
Under the Trust Indenture Act of 1939, Minnesota Power is required to provide to
the Mortgage Trustees an annual statement by an appropriate officer as to
Minnesota Power's compliance with all conditions and covenants under the
Mortgage.
The Bank of New York, as Mortgage Trustee, or the holders of 25 percent of
the First Mortgage Bonds may declare the principal and interest due on default,
but a majority may annul such declaration if the default has been cured. (See
Mortgage, Section 67.) No holder of First Mortgage Bonds may enforce the lien of
the Mortgage without giving the Mortgage Trustees written notice of a default
and unless holders of 25 percent of the First Mortgage Bonds have requested the
Trustees to act and offered them reasonable opportunity to act and indemnity
9
satisfactory to the Mortgage Trustees and they shall have failed to act. (See
Mortgage, Section 80.) The holders of a majority of the First Mortgage Bonds may
direct the time, method and place of conducting any proceedings for any remedy
available to the Mortgage Trustees, or exercising any trust or power conferred
upon the Mortgage Trustees, but the Mortgage Trustees are not required to follow
such direction if not sufficiently indemnified for expenditures. (See Mortgage,
Section 71.)
DESCRIPTION OF DEBT SECURITIES
General. The following description sets forth certain general terms and
provisions of Minnesota Power's unsecured debt securities that Minnesota Power
may offer by this prospectus ("Debt Security" or "Debt Securities"). Minnesota
Power will describe the particular terms of the Debt Securities, and provisions
that vary from those described below, in one or more prospectus supplements.
The Debt Securities will be Minnesota Power's direct unsecured general
obligations. The Debt Securities will be senior debt securities. Minnesota Power
may issue the Debt Securities from time to time in one or more series. Minnesota
Power will issue the Debt Securities under one or more separate Indentures
("Indenture") between Minnesota Power and a trustee ("Indenture Trustee") to be
specified in the prospectus supplement.
The following descriptions of the Debt Securities and the Indenture are
summaries and are qualified by reference to the Indenture. The form of the
Indenture is being filed as an exhibit to the registration statement, and you
should read the Indenture for provisions that may be important to you.
References to certain sections of the Indenture are included in parentheses.
Whenever particular provisions or defined terms in the Indenture are referred to
under this "Description of Debt Securities," such provisions or defined terms
are incorporated by reference herein. The Indenture will be qualified under the
Trust Indenture Act of 1939. You should refer to the Trust Indenture Act of 1939
for provisions that apply to the Debt Securities.
The Debt Securities will rank equally with all of Minnesota Power's other
senior, unsecured and unsubordinated debt.
The prospectus supplement relating to any series of Debt Securities being
offered will include specific terms relating to that offering. These terms will
include any of the following terms that apply to that series:
o the title of the Debt Securities;
o the total principal amount of the Debt Securities;
o the date or dates on which the principal of the Debt Securities will
be payable and how it will be paid;
o the rate or rates at which the Debt Securities will bear interest, or
how such rate or rates will be determined;
o the date or dates from which interest on the Debt Securities will
accrue, the interest payment dates on which interest will be paid, and
the record dates for interest payments;
o the percentage, if less than 100 percent, of the principal amount of
the Debt Securities that will be payable if the maturity of the Debt
Securities is accelerated;
o any date or dates on which, and the price or prices at which, the Debt
Securities may be redeemed at the option of Minnesota Power and any
restrictions on such redemptions;
o any sinking fund or other provisions or options held by holders of
Debt Securities that would obligate Minnesota Power to repurchase or
otherwise redeem the Debt Securities;
10
o any changes or additions to the Events of Default under the Indenture
or changes or additions to the covenants of Minnesota Power under the
Indenture;
o if the Debt Securities will be issued in denominations other than
$1,000;
o if payments on the Debt Securities may be made in a currency or
currencies other than United States dollars;
o any convertible feature or options regarding the Debt Securities;
o any rights or duties of another person to assume the obligations of
Minnesota Power with respect to the Debt Securities;
o any collateral, security, assurance or guarantee for the Debt
Securities;
o any rights to change or eliminate any provision of the Indenture or to
add any new provision to the Indenture without the consent of the
holders of the securities of such series; and
o any other terms of the Debt Securities not inconsistent with the terms
of the Indenture.
(See Indenture, Section 301.)
The Indenture does not limit the principal amount of Debt Securities that
may be issued. The Indenture allows Debt Securities to be issued up to the
principal amount that may be authorized by Minnesota Power.
Debt Securities may be sold at a discount below their principal amount.
United States federal income tax considerations applicable to Debt Securities
sold at an original issue discount may be described in the prospectus
supplement. In addition, certain United States federal income tax or other
considerations applicable to any Debt Securities which are denominated or
payable in a currency or currency unit other than United States dollars may be
described in the prospectus supplement.
Except as may otherwise be described in the prospectus supplement, the
covenants contained in the Indenture will not afford holders of Debt Securities
protection in the event of a highly-leveraged or similar transaction involving
Minnesota Power or in the event of a change in control.
Payment and Paying Agents. Except as may be provided in the prospectus
supplement, interest, if any, on each Debt Security payable on each interest
payment date will be paid to the person in whose name such Debt Security is
registered as of the close of business on the regular record date for the
interest payment date. However, interest payable at maturity will be paid to the
person to whom the principal is paid. If there has been a default in the payment
of interest on any Debt Security, the defaulted interest may be paid to the
holder of such Debt Security as of the close of business on a date to be fixed
by the Indenture Trustee, which will be between 10 and 15 days prior to the date
proposed by Minnesota Power for payment of such defaulted interest or in any
other manner permitted by any securities exchange on which such Debt Security
may be listed, if the Indenture Trustee finds it practicable. (See Indenture,
Section 307.)
Unless otherwise specified in the prospectus supplement, principal of, and
premium, if any, and interest, if any, on the Debt Securities at maturity will
be payable upon presentation of the Debt Securities at the corporate trust
office of the Indenture Trustee, in The City of New York, as Paying Agent for
Minnesota Power. Minnesota Power may change the place of payment on the Debt
Securities, may appoint one or more additional Paying Agents, including
Minnesota Power, and may remove any Paying Agent, all at the discretion of
Minnesota Power. (See Indenture, Section 602.)
Registration and Transfer. Unless otherwise specified in the prospectus
supplement, the transfer of Debt Securities may be registered, and Debt
Securities may be exchanged for other Debt Securities of the same series of
authorized denominations and with the same terms and principal amount, at the
corporate trust office of the Indenture Trustee in The City of New York.
11
Minnesota Power may change the place for registration of transfer and exchange
of the Debt Securities and may designate additional places for such registration
and exchange. Unless otherwise provided in the prospectus supplement, no service
charge will be made for any transfer or exchange of the Debt Securities.
However, Minnesota Power may require payment to cover any tax or other
governmental charge that may be imposed. Minnesota Power will not be required to
execute or to provide for the registration of transfer of, or the exchange of,
(a) any Debt Security during a period of 15 days prior to giving any notice of
redemption or (b) any Debt Security selected for redemption except the
unredeemed portion of any Debt Security being redeemed in part. (See Indenture,
Section 305.)
Satisfaction and Discharge. Minnesota Power will be discharged from its
obligations on the Debt Securities of a particular series, or any portion of the
principal amount of the Debt Securities of such series, if it irrevocably
deposits with the Indenture Trustee sufficient cash or government securities to
pay the principal, or portion of principal, interest, any premium and any other
sums when due on the Debt Securities of such series at their maturity, stated
maturity date, or redemption. (See Indenture, Section 701.)
The Indenture will be deemed satisfied and discharged when no Debt
Securities remain outstanding and when Minnesota Power has paid all other sums
payable by Minnesota Power under the Indenture. (See Indenture, Section 702.)
All moneys Minnesota Power pays to the Indenture Trustee or any Paying
Agent on Debt Securities which remain unclaimed at the end of two years after
payments have become due will be paid to or upon the order of Minnesota Power.
Thereafter, the holder of such Debt Security may look only to Minnesota Power
for payment thereof. (See Indenture, Section 603.)
Limitation on Liens. Unless otherwise specified in a prospectus supplement
with respect to a particular series of Debt Securities, Minnesota Power will not
create or allow any liens, other than permitted liens, to be created on any of
its property, other than excepted property, without making effective provision
whereby:
o the outstanding Debt Securities shall be equally and ratably secured;
or
o secured obligations shall be delivered to the Indenture Trustee in an
amount equal to the outstanding Debt Securities.
The term permitted liens includes, among others:
o non-delinquent or contested tax or construction liens;
o judgment liens in an aggregate amount less than $10 million or subject
to appeal;
o easements, leases, title defects that do not impair Minnesota Power's
intended use of property;
o governmental rights, mineral, timber or production rights, joint
ownership rights;
o liens fully secured by deposited money or investment securities,
purchase money liens and liens on property at the time of acquisition;
o liens securing tax-exempt financing, non-recourse liens related to the
acquisition or construction of additional property;
o the lien of the Mortgage or any successor indenture secured by First
Mortgage Bonds; and
o any other liens in an aggregate amount not exceeding 2.5 percent of
Minnesota Power's consolidated assets.
The term excepted property includes, among others:
12
o cash, shares of stock, interests in partnerships, bonds, notes,
evidence of indebtedness and other securities, including investments
in its subsidiaries;
o contracts, leases, accounts receivable, patents, trademarks,
intangibles, vehicles, rolling stock, aircraft, inventory;
o fuel and other consumables, minerals, timber, natural gas production
and gathering assets, hydroelectric assets; and
o leaseholds.
(See Indenture, Section 608.)
Consolidation, Merger, and Sale of Assets. Under the terms of the
Indenture, Minnesota Power may not consolidate with or merge into any other
entity or convey, transfer or lease its properties and assets substantially as
an entirety to any entity, unless:
o the surviving or successor entity is organized and validly existing
under the laws of any domestic jurisdiction and it expressly assumes
Minnesota Power's obligations on all Debt Securities and under the
Indenture;
o immediately after giving effect to the transaction, no Event of
Default and no event which, after notice or lapse of time or both,
would become an Event of Default shall have occurred and be
continuing; and
o Minnesota Power shall have delivered to the Indenture Trustee an
officer's certificate and an opinion of counsel as to compliance with
the foregoing.
The terms of the Indenture do not restrict Minnesota Power in a merger in
which Minnesota Power is the surviving entity. (See Indenture, Section 1101.)
Events of Default. "Event of Default" when used in the Indenture with
respect to any series of Debt Securities, means any of the following:
o failure to pay interest, if any, on any Debt Security of the
applicable series for 30 days after it is due;
o failure to pay the principal of or premium, if any, on any Debt
Security of the applicable series when due, whether at maturity or
upon earlier redemption;
o failure to perform any other covenant in the Indenture, other than a
covenant that does not relate to that series of Debt Securities, that
continues for 90 days after Minnesota Power receives written notice
from the Indenture Trustee, or Minnesota Power and the Indenture
Trustee receive a written notice from 33 percent of the holders of the
Debt Securities of such series; however, the Indenture Trustee or the
Indenture Trustee and the holders of such principal amount of Debt
Securities of this series can agree to an extension of the 90 day
period and such an agreement to extend will be automatically deemed to
occur if Minnesota Power is diligently pursuing action to correct the
default;
o certain events in bankruptcy, insolvency or reorganization of
Minnesota Power; or
o any other event of default included in any supplemental indenture or
officer's certificate for a specific series of Debt Securities.
(See Indenture, Section 801.)
13
The Indenture Trustee may withhold notice to the holders of Debt Securities
of any default, except default in the payment of principal, premium or interest,
if it considers such withholding of notice to be in the interests of the
holders. An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under the Indenture.
Remedies
Acceleration of Maturity. If an Event of Default with respect to fewer than
all the series of Debt Securities occurs and continues, either the Indenture
Trustee or the holders of at least 33 percent in principal amount of the Debt
Securities of any such series may declare the entire principal amount of all the
Debt Securities of such series, together with accrued interest, to be due and
payable immediately. However, if the Event of Default is applicable to all
outstanding Debt Securities under the Indenture, only the Indenture Trustee or
holders of at least 33 percent in principal amount of all outstanding Debt
Securities of all series, voting as one class, and not the holders of any one
series, may make such a declaration of acceleration.
At any time after a declaration of acceleration with respect to the Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained, the Event of Default giving rise to
such declaration of acceleration will be considered waived, and such declaration
and its consequences will be considered rescinded and annulled, if:
o Minnesota Power has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(1) all overdue interest, if any, on all Debt Securities of the
series;
(2) the principal of and premium, if any, on any Debt Securities of
the series which have otherwise become due and interest, if any,
that is currently due;
(3) interest, if any, on overdue interest; and
(4) all amounts due to the Indenture Trustee under the Indenture; or
o any other Event of Default with respect to the Debt Securities of that
series has been cured or waived as provided in the Indenture.
There is no automatic acceleration, even in the event of bankruptcy,
insolvency or reorganization of Minnesota Power. (See Indenture, Section 802.)
Right to Direct Proceedings. Other than its duties in case of an Event of
Default, the Indenture Trustee is not obligated to exercise any of its rights or
powers under the Indenture at the request, order or direction of any of the
holders, unless the holders offer the Indenture Trustee a reasonable indemnity.
(See Indenture, Section 903.) If they provide a reasonable indemnity, the
holders of a majority in principal amount of any series of Debt Securities will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or exercising any power
conferred upon the Indenture Trustee. However, if the Event of Default relates
to more than one series, only the holders of a majority in aggregate principal
amount of all affected series will have the right to give this direction. (See
Indenture, Section 812). The Indenture Trustee is not obligated to comply with
directions that conflict with law or other provisions of the Indenture.
Limitation on Right to Institute Proceedings. No holder of Debt Securities
of any series will have any right to institute any proceeding under the
Indenture, or to exercise any remedy under the Indenture, unless:
o the holder has previously given to the Indenture Trustee written
notice of a continuing Event of Default;
o the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of all series in respect of which an Event
of Default shall have occurred and be continuing have made a written
14
request to the Indenture Trustee, and have offered reasonable
indemnity to the Indenture Trustee to institute proceedings; and
o the Indenture Trustee has failed to institute any proceeding for 60
days after notice and has not received any direction inconsistent with
the written request of holders during such period.
(See Indenture, Section 807.)
No Impairment of Right to Receive Payment. However, the limitations
described in the preceding paragraph do not apply to a suit by a holder of a
Debt Security for payment of the principal of or premium, if any, or interest,
if any, on a Debt Security on or after the applicable due date. (See Indenture,
Section 808.)
Annual Notice to Indenture Trustee. Minnesota Power will provide to the
Indenture Trustee an annual statement by an appropriate officer as to Minnesota
Power's compliance with all conditions and covenants under the Indenture. (See
Indenture, Section 606.)
Modification and Waiver. Minnesota Power and the Indenture Trustee may
enter into one or more supplemental indentures without the consent of any holder
of Debt Securities for any of the following purposes:
o to evidence the assumption by any permitted successor of the covenants
of Minnesota Power in the Indenture and in the Debt Securities;
o to add additional covenants of Minnesota Power or to surrender any
right or power of Minnesota Power under the Indenture;
o to add additional Events of Default;
o to change, eliminate, or add any provision to the Indenture; provided,
however, if the change, elimination, or addition will adversely affect
the interests of the holders of Debt Securities of any series, other
than any series the terms of which permit such change, elimination or
addition, in any material respect, such change, elimination, or
addition will become effective only as to such series:
(1) when the consent of the holders of Debt Securities of such series
has been obtained in accordance with the Indenture; or
(2) when no Debt Securities of such series remain outstanding under
the Indenture;
o to provide collateral security for all or part of the Debt Securities;
o to establish the form or terms of Debt Securities of any other series
as permitted by the Indenture;
o to provide for the authentication and delivery of bearer securities
and coupons attached thereto;
o to evidence and provide for the acceptance of appointment of a
successor Indenture Trustee;
o to provide for the procedures required for use of a noncertificated
system of registration for the Debt Securities of all or any series;
o to change any place where principal, premium, if any, and interest
shall be payable, Debt Securities may be surrendered for registration
of transfer or exchange and notices to Minnesota Power may be served;
or
o to cure any ambiguity or inconsistency or to make any other provisions
with respect to matters and questions arising under the Indenture;
provided that such action shall not adversely affect the interests of
the holders of Debt Securities of any series in any material respect.
15
(See Indenture, Section 1201.)
The holders of at least a majority in aggregate principal amount of the
Debt Securities of all series then outstanding may waive compliance by Minnesota
Power with certain restrictive provisions of the Indenture. (See Indenture,
Section 607.) The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may waive any past default under the
Indenture with respect to that series, except a default in the payment of
principal, premium, if any, or interest and certain covenants and provisions of
the Indenture that cannot be modified or be amended without the consent of the
holder of each outstanding Debt Security of the series affected. (See Indenture,
Section 813.)
If the Trust Indenture Act of 1939 is amended after the date of the
Indenture in such a way as to require changes to the Indenture, the Indenture
will be deemed to be amended so as to conform to such amendment of the Trust
Indenture Act of 1939. Minnesota Power and the Indenture Trustee may, without
the consent of any holders, enter into one or more supplemental indentures to
evidence such an amendment. (See Indenture, Section 1201.)
The consent of the holders of a majority in aggregate principal amount of
the Debt Securities of all series then outstanding is required for all other
modifications to the Indenture. However, if less than all of the series of Debt
Securities outstanding are directly affected by a proposed supplemental
indenture, then the consent only of the holders of a majority in aggregate
principal amount of all series that are directly affected will be required. No
such amendment or modification may:
o change the stated maturity of the principal of, or any installment of
principal of or interest on, any Debt Security, or reduce the
principal amount of any Debt Security or its rate of interest or
change the method of calculating such interest rate or reduce any
premium payable upon redemption, or change the currency in which
payments are made, or impair the right to institute suit for the
enforcement of any payment on or after the stated maturity of any Debt
Security, without the consent of the holder;
o reduce the percentage in principal amount of the outstanding Debt
Securities of any series whose consent is required for any
supplemental indenture or any waiver of compliance with a provision of
the Indenture or any default thereunder and its consequences, or
reduce the requirements for quorum or voting, without the consent of
all the holders of the series; or
o modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and waivers of
past defaults with respect to the Debt Securities of any series,
without the consent of the holder of each outstanding Debt Security
affected thereby.
A supplemental indenture which changes the Indenture solely for the benefit
of one or more particular series of Debt Securities, or modifies the rights of
the holders of Debt Securities of one or more series, will not affect the rights
under the Indenture of the holders of the Debt Securities of any other series.
(See Indenture, Section 1202.)
The Indenture provides that Debt Securities owned by Minnesota Power or
anyone else required to make payment on the Debt Securities shall be disregarded
and considered not to be outstanding in determining whether the required holders
have given a request or consent. (See Indenture, Section 101.)
Minnesota Power may fix in advance a record date to determine the required
number of holders entitled to give any request, demand, authorization,
direction, notice, consent, waiver or other such act of the holders, but
Minnesota Power shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other act of the holders may be given before or after such record date, but
only the holders of record at the close of business on that record date will be
considered holders for the purposes of determining whether holders of the
required percentage of the outstanding Debt Securities have authorized or agreed
or consented to such request, demand, authorization, direction, notice, consent,
waiver or other act of the holders. For that purpose, the outstanding Debt
Securities shall be computed as of the record date. Any request, demand,
authorization, direction, notice, consent, election, waiver or other act of a
holder shall bind every future holder of the same Debt Securities and the holder
of every Debt Security issued upon the registration of transfer of or in
exchange of such Debt Securities. A transferee will be bound by acts of the
16
Indenture Trustee or Minnesota Power taken in reliance thereon, whether or not
notation of such action is made upon such Debt Security. (See Indenture, Section
104.)
Resignation of the Indenture Trustee. The Indenture Trustee may resign at
any time by giving written notice to Minnesota Power or may be removed at any
time by act of the holders of a majority in principal amount of all series of
Debt Securities then outstanding delivered to the Indenture Trustee and
Minnesota Power. No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee will be effective until the
acceptance of appointment by a successor Indenture Trustee. So long as no Event
of Default or event which, after notice or lapse of time, or both, would become
an Event of Default has occurred and is continuing and except with respect to
the Indenture Trustee appointed by act of the holders, if Minnesota Power has
delivered to the Indenture Trustee a resolution of its Board of Directors
appointing a successor Indenture trustee and such successor has accepted such
appointment in accordance with the terms of the respective Indenture, the
Indenture Trustee will be deemed to have resigned and the successor will be
deemed to have been appointed as Indenture trustee in accordance with such
Indenture. (See Indenture, Section 910.)
Notices. Notices to holders of Debt Securities will be given by mail to the
addresses of such holders as they may appear in the security register therefor.
(See Indenture, Section 106.)
Title. Minnesota Power, the Indenture Trustee, and any agent of Minnesota
Power or the Indenture Trustee, may treat the person in whose name Debt
Securities are registered as the absolute owner thereof, whether or not such
Debt Securities may be overdue, for the purpose of making payments and for all
other purposes irrespective of notice to the contrary. (See Indenture, Section
308.)
Governing Law. Each Indenture and the Debt Securities will be governed by,
and construed in accordance with, the laws of the State of New York. (See
Indenture, Section 112.)
Regarding the Indenture Trustee. The Indenture Trustee will be specified in
the prospectus supplement. In addition to acting as Indenture Trustee, the
Indenture Trustee may act as trustee under various indentures and trusts of
Minnesota Power and its affiliates.
PLAN OF DISTRIBUTION
Minnesota Power may sell the Securities:
o through underwriters or dealers;
o through agents; or
o directly to one or more purchasers.
Through Underwriters or Dealers. If Minnesota Power uses underwriters in
the sale, the underwriters will acquire the Securities for their own account.
The underwriters may resell the Securities in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. The underwriters may sell the
Securities directly or through underwriting syndicates represented by managing
underwriters. Unless otherwise stated in the prospectus supplement relating to
any series of Securities, the obligations of the underwriters to purchase the
Securities will be subject to certain conditions, and the underwriters will be
obligated to purchase all of the Securities if they purchase any of them. If
Minnesota Power uses a dealer in the sale, Minnesota Power will sell the
Securities to the dealer as principal. The dealer may then resell those
Securities at varying prices determined at the time of resale.
Any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
17
Through Agents. Minnesota Power may designate one or more agents to sell
the Securities. Unless stated in a prospectus supplement, the agents will agree
to use their best efforts to solicit purchases for the period of their
appointment.
Directly. Minnesota Power may sell the Securities directly to one or more
purchasers. In this case, no underwriters or agents would be involved.
General Information. A prospectus supplement will state the name of any
underwriter, dealer or agent and the amount of any compensation, underwriting
discounts or concessions paid, allowed or reallowed to them. A prospectus
supplement will also state the proceeds to Minnesota Power from the sale of the
Securities, any initial public offering price and other terms of the offering of
the Securities.
Minnesota Power may authorize agents, underwriters or dealers to solicit
offers by certain institutions to purchase the Securities from Minnesota Power
at the public offering price and on terms described in the related prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future.
Minnesota Power may have agreements to indemnify agents, underwriters and
dealers against certain civil liabilities, including liabilities under the
Securities Act of 1933.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to Minnesota Power's Annual Report on Form 10-K for the year
ended December 31, 1999 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
Legal conclusions and opinions specifically attributed to General Counsel
herein under "Description of First Mortgage Bonds" and in the documents
incorporated in this prospectus by reference have been reviewed by Philip R.
Halverson, Esq., Duluth, Minnesota, Vice President, General Counsel and
Secretary of Minnesota Power, and are set forth or incorporated by reference
herein in reliance upon his opinion given upon his authority as an expert.
As of July 1, 2000, Mr. Halverson owned 21,978 shares of common stock of
Minnesota Power. Mr. Halverson is acquiring additional shares of Minnesota Power
common stock at regular intervals as a participant in the Employee Stock
Ownership Plan and Supplemental Retirement Plan. Under the Executive Long-Term
Incentive Compensation Plan, Mr. Halverson has:
o been granted options to purchase 38,467 shares of Minnesota Power
common stock, of which 24,652 options are fully vested, the remainder
of which shall vest over the next two years, and all of which will
expire ten years from the date of grant;
o earned approximately 874 performance shares that have not yet been
paid out under the terms of this Plan; and
o an award opportunity for up to 7,538 additional performance shares
contingent upon the attainment of certain performance goals of
Minnesota Power for the period January 1, 2000 through December 31,
2001.
18
LEGAL OPINIONS
The legality of the Securities will be passed upon for Minnesota Power by
Mr. Halverson and by Thelen Reid & Priest LLP, New York, New York, counsel for
Minnesota Power, and for any underwriter, dealer or agent by Morrison Cohen
Singer & Weinstein, LLP, New York, New York. Thelen Reid & Priest LLP and
Morrison Cohen Singer & Weinstein, LLP may rely as to all matters of Minnesota
law upon the opinion of Mr. Halverson.
-------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. MINNESOTA POWER HAS
NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. MINNESOTA
POWER IS NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE
OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THOSE DOCUMENTS.
19
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
Securities being registered, other than underwriting and/or agents compensation,
are:
Filing Fee for Registration Statement.......................... $ 105,600
Minnesota Mortgage Registration Tax............................ 920,000*
Legal and Accounting Fees...................................... 200,000*
Printing (Form S-3, prospectus, prospectus supplement, etc.)... 25,000*
Fees of the Trustees........................................... 30,000*
Rating agencies' fees.......................................... 100,000*
Miscellaneous.................................................. 29,400*
--------------
Total.......................................................... $1,410,000*
==============
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 302A.521 of the Minnesota Business Corporation Act generally
provides for the indemnification of directors, officers or employees of a
corporation made or threatened to be made a party to a proceeding by reason of
the former or present official capacity of the person against judgments,
penalties and fines (including attorneys' fees and disbursements) where such
person, among other things, has not been indemnified by another organization,
acted in good faith, received no improper personal benefit and with respect to
any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful.
Article IX of the Articles of Incorporation of Minnesota Power contains the
following provision:
"No director of this Corporation shall be personally liable to this
Corporation or its stockholders for monetary damages for breach of
fiduciary duty by that director as a director; provided, however, that this
Article IX shall not eliminate or limit the liability of a director: (a)
for any breach of the director's duty of loyalty to this Corporation or its
stockholders; (b) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of the law; (c) under
Minnesota Statutes Section 302A.559 or 80A.23; (d) for any transaction from
which the director derived an improper personal benefit; or (e) for any act
or omission occurring prior to the date when this Article IX becomes
effective. If, after the stockholders approve this provision, the Minnesota
Business Corporation Act, Minnesota Statutes Chapter 302A, is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of this
Corporation shall be deemed eliminated or limited to the fullest extent
permitted by the Minnesota Business Corporation Act, as so amended. No
amendment to or repeal of this Article IX shall apply to or have any affect
on the liability or alleged liability of any director of this Corporation
for or with respect to any acts or omissions of such director occurring
prior to that amendment or repeal."
Section 13 of the Bylaws of Minnesota Power contains the following
provisions relative to indemnification of directors and officers:
"The Corporation shall reimburse or indemnify each present and future
Director and officer of the Corporation (and his or her heirs, executors
and administrators) for or against all expenses reasonably incurred by such
Director or officer in connection with or arising out of any action, suit
or proceeding in which such Director or officer may be involved by reason
of being or having been a Director or officer of the Corporation. Such
indemnification for reasonable expenses is to be to the fullest extent
permitted by the Minnesota Business Corporation Act, Minnesota Statutes
Chapter 302A. By affirmative vote of the Board of Directors or with written
approval of the Chairman and Chief Executive Officer, such indemnification
may be extended to include agents and employees who are not Directors or
II-1
officers of the Corporation, but who would otherwise be indemnified for
acts and omissions under Chapter 302A of the Minnesota Business Corporation
Act, if such agent or employee were an officer of the Corporation."
"Reasonable expenses may include reimbursement of attorneys' fees and
disbursements, including those incurred by a person in connection with an
appearance as a witness."
"Upon written request to the Corporation and approval by the Chairman and
Chief Executive Officer, an agent or employee for whom indemnification has
been extended, or an officer or Director may receive an advance for
reasonable expenses if such agent, employee, officer or Director is made or
threatened to be made a party to a proceeding involving a matter for which
indemnification is believed to be available under Minnesota Statutes
Chapter 302A."
"The foregoing rights shall not be exclusive of other rights to which any
Director or officer may otherwise be entitled and shall be available
whether or not the Director or officer continues to be a Director or
officer at the time of incurring such expenses and liabilities."
Minnesota Power has insurance covering its expenditures which might arise
in connection with the lawful indemnification of its directors and officers for
their liabilities and expenses, and insuring officers and directors of Minnesota
Power against certain other liabilities and expenses.
ITEM 16. EXHIBITS.
Exhibit
Number Description of Exhibit
- ------- ----------------------
1 - Form of Underwriting Agreement.
*4(a)1 - Articles of Incorporation, amended and restated as of May 27,
1998 (filed as Exhibit 4(a) to the June 3, 1998 Form 8-K, File
No. 1-3548).
*4(a)2 - Certificate Fixing Terms of Serial Preferred Stock A, $7.125
Series (filed as Exhibit 3(a)2, File No. 33-50143).
*4(a)3 - Certificate Fixing Terms of Serial Preferred Stock A, $6.70
Series (filed as Exhibit 3(a)3, File No. 33-50143).
*4(b) - Bylaws, as amended effective May 27, 1998 (filed as Exhibit
4(b), to the June 3, 1998 Form 8-K, File No. 1-3548).
*4(c)1 - Mortgage and Deed of Trust, dated as of September 1, 1945,
between Minnesota Power & Light Company (now Minnesota Power,
Inc.) and Irving Trust Company (now The Bank of New York) and
Richard H. West (Douglas J. MacInnes, successor), as Trustees
(filed as Exhibit 7(c), File No. 2-5865).
*4(c)2 - Supplemental Indentures to Minnesota Power, Inc.'s Mortgage and
Deed of Trust:
Number Dated as of Reference File Exhibit
-------------- ------------------- ------------------- ----------
First March 1, 1949 2-7826 7(b)
Second July 1, 1951 2-9036 7(c)
Third March 1, 1957 2-13075 2(c)
Fourth January 1, 1968 2-27794 2(c)
Fifth April 1, 1971 2-39537 2(c)
Sixth August 1, 1975 2-54116 2(c)
Seventh September 1, 1976 2-57014 2(c)
Eighth September 1, 1977 2-59690 2(c)
II-2
Number Dated as of Reference File Exhibit
-------------- ------------------- ------------------- ----------
Ninth April 1, 1978 2-60866 2(c)
Tenth August 1, 1978 2-62852 2(d)2
Eleventh December 1, 1982 2-56649 4(a)3
Twelfth April 1, 1987 33-30224 4(a)3
Thirteenth March 1, 1992 33-47438 4(b)
Fourteenth June 1, 1992 33-55240 4(b)
Fifteenth July 1, 1992 33-55240 4(c)
Sixteenth July 1, 1992 33-55240 4(d)
Seventeenth February 1, 1993 33-50143 4(b)
Eighteenth July 1, 1993 33-50143 4(c)
Nineteenth February 1, 1997 1-3548 (1996 Form 4(a)3
10-K)
Twentieth November 1, 1997 1-3548 (1997 Form 4(a)3
10-K)
4(c)3 - Form of Supplemental Indenture relating to the First Mortgage
Bonds.
4(d)1 - Form of Indenture (For Unsecured Debt Securities).
4(d)2 - Form of Officer's Certificate relating to Debt Securities, with
form of Debt Security attached.
*4(e)1 - Mortgage and Deed of Trust, dated as of March 1, 1943, between
Superior Water, Light and Power Company and Chemical Bank & Trust
Company and Howard B. Smith, as Trustees, both succeeded by U. S.
Bank Trust N.A., as Trustee (filed as Exhibit 7(c), File No.
2-8668).
*4(e)2 - Supplemental Indentures to Superior Water, Light and Power
Company's Mortgage and Deed of Trust:
Number Dated as of Reference File Exhibit
-------------- ------------------- ------------------- ----------
First March 1, 1951 2-59690 2(d)(1)
Second March 1, 1962 2-27794 2(d)(1)
Third July 1, 1976 2-57478 2(e)1
Fourth January 1, 1985 2-78641 4(b)
Fifth December 1, 1992 1-3548 (1992 Form 4(b)1
10-K)
Sixth March 24, 1994 1-3548 (1996 Form 4(b)1
10-K)
Seventh November 1, 1994 1-3548 (1996 Form 4(b)2
10-K)
*4(f)1 - Indenture, dated as of March 1, 1993, between Southern States
Utilities, Inc. (now Florida Water Services Corporation) and
Nationsbank of Georgia, National Association (now SunTrust Bank,
Central Florida, N.A.), as Trustee (filed as Exhibit 4(d) to the
1992 Form 10-K, File No. 1-3548).
*4(f)2 - Supplemental Indentures to Florida Water Services Corporation's
Indenture:
Number Dated as of Reference File Exhibit
-------------- ------------------- ------------------- ----------
First March 1, 1993 1-3548 (1996 Form 4(c)1
10-K)
Second March 31, 1997 1-3548 (March 31, 4
1997 Form 10-Q)
Third May 28, 1997 1-3548 (June 30, 4
1997 Form 10-Q)
*4(g) - Amended and Restated Trust Agreement, dated as of March 1,
1996, relating to MP&L Capital I's 8.05% Cumulative Quarterly
Income Preferred Securities, between Minnesota Power & Light
Company (now Minnesota Power, Inc.), as Depositor, and The Bank
of New York, The Bank of New York (Delaware), Philip R.
Halverson, David G. Gartzke and James K. Vizanko, as Trustees
(filed as Exhibit 4(a) to the March 31, 1996 Form 10-Q, File No.
1-3548), as modified by Amendment No. 1, dated April 11, 1996
II-3
(filed as Exhibit 4(b) to the March 31, 1996 Form 10-Q, File No.
1-3548).
*4(h) - Indenture, dated as of March 1, 1996, relating to Minnesota
Power's 8.05% Junior Subordinated Debentures, Series A, Due 2015,
between Minnesota Power & Light Company (now Minnesota Power,
Inc.) and The Bank of New York, as Trustee (filed as Exhibit 4(c)
to the March 31, 1996 Form 10-Q, File No. 1-3548).
*4(i) - Guarantee Agreement, dated as of March 1, 1996, relating to
MP&L Capital I's 8.05% Cumulative Quarterly Income Preferred
Securities, between Minnesota Power & Light Company (now
Minnesota Power, Inc.), as Guarantor, and The Bank of New York,
as Trustee (filed as Exhibit 4(d) to the March 31, 1996 Form
10-Q, File No. 1-3548).
*4(j) - Agreement as to Expenses and Liabilities, dated as of March 20,
1996, relating to MP&L Capital I's 8.05% Cumulative Quarterly
Income Preferred Securities, between Minnesota Power & Light
Company (now Minnesota Power, Inc.) and MP&L Capital I (filed as
Exhibit 4(e) to the March 31, 1996 Form 10-Q, File No. 1-3548).
*4(k) - Officer's Certificate, dated March 20, 1996, establishing the
terms of the 8.05% Junior Subordinated Debentures, Series A, Due
2015 issued in connection with the 8.05% Cumulative Quarterly
Income Preferred Securities of MP&L Capital I (filed as Exhibit
4(i) to the 1996 Form 10-K, File No. 1-3548).
*4(l) - Rights Agreement dated as of July 24, 1996, between Minnesota
Power & Light Company (now Minnesota Power, Inc.) and the
Corporate Secretary of Minnesota Power & Light Company (now
Minnesota Power, Inc.), as Rights Agent (filed as Exhibit 4 to
the August 2, 1996 Form 8-K, File No. 1-3548).
*4(m) - Indenture (for Unsecured Debt Securities), dated as of May 15,
1996, between ADESA Corporation and The Bank of New York, as
Trustee relating to the ADESA Corporation's 7.70% Senior Notes,
Series A, Due 2006, and its 8.10% Senior Notes, Series B, Due
2010 (filed as Exhibit 4(k) to the 1996 Form 10-K, File No.
1-3548).
*4(n) - Guarantee of Minnesota Power & Light Company (now Minnesota
Power, Inc.), dated as of May 30, 1996, relating to the ADESA
Corporation's 7.70% Senior Notes, Series A, Due 2006 (filed as
Exhibit 4(l) to the 1996 Form 10-K, File No. 1-3548).
*4(o) - ADESA Corporation Officer's Certificate 1-D-1, dated May 30,
1996, relating to the ADESA Corporation's 7.70% Senior Notes,
Series A, Due 2006 (filed as Exhibit 4(m) to the 1996 Form 10-K,
File No. 1-3548).
*4(p) - Guarantee of Minnesota Power, Inc., dated as of March 30, 2000,
relating to ADESA Corporation's 8.10% Senior Notes, Series B, Due
2010 (filed as Exhibit 4(a) to the March 31, 2000 Form 10-Q, File
No. 1-3548).
*4(q) - ADESA Corporation Officer's Certificate 2-D-2, dated as of
March 30, 2000, relating to ADESA Corporation's 8.10% Senior
Notes, Series B, Due 2010 (filed as Exhibit 4(b) to the March 31,
2000 Form 10-Q, File No. 1-3548).
5(a) - Opinion and Consent of Philip R. Halverson, Esq., Vice
President, General Counsel and Secretary of Minnesota Power, Inc.
5(b) - Opinion and Consent of Thelen Reid & Priest LLP.
II-4
12 - Computation of Ratios of Earnings to Fixed Charges and
Supplemental Ratios of Earnings to Fixed Charges.
23(a) - Independent Auditors' Consent of PricewaterhouseCoopers LLP.
23(b) - Consent of Philip R. Halverson, Esq. (included in opinion,
attached hereto as Exhibit 5(a)).
23(c) - Consent of Thelen Reid & Priest LLP (included in opinion,
attached hereto as Exhibit 5(b)).
24 - Powers of Attorney (included on the signature pages of this
registration statement).
25(a) - Statement of Eligibility on Form T-1 of The Bank of New York
(as Mortgage Trustee).
25(b) - Statement of Eligibility on Form T-2 of Douglas J. MacInnes (as
Mortgage Trustee).
**25(c) - Statement of Eligibility on Form T-1 of Indenture Trustee.
* Incorporated herein by reference as indicated.
** To be filed by amendment or pursuant to Trust Indenture Act Section
305(b)(2).
ITEM 17. UNDERTAKINGS.
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii)To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement,
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
II-5
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
b. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-6
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes any agent for
service named in this registration statement to execute in the name of each such
person, and to file with the SEC, any and all amendments, including
post-effective amendments, to this registration statement, and appoints any such
agent for service as attorney-in-fact to sign in each such person's behalf
individually and in each capacity stated below and file any such amendments to
this registration statement and the registrant hereby also appoints each such
agent for service as its attorney-in-fact with like authority to sign and file
any such amendments in its name and behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Duluth, State of Minnesota, on July 20, 2000.
MINNESOTA POWER, INC.
By /s/ Edwin L. Russell
--------------------------------------
Edwin L. Russell
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Edwin L. Russell Chairman, President, Chief July 20, 2000
- ----------------------------- Executive Officer and
Edwin L. Russell Director (Principal
Executive Officer)
/s/ David G. Gartzke Senior Vice President-- July 20, 2000
- ----------------------------- Finance and Chief Financial
David G. Gartzke Officer (Principal Financial
Officer)
/s/ Mark A. Schober Controller July 20, 2000
- ----------------------------- (Principal Accounting
Mark A. Schober Officer)
II-7
/s/ Kathleen A. Brekken Director July 20, 2000
- -----------------------------
Kathleen A. Brekken
/s/ Merrill K. Cragun Director July 20, 2000
- -----------------------------
Merrill K. Cragun
/s/ Dennis E. Evans Director July 20, 2000
- -----------------------------
Dennis E. Evans
- ----------------------------- Director
Glenda E. Hood
/s/ Peter J. Johnson Director July 20, 2000
- -----------------------------
Peter J. Johnson
/s/ George L. Mayer Director July 20, 2000
- -----------------------------
George L. Mayer
/s/ Jack I. Rajala Director July 20, 2000
- -----------------------------
Jack I. Rajala
/s/ Arend J. Sandbulte Director July 20, 2000
- -----------------------------
Arend J. Sandbulte
/s/ Nick Smith Director July 20, 2000
- -----------------------------
Nick Smith
/s/ Bruce W. Stender Director July 20, 2000
- -----------------------------
Bruce W. Stender
/s/ Donald C. Wegmiller Director July 20, 2000
- -----------------------------
Donald C. Wegmiller
II-8
EXHIBIT INDEX
1 Form of Underwriting Agreement.
4(c)3 Form of Supplemental Indenture relating to the First Mortgage Bonds.
4(d)1 Form of Indenture (For Unsecured Debt Securities).
4(d)2 Form of Officer's Certificate relating to Debt Securities, with form
of Debt Security attached.
5(a) Opinion and Consent of Philip R. Halverson, Esq., Vice President,
General Counsel and Secretary of Minnesota Power, Inc.
5(b) Opinion and Consent of Thelen Reid & Priest LLP.
12 Computation of Ratios of Earnings to Fixed Charges and Supplemental
Ratios of Earnings to Fixed Charges.
23(a) Independent Auditors' Consent of PricewaterhouseCoopers LLP.
23(b) Consent of Philip R. Halverson, Esq. (included in opinion, attached
hereto as Exhibit 5(a)).
23(c) Consent of Thelen Reid & Priest LLP (included in opinion, attached
hereto as Exhibit 5(b)).
24 Powers of Attorney (included on the signature pages of this
registration statement).
25(a) Statement of Eligibility on Form T-1 of The Bank of New York (as
Mortgage Trustee).
25(b) Statement of Eligibility on Form T-2 of Douglas J. MacInnes (as
Mortgage Trustee).
EXHIBIT 1
MINNESOTA POWER, INC.
UNDERWRITING AGREEMENT
[ , 200 ]
---------- -
New York, New York
[Insert Name(s)
and Address(es)
of Underwriter(s)]
Dear Sirs:
Minnesota Power, Inc., a corporation incorporated under the laws of
Minnesota (the "Company"), proposes to issue and sell to you (the
"Underwriter"), [1 its First Mortgage Bonds of the series designation, with the
term and in the principal amount specified in Schedule I hereto (the "Bonds" or
the "Securities")] [2 its debt securities of the series designation, with the
term and in the principal amount specified in Schedule I hereto (the "Debt
Securities" or the "Securities")]. [1 The Bonds will be issued under the
Company's Mortgage and Deed of Trust, dated as of September 1, 1945, to Irving
Trust Company (now The Bank of New York) and Richard D. West (Douglas J.
MacInnes, successor), as Trustees, as supplemented and as it will be further
supplemented by a [ ] Supplemental Indenture, to be dated as of
--------
[ , 200 ], in substantially the form heretofore delivered to the
------------ -
Underwriter (the "[ ] Supplemental Indenture"). The Mortgage and Deed
----------
of Trust, as to be supplemented, are hereinafter referred to as the "Mortgage."]
[2 The Debt Securities are to be issued pursuant to the provisions of an
Indenture (For Unsecured Debt Securities), dated as of , 200 ,
------------ -
between the Company and The Bank of New York, as trustee (the "Indenture
Trustee"), said Indenture, together with any amendments or supplements thereto,
are hereinafter referred to as the "Indenture."]
1. Sale and Purchase. The Company agrees to issue and sell to the
-----------------
Underwriter, and the Underwriter agrees to purchase from the Company, its
Securities as specified in Schedule I hereto. The obligations of the Company and
the Underwriter under this Agreement are undertaken on the basis of the
representations and are subject to the conditions in this Agreement.
2. Payment and Delivery. Delivery of the Securities to the
--------------------
Underwriter, and payment of the purchase price by wire transfer in Federal
funds, to the Company, will take place at the offices of Thelen Reid & Priest
LLP, 40 West 57th Street, New York, New York, at 10:00 a.m., New York City time,
on [ , 200 ], or at such time, date and place as may be agreed upon
------------ -
by the Company and the Underwriter (the "Closing Date"). The Securities shall be
delivered [to The Depository Trust Company or to The Bank of New York, as
custodian for The Depository Trust Company, in definitive fully-registered
global form without coupons registered in the name of Cede & Co. for the account
specified by the Underwriter not later than the close of business on the
business day preceding the Closing Date] [to the Underwriter in definitive
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
fully-registered form without coupons, registered in such names and in such
denominations as the Underwriter requests at least three full business days
before the Closing Date. If no such request is received by said time, the
Company shall have the right to deliver the Securities registered in the name of
the Underwriter in such denominations as the Company may determine. The
Securities will be made available to the Underwriter for checking and packaging
at least one full business day before the Closing Date].
3. Registration Statement and Prospectus; Public Offering. The Company
------------------------------------------------------
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and the published rules and regulations adopted by the
Commission under it (the "Rules and Regulations"), a registration statement on
Form S-3, including a prospectus ("Registration Statement No. 333-[ ]"),
------
relating to the registration of $ ,000,000 principal amount of its First
---
Mortgage Bonds and Debt Securities, and such registration statement was declared
effective on [ , 2000]. The term "preliminary prospectus" means any
-----------
preliminary prospectus (as referred to in Rule 430 of the Rules and Regulations)
included at any time as a part of the Registration Statement. Copies of such
registration statement and any amendments thereto and of each preliminary
prospectus included as part of Registration Statement No. 333-[______] have been
delivered to the Underwriter. Registration Statement No. 333-[______], as it may
be amended to the date of this Agreement, including financial statements and all
exhibits, and the prospectus, as supplemented by a prospectus supplement
relating to the Securities, proposed to be filed pursuant to Rule 424 is
hereinafter respectively called the "Registration Statement" and the
"Prospectus." References herein to the term "Effective Date" shall be deemed to
refer to the later of the time and date the Registration Statement was declared
effective or the time and date of the filing of the Company's most recent Annual
Report on Form 10-K if such filing is made prior to the Closing Date. Any
reference herein to the Registration Statement, any preliminary prospectus or
the Prospectus includes the documents incorporated by reference (the
"Incorporated Documents") therein pursuant to Item 12 of Form S-3 under the
Securities Act and filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or before the Effective Date or date of such
preliminary prospectus or the Prospectus, as the case may be, and any reference
herein to "amend," "amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus includes the filing of
any document under the Exchange Act after the Effective Date or the date of any
preliminary prospectus or the Prospectus, as the case may be, and incorporated
in such document by reference if such filing is made prior to the Closing Date.
The Company understands that the Underwriter proposes to make a public
offering of the Securities, as described in the Prospectus, as soon after the
date of this Agreement as the Underwriter deems advisable. The Company confirms
that the Underwriter and dealers have been authorized to distribute each
preliminary prospectus, if any, and are authorized to distribute the Prospectus
and any amendments or supplements to it.
4. Representations of the Company. The Company represents to the
------------------------------
Underwriter as follows:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act.
2
(b) On the Effective Date, and at the Closing Date, the Registration
Statement and, at the date of the filing of the Prospectus, and at the Closing
Date, the Prospectus, as each may be amended or supplemented, and the
[1 Mortgage] [2 Indenture] fully complied or will fully comply in all material
respects with the applicable provisions of the Securities Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the Rules and
Regulations, or pursuant to the Rules and Regulations will be deemed to comply
therewith; on said Effective Date and Closing Date the Registration Statement,
as it may be amended or supplemented, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; on
said date of filing of the Prospectus and the Closing Date, the Prospectus, as
it may be amended or supplemented, will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and on said date of filing of the Prospectus and the
Closing Date, the Incorporated Documents will fully comply in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act (the "Exchange Act Rules
and Regulations"), and, when read together with the Prospectus, as it may be
amended or supplemented, will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; except that this representation does
not apply to (1) statements or omissions made in reliance on and in conformity
with information relating to the Underwriter furnished in writing to the Company
by the Underwriter expressly for use in the Registration Statement or the
Prospectus, as they may be amended or supplemented or (2) the portion of the
Registration Statement constituting the respective Statements of Eligibility, or
amendments thereto, of The Bank of New York and Douglas J. MacInnes, as
Trustees, with respect to the Mortgage, or the portion of the Registration
Statement constituting the Statement of Eligibility, or amendments thereto, of
[ ], with respect to the Indenture, under the Trust Indenture Act
---------------
except statements or omissions made in reliance on and in conformity with
information furnished in writing to the Trustee by or on behalf of the Company
for use in such Statements of Eligibility or any amendments thereto. For
purposes of this Agreement, [indicate topics addressed and location in
Prospectus] constitute the only information relating to the Underwriter
furnished in writing to the Company specifically for inclusion in any
preliminary prospectus, any preliminary prospectus supplement, the Registration
Statement or the Prospectus.
(c) The Company and its Material Subsidiaries (as defined below) have
good and sufficient title to all real material property and good and sufficient
title to all material personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially interfere with the use made and proposed
to be made of such property by the Company and its Material Subsidiaries; and
any material real property and buildings held under lease by the Company and its
Material Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Material Subsidiaries (as used in this Agreement, the term
"Material Subsidiary" means a significant subsidiary under Rule 1-02(w) of
Regulation S-X of the Commission).
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
3
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Minnesota, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and there is no jurisdiction wherein the
character of the properties owned or held under lease by the Company or the
nature of the business transacted by the Company would expose the Company to any
material liability or disability by reason of the failure to qualify the Company
as a foreign corporation in any such jurisdiction; and each Material Subsidiary
of the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, and there is no jurisdiction wherein the character of the
properties owned or held under lease by any Material Subsidiary or the nature of
the business transacted by such Material Subsidiary would expose such Material
Subsidiary to any material liability or disability by reason of the failure to
qualify such Material Subsidiary as a foreign corporation in any such
jurisdiction.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, as they may be amended or
supplemented, there has not been any material adverse change in the management,
business, properties, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, and there has not been any
material transaction entered into by the Company or its Material Subsidiaries,
other than transactions in the ordinary course of business and transactions set
forth in or contemplated by the Registration Statement and the Prospectus, as
they may be amended or supplemented, which is material to the Company and its
subsidiaries, taken as a whole. The Company and its Material Subsidiaries have
no contingent obligation which is not disclosed in the Registration Statement
and the Prospectus, as they may be amended or supplemented, which is material to
the Company and its subsidiaries, taken as a whole.
(f) Any Incorporated Documents filed and incorporated by reference
prior to the Closing Date will, when they are filed with the Commission, conform
in all material respects with the requirements of the Exchange Act and the
Exchange Act Rules and Regulations.
(g) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company enforceable
against it in accordance with its terms.
(h) The performance of this Agreement and the consummation of the
transactions contemplated hereby this Agreement and the fulfillment of its terms
will not result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, or other material
agreement or instrument to which the Company is now a party.
(i) The statements set forth in the Prospectus under the captions
[1 "Description of New Bonds" and "Certain Terms of the Offered Bonds."]
[2 "Description of the Debt Securities" and "Certain Terms of the Offered Debt
Securities"] constitute a summary of the securities, documents and instruments
therein described, are accurate and fairly present the information contained
therein in all material respects.
(j) The Securities, when issued and delivered as provided in this
Agreement, will constitute legal, valid and binding obligations of the Company
in accordance with their terms except as the same (1) may be subject to
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
4
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights and (2) may be limited by general
principles of equity (whether such enforceability is considered in a proceeding
in equity or in law).
(k) The description of the Securities in the Registration Statement
and the Prospectus, as they may be amended or supplemented, is, and at the
Closing Date will be, complete and accurate in all respects.
(l) The Company has filed a Petition for Certification of Capital
Structure with the Minnesota Public Utilities Commission ("Minnesota
Commission") pursuant to the Minnesota Public Utilities Act with respect to the
issuance and sale by the Company of the Securities. The Minnesota Commission has
entered an authorizing order approving the capital structure including the
issuance and sale of the Securities. Apart from such authorizing order of the
Minnesota Commission, no consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Securities Act or the
Rules and Regulations.
(m) The Company is not, and after giving effect to the offering and
sale of the Securities will not be, an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended.
(n) Except as set forth in the Registration Statement and the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its Material Subsidiaries is a party or to which any property
of the Company or any of its Material Subsidiaries is subject, which, if
determined adversely to the Company or any of its Material Subsidiaries would in
the Company's reasonable judgment individually or in the aggregate have a
material adverse effect on the management, business, properties, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
5. Agreements of the Company. (a) The Company will not file any
-------------------------
amendment or supplement to the Registration Statement or the Prospectus unless a
copy has first been submitted to the Underwriter a reasonable time before its
filing and the Underwriter has not reasonably objected to it in writing within a
reasonable time after receiving the copy.
(b) The Company will promptly advise the Underwriter (i) of the
initiation or threatening of any proceedings for, or receipt by the Company of
any notice with respect to, the suspension of the qualification of the
Securities for sale in any jurisdiction or the issuance of any order by the
Commission suspending the effectiveness of the Registration Statement and (ii)
of receipt by the Company or any representative or attorney of the Company of
any other communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the Prospectus or to the
transactions contemplated by this Agreement. The Company will make every
reasonable effort to prevent the issuance of an order suspending the
effectiveness of the Registration Statement and, if any such order is issued, to
obtain its lifting as soon as possible.
5
(c) The Company will furnish to the Underwriter without charge one
signed copy, or one conformed copy certified by an officer of the Company, of
each of the Registration Statement and of any amendments thereto (including all
exhibits filed with any such document) and as many conformed copies of the
Registration Statement as the Underwriter may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by the Underwriter or a dealer, the Company will deliver, without
charge, to the Underwriter and to dealers, at such office or offices as the
Underwriter may designate, as many copies of the Prospectus as the Underwriter
may reasonably request, and, during such period (not exceeding nine months)
after the Effective Date if any event occurs as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
in it, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading in any material respect, or if during
such period it is necessary to amend or supplement the Prospectus to comply with
the Securities Act or the Rules and Regulations, the Company will promptly
prepare, submit to the Underwriter, file, subject to paragraph (a) of this
Section, with the Commission and deliver, without charge, to the Underwriter and
to dealers (whose names and addresses the Underwriter will furnish to the
Company) to whom Securities may have been sold by the Underwriter, and to other
dealers on request, amendments or supplements to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, be misleading in any material respect and will comply with the
Securities Act and the Rules and Regulations; provided that should such event
relate solely to the activities of the Underwriter, then the Underwriter shall
assume the expense of preparing and furnishing any such amendment or supplement.
In case the Underwriter is required to deliver a Prospectus after the expiration
of nine months from the Effective Date, the Company, upon the request of the
Underwriter, will furnish to the Underwriter, at the expense of the Underwriter,
a reasonable quantity of an amendment or supplement complying with Section 10(a)
of the Securities Act. Delivery by the Underwriter of any such amendments or
supplements to the Prospectus will not constitute a waiver of any of the
conditions in Section 6.
(e) The Company will make generally available to the Company's
security holders, as soon as practicable but in no event later than the last day
of the 15th full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(f) The Company will take such actions as the Underwriter reasonably
designates in order to qualify the Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions as the Underwriter
reasonably designates.
(g) The Company will pay, or reimburse if paid by the Underwriter,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
costs and expenses relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits thereto, each preliminary prospectus, the
Prospectus, all amendments and supplements to the Registration Statement and the
6
Prospectus, except as provided in Section 5(d), [5the printing or other
reproduction of the [ ] Supplemental Indenture, which [ ]
-------- ---------
Supplemental Indenture is to be promptly filed and recorded after execution and
delivery of it to the Trustees, in the counties where the mortgaged property of
the Company is located,] (ii) the authorization and issuance of the Securities
and the preparation and delivery of the forms of the Securities sold by the
Company to the Underwriter, (iii) the registration or qualification of the
Securities for offer and sale under the securities or "blue sky" laws of the
jurisdictions referred to in Section 5(f) and the determination of the legality
of the Securities for investment, including the reasonable fees and
disbursements of counsel for the Underwriter (not to exceed $ ) in that
-----
connection, and the preparation and printing of preliminary and supplemental
"blue sky" memoranda and legal investment memoranda, (iv) except as provided in
Section 5(d), the furnishing (including costs of shipping and mailing) to the
Underwriter and to dealers of copies of the Registration Statement, each
preliminary prospectus, the Prospectus, and all amendments or supplements to the
Prospectus, and of the other documents required by this Section to be so
furnished, (v) any fees charged by securities rating services for rating the
Securities, (vi) all transfer taxes, if any, with respect to the sale and
delivery of the Securities by the Company to the Underwriter, and (vii) the fees
and expenses of the Trustees, and Paying Agent or Registrar under the
[1 ] Supplemental Indenture] [2 ] and the reasonable fees
--------- -------------
and disbursements of counsel for any Trustee in connection with the
[1[ ] Supplemental Indenture] [2 ] or the Securities.
--------- -------------
6. Conditions of the Underwriter's Obligation. The obligation of the
------------------------------------------
Underwriter to purchase the Securities is subject to the accuracy, on the date
of this Agreement and on the Closing Date, of the representations of the Company
in this Agreement, to the accuracy and completeness of all statements made by
the Company or any of its officers in any certificate delivered to the
Underwriter or its counsel pursuant to this Agreement, to performance by the
Company of its obligations under this Agreement and to each of the following
additional conditions:
(a) All filings required by Rule 424 of the Rules and Regulations must
have been made.
(b) No stop order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose may be pending
before or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) must have been complied with.
(c) Since the respective dates as of which such information is given
in the Registration Statement and the Prospectus, as they may be amended or
supplemented, (i) there must not have been any material change in the capital
stock or long-term debt of the Company and its subsidiaries, taken as a whole,
(ii) there must not have been any material adverse change in the management,
business, properties, financial condition, or results of operations of the
Company and its subsidiaries, taken as a whole, other than transactions in the
ordinary course of business and transactions set forth in or contemplated by the
Prospectus, and (iii) there must not have occurred any event that makes untrue
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
7
or incorrect in any material respect any statement or information contained in
the Prospectus or that is not reflected in the Prospectus but should be
reflected in it in order to make the statements or information in it not
misleading in any material respect; and in the judgment of the Underwriter, any
such development referred to in clause (i), (ii) or (iii) makes it impracticable
to consummate the sale and delivery of the Bonds by the Underwriter at the
initial public offering price.
(d) The Underwriter must receive on the Closing Date a certificate,
dated such date, of the chief executive officer, the chief operating officer or
the chief financial officer of the Company certifying that (i) the signer has
carefully examined the Registration Statement and the Prospectus (including any
Incorporated Documents) and this Agreement, (ii) the representations of the
Company in this Agreement are accurate on and as of the date of the certificate,
(iii) there has not been any material adverse change in the management,
business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, other than transactions in the
ordinary course of business and transactions set forth in or contemplated in the
Prospectus, (iv) to the knowledge of such officer, no order suspending the
effectiveness of the Registration Statement or prohibiting the sale of the
Securities has been issued and no proceedings for such purpose are pending
before or threatened by the Commission, (v) there has been no document required
to be filed under the Exchange Act and the Exchange Act Rules and Regulations
that upon such filing would be deemed to be an Incorporated Document that has
not been so filed, and (vi) the Company has performed all agreements that this
Agreement requires it to perform by the Closing Date.
(e) Since the date of this Agreement, there must not have been any
decreases in the rating of the Company's Securities by Moody's Investors
Service, Inc. or Standard & Poor's Rating Services.
(f) The Underwriter must receive on the Closing Date opinions dated
the Closing Date substantially in the form of Annex A and B to this Agreement
from Thelen Reid & Priest LLP, counsel to the Company, and Philip R. Halverson,
Esq., general counsel of the Company, respectively.
(g) The Underwriter must receive on the Closing Date from Morrison
Cohen Singer & Weinstein, LLP, its counsel, an opinion dated the Closing Date
with respect to the Company, the Securities, the Registration Statement, the
Prospectus, the [1[ ] Supplemental Indenture] [2 ], this
-------- ------------------
Agreement and the form and sufficiency of all proceedings taken in connection
with the sale and delivery of the Securities. Such opinion and proceedings shall
be satisfactory in all respects to the Underwriter. The Company must have
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to render such opinion.
(h) The Underwriter must receive on the Closing Date a signed letter,
dated the Closing Date, from PricewaterhouseCoopers LLP to the effect that (i)
they are independent public accountants with respect to the Company within the
meaning of the Securities Act and the applicable published rules and regulations
thereunder, (ii) in their opinion, the consolidated financial statements audited
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
8
by them and incorporated by reference in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the published rules and regulations thereunder with
respect to registration statements on Form S-3, (iii) on the basis of a reading
of the unaudited consolidated financial statements of the Company incorporated
by reference in the Prospectus, the latest available unaudited consolidated
financial data of the Company since the close of the Company's most recent
audited fiscal year, the minutes and consents of the Board of Directors since
the end of the most recent audited fiscal year, and inquiries of officials of
the Company who have responsibility for financial and accounting matters (it
being understood that the foregoing procedures do not constitute an audit made
in accordance with generally accepted auditing standards and would not
necessarily reveal matters of significance with respect to the comments made in
such letter, and, accordingly, that PricewaterhouseCoopers LLP makes no
representations as to the sufficiency of such procedures for the Underwriter's
purposes), nothing has come to their attention which caused them to believe that
(1) the unaudited consolidated financial statements of the Company incorporated
by reference in the Prospectus (a) do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the published rules and regulations thereunder or (b)
are not stated on a basis substantially consistent with that of the audited
consolidated financial statements of the Company incorporated by reference in
the Prospectus, (2) at the date of the latest available unaudited financial data
read by them and at a specified date not more than five days prior to the
Closing Date there was any change in the capital stock or long-term debt of the
Company and its subsidiaries, or any decrease in the Company's consolidated net
current assets or shareholders' equity, in each case as compared with amounts
shown in the most recent consolidated financial information incorporated by
reference in the Prospectus, except in all instances for changes or decreases
which the Prospectus, as amended or supplemented, discloses have occurred or may
occur, or which are disclosed in such letter, or (3) for the period from the
date of the most recent audited consolidated financial statements to the date of
the latest available unaudited financial data read by them and for the period
from the date of the latest available unaudited financial data read by them to a
specified date not more than five days prior to the Closing Date, there were any
decreases, as compared with the corresponding period in the preceding year, in
consolidated operating revenues or in the total or per average share amounts of
net income, except in all instances for decreases which the Prospectus, as
amended or supplemented, discloses have occurred or may occur, or which are
disclosed in such letter, and (4) they have carried out certain procedures and
made certain findings, as specified in such letter, with respect to certain
amounts included or incorporated by reference in the Registration Statement and
the Prospectus and such other items as the Underwriter may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement will comply with this Agreement only if they are in
form and scope satisfactory to counsel for the Underwriter.
7. Indemnification. (a) The Company shall indemnify and hold harmless
---------------
the Underwriter, the directors, officers, employees and agents of the
Underwriter, and each person, if any, who controls the Underwriter, within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages and liabilities, joint or several
(including, as and when incurred, any investigative, legal or other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they, or any of
9
them, may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
on any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus, the Registration Statement or the Prospectus or
any amendment or supplement to the Registration Statement or the Prospectus
(including any Incorporated Document), or the omission or alleged omission to
state in it a material fact required to be stated in it or necessary to make the
statements in it not misleading; provided, however, that the Company will not be
liable to the extent that such loss, claim, damage, or liability arises from the
sale of the Securities in the public offering to any person by the Underwriter
and is based on an untrue statement or omission or alleged untrue statement or
omission (1) made in reliance on and in conformity with information furnished in
writing to the Company by the Underwriter expressly for use in the Registration
Statement or the Prospectus or (2) in a preliminary prospectus if the Prospectus
corrects the untrue statement or omission or alleged untrue statement or
omission which is the basis of the loss, claim, damage or liability for which
indemnification is sought and a copy of the Prospectus was not sent or given to
such person at or before the confirmation of the sale to such person in any case
where such delivery is required by the Securities Act, unless such failure to
deliver the Prospectus was a result of noncompliance by the Company with Section
5(d). This indemnity agreement will be in addition to any liability that the
Company might otherwise have.
(b) The Underwriter shall indemnify and hold harmless the Company, its
officers and directors, and each person, if any, who controls any thereof within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, to the same extent as the foregoing indemnity from the Company to the
Underwriter, but only insofar as losses, claims, damages or liabilities arise
out of or are based on any untrue statement or omission or alleged untrue
statement or omission made in or in reliance on and in conformity with
information furnished in writing to the Company by the Underwriter expressly for
use in the Registration Statement or the Prospectus , as set forth in the last
sentence of Section 4(b). This indemnity agreement will be in addition to any
liability that the Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify in writing each
such indemnifying party of the commencement of such action, enclosing a copy of
all papers served, but the omission so to notify such indemnifying party will
not relieve it from any liability that it may have to any indemnified party
otherwise than under this Section 7. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its commencement,
the indemnifying party will be entitled to participate in, and, to the extent
that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel satisfactory to the indemnified party,
and, after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its counsel in any such action, but the fees and
10
expenses of such counsel will be at the expense of such indemnified party unless
(i) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has been advised
by such counsel employed by it that there may be legal defenses available to it
involving potential conflict with the interests of an indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iii) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the fees and expenses of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate counsel admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
8. Contribution. In order to provide for just and equitable
------------
contribution in the circumstances in which the indemnification provided for
under the foregoing provisions of Section 7 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Underwriter, the Company and the Underwriter shall contribute to the amount paid
or payable as a result of losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted) to which the Company and the Underwriter may
be subject in such proportion as shall be appropriate to reflect (i) the
relative benefits received by the Company on the one hand and the Underwriter on
the other, (ii) the relative fault of the Company, on the one hand, and the
Underwriter, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as (iii) any other relevant equitable considerations with
respect to such offering. Such relative benefits shall be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriter as set forth in the Prospectus. Such relative fault shall be
determined by reference, among other things, to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Underwriter, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this Section 8 were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
11
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 8 shall
be deemed to include, for purpose of this Section 8, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, the Underwriter shall not be required to contribute any amount in
excess of the underwriting discounts received by it, except that insofar as
losses, claims, damages and liabilities arise from the sale of the Securities in
the public offering to any person by the Underwriter and are based on any untrue
statement or omission or alleged untrue statement or omission made in or in
reliance on and in conformity with information furnished in writing to the
Company by the Underwriter expressly for use in the Registration Statement, any
preliminary prospectus or preliminary prospectus supplement or the Prospectus,
as set forth in the last sentence of Section 4(b), the Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 8, will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 8. No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
9. Termination. This Agreement may be terminated by the Underwriter by
-----------
notifying the Company at any time
(a) on or before the Closing Date if, in the judgment of the
Underwriter, payment for the delivery of the Securities is rendered
impracticable or inadvisable because (1) trading in the equity
securities of the Company is suspended by the Commission or by the New
York Stock Exchange, (2) additional material governmental
restrictions, not in force on the date of this Agreement, are imposed
upon trading in securities generally or minimum or maximum prices have
been generally established on the New York Stock Exchange or on the
American Stock Exchange, or trading in securities generally has been
suspended or limited on either such Exchange or a general banking
moratorium has been established by Federal or New York authorities, or
(3) any outbreak or material escalation of hostilities or other
calamity or crisis occurs the effect of which is such as to make it
impracticable to market the Securities, or
(b) at or before the Closing Date, if any of the conditions
specified in Section 6 have not been fulfilled when and as required by
this Agreement.
12
If this Agreement is terminated pursuant to any of its provisions,
except as otherwise provided, the Company will not be under any liability to the
Underwriter and the Underwriter will not be under any liability to the Company,
except that (A) if this Agreement is terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms of
this Agreement or because any of the conditions in Section 6 are not satisfied,
the Company will reimburse the Underwriter for all reasonable out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by them in connection with the proposed purchase and sale of the
Securities, and (B) if the Underwriter fails or refuses to purchase the
Securities agreed to be purchased by it under this Agreement, without some
reason sufficient to justify cancellation or termination of its obligations
under this Agreement, it will not be relieved of liability to the Company for
damages occasioned by its default.
The Company shall not in any event be liable to the Underwriter for
damages on account of loss of anticipated profits.
10. Miscellaneous. The reimbursement, indemnification and contribution
-------------
agreements in Sections 5, 7, 8 and 9 and the representations and agreements of
the Company and the Underwriter in this Agreement will remain in full force and
effect regardless of any termination of this Agreement, any investigation made
by or on behalf of the Underwriter, the Company, or any controlling person and
delivery and acceptance of and payment for the Securities.
This Agreement is for the benefit of the Underwriter, the Company, and
their successors and assigns, and, to the extent expressed in this Agreement,
for the benefit of persons controlling the Underwriter or the Company, directors
and officers of the Company and directors, officers, employees and agents of the
Underwriter, and their respective successors and assigns, and no other persons,
partnership, association or corporation will acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" does not include
any purchaser of Securities from the Underwriter merely because of such
purchase.
All notices and communications under this Agreement will be in writing
and mailed or delivered, by messenger, facsimile transmission or otherwise, to
the Underwriter at[ ]
------------------------------------------------------------
Attention: [ ] and to the Company, at 30 West Superior
--------------------
Street, Duluth, Minnesota 55802, Attention: Chief Financial Officer. Any such
notice or communication shall take effect upon receipt thereof.
This Agreement may be signed in multiple counterparts that taken as a
whole constitute one agreement.
13
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
MINNESOTA POWER, INC.
By:
-------------------------------------
Title:
Confirmed:
[Name(s) of Underwriter(s)]
By:
--------------------------------
Title:
14
SCHEDULE I
Securities:
Designation:
Principal Amount:
Indenture dated as of:
Date of Maturity:
Interest Rate:
Purchase Price:
Public Offering Price:
ANNEX A
FORM OF OPINION OF THELEN REID & PRIEST LLP
[ , 200 ]
---------- -
[Insert Name(s)
and Address(es)
of Underwriter(s)]
Dear Sirs:
Reference is made to the sale by Minnesota Power, Inc. ("Company") of
[$ ] principal amount of its [1 First Mortgage Bonds, % Series Due
-------- --
[ , 20 ] (the "Bonds" or the "Securities")] [2 % Debt Securities,
------------ -- --
Series Due [ , 20 ] (the "Debt Securities" or the "Securities")].
----------- --
[1 The Bonds will be issued under the Company's Mortgage and Deed of Trust,
dated as of September 1, 1945, to Irving Trust Company (now The Bank of New
York) and Richard H. West (Douglas J. MacInnes, successor), as Trustees, as
amended and supplemented by all indentures supplemental thereto,
including a [ ] Supplemental Indenture thereto dated as of
------------
[ , 200 ] (said Mortgage and Deed of Trust, as so supplemented,
------------ -
being hereinafter called the "Mortgage")]. [2 The Debt Securities will be
issued under the Company's Indenture (For Unsecured Debt Securities,
dated as of [ , 200 ] to The Bank of New York, as Trustee, as
------------ -
]. We advise you that we have acted as
- ---------------------------------------
counsel to the Company in connection with such issuance and sale and have
participated in the preparation of (a) [1 the Mortgage] [2 the Indenture]; (b)
Registration Statement No. 333-[ ], as filed by the Company with the
------
Securities and Exchange Commission for the registration of the Company's First
Mortgage Bonds and Debt Securities under the Securities Act of 1933, as amended
(the "Securities Act"), and for the qualification under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act") of the Mortgage and of the
Indenture (such registration statement, as amended at the Effective Date (as
such term is defined in the Agreement referred to below), being hereinafter
referred to as the "Registration Statement"); (c) the prospectus constituting
part of the Registration Statement, as amended and supplemented by a prospectus
supplement relating to the Securities ("Prospectus"); and (d) the Underwriting
Agreement dated [ , 200 ] between the Company and you ("Agreement").
------------- -
In addition, we have reviewed the petition filed by the Company with the
Minnesota Public Utilities Commission seeking authorization to issue the
Securities, and the order issued by said Commission in response to said
petition.
We have reviewed all corporate proceedings taken by the Company in
respect of the authorization of the [1 Mortgage] [2 Indenture] and the issuance
and sale of the Securities thereunder.
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
Upon the basis of our familiarity with these transactions, we are of
the opinion that:
1. The [1 Mortgage] [2 Indenture] has been duly and validly authorized
by all necessary corporate action, has been duly and validly executed and
delivered, and is a valid and binding mortgage of the Company enforceable in
accordance with its terms, except as limited or affected by bankruptcy,
insolvency, reorganization, receivership, moratorium or other laws affecting
enforcement of [1mortgagees' and] other creditors' rights and remedies generally
and general principles of equity.
2. The Securities are legal, valid and binding obligations of the
Company enforceable in accordance with their terms, except as limited or
affected by bankruptcy, insolvency, reorganization, receivership, moratorium or
other laws affecting enforcement of mortgagees' and other creditors' rights and
remedies generally [2 and are entitled to the benefit of the security afforded
by the Mortgage].
3. An authorizing order has been issued by the Minnesota Public
Utilities Commission certifying the Company's capital structure and authorizing
the issuance and sale of the Securities, and to the best of our knowledge, said
order is still in full force and effect; and no further approval, authorization,
consent or order of any public board or body (other than in connection or in
compliance with the provisions of the securities or "blue sky" laws of any
jurisdiction) is legally required for the authorization of the issuance and sale
of the Securities.
4. The Registration Statement and the Prospectus (except as to the
financial statements, statement of income and other financial or statistical
data contained therein, upon which we do not pass) comply as to form in all
material respects with the requirements of the Securities Act and the applicable
instructions, rules and regulations of the Securities and Exchange Commission
thereunder; the Registration Statement have each become, and at the date hereof
each of the Registration Statement is, effective under the Securities Act, and
to the best of our knowledge no proceedings for a stop order with respect
thereto are pending or threatened under Section 8 of the Securities Act.
5. The [1 Mortgage] [2 Indenture] is duly qualified under the Trust
Indenture Act.
6. The statements set forth in the Prospectus under the captions
[1 "Description of New Bonds" and "Certain Terms of the Offered Bonds."]
[2 "Description of the Debt Securities" and "Certain Terms of the Offered Debt
Securities"] constitute a summary of the securities, documents and instruments
therein described, are accurate and fairly present the information contained
therein in all material respects.
7. The Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and legally binding obligation of the
Company.
8. The Company is not an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended.
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
In passing upon the forms of the Registration Statement and the
Prospectus, we necessarily assume the correctness and completeness of the
statements made or included therein by the Company and take no responsibility
therefor, except insofar as such statements relate to us and as set forth in the
Prospectus under the heading "Legal Opinions" and in paragraph 6 above. In the
course of the preparation by the Company of the Registration Statement and the
Prospectus, we have had conferences with certain of its officers and
representatives, with other counsel for the Company and with
PricewaterhouseCoopers LLP, the independent certified public accountants who
examined certain of the Company's financial statements incorporated by reference
in the Registration Statement. Our examination of the Registration Statement and
the Prospectus, and our discussions in the above-mentioned conferences did not
disclose to us any information which gives us reason to believe that, at the
Effective Date, the Registration Statement contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus at the time it was filed electronically with the Commission pursuant
to Rule 424, and the Prospectus, as amended or supplemented at the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. We do
not express any opinion or belief as to the financial statements, statement of
income or other financial or statistical data contained in the Registration
Statement or in the Prospectus.
We are members of the New York Bar and do not hold ourselves out as
experts on the laws of Minnesota. As to all matters of Minnesota law (and as to
the incorporation of the Company, titles to property, franchises [1 and the lien
of the Mortgage], upon which we do not pass), we have relied with your consent
upon the opinion of even date herewith addressed to you by Philip R. Halverson,
Esq., Vice President, General Counsel and Secretary of the Company.
Very truly yours,
THELEN REID & PRIEST LLP
- ------------------------
1 For use in connection with First Mortgage Bond.
ANNEX B
FORM OF OPINION OF
PHILIP R. HALVERSON, ESQ.
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY OF
MINNESOTA POWER, INC.
[ , 200 ]
-------- -
[Insert Name(s)
and Address(es)
of Underwriter(s)]
Dear Sirs:
Reference is made to the sale by Minnesota Power, Inc. ("Company") of
[$ ] principal amount of its [1 First Mortgage Bonds, [ %] Series Due
----------- --
[ , 20 ] (the "Bonds" or the "Securities")] [2 % Debt Securities,
----------- -- --
Series Due [ , 20 ] (the "Debt Securities" or the "Securities")].
------------ --
[1 The Bonds will be issued under the Company's Mortgage and Deed of Trust,
dated as of September 1, 1945, to Irving Trust Company (now The Bank of New
York) and Richard H. West (Douglas J. MacInnes, successor), as Trustees, as
amended and supplemented by all indentures supplemental thereto, including
a [ ] Supplemental Indenture thereto dated as of [ , 200 ]
------------ ----------- -
(said Mortgage and Deed of Trust, as so supplemented, being hereinafter called
the "Mortgage")]. [2 The Debt Securities will be issued under the Company's
Indenture (For Unsecured Debt Securities, dated as of [ , 200 ] to
------------ -
The Bank of New York, as Trustee, as ].
---------------------------------------
I advise you that I am General Counsel to the Company and have acted in that
capacity in connection with such issuance and sale and have participated in
the preparation of (a) the [1 Mortgage] [2 Indenture]; (b) Registration
Statement No. 333-[ ], as filed by the Company with the Securities and
-------
Exchange Commission for the registration of the Company's First Mortgage Bonds
and Debt Securities under the Securities Act of 1933, as amended (the
"Securities Act"), and for the qualification under the Trust Indenture
Act of 1939,as amended (the "Trust Indenture Act"), of the Mortgage and
of the Indenture (such registration statement, as amended at the Effective
Date (as such term is defined in the Agreement referred to below),
being hereinafter collectively referred to as the "Registration Statement"); (c)
the prospectus constituting part of the Registration Statement, as amended and
supplemented by a prospectus supplement relating to the Securities
("Prospectus"); (d) the Underwriting Agreement dated [ , 200_] between
---------
the Company and you ("Agreement"); and (e) the petition filed by the Company
with the Minnesota Public Utilities Commission seeking authorization to issue
the Securities. In addition, I have reviewed the order issued by said Commission
in response to said petition.
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
I have reviewed all corporate proceedings taken by the Company in
respect of the authorization of the [1 Mortgage] [2 Indenture] and the issuance
and sale of the Securities thereunder.
Upon the basis of my familiarity with these transactions and with the
Company's properties and affairs generally, I am of the opinion that:
1. The [1 Mortgage] [2 Indenture] has been duly and validly authorized
by all necessary corporate action, has been validly executed and delivered, and
is a valid and binding mortgage of the Company enforceable in accordance with
its terms, except as limited or affected by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws affecting enforcement of
[1 mortgagees' and other] creditors' rights and remedies generally and general
principles of equity.
2. The Securities are legal, valid and binding obligations of the
Company enforceable in accordance with their terms, except as limited or
affected by bankruptcy, insolvency, reorganization, receivership, moratorium or
other laws affecting enforcement of mortgagees' and other creditors' rights and
remedies generally and general principles of equity [1 and are entitled to the
benefit of the security afforded by the Mortgage].
3. An authorizing order has been issued by the Minnesota Public
Utilities Commission certifying the Company's capital structure and authorizing
the issuance and sale of the Securities, and to the best of my knowledge, said
order is still in full force and effect; and no further approval, authorization,
consent or order of any public board or body (other than in connection or in
compliance with the provisions of the securities or "blue sky" laws of any
jurisdiction) is legally required for the authorization of the issuance and sale
of the Securities.
4. The Registration Statement and the Prospectus (except as to the
financial statements, statement of income and other financial or statistical
data contained therein, upon which I do not pass) comply as to form in all
material respects with the requirements of the Securities Act and the applicable
instructions, rules and regulations of the Securities and Exchange Commission
thereunder; the Registration Statement have each become, and at the date hereof
each of the Registration Statement is, effective under the Securities Act and to
the best of my knowledge no proceedings for a stop order with respect thereto
are pending or threatened under Section 8 of the Securities Act.
5. The [1 Mortgage] [2 Indenture] is duly qualified under the Trust
Indenture Act.
6. The statements set forth in the Prospectus under the captions
[1 "Description of New Bonds" and "Certain Terms of the Offered Bonds."]
[2 "Description of the Debt Securities" and "Certain Terms of the Offered Debt
Securities"] constitute a summary of the securities, documents and instruments
therein described, are accurate and fairly present the information contained
therein in all material respects.
7. The Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and legally binding obligation of the
Company.
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
A-2
8. The Company is a validly organized and existing corporation under
the laws of the State of Minnesota and is duly qualified to do business, and is
doing business, in that State.
9. The Company is a public utility corporation duly authorized by its
Articles of Incorporation to conduct the business which it is now conducting as
set forth in the Prospectus and the Company holds valid and subsisting
franchises, licenses and permits authorizing it to carry on the utility business
in which it is engaged.
10. Each Material Subsidiary (as defined in the Agreement) of the
Company is a validly organized and existing corporation under the laws of the
State of its incorporation and is duly qualified to do business, and is doing
business, in such State and in each other State in which the failure to qualify
as a foreign corporation would be material to the Company and its subsidiaries,
taken as a whole.
11. [1 The Company has good and sufficient title to all the properties
specifically described in the granting clauses of the Mortgage as owned by it,
subject only to excepted encumbrances as defined in the Mortgage and other
defects which the Company has the right to cure by condemnation proceedings if
the property is necessary for utility purposes, and which, in my opinion, do not
impair the use of such properties by the Company, except properties retired and
properties previously released from the lien of the Mortgage, and except that
the Company's practice is not to require examination of title, and I have not
examined title, to land upon which the Company has merely a transmission or
distribution line right of way or easement, reservoir lands, lands or rights
held for flowage, flooding or seepage purposes, riparian rights, or other
properties certified by the Company as costing $25,000 or less, titles to which
lands, rights or properties could, if necessary for utility purposes, be
perfected or obtained by condemnation proceedings. The description of all the
properties so specifically described in the Mortgage is adequate to constitute
the Mortgage a lien thereon, and said properties constitute all of the electric
generating plants and other materially important physical properties and
substantially all the other properties of the Company (other than those
expressly excepted). The Mortgage constitutes a valid, direct and first mortgage
lien upon the properties of the Company specifically described in the granting
clauses of the Mortgage or upon the interest of the Company therein and upon the
interest of the Company in all other properties described in the Mortgage and
intended to be subject to the lien thereof, subject only to excepted
encumbrances and defects as above stated, and will constitute a valid mortgage
lien upon all permanent physical properties and franchises (other than those
expressly excepted) acquired by the Company after the date of the [ ]
---------
Supplemental Indenture upon such acquisition, subject, however, to encumbrances
and liens, if any, existing or placed thereon at the date of acquisition thereof
by the Company, except that in the case of real estate or interests in real
estate the title to which is registered, the Mortgage becomes a lien thereon
upon the registration of said Mortgage against the appropriate certificates of
title.]
12. Other than as stated in the Registration Statement and the
Prospectus there are no pending legal proceedings to which the Company or any
Material Subsidiary is a party or of which property of the Company or any
Material Subsidiary is the subject, which depart from the ordinary routine
litigation incident to the kind of business conducted by the Company or any such
- ------------------------
1 For use in connection with First Mortgage Bond.
A-3
Material Subsidiary, and which is material to the Company and its subsidiaries,
taken as a whole, and, to the best of my knowledge, no such proceedings are
known to be contemplated by governmental authorities.
13. The portions of the answers to the items of the Registration
Statement and the portions of the information contained in the Prospectus, which
are stated therein to have been made on my authority as General Counsel of the
Company, have been reviewed by me and, as to matters of law and legal
conclusions, are correct.
14. Neither the execution by the Company of the [1[ ]
----------
Supplemental Indenture nor the issue and sale by the Company of the Bonds]
[2 nor the issue and sale by the Company of the
---------------------------------
Debt Securities] as contemplated by the Agreement nor the consummation by the
Company of the other transactions contemplated by the Agreement conflicts with,
or results in a breach of, the charter or by-laws of the Company or any Material
Subsidiary or any agreement or instrument known to me to which the Company or
any Material Subsidiary is a party or by which the Company or any Material
Subsidiary is bound, any law or regulation or, so far as is known to me, any
order or regulation of any court, governmental instrumentality or arbitrator,
and which conflict or breach is material to the Company and its subsidiaries,
taken as a whole.
15. To the best of my knowledge, the Company is not currently in
breach of, or in default under, any material written agreement or instrument to
which it is a party or by which it or its property is bound or affected, and
which breach or default is material to the Company and its subsidiaries, taken
as a whole.
In passing upon the forms of the Registration Statement and the
Prospectus, I necessarily assume the correctness and completeness of the
statements made or included therein by the Company and take no responsibility
therefor, except insofar as such statements relate to me and as set forth in the
Prospectus under the headings "Experts" and "Legal Opinions" and in paragraphs 6
and 13 above. In the course of the preparation by the Company of the
Registration Statement and the Prospectus, I had conferences with certain of its
officers and representatives, with other counsel for the Company and with
PricewaterhouseCoopers LLP, the independent certified public accountants who
examined certain of the Company's financial statements incorporated by reference
in the Registration Statement. My examination of the Registration Statement and
the Prospectus, and my discussions in the above-mentioned conferences did not
disclose to me any information which gives me reason to believe that, at the
Effective Date, the Registration Statement contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus at the time it was filed electronically with the Commission pursuant
to Rule 424, and the Prospectus, as amended or supplemented at the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. I do
not express any opinion or belief as to the financial statements, statement of
income or other financial or statistical data included in the Registration
Statement or in the Prospectus.
- ------------------------
1 For use in connection with First Mortgage Bond.
2 For use in connection with Debt Securities.
A-4
As to all matters of Minnesota law, Thelen Reid & Priest LLP and
Morrison Cohen Singer & Weinstein, LLP are hereby authorized to rely upon this
opinion as though it was rendered to each of them.
Very truly yours,
PHILIP R. HALVERSON
B-5
EXHIBIT 4(C)3
- --------------------------------------------------------------------------------
MINNESOTA POWER, INC.
(FORMERLY MINNESOTA POWER & LIGHT COMPANY)
TO
THE BANK OF NEW YORK
(FORMERLY IRVING TRUST COMPANY)
AND
DOUGLAS J. MACINNES
(SUCCESSOR TO RICHARD H. WEST, J.A. AUSTIN,
E.J. MCCABE, D.W. MAY, J.A. VAUGHAN AND W.T. CUNNINGHAM)
AS TRUSTEES UNDER MINNESOTA POWER,
INC.'S MORTGAGE AND DEED OF TRUST
DATED AS OF SEPTEMBER 1, 1945
-----------------------------
SUPPLEMENTAL INDENTURE
------------
PROVIDING AMONG OTHER THINGS FOR
FIRST MORTGAGE BONDS, % SERIES DUE
--- -------------
( SERIES)
------------
DATED AS OF
-----------
- --------------------------------------------------------------------------------
SUPPLEMENTAL INDENTURE
---------------
THIS INDENTURE, dated as of , by and between MINNESOTA
--------------
POWER, INC. (formerly Minnesota Power & Light Company), a corporation of the
State of Minnesota, whose post office address is 30 West Superior Street,
Duluth, Minnesota 55802 (hereinafter sometimes called the "Company"), and THE
BANK OF NEW YORK (formerly Irving Trust Company), a corporation of the State of
New York, whose post office address is 101 Barclay Street, New York, New York
10286 (hereinafter sometimes called the "Corporate Trustee"), and DOUGLAS J.
MACINNES (successor to Richard H. West, J.A. Austin, E.J. McCabe, D.W. May, J.A.
Vaughan and W.T. Cunningham), whose post office address is 1784 W. McGalliard
Avenue, Hamilton, New Jersey 08610 (said Douglas J. MacInnes being hereinafter
sometimes called the "Co-Trustee" and the Corporate Trustee and the Co-Trustee
being hereinafter together sometimes called the "Trustees"), as Trustees under
the Mortgage and Deed of Trust, dated as of September 1, 1945, between the
Company and Irving Trust Company and Richard H. West, as Trustees, securing
bonds issued and to be issued as provided therein (hereinafter sometimes called
the "Mortgage"), reference to which mortgage is hereby made, this indenture
(hereinafter sometimes called the "__________ Supplemental Indenture") being
supplemental thereto:
WHEREAS, the Mortgage was filed and recorded in various official
records in the State of Minnesota; and
WHEREAS, an instrument, dated as of October 16, 1957, was executed and
delivered under which J.A. Austin succeeded Richard H. West as Co-Trustee under
the Mortgage, and such instrument was filed and recorded in various official
records in the State of Minnesota; and
WHEREAS, an instrument, dated as of April 4, 1967, was executed and
delivered under which E.J. McCabe in turn succeeded J.A. Austin as Co-Trustee
under the Mortgage, and such instrument was filed and recorded in various
official records in the State of Minnesota; and
WHEREAS, under the Sixth Supplemental Indenture, dated as of August 1,
1975, to which reference is hereinafter made, D.W. May in turn succeeded E.J.
McCabe as Co-Trustee under the Mortgage; and
WHEREAS, an instrument, dated as of June 25, 1984, was executed and
delivered under which J.A. Vaughan in turn succeeded D.W. May as Co-Trustee
under the Mortgage, and such instrument was filed and recorded in various
official records in the State of Minnesota; and
WHEREAS, an instrument, dated as of July 27, 1988, was executed and
delivered under which W.T. Cunningham in turn succeeded J.A. Vaughan as
Co-Trustee under the Mortgage, and such instrument was filed and recorded in
various official records in the State of Minnesota; and
WHEREAS, an instrument, dated as of April 15, 1999, was executed and
delivered under which Douglas J. MacInnes in turn succeeded W.T. Cunningham as
Co-Trustee under the Mortgage, and such instrument was filed and recorded in
various official records in the State of Minnesota; and
2
WHEREAS, by the Mortgage the Company covenanted, among other things,
that it would execute and deliver such supplemental indenture or indentures and
such further instruments and do such further acts as might be necessary or
proper to carry out more effectually the purposes of the Mortgage and to make
subject to the lien of the Mortgage any property thereafter acquired and
intended to be subject to the lien thereof; and
WHEREAS, for said purposes, among others, the Company executed and
delivered the following indentures supplemental to the Mortgage:
DESIGNATION DATED AS OF
----------- -----------
First Supplemental Indenture........................ March 1, 1949
Second Supplemental Indenture....................... July 1, 1951
Third Supplemental Indenture........................ March 1, 1957
Fourth Supplemental Indenture....................... January 1, 1968
Fifth Supplemental Indenture........................ April 1, 1971
Sixth Supplemental Indenture........................ August 1, 1975
Seventh Supplemental Indenture...................... September 1, 1976
Eighth Supplemental Indenture....................... September 1, 1977
Ninth Supplemental Indenture........................ April 1, 1978
Tenth Supplemental Indenture........................ August 1, 1978
Eleventh Supplemental Indenture..................... December 1, 1982
Twelfth Supplemental Indenture...................... April 1, 1987
Thirteenth Supplemental Indenture................... March 1, 1992
Fourteenth Supplemental Indenture................... June 1, 1992
Fifteenth Supplemental Indenture.................... July 1, 1992
Sixteenth Supplemental Indenture.................... July 1, 1992
Seventeenth Supplemental Indenture.................. February 1, 1993
Eighteenth Supplemental Indenture................... July 1, 1993
*
which supplemental indentures were filed and recorded in various official
records in the State of Minnesota; and
WHEREAS, for said purposes, among others, the Company also executed
and delivered a ** Supplemental Indenture, dated as of
-------------
, which was filed and recorded in various official records in the
- --------------
State of Minnesota as follows:
- ------------------------
* Here will be inserted additional executed Supplemental Indentures.
** Here will be inserted the most recent executed Supplemental Indenture(s).
3
REGISTRAR
COUNTY IN RECORDER OF TITLES
MINNESOTA DATE DOC. NO. DATE DOC. NO.
- --------- ---- -------- ---- --------
Aitkin...............................
Benton...............................
Carlton..............................
Cass.................................
Crow Wing............................
Hubbard..............................
Itasca...............................
Koochiching..........................
Lake.................................
Morrison.............................
Otter Tail...........................
Pine.................................
St. Louis............................
Stearns..............................
Todd.................................
Wadena...............................
Office of Secretary of State of Minnesota; recorded as Document No.
------------
; and
- ---------
WHEREAS, the Company has heretofore issued, in accordance with the
provisions of the Mortgage, as heretofore supplemented, the following series of
First Mortgage Bonds:
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
- ------ ---------- -----------
3-1/8% Series due 1975................... $26,000,000 None
3-1/8% Series due 1979................... 4,000,000 None
3-5/8% Series due 1981................... 10,000,000 None
4-3/4% Series due 1987................... 12,000,000 None
6-1/2% Series due 1998................... 18,000,000 None
8-1/8% Series due 2001................... 23,000,000 None
10-1/2% Series due 2005.................. 35,000,000 None
8.70% Series due 2006.................... 35,000,000 None
8.35% Series due 2007.................... 50,000,000 None
9-1/4% Series due 2008................... 50,000,000 None
Pollution Control Series A............... 111,000,000 None
Industrial Development Series A.......... 2,500,000 None
Industrial Development Series B.......... 1,800,000 None
Industrial Development Series C.......... 1,150,000 None
Pollution Control Series B............... 13,500,000 None
Pollution Control Series C............... 2,000,000 None
Pollution Control Series D............... 3,600,000 None
7-3/4% Series due 1994................... 55,000,000 None
4
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
- ------ ---------- -----------
7-3/8% Series due March 1, 1997.......... 60,000,000 None
7-3/4% Series due June 1, 2007........... 55,000,000 55,000,000
7-1/2% Series due August 1, 2007......... 35,000,000 35,000,000
Pollution Control Series E............... 111,000,000 111,000,000
7% Series due March 1, 2008.............. 50,000,000 50,000,000
6-1/4% Series due July 1, 2003........... 25,000,000 25,000,000
7% Series due February 15, 2007.......... 60,000,000 60,000,000
6.68% Series due November 15, 2007....... 20,000,000 20,000,000
*
which bonds are also hereinafter sometimes called bonds of the First through
** Series, respectively; and
- -----------
WHEREAS, Section 8 of the Mortgage provides that the form of each
series of bonds (other than the First Series) issued thereunder and of coupons
to be attached to coupon bonds of such series shall be established by Resolution
of the Board of Directors of the Company and that the form of such series, as
established by said Board of Directors, shall specify the descriptive title of
the bonds and various other terms thereof, and may also contain such provisions
not inconsistent with the provisions of the Mortgage as the Board of Directors
may, in its discretion, cause to be inserted therein expressing or referring to
the terms and conditions upon which such bonds are to be issued and/or secured
under the Mortgage; and
WHEREAS, Section 120 of the Mortgage provides, among other things,
that any power, privilege or right expressly or impliedly reserved to or in any
way conferred upon the Company by any provision of the Mortgage, whether such
power, privilege or right is in any way restricted or is unrestricted, may (to
the extent permitted by law) be in whole or in part waived or surrendered or
subjected to any restriction if at the time unrestricted or to additional
restriction if already restricted, and the Company may enter into any further
covenants, limitations or restrictions for the benefit of any one or more series
of bonds issued thereunder, or the Company may cure any ambiguity contained
therein, or in any supplemental indenture, or may establish the terms and
provisions of any series of bonds (other than said First Series) by an
instrument in writing executed and acknowledged by the Company in such manner as
would be necessary to entitle a conveyance of real estate to record in all of
the states in which any property at the time subject to the lien of the Mortgage
shall be situated; and
- ------------------------
* Here will be inserted additional executed Supplemental Indentures.
** Here will be inserted the most recent executed Supplemental Indenture(s).
5
WHEREAS, the Company now desires to create new series of bonds
----
and (pursuant to the provisions of Section 120 of the Mortgage) to add to its
covenants and agreements contained in the Mortgage, as heretofore supplemented,
certain other covenants and agreements to be observed by it and to alter and
amend in certain respects the covenants and provisions contained in the
Mortgage, as heretofore supplemented; and
WHEREAS, the execution and delivery by the Company of this
-----------
Supplemental Indenture, and the terms of the bonds of the Series,
-----------
hereinafter referred to, have been duly authorized by the Board of Directors of
the Company by appropriate resolutions of said Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, in consideration of the premises and of One Dollar
to it duly paid by the Trustees at or before the ensealing and delivery of these
presents, the receipt whereof is hereby acknowledged, and in further evidence of
assurance of the estate, title and rights of the Trustees and in order further
to secure the payment of both the principal of and interest and premium, if any,
on the bonds from time to time issued under the Mortgage, as heretofore
supplemented, according to their tenor and effect and the performance of all the
provisions of the Mortgage (including any instruments supplemental thereto and
any modification made as in the Mortgage provided) and of said bonds, hereby
grants, bargains, sells, releases, conveys, assigns, transfers, mortgages,
pledges, sets over and confirms (subject, however, to Excepted Encumbrances)
unto THE BANK OF NEW YORK and DOUGLAS J. MACINNES, as Trustees under the
Mortgage, and to their successor or successors in said trust, and to said
Trustees and their successors and assigns forever, all property, real, personal
and mixed, of the kind or nature specifically mentioned in the Mortgage, as
heretofore supplemented, or of any other kind or nature acquired by the Company
after the date of the execution and delivery of the Mortgage, as heretofore
supplemented (except any herein or in the Mortgage, as heretofore supplemented,
expressly excepted), now owned or, subject to the provisions of subsection (I)
of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase,
consolidation, merger, donation, construction, erection or in any other way) and
wheresoever situated, including (without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the foregoing or of any general
description contained in this Supplemental Indenture) all lands,
-------------
power sites, flowage rights, water rights, water locations, water
appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways,
dams, dam sites, aqueducts, and all other rights or means for appropriating,
conveying, storing and supplying water; all rights of way and roads; all plants
for the generation of electricity by steam, water and/or other power; all power
houses, gas plants, street lighting systems, standards and other equipment
incidental thereto, telephone, radio and television systems, air-conditioning
systems and equipment incidental thereto, water works, water systems, steam heat
and hot water plants, substations, lines, service and supply systems, bridges,
culverts, tracks, ice or refrigeration plants and equipment, offices, buildings
and other structures and the equipment thereof; all machinery, engines, boilers,
dynamos, electric, gas and other machines, regulators, meters, transformers,
generators, motors, electrical, gas and mechanical appliances, conduits, cables,
water, steam heat, gas or other pipes, gas mains and pipes, service pipes,
fittings, valves and connections, pole and transmission lines, wires, cables,
tools, implements, apparatus, furniture and chattels; all municipal and other
franchises, consents or permits; all lines for the transmission and distribution
6
of electric current, gas, steam heat or water for any purpose including towers,
poles, wires, cables, pipes, conduits, ducts and all apparatus for use in
connection therewith; all real estate, lands, easements, servitudes, licenses,
permits, franchises, privileges, rights of way and other rights in or relating
to real estate or the occupancy of the same and (except as herein or in the
Mortgage, as heretofore supplemented, expressly excepted) all the right, title
and interest of the Company in and to all other property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection with
any property hereinbefore or in the Mortgage, as heretofore supplemented,
described.
TOGETHER WITH all and singular the tenements, hereditaments,
prescriptions, servitudes and appurtenances belonging or in anywise appertaining
to the aforesaid property or any part thereof, with the reversion and
reversions, remainder and remainders and (subject to the provisions of Section
57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income,
product and profits thereof, and all the estate, right, title and interest and
claim whatsoever, at law as well as in equity, which the Company now has or may
hereafter acquire in and to the aforesaid property and franchises and every part
and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of
subsection (I) of Section 87 of the Mortgage, all the property, rights, and
franchises acquired by the Company (by purchase, consolidation, merger,
donation, construction, erection or in any other way) after the date hereof,
except any herein or in the Mortgage, as heretofore supplemented, expressly
excepted, shall be and are as fully granted and conveyed hereby and by the
Mortgage and as fully embraced within the lien hereof and the lien of the
Mortgage as if such property, rights and franchises were now owned by the
Company and were specifically described herein or in the Mortgage and conveyed
hereby or thereby.
PROVIDED that the following are not and are not intended to be now or
hereafter granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, hypothecated, affected, pledged, set over or confirmed hereunder and
are hereby expressly excepted from the lien and operation of this
-------------
Supplemental Indenture and from the lien and operation of the Mortgage, namely:
(1) cash, shares of stock, bonds, notes and other obligations and other
securities not hereafter specifically pledged, paid, deposited, delivered or
held under the Mortgage or covenanted so to be; (2) merchandise, equipment,
apparatus, materials or supplies held for the purpose of sale or other
disposition in the usual course of business; fuel, oil and similar materials and
supplies consumable in the operation of any of the properties of the Company;
all aircraft, rolling stock, trolley coaches, buses, motor coaches, automobiles
and other vehicles and materials and supplies held for the purpose of repairing
or replacing (in whole or part) any of the same; all timber, minerals, mineral
rights and royalties; (3) bills, notes and accounts receivable, judgments,
demands and choses in action, and all contracts, leases and operating agreements
not specifically pledged under the Mortgage or covenanted so to be; the
Company's contractual rights or other interest in or with respect to tires not
owned by the Company; (4) the last day of the term of any lease or leasehold
which may hereafter become subject to the lien of the Mortgage; (5) electric
energy, gas, steam, ice, and other materials or products generated,
manufactured, produced or purchased by the Company for sale, distribution or use
in the ordinary course of its business; and (6) the Company's franchise to be a
corporation; provided, however, that the property and rights expressly excepted
7
from the lien and operation of this Supplemental Indenture and
-------------
from the lien and operation of the Mortgage in the above subdivisions (2) and
(3) shall (to the extent permitted by law) cease to be so excepted in the event
and as of the date that either or both of the Trustees or a receiver or trustee
shall enter upon and take possession of the Mortgaged and Pledged Property in
the manner provided in Article XIII of the Mortgage by reason of the occurrence
of a Default as defined in Section 65 thereof.
TO HAVE AND TO HOLD all such properties, real, personal and mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustees and their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms,
trusts and conditions and subject to and with the same provisos and covenants as
are set forth in the Mortgage, as supplemented, this Supplemental
-----------
Indenture being supplemental thereto.
AND IT IS HEREBY COVENANTED by the Company that all the terms,
conditions, provisos, covenants and provisions contained in the Mortgage, as
heretofore supplemented, shall affect and apply to the property hereinbefore
described and conveyed and to the estate, rights, obligations and duties of the
Company and Trustees and the beneficiaries of the trust with respect to said
property, and to the Trustees and their successors in the trust in the same
manner and with the same effect as if said property had been owned by the
Company at the time of the execution of the Mortgage, and had been specifically
and at length described in and conveyed to said Trustees by the Mortgage as a
part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with the Trustees and
their successors in said trust under the Mortgage as follows:
ARTICLE I
SERIES OF BONDS
------------
SECTION 1. There shall be a series of bonds designated " % Series
-----
due " (herein sometimes referred to as the " Series"),
-------------- ----------
each of which shall also bear the descriptive title "First Mortgage Bond", and
the form thereof, which shall be established by Resolution of the Board of
Directors of the Company, shall contain suitable provisions with respect to the
matters hereinafter in this Section specified. Bonds of the Series
----------
shall be dated as in Section 10 of the Mortgage provided, mature on
, be issued as fully registered bonds in denominations of One
- -------------
Thousand Dollars and, at the option of the Company, in any multiple or multiples
of One Thousand Dollars (the exercise of such option to be evidenced by the
execution and delivery thereof) and bear interest [at the rate of % per
-----
annum, payable semi-annually on and of each year]*,
-------- -----------
- ------------------------
* Bracketed material to be changed if bonds of the Series to which this
Supplemental Indenture shall relate shall bear interest at a rate which may
be changed during the life of such bonds or if such bonds shall bear
interest payable other than semi-annually.
8
commencing , the principal of and interest on each said bond to
---------------
be payable at the office or agency of the Company in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for public and private debts.
**(I) Bonds of the Series shall not be redeemable prior to
-----------
.
- ---------
**(II) Bonds of the Series shall be redeemable on and
-----------
after , in whole at any time, or in part from time to time, prior
--------------
to maturity, upon notice as provided in Section 52 of the Mortgage mailed at
least 30 days prior to the date fixed for redemption, at 100% of the principal
amount of the bonds to be redeemed together, in each case, with accrued interest
to the date fixed for redemption.
(III) At the option of the registered owner, any bonds of the
Series, upon surrender thereof for cancellation at the office or
- ----------
agency of the Company in the Borough of Manhattan, The City of New York,
together with a written instrument of transfer wherever required by the Company
duly executed by the registered owner or by his duly authorized attorney, shall
(subject to the provisions of Section 12 of the Mortgage) be exchangeable for a
like aggregate principal amount of bonds of the same series of other authorized
denominations.
Bonds of the Series shall be transferable (subject to the
----------
provisions of Section 12 of the Mortgage) at the office or agency of the Company
in the Borough of Manhattan, The City of New York.
Upon any exchange or transfer of bonds of the Series, the
-----------
Company may make a charge therefor sufficient to reimburse it for any tax or
taxes or other governmental charge, as provided in Section 12 of the Mortgage,
but the Company hereby waives any right to make a charge in addition thereto for
any exchange or transfer of bonds of the Series.
----------
Upon the delivery of this Supplemental Indenture and upon
------------
compliance with the applicable provisions of the Mortgage, there shall be an
initial issue of bonds of the Series for the aggregate principal
----------
amount of $ .
----------
ARTICLE II
DIVIDEND COVENANT
SECTION 2. The Company covenants and agrees that the provisions of
subdivision (III) of Section 39 of the Mortgage, which are to remain in effect
so long as any of the bonds of the First Series shall remain Outstanding, shall
remain in full force and effect so long as any bonds of the First through
Series shall remain Outstanding.
- ----------
- ------------------------
** These paragraphs will be omitted or changed if the bonds of the series to
which this Supplemental Indenture shall relate shall not be subject to
redemption or shall be subject to redemption on terms different from those
described above.
9
[ AMENDMENT TO THE MORTGAGE
MEETINGS AND CONSENTS OF BONDHOLDERS
SECTION . Pursuant to the reservation of right in Section 3 of the
--
Fifth Supplemental Indenture dated as of April 1, 1971 and there being no
Outstanding bonds of any series created prior to the Sixth Series, the Company
hereby amends the Mortgage, as supplemented, by substituting for Article XIX
(relating to Meetings and Consents of Bondholders) a new Article XIX to read as
set forth in Section 3 of such Fifth Supplemental Indenture.]*
[ AMENDMENT TO THE MORTGAGE
NUCLEAR FUEL
SECTION . Pursuant to the reservation of right in Section 2 of the
--
Fifth Supplemental Indenture dated as of April 1, 1971 and there being no
Outstanding bonds of any series created prior to the Sixth Series, the Company
hereby amends the Mortgage, as supplemented, as set forth in paragraphs (A), (B)
and (C) of Section 2 of such Fifth Supplemental Indenture (relating to Nuclear
Fuel).]*
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3. Section 126 of the Mortgage, as heretofore amended, is
hereby further amended by adding the words "and ,"** after the words
-----------
"and ."***
---------
SECTION 4. Subject to the amendments provided for in this
Supplemental Indenture, the terms defined in the Mortgage, as
- -------------
heretofore supplemented, shall, for all purposes of this
-------------
Supplemental Indenture, have the meanings specified in the Mortgage, as
heretofore supplemented.
SECTION 5. The holders of bonds of the Series consent
-------------
that the Company may, but shall not be obligated to, fix a record date for the
purpose of determining the holders of bonds of the Series entitled
-------------
to consent to any amendment, supplement or waiver. If a record date is fixed,
those persons who were holders at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date. No
- ------------------------
* The Company may insert the bracketed language in any one Supplemental
Indenture executed after all bonds of the Fifth Series have been retired.
** Here will be inserted the maturity date of the most recent series of bonds.
*** Here will be inserted the maturity date of the series of bonds issued
immediately before the most recent series of bonds.
10
such consent shall be valid or effective for more than 90 days after such record
date.
SECTION 6. The Trustees hereby accept the trusts herein declared,
provided, created or supplemented and agree to perform the same upon the terms
and conditions herein and in the Mortgage set forth and upon the following terms
and conditions:
The Trustees shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental
-------------
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made by the Company solely. In general, each and every term and
condition contained in Article XVII of the Mortgage shall apply to and form part
of this Supplemental Indenture with the same force and effect as
-------------
if the same were herein set forth in full with such omissions, variations and
insertions, if any, as may be appropriate to make the same conform to the
provisions of this Supplemental Indenture.
-------------
SECTION 7. Whenever in this Supplemental Indenture any
-------------
party hereto is named or referred to, this shall, subject to the provisions of
Articles XVI and XVII of the Mortgage, as heretofore supplemented, be deemed to
include the successors or assigns of such party, and all the covenants and
agreements in this Supplemental Indenture contained by or on
-------------
behalf of the Company, or by or on behalf of the Trustees shall, subject as
aforesaid, bind and inure to the benefit of the respective successors and
assigns of such party whether so expressed or not.
SECTION 8. Nothing in this Supplemental Indenture,
-------------
expressed or implied, is intended, or shall be construed, to confer upon, or
give to, any person, firm or corporation, other than the parties hereto and the
holders of the bonds and coupons Outstanding under the Mortgage, any right,
remedy, or claim under or by reason of this Supplemental Indenture
-------------
or any covenant, condition, stipulation, promise or agreement hereof, and all
the covenants, conditions, stipulations, promises and agreements in this
Supplemental Indenture contained by and on behalf of the Company
- -------------
shall be for the sole and exclusive benefit of the parties hereto, and of the
holders of the bonds and of the coupons Outstanding under the Mortgage.
SECTION 9. This Supplemental Indenture shall be executed
-------------
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
SECTION 10. The Company, the mortgagor named herein, by its execution
hereof acknowledges receipt of a full, true and complete copy of this
Supplemental Indenture.
- -------------
11
IN WITNESS WHEREOF, Minnesota Power, Inc. has caused its corporate
name to be hereunto affixed, and this instrument to be signed and sealed by its
President or one of its Vice Presidents, and its corporate seal to be attested
by its Secretary or one of its Assistant Secretaries for and in its behalf, and
The Bank of New York has caused its corporate name to be hereunto affixed, and
this instrument to be signed and sealed by one of its Vice Presidents or one of
its Assistant Vice Presidents and its corporate seal to be attested by one of
its Assistant Treasurers or one of its Assistant Vice Presidents, and Douglas J.
MacInnes has hereunto set his hand and affixed his seal, all in The City of New
York, as of the day and year first above written.
MINNESOTA POWER, INC.
By
--------------------------------------
[Name]
[Title]
Attest:
- -----------------------------
[Name]
[Title]
Executed, sealed and delivered by MINNESOTA POWER, INC.
in the presence of:
- -----------------------------
- -----------------------------
12
THE BANK OF NEW YORK
as Trustee
By
--------------------------------------
[Name]
[Title]
Attest:
- -----------------------------
[Name]
[Title]
--------------------------------------
DOUGLAS J. MACINNES
Executed, sealed and delivered by THE BANK
OF NEW YORK and DOUGLAS J. MACINNES
in the presence of:
- -----------------------------
- -----------------------------
- -----------------------------
13
STATE OF MINNESOTA )
) SS.:
COUNTY OF ST. LOUIS )
On this day of , before me, a Notary Public
----- ----------------
within and for said County, personally appeared and
--------------------
, to me personally known, who, being each by me duly sworn,
- -------------------
did say that they are respectively the and the
----------------------
of MINNESOTA POWER, INC. of the State of
- -----------------------------
Minnesota, the corporation named in the foregoing instrument; that the seal
affixed to the foregoing instrument is the corporate seal of said corporation;
that said instrument was signed and sealed in behalf of said corporation by
authority of its Board of Directors; and said and
--------------------
acknowledged said instrument to be the free act and deed of
- -------------------
said corporation.
Personally came before me on this day of ,
----- ---------------
, to me known to be the , and
- -------------------- ------------------------
, to me known to be the , of the
- -------------------- -----------------------
above named MINNESOTA POWER, INC., the corporation described in and which
executed the foregoing instrument, and to me personally known to be the persons
who as such officers executed the foregoing instrument in the name and behalf of
said corporation, who, being by me duly sworn did depose and say and acknowledge
that they are respectively the and the
--------------------- -------------------
of said corporation; that the seal affixed to said instrument is the corporate
seal of said corporation; and that they signed, sealed and delivered said
instrument in the name and on behalf of said corporation by authority of its
Board of Directors and stockholders, and said and
--------------------
then and there acknowledged said instrument to be the free
- -------------------
act and deed of said corporation and that such corporation executed the same.
On the day of , before me personally came
----- ---------------
and , to me known, who, being by me duly
- -------------------- -------------------
sworn, did depose and say that they respectively reside at
, and
- ---------------------------------------
; that they are respectively the
- ----------------------------------------
and the of MINNESOTA POWER, INC.,
- -------------------- -----------------------
one of the corporations described in and which executed the above instrument;
that they know the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the Board
of Directors of said corporation, and that they signed their names thereto by
like order.
GIVEN under my hand and notarial seal this day of .
----- -------------
--------------------------------------
Notary Public
14
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this day of , before me, a Notary Public within
----- --------------
and for said County, personally appeared and
--------------------
, to me personally known, who, being each by me duly sworn,
- -------------------
did say that they are respectively a and an of
--------------- ----------------
THE BANK OF NEW YORK of the State of New York, the corporation named in the
foregoing instrument; that the seal affixed to the foregoing instrument is the
corporate seal of said corporation; that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors; and said
and acknowledged said instrument to be
- -------------------- -------------------
the free act and deed of said corporation.
Personally came before me on this day of ,
----- --------------
, to me known to be a , and
- -------------------- ------------------
, known to me to be an , of the above
- -------------------- ------------------
named THE BANK OF NEW YORK, the corporation described in and which executed the
foregoing instrument, and to me personally known to be the persons who as such
officers executed the foregoing instrument in the name and behalf of said
corporation, who, being by me duly sworn did depose and say and acknowledge that
they are respectively a and an of said
----------------- ----------------
corporation; that the seal affixed to said instrument is the corporate seal of
said corporation; and that they signed, sealed and delivered said instrument in
the name and on behalf of said corporation by authority of its Board of
Directors, and said and then and there
-------------------- -------------------
acknowledged said instrument to be the free act and deed of said corporation and
that such corporation executed the same.
On the day of , before me personally came
----- ---------------
and , to me known, who, being by me duly
- -------------------- -------------------
sworn, did depose and say that they respectively reside at
, and ;
- -------------------------------- ---------------------------------------
that they are respectively a and an of
----------------- --------------------
THE BANK OF NEW YORK, one of the corporations described in and which executed
the above instrument; that they know the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that they signed their
names thereto by like order.
GIVEN under my hand and notarial seal this day of .
----- -------------
--------------------------------------
Notary Public, State of New York
15
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this day of , before me personally
----- -------------------
appeared DOUGLAS J. MACINNES, to me known to be the person described in and who
executed the foregoing instrument, and acknowledged that he executed the same as
his free act and deed.
Personally came before me this day of , the above
----- --------------
named DOUGLAS J. MACINNES, to me known to be the person who executed the
foregoing instrument, and acknowledged the same.
On the day of , before me personally came DOUGLAS
----- --------------
J. MACINNES, to me known to be the person described in and who executed the
foregoing instrument, and acknowledged that he executed the same.
GIVEN under my hand and notarial seal this day of .
----- ----------------
--------------------------------------
Notary Public, State of New York
EXHIBIT 4(D)1
------------------------------------------
MINNESOTA POWER, INC.
,
---------------------
TRUSTEE
---------
INDENTURE
(FOR UNSECURED DEBT SECURITIES)
DATED AS OF
------------
------------------------------------------
TABLE OF CONTENTS
PARTIES........................................................................1
RECITAL OF THE COMPANY.........................................................1
ARTICLE ONE....................................................................1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........................1
SECTION 101. Definitions..................................................1
ACT..................................................................2
AFFILIATE............................................................2
AUTHENTICATING AGENT.................................................2
AUTHORIZED OFFICER...................................................2
BOARD OF DIRECTORS...................................................2
BOARD RESOLUTION.....................................................2
BUSINESS DAY.........................................................2
COMMISSION...........................................................3
COMPANY..............................................................3
COMPANY REQUEST......................................................3
COMPANY ORDER........................................................3
CORPORATE TRUST OFFICE...............................................3
CORPORATION..........................................................3
DEFAULTED INTEREST...................................................3
DISCOUNT SECURITY....................................................3
DOLLAR...............................................................3
$....................................................................3
EVENT OF DEFAULT.....................................................3
GOVERNMENTAL AUTHORITY...............................................3
GOVERNMENT OBLIGATIONS...............................................3
HOLDER...............................................................4
INDENTURE............................................................4
INTEREST PAYMENT DATE................................................4
MATURITY.............................................................4
OFFICER'S CERTIFICATE................................................4
OPINION OF COUNSEL...................................................4
OUTSTANDING..........................................................4
PAYING AGENT.........................................................5
PERIODIC OFFERING....................................................5
PERSON...............................................................5
PLACE OF PAYMENT.....................................................5
PREDECESSOR SECURITY.................................................6
REDEMPTION DATE......................................................6
REDEMPTION PRICE.....................................................6
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
ii
REGULAR RECORD DATE..................................................6
RESPONSIBLE OFFICER..................................................6
SECURITIES...........................................................6
SECURITY REGISTER....................................................6
SECURITY REGISTRAR...................................................6
SPECIAL RECORD DATE..................................................6
STATED INTEREST RATE.................................................6
STATED MATURITY......................................................6
TRUST INDENTURE ACT..................................................6
TRUSTEE..............................................................6
UNITED STATES........................................................7
SECTION 102. Compliance Certificates and Opinions.........................7
SECTION 103. Form of Documents Delivered to Trustee.......................7
SECTION 104. Acts of Holders..............................................8
SECTION 105. Notices, etc. to Trustee and Company........................10
SECTION 106. Notice to Holders of Securities; Waiver.....................11
SECTION 107. Conflict with Trust Indenture Act...........................11
SECTION 108. Effect of Headings and Table of Contents....................11
SECTION 109. Successors and Assigns......................................11
SECTION 110. Separability Clause.........................................11
SECTION 111. Benefits of Indenture.......................................12
SECTION 112. Governing Law...............................................12
SECTION 113. Legal Holidays..............................................12
ARTICLE TWO...................................................................12
SECURITY FORMS................................................................12
SECTION 201. Forms Generally.............................................12
SECTION 202. Form of Trustee's Certificate of Authentication.............13
ARTICLE THREE.................................................................14
THE SECURITIES................................................................14
SECTION 301. Amount Unlimited; Issuable in Series........................14
SECTION 302. Denominations...............................................17
SECTION 303. Execution, Authentication, Delivery and Dating..............17
SECTION 304. Temporary Securities........................................20
SECTION 305. Registration, Registration of Transfer and Exchange.........20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............22
SECTION 307. Payment of Interest; Interest Rights Preserved..............22
SECTION 308. Persons Deemed Owners.......................................23
SECTION 309. Cancellation by Security Registrar..........................24
SECTION 310. Computation of Interest.....................................24
SECTION 311. Payment to Be in Proper Currency............................24
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
iii
ARTICLE FOUR..................................................................25
REDEMPTION OF SECURITIES......................................................25
SECTION 401. Applicability of Article....................................25
SECTION 402. Election to Redeem; Notice to Trustee.......................25
SECTION 403. Selection of Securities to Be Redeemed......................25
SECTION 404. Notice of Redemption........................................26
SECTION 405. Securities Payable on Redemption Date.......................27
SECTION 406. Securities Redeemed in Part.................................27
ARTICLE FIVE..................................................................28
SINKING FUNDS.................................................................28
SECTION 501. Applicability of Article....................................28
SECTION 502. Satisfaction of Sinking Fund Payments with Securities.......28
SECTION 503. Redemption of Securities for Sinking Fund...................28
ARTICLE SIX...................................................................29
COVENANTS.....................................................................29
SECTION 601. Payment of Principal, Premium and Interest..................29
SECTION 602. Maintenance of Office or Agency.............................29
SECTION 603. Money for Securities Payments to Be Held in Trust...........30
SECTION 604. Corporate Existence.........................................31
SECTION 605. Maintenance of Properties...................................31
SECTION 606. Annual Officer's Certificate as to Compliance...............31
SECTION 607. Waiver of Certain Covenants.................................32
SECTION 608. Limitation on Liens.........................................32
ARTICLE SEVEN.................................................................41
SATISFACTION AND DISCHARGE....................................................41
SECTION 701. Defeasance..................................................41
SECTION 702. Satisfaction and Discharge of Indenture.....................43
SECTION 703. Application of Trust Money..................................43
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
iv
ARTICLE EIGHT.................................................................44
EVENTS OF DEFAULT; REMEDIES...................................................44
SECTION 801. Events of Default...........................................44
SECTION 802. Acceleration of Maturity; Rescission and Annulment..........45
SECTION 803. Collection of Indebtedness and Suits for Enforcement
by Trustee..................................................46
SECTION 804. Trustee May File Proofs of Claim............................47
SECTION 805. Trustee May Enforce Claims Without Possession of
Securities..................................................48
SECTION 806. Application of Money Collected..............................48
SECTION 807. Limitation on Suits.........................................48
SECTION 808. Unconditional Right of Holders to Receive Principal,
Premium and Interest........................................49
SECTION 809. Restoration of Rights and Remedies..........................49
SECTION 810. Rights and Remedies Cumulative..............................49
SECTION 811. Delay or Omission Not Waiver................................49
SECTION 812. Control by Holders of Securities............................50
SECTION 813. Waiver of Past Defaults.....................................50
SECTION 814. Undertaking for Costs.......................................50
SECTION 815. Waiver of Stay or Extension Laws............................51
ARTICLE NINE..................................................................51
THE TRUSTEE...................................................................51
SECTION 901. Certain Duties and Responsibilities.........................51
SECTION 902. Notice of Defaults..........................................52
SECTION 903. Certain Rights of Trustee...................................52
SECTION 904. Not Responsible for Recitals or Issuance of Securities......53
SECTION 905. May Hold Securities.........................................53
SECTION 906. Money Held in Trust.........................................54
SECTION 907. Compensation and Reimbursement..............................54
SECTION 908. Disqualification; Conflicting Interests.....................55
SECTION 909. Corporate Trustee Required; Eligibility.....................55
SECTION 910. Resignation and Removal; Appointment of Successor...........55
SECTION 911. Acceptance of Appointment by Successor......................57
SECTION 912. Merger, Conversion, Consolidation or Succession to Business.58
SECTION 913. Preferential Collection of Claims Against Company...........58
SECTION 914. Co-trustees and Separate Trustees...........................59
SECTION 915. Appointment of Authenticating Agent.........................60
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
v
ARTICLE TEN...................................................................62
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.............................62
SECTION 1001. Lists of Holders...........................................62
SECTION 1002. Reports by Trustee and Company.............................62
ARTICLE ELEVEN................................................................62
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER...........................62
SECTION 1101. Company May Consolidate, etc., Only on Certain Terms.......62
SECTION 1102. Successor Person Substituted...............................63
ARTICLE TWELVE................................................................63
SUPPLEMENTAL INDENTURES.......................................................63
SECTION 1201. Supplemental Indentures Without Consent of Holders.........63
SECTION 1202. Supplemental Indentures With Consent of Holders............65
SECTION 1203. Execution of Supplemental Indentures.......................66
SECTION 1204. Effect of Supplemental Indentures..........................66
SECTION 1205. Conformity With Trust Indenture Act........................66
SECTION 1206. Reference in Securities to Supplemental Indentures.........67
SECTION 1207. Modification Without Supplemental Indenture................67
ARTICLE THIRTEEN..............................................................67
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING...................................67
SECTION 1301. Purposes for Which Meetings May Be Called..................67
SECTION 1302. Call, Notice and Place of Meetings.........................67
SECTION 1303. Persons Entitled to Vote at Meetings.......................68
SECTION 1304. Quorum; Action.............................................68
SECTION 1305. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings................69
SECTION 1306. Counting Votes and Recording Action of Meetings............70
SECTION 1307. Action Without Meeting.....................................70
ARTICLE FOURTEEN..............................................................71
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...............71
SECTION 1401. Liability Solely Corporate.................................71
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
vi
Testimonium...................................................................63
Signatures and Seals..........................................................63
Acknowledgements..............................................................64
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
vii
MINNESOTA POWER, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF ,
--------- ----
TRUST INDENTURE ACT SECTION INDENTURE SECTION
ss.310 (a)(1)...............................................................909
(a)(2)...............................................................909
(a)(3)...............................................................914
(a)(4)....................................................Not Applicable
(b)..................................................................908
910
ss.311 (a)..................................................................913
(b)..................................................................913
(c)..................................................................913
ss.312 (a).................................................................1001
(b).................................................................1001
(c).................................................................1001
ss.313 (a).................................................................1002
(b).................................................................1002
(c).................................................................1002
ss.314 (a).................................................................1002
(a)(4)...............................................................606
(b).......................................................Not Applicable
(c)(1)...............................................................102
(c)(2)...............................................................102
(c)(3)....................................................Not Applicable
(d).......................................................Not Applicable
(e)..................................................................102
ss.315 (a)..................................................................901
903
(b)..................................................................902
(c)..................................................................901
(d)..................................................................901
(e)..................................................................814
ss.316 (a)..................................................................812
813
(a)(1)(A)............................................................802
812
(a)(1)(B)............................................................813
(a)(2)....................................................Not Applicable
(b)..................................................................808
ss.317 (a)(1)...............................................................803
(a)(2)...............................................................804
(b)..................................................................603
ss.318 (a)..................................................................107
NOTE: THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE PART
OF THE INDENTURE.
INDENTURE, dated as of , between MINNESOTA POWER, INC.,
------------
corporation duly organized and existing under the laws of the State of Minnesota
(herein called the "Company"), having its principal office at 30 West Superior
Street, Duluth Minnesota 55802, and , a corporation of the
---------------------
State of New York, having its principal corporate trust office at
, as Trustee (herein called the "Trustee").
- ----------------------------
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), in an unlimited aggregate principal amount to be issued in one or
more series as contemplated herein; and all acts necessary to make this
Indenture a valid agreement of the Company have been performed.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capitalized terms used herein
shall have the meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at the
date of such computation or, at the election of the Company from time to
2
time, at the date of the execution and delivery of this Indenture;
provided, however, that in determining generally accepted accounting
principles applicable to the Company, the Company shall, to the extent
required, conform to any order, rule or regulation of any administrative
agency, regulatory authority or other governmental body having jurisdiction
over the Company; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six and Article Nine, are
defined in those Articles.
"ACT", when used with respect to any Holder of a Security, has the
meaning specified in Section 104.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"AUTHENTICATING AGENT" means any Person (other than the Company or an
Affiliate of the Company) authorized by the Trustee pursuant to Section 915 to
act on behalf of the Trustee to authenticate one or more series of Securities.
"AUTHORIZED OFFICER" means the Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary, or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters relating to
this Indenture.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee thereof duly authorized to act in respect of matters
relating to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY", when used with respect to a Place of Payment or any
other particular location specified in the Securities or this Indenture, means
any day, other than a Saturday or Sunday, which is not a day on which banking
institutions or trust companies in such Place of Payment or other location are
generally authorized or required by law, regulation or executive order to remain
closed, except as may be otherwise specified as contemplated by Section 301.
3
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the date of execution and delivery of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body, if any, performing such
duties at such time.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by an Authorized Officer and delivered to the
Trustee.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution and delivery of this
Indenture is located on .
-----------------------------------------------
"CORPORATION" means a corporation, association, company, limited
liability company, joint stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DISCOUNT SECURITY" means any Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 802. "Interest" with
respect to a Discount Security means interest, if any, borne by such Security at
a Stated Interest Rate.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"EVENT OF DEFAULT" has the meaning specified in Section 801.
"GOVERNMENTAL AUTHORITY" means the government of the United States or
of any State or Territory thereof or of the District of Columbia or of any
county, municipality or other political subdivision of any of the foregoing, or
any department, agency, authority or other instrumentality of any of the
foregoing.
"GOVERNMENT OBLIGATIONS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
and entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments which
evidence a direct ownership interest in obligations described in
clause (a) above or in any specific interest or principal payments due
in respect thereof; provided, however, that the custodian of such
4
obligations or specific interest or principal payments shall be a bank
or trust company (which may include the Trustee or any Paying Agent)
subject to Federal or state supervision or examination with a combined
capital and surplus of at least $50,000,000; and provided, further,
that except as may be otherwise required by law, such custodian shall
be obligated to pay to the holders of such certificates, depositary
receipts or other instruments the full amount received by such
custodian in respect of such obligations or specific payments and
shall not be permitted to make any deduction therefrom.
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"INDENTURE" means this instrument as originally executed and delivered
and as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of a particular series of
Securities established as contemplated by Section 301.
"INTEREST PAYMENT DATE", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as provided in such Security or in this Indenture, whether at the
Stated Maturity, by declaration of acceleration, upon call for redemption or
otherwise.
"OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Officer and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, or other counsel acceptable to the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled or delivered to the Security
Registrar for cancellation;
(b) Securities deemed to have been paid in accordance with
Section 701; and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it and the Company that such
Securities are held by a bona fide purchaser or purchasers in whose
hands such Securities are valid obligations of the Company;
5
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this Indenture,
or the Outstanding Securities of any series, have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities,
(x) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor (unless
the Company, such Affiliate or such obligor owns all Securities Outstanding
under this Indenture, or all Outstanding Securities of each such series, as
the case may be, determined without regard to this provision) shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver or upon any
such determination as to the presence of a quorum, only Securities which
the Trustee knows to be so owned shall be so disregarded; provided,
however, that Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other
obligor; and
(y) the principal amount of a Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant to Section
802;
provided, further, that, in the case of any Security the principal of which is
payable from time to time without presentment or surrender, the principal amount
of such Security that shall be deemed to be Outstanding at any time for all
purposes of this Indenture shall be the original principal amount thereof less
the aggregate amount of principal thereof theretofore paid.
"PAYING AGENT" means any Person, including the Company, authorized by
the Company to pay the principal of, and premium, if any, or interest, if any,
on any Securities on behalf of the Company.
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time any or all of the specific terms of which Securities, including
without limitation the rate or rates of interest, if any, thereon, the Stated
Maturity or Maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents from time to
time subsequent to the initial request for the authentication and delivery of
such Securities by the Trustee, all as contemplated in Section 301 and clause
(b) of Section 303.
"PERSON" means any individual, corporation, partnership, limited
liability partnership, joint venture, trust or unincorporated organization or
any Governmental Authority.
"PLACE OF PAYMENT", when used with respect to the Securities of any
series, means the place or places, specified as contemplated by Section 301, at
which, subject to Section 602, principal of and premium, if any, and interest,
if any, on the Securities of such series are payable.
6
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed (to the extent
lawful) to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means
any Vice President, Assistant Vice President, Trust Officer or other officer of
the Trustee assigned by the Trustee to the Corporate Trust Administration
Division of the Trustee (or any successor division or department of the
Trustee).
"SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any securities authenticated and delivered
under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Securities of any series means a date fixed by the Trustee pursuant to Section
307.
"STATED INTEREST RATE" means a rate (whether fixed or variable) at
which an obligation by its terms is stated to bear simple interest. Any
calculation or other determination to be made under this Indenture by reference
to the Stated Interest Rate on a Security shall be made without regard to the
effective interest cost to the Company of such Security and without regard to
the Stated Interest Rate on, or the effective cost to the Company of, any other
indebtedness in respect of which the Company's obligations are evidenced or
secured in whole or in part by such Security.
"STATED MATURITY", when used with respect to any obligation or any
installment of principal thereof or interest thereon, means the date on which
the principal of such obligation or such installment of principal or interest is
stated to be due and payable (without regard to any provisions for redemption,
prepayment, acceleration, purchase or extension).
"TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act
of 1939, or any successor statute, as in effect at such time.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
with respect to one or more series of Securities pursuant to the applicable
7
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"UNITED STATES" means the United States of America, its Territories,
its possessions and other areas subject to its political jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action (including any covenants
compliance with which constitutes a condition precedent) have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such Person
has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
8
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion are
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the benefits of this Indenture equally and ratably with all
other Outstanding Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be made,
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing or, alternatively, may be embodied
in and evidenced by the record of Holders voting in favor thereof, either
in person or by proxies duly appointed in writing, at any meeting of
Holders duly called and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such record. Except
as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments or record or both are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
9
"Act" of the Holders signing such instrument or instruments and so voting
at any such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 901) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders shall be proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which the Trustee
and the Company deem sufficient. Where such execution is by a signer acting
in a capacity other than his or her individual capacity, such certificate
or affidavit shall also constitute sufficient proof of his or her
authority.
(c) The principal amount (except as otherwise contemplated in clause
(y) of the first proviso to the definition of Outstanding) and serial
numbers of Securities held by any Person, and the date of holding the same,
shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future Holder of
the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee
or the Company in reliance thereon, whether or not notation of such action
is made upon such Security.
(e) Until such time as written instruments shall have been delivered
to the Trustee with respect to the requisite percentage of principal amount
of Securities for the action contemplated by such instruments, any such
instrument executed and delivered by or on behalf of a Holder may be
revoked with respect to any or all of such Securities by written notice by
such Holder or any subsequent Holder, proven in the manner in which such
instrument was proven.
(f) Securities of any series authenticated and delivered after any Act
of Holders may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any action taken by such Act of Holders.
If the Company shall so determine, new Securities of any series so modified
as to conform, in the opinion of the Trustee and the Company, to such
action may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such
series.
(g) If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
10
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the
close of business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of the
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as
of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee by any Holder or by the Company, or the Company by the Trustee or by any
Holder, shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and delivered personally to an officer or
other responsible employee of the addressee, or transmitted by facsimile
transmission or other direct written electronic means to such telephone number
or other electronic communications address as the parties hereto shall from time
to time designate, or transmitted by certified or registered mail, charges
prepaid, to the applicable address set below such party's name below or to such
other address as either party hereto may from time to time designate:
If to the Trustee, to:
Attention:
Telephone:
Telecopy:
If to the Company, to:
Minnesota Power, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Attention:
--------------------
Telephone: (218) 722-2641
Telecopy: (218 )
---------
Any communication contemplated herein shall be deemed to have been
made, given, furnished and filed if personally delivered, on the date of
delivery, if transmitted by facsimile transmission or other direct written
electronic means, on the date of transmission, and if transmitted by registered
mail, on the date of receipt.
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SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given, and shall be deemed given, to Holders if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Security Register, not later than
the latest date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders.
Any notice required by this Indenture may be waived in writing by the
Person entitled to receive such notice, either before or after the event
otherwise to be specified therein, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Indenture by, or is otherwise governed by, any of the provisions of the Trust
Indenture Act, such other provision shall control; and if any provision hereof
otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall
control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings in this Indenture and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and
Trustee shall bind their respective successors and assigns, whether so expressed
or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities, express or implied, shall
give to any Person, other than the parties hereto, their successors hereunder,
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the internal laws of the State of New York, except to the
extent that the law of any other jurisdiction shall be mandatorily applicable.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
other than a provision in Securities of any series, or in the Board Resolution
or Officer's Certificate which establishes the terms of the Securities of such
series, which specifically states that such provision shall apply in lieu of
this Section) payment of interest or principal and premium, if any, need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment, in each case with the same
force and effect, and in the same amount, as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, as the case may be, and, if
such payment is made or duly provided for on such Business Day, no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be,
to such Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The definitive Securities of each series shall be in substantially the
form or forms thereof established in the indenture supplemental hereto
establishing such series or in a Board Resolution establishing such series, or
in an Officer's Certificate pursuant to such supplemental indenture or Board
Resolution, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form or forms of Securities of any series
are established in a Board Resolution or in an Officer's Certificate pursuant to
a Board Resolution, such Board Resolution and Officer's Certificate, if any,
shall be delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
13
Unless otherwise specified as contemplated by Sections 301 or 1201(g),
the Securities of each series shall be issuable in registered form without
coupons. The definitive Securities shall be produced in such manner as shall be
determined by the officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the form set forth below:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
----------------------------------------
as Trustee
By:
-------------------------------------
Authorized Signatory
14
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. Subject to the
last paragraph of this Section, prior to the authentication and delivery of
Securities of any series there shall be established by specification in a
supplemental indenture or in a Board Resolution, or in an Officer's Certificate
pursuant to a supplemental indenture or a Board Resolution:
(a) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of all other
series);
(b) any limit upon the aggregate principal amount of the Securities of
such series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of such
series pursuant to Section 304, 305, 306, 406 or 1206 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(c) the Person or Persons (without specific identification) to whom
interest on Securities of such series shall be payable on any Interest
Payment Date, if other than the Persons in whose names such Securities (or
one or more Predecessor Securities) are registered at the close of business
on the Regular Record Date for such interest;
(d) the date or dates on which the principal of the Securities of such
series is payable or any formulary or other method or other means by which
such date or dates shall be determined, by reference to an index or other
fact or event ascertainable outside of this Indenture or otherwise (without
regard to any provisions for redemption, prepayment, acceleration, purchase
or extension);
(e) the rate or rates at which the Securities of such series shall
bear interest, if any (including the rate or rates at which overdue
principal shall bear interest, if different from the rate or rates at which
such Securities shall bear interest prior to Maturity, and, if applicable,
the rate or rates at which overdue premium or interest shall bear interest,
if any), or any formulary or other method or other means by which such rate
or rates shall be determined, by reference to an index or other fact or
event ascertainable outside of this Indenture or otherwise; the date or
dates from which such interest shall accrue; the Interest Payment Dates on
which such interest shall be payable and the Regular Record Date, if any,
for the interest payable on such Securities on any Interest Payment Date;
and the basis of computation of interest, if other than as provided in
Section 310;
15
(f) the place or places at which or methods by which (1) the principal
of and premium, if any, and interest, if any, on Securities of such series
shall be payable, (2) registration of transfer of Securities of such series
may be effected, (3) exchanges of Securities of such series may be effected
and (4) notices and demands to or upon the Company in respect of the
Securities of such series and this Indenture may be served; the Security
Registrar and any Paying Agent or Agents for such series; and if such is
the case, that the principal of such Securities shall be payable without
presentment or surrender thereof;
(g) the period or periods within which, or the date or dates on which,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such redemptions, including
but not limited to a restriction on a partial redemption by the Company of
the Securities of any series, resulting in delisting of such Securities
from any national exchange;
(h) the obligation or obligations, if any, of the Company to redeem or
purchase the Securities of such series pursuant to any sinking fund or
other mandatory redemption provisions or at the option of a Holder thereof
and the period or periods within which or the date or dates on which, the
price or prices at which and the terms and conditions upon which such
Securities shall be redeemed or purchased, in whole or in part, pursuant to
such obligation, and applicable exceptions to the requirements of Section
404 in the case of mandatory redemption or redemption at the option of the
Holder;
(i) the denominations in which Securities of such series shall be
issuable if other than denominations of One Thousand Dollars ($1,000) and
any integral multiple thereof;
(j) the currency or currencies, including composite currencies, in
which payment of the principal of and premium, if any, and interest, if
any, on the Securities of such series shall be payable (if other than in
Dollars) and the formulary or other method or other means by which the
equivalent of any such amount in Dollars is to be determined for any
purpose, including for the purpose of determining the principal amount of
such Securities deemed to be Outstanding at any time;
(k) if the principal of or premium, if any, or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency other than that in which
the Securities are stated to be payable, the period or periods within which
and the terms and conditions upon which, such election may be made;
(l) if the principal of or premium, if any, or interest, if any, on
the Securities of such series are to be payable, or are to be payable at
the election of the Company or a Holder thereof, in securities or other
property, the type and amount of such securities or other property, or the
formulary or other method or other means by which such amount shall be
determined, and the period or periods within which, and the terms and
conditions upon which, any such election may be made;
16
(m) if the amount payable in respect of principal of or premium, if
any, or interest, if any, on the Securities of such series may be
determined with reference to an index or other fact or event ascertainable
outside this Indenture, the manner in which such amounts shall be
determined to the extent not established pursuant to clause (e) of this
paragraph;
(n) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
802;
(o) any Events of Default, in addition to those specified in Section
801, with respect to the Securities of such series, and any covenants of
the Company for the benefit of the Holders of the Securities of such
series, in addition to those set forth in Article Six;
(p) the terms, if any, pursuant to which the Securities of such series
may be converted into or exchanged for shares of capital stock or other
securities of the Company or any other Person;
(q) the obligations or instruments, if any, which shall be considered
to be Government Obligations in respect of the Securities of such series
denominated in a currency other than Dollars or in a composite currency,
and any additional or alternative provisions for the reinstatement of the
Company's indebtedness in respect of such Securities after the satisfaction
and discharge thereof as provided in Section 701;
(r) if the Securities of such series are to be issued in global form,
(i) any limitations on the rights of the Holder or Holders of such
Securities to transfer or exchange the same or to obtain the registration
of transfer thereof, (ii) any limitations on the rights of the Holder or
Holders thereof to obtain certificates therefor in definitive form in lieu
of temporary form and (iii) any and all other matters incidental to such
Securities;
(s) if the Securities of such series are to be issuable as bearer
securities, any and all matters incidental thereto which are not
specifically addressed in a supplemental indenture as contemplated by
clause (g) of Section 1201;
(t) to the extent not established pursuant to clause (r) of this
paragraph, any limitations on the rights of the Holders of the Securities
of such Series to transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be made for
the registration of transfer or exchange of Securities of such series the
amount or terms thereof;
(u) any exceptions to Section 113, or variation in the definition of
Business Day, with respect to the Securities of such series;
(v) any collateral security, assurance or guarantee for the Securities
of such series;
17
(w) the non-applicability of Section 608 to the Securities of such
Series or any exceptions or modifications of Section 608 with respect to
the Securities of such Series; any rights or duties of another Person to
assume the obligations of the Company with respect to the Securities of
such series (whether as joint obligor, primary obligor, secondary obligor
or substitute obligor) and any rights or duties to discharge and release
any obligor with respect to the Securities of such series or the Indenture
to the extent related to such series;
(x) any rights to change or eliminate any provision of this Indenture
or to add any new provision to this Indenture (by supplemental indenture or
otherwise) without the consent of the Holders of the Securities of such
series; and
(y) any other terms of the Securities of such series not inconsistent
with the provisions of this Indenture.
With respect to Securities of a series subject to a Periodic Offering,
the indenture supplemental hereto or the Board Resolution which establishes such
series, or the Officer's Certificate pursuant to such supplemental indenture or
Board Resolution, as the case may be, may provide general terms or parameters
for Securities of such series and provide either that the specific terms of
Securities of such series shall be specified in a Company Order or that such
terms shall be determined by the Company or its agents in accordance with
procedures specified in a Company Order as contemplated by clause (b) of Section
303.
Unless otherwise specified with respect to a series of Securities
pursuant to Section 301(b), any limit upon the aggregate principal amount of a
series of Securities may be increased without the consent of any Holders and
additional Securities of such series may be authenticated and delivered up to
the limit upon the aggregate principal amount authorized with respect to such
series as so increased.
SECTION 302. DENOMINATIONS.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, the Securities of each series shall be issuable in
denominations of One Thousand Dollars ($1,000) and any integral multiple
thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, the Securities shall be executed on behalf of the
Company by an Authorized Officer and may have the corporate seal of the Company
affixed thereto or reproduced thereon attested by any other Authorized Officer.
The signature of any or all of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of execution Authorized Officers shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
18
The Trustee shall authenticate and deliver Securities of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
(a) the instrument or instruments establishing the form or forms and
terms of such series, as provided in Sections 201 and 301;
(b) a Company Order requesting the authentication and delivery of such
Securities and, to the extent that the terms of such Securities shall not
have been established in an indenture supplemental hereto or in a Board
Resolution, or in an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated by Sections 201 and 301,
either (i) establishing such terms or (ii) in the case of Securities of a
series subject to a Periodic Offering, specifying procedures, acceptable to
the Trustee, by which such terms are to be established (which procedures
may provide, to the extent acceptable to the Trustee, for authentication
and delivery pursuant to oral or electronic instructions from the Company
or any agent or agents thereof, which oral instructions are to be promptly
confirmed electronically or in writing), in either case in accordance with
the instrument or instruments delivered pursuant to clause (a) above;
(c) the Securities of such series, executed on behalf of the Company
by an Authorized Officer;
(d) an Opinion of Counsel to the effect that:
(i) the form or forms of such Securities have been duly
authorized by the Company and have been established in conformity with
the provisions of this Indenture;
(ii) the terms of such Securities have been duly authorized by
the Company and have been established in conformity with the
provisions of this Indenture; and
(iii) such Securities, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the Company, entitled to the
benefits provided by this Indenture, and enforceable in accordance
with their terms, except as the same may be limited by laws relating
to or affecting generally the enforcement of creditors' rights,
including, without limitation, bankruptcy and insolvency laws and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
provided, however, that, with respect to Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to
receive such Opinion of Counsel only once at or prior to the time of
the first authentication and delivery of such Securities (provided
19
that such Opinion of Counsel addresses the authentication and delivery
of all Securities of such series) and that, in lieu of the opinions
described in clauses (ii) and (iii) above, Counsel may opine that:
(x) when the terms of such Securities shall have
been established pursuant to a Company Order or Orders or
pursuant to such procedures acceptable to the Trustee as may
be specified from time to time by a Company Order or Orders,
all as contemplated by and in accordance with the instrument
or instruments delivered pursuant to clause (a) above, such
terms will have been duly authorized by the Company and will
have been established in conformity with the provisions of
this Indenture; and
(y) such Securities, when authenticated and
delivered by the Trustee in accordance with this Indenture
and the Company Order or Orders or specified procedures
referred to in paragraph (x) above and issued and delivered
by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will have been duly
issued under this Indenture and will constitute valid and
legally binding obligations of the Company, entitled to the
benefits provided by the Indenture, and enforceable in
accordance with their terms, except as the same may be
limited by laws relating to or affecting generally the
enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws, and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, and compliance of the authentication
and delivery thereof with the terms and conditions of this Indenture, upon the
Opinion of Counsel and other documents delivered pursuant to Sections 201 and
301 and this Section, as applicable, at or prior to the time of the first
authentication of Securities of such series unless and until such opinion or
other documents have been superseded or revoked or expire by their terms. In
connection with the authentication and delivery of Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to assume that the
Company's instructions to authenticate and deliver such Securities do not
violate any applicable law or any applicable rule, regulation or order of any
Governmental Authority having jurisdiction over the Company.
If the form or terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate as
permitted by Sections 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such Securities pursuant to this
Indenture will materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, each Security shall be dated the date of its
authentication.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, no Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form provided
20
for herein executed by the Trustee or an Authenticating Agent by manual
signature of an authorized signatory thereof, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder to the Company, or any Person
acting on its behalf, but shall never have been issued and sold by the Company,
and the Company shall deliver such Security to the Security Registrar for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Officer's
Certificate or an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits hereof.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may determine, as evidenced
by their execution of such Securities; provided, however, that temporary
Securities need not recite specific redemption, sinking fund, conversion or
exchange provisions.
Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, after the preparation of definitive Securities
of such series, the temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities of such series
upon surrender of such temporary Securities at the office or agency of the
Company maintained pursuant to Section 602 in a Place of Payment for such
Securities. Upon such surrender of temporary Securities for such exchange, the
Company shall, except as aforesaid, execute and the Trustee shall authenticate
and deliver in exchange therefor definitive Securities of the same series, of
authorized denominations and of like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in each office designated pursuant
to Section 602, with respect to the Securities of each series, a register (all
registers kept in accordance with this Section being collectively referred to as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities of
such series and the registration of transfer thereof. The Company shall
designate one Person to maintain the Security Register for the Securities of
each series on a consolidated basis, and such Person is referred to herein, with
respect to such series, as the "Security Registrar." Anything herein to the
21
contrary notwithstanding, the Company may designate one or more of its offices
as an office in which a register with respect to the Securities of one or more
series shall be maintained, and the Company may designate itself the Security
Registrar with respect to one or more of such series. The Security Register
shall be open for inspection by the Trustee and the Company at all reasonable
times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, upon surrender for registration of
transfer of any Security of such series at the office or agency of the Company
maintained pursuant to Section 602 in a Place of Payment for such series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of authorized denominations and of like tenor and aggregate
principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, any Security of such series may be
exchanged at the option of the Holder, for one or more new Securities of the
same series, of authorized denominations and of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities delivered upon any registration of transfer or exchange
of Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Trustee or the
Security Registrar) be duly endorsed or shall be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee or the
Security Registrar, as the case may be, duly executed by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with respect
to Securities of any series, no service charge shall be made for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 406 or 1206 not
involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series
during a period of 15 days immediately preceding the date of the mailing of any
notice of redemption of such Securities called for redemption or (b) any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
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SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series, and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction, loss or
theft of any Security and (b) such security or indemnity as may be reasonably
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
is held by a Person purporting to be the owner of such Security, the Company
shall execute and the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series, and
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
Notwithstanding the foregoing, in case any such mutilated, destroyed,
lost or stolen Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay such
Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone other than
the Holder of such new Security, and any such new Security shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, interest on any Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the related Regular Record Date by virtue of having been such Holder, and
23
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a date (herein called a "Special Record Date") for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall promptly cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series at the address
of such Holder as it appears in the Security Register, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date.
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to interest which may accrue, which were
carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of and premium,
if any, and (subject to Sections 305 and 307) interest, if any, on such Security
24
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Security
Registrar, be delivered to the Security Registrar and, if not theretofore
canceled, shall be promptly canceled by the Security Registrar. The Company may
at any time deliver to the Security Registrar for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever or which the Company shall not have issued and
sold, and all Securities so delivered shall be promptly canceled by the Security
Registrar. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Security
Registrar shall be disposed of in accordance with a Company Order delivered to
the Security Registrar and the Trustee, and the Security Registrar shall
promptly deliver a certificate of disposition to the Trustee and the Company
unless, by a Company Order, similarly delivered, the Company shall direct that
canceled Securities be returned to it. The Security Registrar shall promptly
deliver evidence of any cancellation of a Security in accordance with this
Section 309 to the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year consisting of twelve 30-day months and
for any period shorter than a full month, on the basis of the actual number of
days elapsed in such period.
SECTION 311. PAYMENT TO BE IN PROPER CURRENCY.
In the case of the Securities of any series denominated in any
currency other than Dollars or in a composite currency (the "Required
Currency"), except as otherwise specified with respect to such Securities as
contemplated by Section 301, the obligation of the Company to make any payment
of the principal thereof, or the premium, if any, or interest, if any, thereon,
shall not be discharged or satisfied by any tender by the Company, or recovery
by the Trustee, in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the Trustee timely holding
the full amount of the Required Currency then due and payable. If any such
tender or recovery is in a currency other than the Required Currency, the
Trustee may take such actions as it considers appropriate to exchange such
currency for the Required Currency. The costs and risks of any such exchange,
including without limitation the risks of delay and exchange rate fluctuation,
shall be borne by the Company, the Company shall remain fully liable for any
shortfall or delinquency in the full amount of Required Currency then due and
payable, and in no circumstances shall the Trustee be liable therefor except in
the case of its negligence or willful misconduct.
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ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity (or, if the principal of the Securities of any series is payable in
installments, the Stated Maturity of the final installment of the principal
thereof) shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of such
series) in accordance with this Article.
SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or an Officer's Certificate. The Company shall,
at least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee in
writing of such Redemption Date and of the principal amount of such Securities
to be redeemed. In the case of any redemption of Securities (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture or (b) pursuant to an election of the
Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officer's Certificate
evidencing compliance with such restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected by the Trustee from the
Outstanding Securities of such series not previously called for redemption, by
such method as shall be provided for any particular series, or, in the absence
of any such provision, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of such series or
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of such series; provided, however, that if, as indicated in an
Officer's Certificate, the Company shall have offered to purchase all or any
principal amount of the Securities then Outstanding of any series, and less than
all of such Securities as to which such offer was made shall have been tendered
to the Company for such purchase, the Trustee, if so directed by Company Order,
shall select for redemption all or any principal amount of such Securities which
have not been so tendered.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected to be redeemed in part, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
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SECTION 404. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
106 to the Holders of the Securities to be redeemed not less than 30 nor more
than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price, or the formula pursuant to which the
Redemption Price is to be determined if the Redemption Price cannot be
determined at the time the notice is given,
(c) if less than all the Securities of any series are to be redeemed,
the identification of the particular Securities to be redeemed and the
portion of the principal amount of any Security to be redeemed in part and,
in the case of any such Security of such series to be redeemed in part,
that, on and after the Redemption Date, upon surrender of such Security, a
new Security or Securities of such series in principal amount equal to the
remaining unpaid principal amount thereof will be issued as provided in
Section 406,
(d) that on the Redemption Date the Redemption Price, together with
accrued interest, if any, to the Redemption Date, will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, unless it
shall have been specified as contemplated by Section 301 with respect to
such Securities that such surrender shall not be required,
(f) that the redemption is for a sinking or other fund, if such is the
case,
(g) the CUSIP numbers, if any, assigned to such Securities; provided
however, that such notice may state that no representation is made as to
the correctness of CUSIP numbers, and the redemption of such Securities
shall not be affected by any defect in or omission of such number, and
(h) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301, with respect to any notice of redemption of
Securities at the election of the Company, unless, upon the giving of such
notice, such Securities shall be deemed to have been paid in accordance with
Section 701, such notice may state that such redemption shall be conditional
upon the receipt by the Paying Agent or Agents for such Securities, on or prior
to the date fixed for such redemption, of money sufficient to pay the principal
of and premium, if any, and interest, if any, on such Securities and that if
such money shall not have been so received such notice shall be of no force or
effect and the Company shall not be required to redeem such Securities. In the
27
event that such notice of redemption contains such a condition and such money is
not so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Paying Agent or Agents for the Securities
otherwise to have been redeemed shall promptly return to the Holders thereof any
of such Securities which had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of a condition for redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Security Registrar in the name and at the expense of the Company. Notice of
mandatory redemption of Securities shall be given by the Security Registrar in
the name and at the expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with such notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security; and provided, further, that except as otherwise
specified as contemplated by Section 301 with respect to such Security, any
installment of interest on any Security the Stated Maturity of which installment
is on or prior to the Redemption Date shall be payable to the Holder of such
Security, or one or more Predecessor Securities, registered as such at the close
of business on the related Regular Record Date according to the terms of such
Security and subject to the provisions of Section 307.
SECTION 406. SECURITIES REDEEMED IN PART.
Upon the surrender of any Security which is to be redeemed only in
part at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities of the same series, of any
authorized denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
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ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of the Securities of any series, except as otherwise
specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 502. Each sinking fund payment shall be applied to the
redemption of Securities of the series in respect of which it was made as
provided for by the terms of such Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (a) may deliver to the Trustee Outstanding Securities
(other than any previously called for redemption) of a series in respect of
which a mandatory sinking fund payment is to be made and (b) may apply as a
credit Securities of such series which have been redeemed either at the election
of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of
such Securities or Outstanding Securities purchased by the Company, in each case
in satisfaction of all or any part of such mandatory sinking fund payment with
respect to the Securities of such series; provided, however, that no Securities
shall be applied in satisfaction of a mandatory sinking fund payment if such
Securities shall have been previously so applied. Securities so applied shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such mandatory sinking fund payment shall be reduced
accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for the
Securities of any series, the Company shall deliver to the Trustee an Officer's
Certificate specifying:
(a) the amount of the next succeeding mandatory sinking fund payment
for such series;
(b) the amount, if any, of the optional sinking fund payment to be
made together with such mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
29
(d) the portion, if any, of such aggregate sinking fund payment which
is to be satisfied by the payment of cash; and
(e) the portion, if any, of such aggregate sinking fund payment which
is to be satisfied by delivering and crediting Securities of such series
pursuant to Section 502 and stating the basis for such credit and that such
Securities have not previously been so credited, and the Company shall also
deliver to the Trustee any Securities to be so delivered. If the Company
shall not deliver such Officer's Certificate, the next succeeding sinking
fund payment for such series shall be made entirely in cash in the amount
of the mandatory sinking fund payment. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 403 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
404. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 405 and
406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay the principal of and premium, if any, and
interest, if any, on the Securities of each series in accordance with the terms
of such Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the Securities
of each series an office or agency where payment of such Securities shall be
made, where the registration of transfer or exchange of such Securities may be
effected and where notices and demands to or upon the Company in respect of such
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency and prompt notice to the Holders of any such
change in the manner specified in Section 106. If at any time the Company shall
fail to maintain any such required office or agency in respect of Securities of
any series, or shall fail to furnish the Trustee with the address thereof,
payment of such Securities shall be made, registration of transfer or exchange
thereof may be effected and notices and demands in respect thereof may be served
at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its agent for all such purposes in any such event.
The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities of one or more series, for
any or all of the foregoing purposes and may from time to time rescind such
designations; provided, however, that, unless otherwise specified as
contemplated by Section 301 with respect to the Securities of such series, no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency for such purposes in each Place of
Payment for such Securities in accordance with the requirements set forth above.
30
The Company shall give prompt written notice to the Trustee, and prompt notice
to the Holders in the manner specified in Section 106, of any such designation
or rescission and of any change in the location of any such other office or
agency.
Anything herein to the contrary notwithstanding, any office or agency
required by this Section may be maintained at an office of the Company, in which
event the Company shall perform all functions to be performed at such office or
agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to the Securities of any series, it shall, on or before each due date of
the principal of and premium, if any, and interest, if any, on any of such
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided. The Company shall promptly notify the Trustee of any
failure by the Company (or any other obligor on such Securities) to make any
payment of principal of or premium, if any, or interest, if any, on such
Securities.
Whenever the Company shall have one or more Paying Agents for the
Securities of any series, it shall, on or before each due date of the principal
of and premium, if any, and interest, if any, on such Securities, deposit with
such Paying Agents sums sufficient (without duplication) to pay the principal
and premium or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company shall promptly notify the
Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of any
series, other than the Company or the Trustee, to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of and
premium, if any, or interest, if any, on such Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company (or any
other obligor upon such Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such Securities; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent and furnish to the Trustee such
information as it possesses regarding the names and addresses of the
Persons entitled to such sums.
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The Company may at any time pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by the Company or such Paying Agent and, if so
stated in a Company Order delivered to the Trustee, in accordance with the
provisions of Article Seven; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and premium, if
any, or interest, if any, on any Security and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall be paid to the Company on Company Request, or, if then held by the
Company, shall be discharged from such trust; and, upon such payment or
discharge, the Holder of such Security shall, as an unsecured general creditor
and not as a Holder of an Outstanding Security, look only to the Company for
payment of the amount so due and payable and remaining unpaid, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such payment to the Company, may at the expense of the Company cause to be
mailed, on one occasion only, notice to such Holder that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such mailing, any unclaimed balance of such money then
remaining will be paid to the Company.
SECTION 604. CORPORATE EXISTENCE.
Subject to the rights of the Company under Article Eleven, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES.
The Company shall cause (or, with respect to property owned in common
with others, make reasonable effort to cause) all its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and shall cause (or, with respect to property owned in
common with others, make reasonable effort to cause) to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as,
in the judgment of the Company, may be necessary so that the business carried on
in connection therewith may be properly conducted; provided, however, that
nothing in this Section shall prevent the Company from discontinuing, or causing
the discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business.
SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than in each year, commencing ,
------------- ------------
, the Company shall deliver to the Trustee an Officer's Certificate which
- ----
need not comply with Section 102, executed by the principal executive officer,
the principal financial officer or the principal accounting officer of the
32
Company, as to (i) such officer's knowledge of the Company's compliance with all
conditions and covenants under this Indenture, such compliance to be determined
without regard to any period of grace or requirement of notice under this
Indenture and (ii) any other statements as may be required by the provisions of
Section 314(a) of the Trust Indenture Act.
SECTION 607. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in (a) Section 602 or any additional
covenant or restriction specified with respect to the Securities of any series,
as contemplated by Section 301, if before the time for such compliance the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities of all series with respect to which compliance with Section 602 or
such additional covenant or restriction is to be omitted, considered as one
class, shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition
and (b) Section 604, 605 or Article Eleven if before the time for such
compliance the Holders of at least a majority in principal amount of Securities
Outstanding under this Indenture shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such term,
provision or condition; but, in the case of (a) or (b), no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
SECTION 608. LIMITATION ON LIENS.
(a) Except as otherwise specified as contemplated by Section 301 for
Securities of any series, so long as any Securities of any series are
Outstanding, the Company shall not suffer any Lien (other than Permitted
Liens) to be created or to exist upon any property (other than Excepted
Property) of the Company, real, personal or mixed, of whatever kind or
nature and located in the State of Minnesota, whether owned at the date of
the execution and delivery of this Indenture or hereafter acquired, all
except as expressly contemplated in subsection (b) of this Section.
(b) The provisions of subsection (a) shall not prohibit the creation
or existence of any Lien on property of the Company which secures
indebtedness for borrowed money if either:
(1) the Company shall make effective provision whereby the
Outstanding Securities shall be secured equally and ratably with the
indebtedness secured by such Lien; or
(2) the Company shall deliver to the Trustee bonds, notes or
other evidences of indebtedness secured by such Lien (hereinafter
called "Secured Obligations") (i) in an aggregate principal amount
equal to the aggregate principal amount of each series then
Outstanding, (ii) maturing (or being subject to mandatory redemption)
on the Stated Maturities of such series and (iii) containing, in
33
addition to any mandatory redemption provisions applicable to all
Secured Obligations outstanding under such Lien and any mandatory
redemption provisions contained therein pursuant to clause (ii) above,
mandatory redemption provisions correlative to the provisions, if any,
for the mandatory redemption (pursuant to a sinking fund or otherwise)
of the Securities of such series or for the redemption thereof at the
option of the Holder, as well as a provision for mandatory redemption
upon an acceleration of the maturity of all Outstanding Securities of
such series following an Event of Default (such mandatory redemption
to be rescinded upon the rescission of such acceleration); it being
expressly understood that such Secured Obligations (x) may, but need
not, bear interest, (y) may, but need not, contain provisions for the
redemption thereof at the option of the issuer, any such redemption to
be made at a redemption price or prices not less than the principal
amount thereof and (z) shall be held by the Trustee for the benefit of
the Holders of all Securities of such series from time to time
Outstanding subject to such terms and conditions relating to surrender
to the Company, transfer restrictions, voting, application of payments
of principal and interest and other matters as shall be set forth in
an indenture supplemental hereto specifically providing for the
delivery to the Trustee of such Secured Obligations.
(c) If the Company shall elect either of the alternatives described in
subsection (b), the Company shall deliver to the Trustee:
(1) an amendment to this Indenture (i) together with evidence of
appropriate inter-creditor arrangements, whereby this Indenture shall
be secured by the Lien referred to in subsection (b) equally and
ratably with all other indebtedness secured by such Lien or (ii)
providing for the delivery to the Trustee of Secured Obligations;
(2) an Officer's Certificate (i) stating that, to the knowledge
of the signer, (x) no Event of Default has occurred and is continuing
and (y) no event has occurred and is continuing which entitles the
secured party under such Lien to accelerate the maturity of the
indebtedness outstanding thereunder and (y) stating the aggregate
principal amount of indebtedness issuable, and then proposed to be
issued, under and secured by such Lien;
(3) an Opinion of Counsel (i) if this Indenture is to be secured
by such Lien, to the effect that all Securities then Outstanding are
entitled to the benefit of such Lien equally and ratably with all
other indebtedness outstanding under such Lien or (ii) if Secured
Obligations are to be delivered to the Trustee, to the effect that
such Secured Obligations have been duly issued under such Lien and
constitute valid obligations, entitled to the benefit of such Lien
equally and ratably with all other indebtedness then outstanding under
such Lien.
(d) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
"EXCEPTED PROPERTY" means
34
(1) all cash on hand or in banks or other financial institutions,
deposit accounts, shares of stock, interests in general or limited
partnerships, bonds, notes, evidences of indebtedness and other
securities not hereafter paid or delivered to, deposited with or held
by the Trustee hereunder or required so to be;
(2) all contracts, leases, operating agreements, and other
agreements of whatsoever kind and nature; all contract rights, bills,
notes and other instruments and chattel paper (except to the extent
that any of the same constitute securities, in which case they are
separately excepted from this Indenture under clause (1) above); all
revenues, income and earnings, all accounts, accounts receivable and
unbilled revenues, and all rents, tolls, issues, product and profits,
claims, credits, demands and judgments; all governmental and other
licenses, permits, franchises, consents and allowances; all patents,
patent licenses and other patent rights, patent applications, trade
names, trademarks, copyrights, claims, credits, choses in action and
other intangible property and general intangibles including, but not
limited to, computer software;
(3) all automobiles, buses, trucks, truck cranes, tractors,
trailers and similar vehicles and movable equipment; all rolling
stock, rail cars and other railroad equipment; all vessels, boats,
barges and other marine equipment; all airplanes, helicopters,
aircraft engines and other flight equipment; all parts, accessories
and supplies used in connection with any of the foregoing; and all
personal property of such character that the perfection of a security
interest therein or other Lien thereon is not governed by the Uniform
Commercial Code as in effect in the jurisdiction in which such
property is located;
(4) all goods, stock in trade, wares, merchandise and inventory
held for the purpose of sale or lease in the ordinary course of
business; all materials, supplies, inventory and other items of
personal property which are consumable (otherwise than by ordinary
wear and tear) in their use in the operation of any property of the
Company; all fuel, including nuclear fuel, whether or not any such
fuel is in a form consumable in the operation of any property of the
Company, including separate components of any fuel in the forms in
which such components exist at any time before, during or after the
period of the use thereof as fuel; all hand and other portable tools
and equipment; all furniture and furnishings; and computers and data
processing, data storage, data transmission, telecommunications and
other facilities, equipment and apparatus, which, in any case, are
used primarily for administrative or clerical purposes or are
otherwise not necessary for the operation or maintenance of the
facilities, machinery, equipment or fixtures of the Company for (i)
the generation, transmission or distribution of electric energy, (ii)
the transmission, storage or distribution of gas or (iii) the
appropriation, storage, transmission or distribution of water;
(5) all coal, ore, gas, oil and other minerals and all timber,
and all rights and interests in any of the foregoing, whether or not
such minerals or timber shall have been mined or extracted or
otherwise separated from the land; and all electric energy, gas
35
(natural or artificial), steam, water and other products generated,
produced, manufactured, purchased or otherwise acquired by the
Company;
(6) all real property, leaseholds, gas rights, wells, gathering,
tap or other pipe lines, or facilities, equipment or apparatus, in any
case used or to be used primarily for the production or gathering of
natural gas;
(7) all hydroelectric plants and all lands, power sites, flowage
rights, water rights, riparian rights, permits, licenses, franchises,
privileges, leaseholds, water locations, water appropriations,
ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams,
dam sites, aqueducts, structures, facilities, equipment, or apparatus,
in any case used or to be used primarily in connection with the
Company's hydroelectric plants; and
(8) all leasehold interests held by the Company as lessee.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
encumbrance, easement, lease, reservation, restriction, servitude, charge or
similar right and any other lien of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any defect, irregularity, exception or limitation in record title.
"PERMITTED LIENS" means, as of any particular time, any of the
following:
(1) Liens for taxes, assessments and other governmental charges or
requirements which are not delinquent or which are being contested in good
faith by appropriate proceedings;
(2) mechanics', workmen's, repairmen's, materialmen's, warehousemen's
and carriers' Liens, other Liens incident to construction, Liens or
privileges of any employees of the Company for salary or wages earned, but
not yet payable, and other Liens, including without limitation Liens for
worker's compensation awards, arising in the ordinary course of business
for charges or requirements which are not delinquent or which are being
contested in good faith and by appropriate proceedings;
(3) Liens in respect of attachments, judgments or awards arising out
of judicial or administrative proceedings (i) in an aggregate amount not
exceeding Ten Million Dollars ($10,000,000) or (ii) with respect to which
the Company shall (x) in good faith be prosecuting an appeal or other
proceeding for review and with respect to which the Company shall have
secured a stay of execution pending such appeal or other proceeding or (y)
have the right to prosecute an appeal or other proceeding for review;
(4) easements, leases, reservations or other rights of others in, on,
over, and/or across, and laws, regulations and restrictions affecting, and
defects, irregularities, exceptions and limitations in title to, the
property of the Company or any part thereof; provided, however, that such
36
easements, leases, reservations, rights, laws, regulations, restrictions,
defects, irregularities, exceptions and limitations do not in the aggregate
materially impair the use by the Company of its property considered as a
whole for the purposes for which it is held by the Company;
(5) defects, irregularities, exceptions and limitations in title to
real property subject to rights-of-way in favor of the Company or otherwise
or used or to be used by the Company primarily for right-of-way purposes or
real property held under lease, easement, license or similar right;
provided, however, that (i) the Company shall have obtained from the
apparent owner or owners of such real property a sufficient right, by the
terms of the instrument granting such right-of-way, lease, easement,
license or similar right, to the use thereof for the purposes for which the
Company acquired the same, (ii) the Company has power under eminent domain
or similar statutes to remove such defects, irregularities, exceptions or
limitations or (iii) such defects, irregularities, exceptions and
limitations may be otherwise remedied without undue effort or expense; and
defects, irregularities, exceptions and limitations in title to flood
lands, flooding rights and/or water rights;
(6) Liens securing indebtedness or other obligations neither created,
assumed nor guaranteed by the Company nor on account of which it
customarily pays interest upon real property or rights in or relating to
real property acquired by the Company for the purpose of the transmission
or distribution of electric energy, gas or water, for the purpose of
telephonic, telegraphic, radio, wireless or other electronic communication
or otherwise for the purpose of obtaining rights-of-way;
(7) leases existing at the date of the execution and delivery of this
Indenture affecting properties owned by the Company at said date and
renewals and extensions thereof; and leases affecting such properties
entered into after such date or affecting properties acquired by the
Company after such date which, in either case, (i) have respective terms of
not more than ten (10) years (including extensions or renewals at the
option of the tenant) or (ii) do not materially impair the use by the
Company of such properties for the respective purposes for which they are
held by the Company;
(8) Liens vested in lessors, licensors, franchisors or permitters for
rent or other amounts to become due or for other obligations or acts to be
performed, the payment of which rent or the performance of which other
obligations or acts is required under leases, subleases, licenses,
franchises or permits, so long as the payment of such rent or other amounts
or the performance of such other obligations or acts is not delinquent or
is being contested in good faith and by appropriate proceedings;
(9) controls, restrictions, obligations, duties and/or other burdens
imposed by federal, state, municipal or other law, or by rules, regulations
or orders of Governmental Authorities, upon any property of the Company or
the operation or use thereof or upon the Company with respect to any of its
property or the operation or use thereof or with respect to any franchise,
grant, license, permit or public purpose requirement, or any rights
37
reserved to or otherwise vested in Governmental Authorities to impose any
such controls, restrictions, obligations, duties and/or other burdens;
(10) rights which Governmental Authorities may have by virtue of
franchises, grants, licenses, permits or contracts, or by virtue of law, to
purchase, recapture or designate a purchaser of or order the sale of, any
property of the Company, to terminate franchises, grants, licenses,
permits, contracts or other rights or to regulate the property and business
of the Company; and any and all obligations of the Company correlative to
any such rights;
(11) Liens required by law or governmental regulations (i) as a
condition to the transaction of any business or the exercise of any
privilege or license, (ii) to enable the Company to maintain self-insurance
or to participate in any funds established to cover any insurance risks,
(iii) in connection with workmen's compensation, unemployment insurance,
social security, any pension or welfare benefit plan or (iv) to share in
the privileges or benefits required for companies participating in one or
more of the arrangements described in clauses (ii) and (iii) above;
(12) Liens on property of the Company which are granted by the Company
to secure duties or public or statutory obligations or to secure, or serve
in lieu of, surety, stay or appeal bonds;
(13) rights reserved to or vested in others to take or receive any
part of any coal, ore, gas, oil and other minerals, any timber and/or any
electric capacity or energy, gas, water, steam and any other products,
developed, produced, manufactured, generated, purchased or otherwise
acquired by the Company or by others on property of the Company;
(14) (i) rights and interests of Persons other than the Company
arising out of contracts, agreements and other instruments to which the
Company is a party and which relate to the common ownership or joint use of
property; and (ii) all Liens on the interests of Persons other than the
Company in property owned in common by such Persons and the Company if and
to the extent that the enforcement of such Liens would not adversely affect
the interests of the Company in such property in any material respect;
(15) any restrictions on assignment and/or requirements of any
assignee to qualify as a permitted assignee and/or public utility or public
service corporation;
(16) any Liens which have been bonded for the full amount in dispute
or for the payment of which other adequate security arrangements have been
made;
(17) grants, by the Company of easements, ground leases or
rights-of-way in, upon, over and/or across the property or rights-of-way of
the Company for the purpose of roads, pipe lines, transmission lines,
distribution lines, communication lines, railways, removal of coal or other
minerals or timber, and other like purposes, or for the joint or common use
of real property, rights-of-way, facilities and/or equipment; provided,
38
however, that no such grant shall materially impair the use of the property
or rights-of-way for the purposes for which such property or rights-of-way
are held by the Company;
(18) Prepaid Liens;
(19) Purchase Money Liens and any other Liens existing or placed upon
property at the time of, or within one hundred eighty (180) days after, the
acquisition thereof by the Company, and any extensions, renewals and/or
replacements of any such Liens to secure any refundings, refinancings
and/or replacements of the indebtedness secured thereby; provided, however,
that no such Purchase Money Lien or other Lien shall extend to or cover any
property of the Company other than (i) the property so acquired and
improvements, extensions and additions to such property and renewals,
replacements and substitutions of or for such property or any part or parts
thereof and (ii) with respect to Purchase Money Liens, other property
subsequently acquired by the Company;
(20) Liens on property of the Company which secure indebtedness for
borrowed money which matures less than one year from the date of the
issuance or incurrence thereof and is not extendible at the option of the
issuer, and any extensions, renewals and/or replacements of any such Liens
to secure any refundings, refinancings and/or replacements of such
indebtedness by or with similar indebtedness;
(21) Liens created or assumed by the Company in connection with the
issuance of debt securities the interest on which is not included in gross
income for purposes of federal income taxation pursuant to Section 103 of
the Internal Revenue Code of 1986, as amended (or any successor provision
of law), for the purpose of financing, in whole or in part, the acquisition
or construction of property to be used by the Company, to the extent that
such Lien is required in connection with the issuance of such debt
securities either by applicable law or by the issuer of such debt
securities or is otherwise necessary in order to establish or maintain such
exclusion from gross income; and any extensions, renewals and/or
replacements of any such Liens to secure any refundings, refinancings
and/or replacement of such debt securities by or with similar securities;
(22) Liens securing indebtedness or lease obligations (i) which are
related to the construction or acquisition of property not previously owned
by the Company or (ii) which are related to the financing of a project
involving the development or expansion of property of the Company and (iii)
the obligee in respect of which has no recourse to the Company or any
property of the Company other than the property constructed or acquired
with the proceeds of such transaction or the project financed with the
proceeds of such transaction (or the proceeds thereof);
(23) Liens created by the Mortgage and Deed of Trust dated September
1, 1945 between the Company and Irving Trust Company (now The Bank of New
York) and Richard H. West (Douglas I. MacInnes, successor), as Trustees, as
39
heretofore and hereafter supplemented and amended (the "Mortgage"); and
Liens created by any other indenture hereafter executed by the Company
pursuant to which bonds issued under the Mortgage are or are to be
delivered to the trustee(s) under such indenture in a principal amount at
least equal to the principal amount of debt securities to be secured by
such indenture; and
(24) in addition to the Permitted Liens defined in clauses (a) through
(w) above, Liens on any property of the Company (other than Excepted
Property) to secure indebtedness for borrowed money (under circumstances
not otherwise excepted from the operation of this Section) in an aggregate
principal amount not exceeding 2.5% of the total assets of the Company and
its consolidated subsidiaries, as shown on the latest balance sheet of the
Company and its consolidated subsidiaries, audited by independent certified
public accountants, dated prior to the date of the issuance or incurrence
of such indebtedness.
"PREPAID LIEN" means any Lien securing indebtedness for the payment,
prepayment or redemption of which there shall have been irrevocably deposited in
trust with the trustee or other holder of such Lien moneys and/or Investment
Securities which (together with the interest reasonably expected to be earned
from the investment and reinvestment in Investment Securities of the moneys
and/or the principal of and interest on the Investment Securities so deposited)
shall be sufficient for such purpose; provided, however, that if such
indebtedness is to be redeemed or otherwise prepaid prior to the stated maturity
thereof, any notice requisite to such redemption or prepayment shall have been
given in accordance with the instrument creating such Lien or irrevocable
instructions to give such notice shall have been given to such trustee or other
holder. As used herein, the term "Investment Securities" means any of the
following obligations or securities on which neither the Company, any other
obligor on the Outstanding Securities nor any Affiliate of either is the
obligor: (a) Government Obligations; (b) interest bearing deposit accounts
(which may be represented by certificates of deposit) in any national or state
bank (which may include the Trustee or any Paying Agent) or savings and loan
association which has outstanding securities rated by a nationally recognized
rating organization in either of the two (2) highest rating categories (without
regard to modifiers) for short term securities or in any of the three (3)
highest rating categories (without regard to modifiers) for long term
securities; (c) bankers' acceptances drawn on and accepted by any commercial
bank (which may include the Trustee or any Paying Agent) which has outstanding
securities rated by a nationally recognized rating organization in either of the
two (2) highest rating categories (without regard to modifiers) for short term
securities or in any of the three (3) highest rating categories (without regard
to modifiers) for long term securities; (d) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, any State or Territory of the United States or the District of
Columbia, or any political subdivision of any of the foregoing, which are rated
by a nationally recognized rating organization in either of the two (2) highest
rating categories (without regard to modifiers) for short term securities or in
any of the three (3) highest rating categories (without regard to modifiers) for
long term securities; (e) bonds or other obligations of any agency or
instrumentality of the United States; (f) corporate debt securities which are
rated by a nationally recognized rating organization in either of the two (2)
highest rating categories (without regard to modifiers) for short term
securities or in any of the three (3) highest rating categories (without regard
to modifiers) for long term securities; (g) repurchase agreements with respect
40
to any of the foregoing obligations or securities with any banking or financial
institution (which may include the Trustee or any Paying Agent) which has
outstanding securities rated by a nationally recognized rating organization in
either of the two (2) highest rating categories (without regard to modifiers)
for short term securities or in any of the three (3) highest rating categories
(without regard to modifiers) for long term securities; (h) securities issued by
any regulated investment company (including any investment company for which the
Trustee or any Paying Agent is the advisor), as defined in Section 851 of the
Internal Revenue Code of 1986, as amended, or any successor section of such Code
or successor federal statute, provided that the portfolio of such investment
company is limited to obligations or securities of the character and investment
quality contemplated in clauses (a) through (f) above and repurchase agreements
which are fully collateralized by any of such obligations or securities; and (i)
any other obligations or securities which may lawfully be purchased by the
Trustee in its capacity as such.
"PURCHASE MONEY LIEN" means, with respect to any property being
acquired by the Company, a Lien on such property which
(1) is taken or retained by the transferor of such property to secure
all or part of the purchase price thereof;
(2) is granted to one or more Persons other than the transferor which,
by making advances or incurring an obligation, give value to enable the
grantor of such Lien to acquire rights in or the use of such property;
(3) is held by a trustee or agent for the benefit of one or more
Persons described in clause (a) or (b) above, provided that such Lien may
be held, in addition, for the benefit of one or more other Persons which
shall have theretofore given, or may thereafter give, value to or for the
benefit or account of the grantor of such Lien for one or more other
purposes; or
(4) otherwise constitutes a purchase money mortgage or a purchase
money security interest under applicable law;
and, without limiting the generality of the foregoing, for purposes of this
Indenture, the term Purchase Money Lien shall be deemed to include any Lien
described above whether or not such Lien (i) shall permit the issuance or other
incurrence of additional indebtedness secured by such Lien on such property,
(ii) shall permit the subjection to such Lien of additional property and the
issuance or other incurrence of additional indebtedness on the basis thereof
and/or (iii) shall have been granted prior to the acquisition of such property,
shall attach to or otherwise cover property other than the property being
acquired and/or shall secure obligations issued prior and/or subsequent to the
issuance of the obligations delivered in connection with such acquisition.
41
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. DEFEASANCE.
Any Security or Securities, or any portion of the principal amount
thereof, shall be deemed to have been paid for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be deemed to
have been satisfied and discharged, if there shall have been irrevocably
deposited with the Trustee or any Paying Agent (other than the Company), in
trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity of such
Securities or portions thereof, Government Obligations, which shall not
contain provisions permitting the redemption or other prepayment thereof at
the option of the issuer thereof, the principal of and the interest on
which when due, without any regard to reinvestment thereof, will provide
moneys which, together with the money, if any, deposited with or held by
the Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof on or prior to
Maturity; provided, however, that in the case of the provision for payment or
redemption of less than all the Securities of any series, such Securities or
portions thereof shall have been selected by the Trustee as provided herein and,
in the case of a redemption, the notice requisite to the validity of such
redemption shall have been given or irrevocable authority shall have been given
by the Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the Company shall have
delivered to the Trustee and such Paying Agent:
(x) if such deposit shall have been made prior to the Maturity of
such Securities, a Company Order stating that the money and Government
Obligations deposited in accordance with this Section shall be held in
trust, as provided in Section 703; and
(y) if Government Obligations shall have been deposited, an
Opinion of Counsel that the obligations so deposited constitute
Government Obligations and do not contain provisions permitting the
redemption or other prepayment at the option of the issuer thereof,
and an opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the effect that the
requirements set forth in clause (b) above have been satisfied; and
(z) if such deposit shall have been made prior to the Maturity of
such Securities, an Officer's Certificate stating the Company's
intention that, upon delivery of such Officer's Certificate, its
42
indebtedness in respect of such Securities or portions thereof will
have been satisfied and discharged as contemplated in this Section.
Upon the deposit of money or Government Obligations, or both, in
accordance with this Section, together with the documents required by clauses
(x), (y) and (z) above, the Trustee shall, upon receipt of a Company Request,
acknowledge in writing that the Security or Securities or portions thereof with
respect to which such deposit was made are deemed to have been paid for all
purposes of this Indenture and that the entire indebtedness of the Company in
respect thereof has been satisfied and discharged as contemplated in this
Section. In the event that all of the conditions set forth in the preceding
paragraph shall have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate specified in
clause (z) shall not have been delivered, such Securities or portions thereof
shall nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof shall
nevertheless be no longer entitled to the benefits of this Indenture or of any
of the covenants of the Company under Article Six (except the covenants
contained in Sections 602 and 603) or any other covenants made in respect of
such Securities or portions thereof as contemplated by Section 301, but the
indebtedness of the Company in respect of such Securities or portions thereof
shall not be deemed to have been satisfied and discharged prior to Maturity for
any other purpose, and the Holders of such Securities or portions thereof shall
continue to be entitled to look to the Company for payment of the indebtedness
represented thereby; and, upon Company Request, the Trustee shall acknowledge in
writing that such Securities or portions thereof are deemed to have been paid
for all purposes of this Indenture.
If payment at Stated Maturity of less than all of the Securities of
any series is to be provided for in the manner and with the effect provided in
this Section, the Security Registrar shall select such Securities, or portions
of principal amount thereof, in the manner specified by Section 403 for
selection for redemption of less than all the Securities of a series.
In the event that Securities which shall be deemed to have been paid
for purposes of this Indenture, and, if such is the case, in respect of which
the Company's indebtedness shall have been satisfied and discharged, all as
provided in this Section do not mature and are not to be redeemed within the 60
day period commencing with the date of the deposit of moneys or Government
Obligations, as aforesaid, the Company shall, as promptly as practicable, give a
notice, in the same manner as a notice of redemption with respect to such
Securities, to the Holders of such Securities to the effect that such deposit
has been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to have been paid
for purposes of this Indenture, as aforesaid, the obligations of the Company and
the Trustee in respect of such Securities under Sections 304, 305, 306, 404, 503
(as to notice of redemption), 602, 603, 907 and 915 and this Article Seven shall
survive.
The Company shall pay, and shall indemnify the Trustee or any Paying
Agent with which Government Obligations shall have been deposited as provided in
this Section against, any tax, fee or other charge imposed on or assessed
against such Government Obligations or the principal or interest received in
respect of such Government Obligations, including, but not limited to, any such
tax payable by any entity deemed, for tax purposes, to have been created as a
result of such deposit.
43
Anything herein to the contrary notwithstanding, (a) if, at any time
after a Security would be deemed to have been paid for purposes of this
Indenture, and, if such is the case, the Company's indebtedness in respect
thereof would be deemed to have been satisfied or discharged, pursuant to this
Section (without regard to the provisions of this paragraph), the Trustee or any
Paying Agent, as the case may be, shall be required to return the money or
Government Obligations, or combination thereof, deposited with it as aforesaid
to the Company or its representative under any applicable Federal or State
bankruptcy, insolvency or other similar law, such Security shall thereupon be
deemed retroactively not to have been paid and any satisfaction and discharge of
the Company's indebtedness in respect thereof shall retroactively be deemed not
to have been effected, and such Security shall be deemed to remain Outstanding
and (b) any satisfaction and discharge of the Company's indebtedness in respect
of any Security shall be subject to the provisions of the last paragraph of
Section 603.
SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of Section
701, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retroactively not to have been so paid, this
Indenture shall thereupon be deemed retroactively not to have been satisfied and
discharged, as aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 304,
305, 306, 404, 503 (as to notice of redemption), 602, 603, 907 and 915 and this
Article Seven shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall assign, transfer and turn over to the Company,
subject to the lien provided by Section 907, any and all money, securities and
other property then held by the Trustee for the benefit of the Holders of the
Securities other than money and Government Obligations held by the Trustee
pursuant to Section 703 and shall execute and deliver to the Company such
instruments as, in the judgment of the Company, shall be necessary, desirable or
appropriate to effect or evidence the satisfaction and discharge of this
Indenture.
SECTION 703. APPLICATION OF TRUST MONEY.
Neither the Government Obligations nor the money deposited pursuant to
Section 701, nor the principal or interest payments on any such Government
Obligations, shall be withdrawn or used for any purpose other than, and shall be
held in trust for, the payment of the principal of and premium, if any, and
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interest, if any, on the Securities or portions of principal amount thereof in
respect of which such deposit was made, all subject, however, to the provisions
of Section 603; provided, however, that, so long as there shall not have
occurred and be continuing an Event of Default any cash received from such
principal or interest payments on such Government Obligations, if not then
needed for such purpose, shall, to the extent practicable, be invested in
Government Obligations of the type described in clause (b) in the first
paragraph of Section 701 maturing at such times and in such amounts as shall be
sufficient to pay when due the principal of and premium, if any, and interest,
if any, due and to become due on such Securities or portions thereof on and
prior to the Maturity thereof, and interest earned from such reinvestment shall
be paid over to the Company as received, free and clear of any trust, lien or
pledge under this Indenture except the lien provided by Section 907; and
provided, further, that, so long as there shall not have occurred and be
continuing an Event of Default, any moneys held in accordance with this Section
on the Maturity of all such Securities in excess of the amount required to pay
the principal of and premium, if any, and interest, if any, then due on such
Securities shall be paid over to the Company free and clear of any trust, lien
or pledge under this Indenture except the lien provided by Section 907; and
provided, further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this Section shall
be held until such Event of Default shall have been waived or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events:
(a) failure to pay interest, if any, on any Security of such series
within 30 days after the same becomes due and payable; or
(b) failure to pay the principal of or premium, if any, on any
Security of such series when due and payable whether at Maturity, upon
redemption or otherwise; or
(c) failure to perform or breach of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a default in
the performance of which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other
than such series) for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 33% in principal amount
of the Outstanding Securities of such series, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder, unless the Trustee, or the
Trustee and the Holders of a principal amount of Securities of such series
not less than the principal amount of Securities the Holders of which gave
such notice, as the case may be, shall agree in writing to an extension of
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such period prior to its expiration; provided, however, that the Trustee,
or the Trustee and the Holders of such principal amount of Securities of
such series, as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by the Company
within such period and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the premises of (1) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for the Company or for any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any such decree
or order for relief or any such other decree or order shall have remained
unstayed and in effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in a case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the authorization of such action by the Board of Directors; or
(f) any other Event of Default specified with respect to Securities of
such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENTIf an Event of
Default due to the default in payment of principal of, or interest on, any
series of Securities or due to the default in the performance or breach of any
other covenant or warranty of the Company applicable to the Securities of such
series but not applicable to all Outstanding Securities shall have occurred and
be continuing, either the Trustee or the Holders of not less than 33% in
principal amount of the Securities of such series may then declare the principal
amount (or, if any of the Securities of such series are Discount Securities,
such portion of the principal amount as may be specified in the terms thereof as
contemplated by Section 301) of all Securities of such series and interest
accrued thereon to be due and payable immediately. If an Event of Default due to
default in the performance of any other of the covenants or agreements herein
applicable to all Outstanding Securities or an Event of Default specified in
Section 801(d) or (e) shall have occurred and be continuing, either the Trustee
or the Holders of not less than 33% in principal amount of all Securities then
Outstanding (considered as one class), and not the Holders of the Securities of
any one of such series, may declare the principal amount (or, if any of the
Securities are Discount Securities, such portion of the principal amount as may
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be specified in the terms thereof as contemplated by Section 301) of all
Outstanding Securities and interest accrued thereon to be due and payable
immediately. As a consequence of each such declaration (herein referred to as a
declaration of acceleration) with respect to Securities of any series, the
principal amount (or specified portion thereof in the case of Discount
Securities) of such Securities and interest accrued thereon shall become due and
payable immediately.
At any time after such a declaration of acceleration with respect to
Securities of any series shall have been made and before a judgment or decree
for payment of the money due shall have been obtained by the Trustee as
hereinafter in this Article provided, the Event or Events of Default giving rise
to such declaration of acceleration shall, without further act, be deemed to
have been waived, and such declaration and its consequences shall, without
further act, be deemed to have been rescinded and annulled, if
(a) the Company shall have paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest, if any, on all Securities of such
series;
(2) the principal of and premium, if any, on any Securities of
such series which have become due otherwise than by such declaration
of acceleration and interest, if any, thereon at the rate or rates
prescribed therefor in such Securities;
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest, if any, at the rate or rates
prescribed therefor in such Securities; and
(4) all amounts due to the Trustee under Section 907; and
(b) any other Event or Events of Default with respect to Securities of
such series, other than the nonpayment of the principal of Securities of
such series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default or
impair any right consequent thereon.
SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
If an Event of Default described in clause (a) or (b) of Section 801
shall have occurred and be continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of the Securities of the
series with respect to which such Event of Default shall have occurred, the
whole amount then due and payable on such Securities for principal and premium,
if any, and interest, if any, and, to the extent permitted by law, interest on
premium, if any, and on any overdue principal and interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover any amounts due to the Trustee under
Section 907. Unless otherwise specified pursuant to Section 301 with respect to
any series of Securities, the rate or rates at which Securities shall bear
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interest on overdue principal, premium, if any, and interest, if any, shall be,
to the extent permitted by law, the same rate or rates at which such Securities
shall bear interest prior to Maturity.
If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series shall
have occurred and be continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for amounts due to the Trustee under Section 907) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amounts due it under Section 907.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or premium, if
any, or interest, if any, upon presentation of the Securities in respect of
which or for the benefit of which such money shall have been collected and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
907;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal of and premium, if any, and interest, if any, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any,
and interest, if any, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
SECTION 807. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of
such series;
(b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of such series in respect of which an
Event of Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such proceeding;
and
(e) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of all
series in respect of which an Event of Default shall have occurred and be
continuing, considered as one class;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and (subject to Section
307) interest, if any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company, and Trustee and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and such Holder
shall continue as though no such proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 811. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
50
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES.
If an Event of Default shall have occurred and be continuing in
respect of a series of Securities, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series; provided, however,
that if an Event of Default shall have occurred and be continuing with respect
to more than one series of Securities, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all such series, considered as
one class, shall have the right to make such direction, and not the Holders of
the Securities of any one of such series; and provided, further, that such
direction shall not be in conflict with any rule of law or with this Indenture.
The Trustee may take any other action, deemed proper by the Trustee, which is
not inconsistent with any such direction. Before proceeding to exercise any
right or power hereunder at the direction of such Holders, the Trustee shall be
entitled to receive from such Holders reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in compliance
with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default
(a) in the payment of the principal of or premium, if any, or
interest, if any, on any Security of such series, or
(b) in respect of a covenant or provision hereof which under Section
1202 cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any and
all Events of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS.
The Company and the Trustee agree, and each Holder by his acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
51
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; all in the
manner, to the extent and except as otherwise provided in the Trust Indenture
Act; but the provisions of this Section shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the Outstanding Securities of all series in
respect of which such suit may be brought, considered as one class, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of or premium, if any, or interest, if any, on any Security on or
after the Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it 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.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee in the
Trust Indenture Act and no implied covenants or obligations shall be read
into this Indenture against the Trustee. For purposes of Sections 315(a)
and 315(c) of the Trust Indenture Act, the term "default" is hereby defined
as an Event of Default which has occurred and is continuing.
(b) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture to the
contrary, the duties and responsibilities of the Trustee under this
Indenture shall be subject to the protections, exculpations and limitations
on liability afforded to an indenture trustee under the provisions of the
Trust Indenture Act. For the purposes of Sections 315(b)(2) and 315(d)(2)
of the Trust Indenture Act, the term "responsible officer" is hereby
defined as a Responsible Officer and the chairman or vice chairman of the
board of directors, the chairman or vice chairman of the executive
committee of the board of directors, the president, any vice president, any
assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
52
trust officer or assistant trust officer, the controller and any assistant
controller of the Trustee, or any other officer of the Trustee customarily
performing functions similar to those performed by a Responsible Officer or
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 902. NOTICE OF DEFAULTS.
The Trustee shall give notice of any default hereunder with respect to
the Securities of any series to the Holders of Securities of such series in the
manner and to the extent required to do so by the Trust Indenture Act, unless
such default shall have been cured or waived; provided, however, that in the
case of any default of the character specified in Section 801(c), no such notice
to Holders shall be given until at least 45 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time, or both, would become, an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 901 and to the applicable
provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
53
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any Holder pursuant to this Indenture, unless such Holder shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall (subject to applicable legal requirements) be entitled to examine,
during normal business hours, the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be charged with knowledge of any default or
Event of Default, as the case may be, with respect to the Securities of any
series for which it is acting as Trustee unless either (1) a Responsible
Officer of the Trustee shall have actual knowledge of the default or Event
of Default, as the case may be, or (2) written notice of such default or
Event of Default, as the case may be, shall have been given to the Trustee
by the Company, any other obligor on such Securities or by any Holder of
such Securities; and
(i) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES.
Each of the Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 908 and 913, may otherwise deal with the Company with the same rights
it would have if it were not the Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
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SECTION 906. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds, except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
expressly provided herein or otherwise agreed with, and for the sole benefit of,
the Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT.
The Company shall
(a) pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except to the extent
that any such expense, disbursement or advance may be attributable to the
Trustee's negligence, wilful misconduct or bad faith; and
(c) indemnify the Trustee for, and hold it harmless from and against,
any loss, liability or expense reasonably incurred by it arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder or the performance of its duties hereunder, including the
reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence, wilful misconduct, bad
faith or breach of its obligations under this Indenture.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such other than
property and funds held in trust under Section 703 (except as otherwise provided
in Section 703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence, wilful misconduct
or bad faith of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
In addition to the rights provided to the Trustee pursuant to the
provisions of the immediately preceding paragraph of this Section 907, when the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 801(d) or Section 801(e), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section 907 shall survive the termination of
this Indenture.
55
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting interest within
the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the effect,
and subject to the conditions, provided in the Trust Indenture Act and this
Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to
the extent permitted thereby, the Trustee, in its capacity as trustee in respect
of the Securities of any series, shall not be deemed to have a conflicting
interest arising from its capacity as trustee in respect of the Securities of
any other series.
SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either case, qualified and eligible under this Article and the Trust
Indenture Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 911.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 911
shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
56
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 908 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder for at least six months, or
(2) the Trustee shall cease to be eligible under Section 909 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or (y) subject to Section 814, any Holder
who has been a bona fide Holder for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause
(other than as contemplated in clause (y) in subsection (d) of this
Section), with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee
or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of
any particular series) and shall comply with the applicable requirements of
Section 911. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 911,
become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 911, any Holder who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
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(f) So long as no event which is, or after notice or lapse of time, or
both, would become, an Event of Default shall have occurred and be
continuing, and except with respect to a Trustee appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a successor
Trustee, effective as of a date specified therein, and (ii) an instrument
of acceptance of such appointment, effective as of such date, by such
successor Trustee in accordance with Section 911, the Trustee shall be
deemed to have resigned as contemplated in subsection (b) of this Section,
the successor Trustee shall be deemed to have been appointed by the Company
pursuant to subsection (e) of this Section and such appointment shall be
deemed to have been accepted as contemplated in Section 911, all as of such
date, and all other provisions of this Section and Section 911 shall be
applicable to such resignation, appointment and acceptance except to the
extent inconsistent with this subsection (f).
(g) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the Security Register. Each notice shall include the
name of the successor Trustee with respect to the Securities of such series
and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of all series, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all sums owed to it,
execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
58
is not retiring shall continue to be vested in the retiring Trustee and (3)
shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee, upon payment of all sums owed to it, shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such successor
Trustee all such rights, powers and trusts referred to in subsection (a) or
(b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any
other obligor upon the Securities (other than by reason of a relationship
described in Section 311(b) of the Trust Indenture Act), the Trustee shall be
subject to any and all applicable provisions of the Trust Indenture Act
regarding the collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
59
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal
requirements of any applicable jurisdiction, the Company and the Trustee shall
have power to appoint, and, upon the written request of the Trustee or of the
Holders of at least 33% in principal amount of the Securities then Outstanding,
the Company shall for such purpose join with the Trustee in the execution and
delivery of all instruments and agreements necessary or proper to appoint, one
or more Persons approved by the Trustee either to act as co-trustee, jointly
with the Trustee, or to act as separate trustee, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such Person
or Persons, in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section.
If the Company does not join in such appointment within 15 days after the
receipt by it of a request so to do, or if an Event of Default shall have
occurred and be continuing, the Trustee alone shall have power to make such
appointment.
Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed, acknowledged
and delivered by the Company.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following conditions:
(a) the Securities shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised
solely, by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of
any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in which
60
event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section,
and, if an Event of Default shall have occurred and be continuing, the
Trustee shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Company. Upon
the written request of the Trustee, the Company shall join with the Trustee
in the execution and delivery of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee, or any other such
trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to the Securities of one or more series, which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issuance and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States, any State or territory thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
61
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
The provisions of Sections 308, 904 and 905 shall be applicable to
each Authenticating Agent.
If an appointment with respect to the Securities of one or more series
shall be made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
---------------------------------------
As Trustee
By
-------------------------------------
As Authenticating
Agent
By
-------------------------------------
Authorized Signatory
If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an Opinion of
62
Counsel), shall appoint, in accordance with this Section and in accordance with
such procedures as shall be acceptable to the Trustee, an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.
ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS.
Semiannually, not later than and in each year,
------ ----------
commencing , , and at such other times as the Trustee may request in
------ ----
writing, the Company shall furnish or cause to be furnished to the Trustee
information as to the names and addresses of the Holders, and the Trustee shall
preserve such information and similar information received by it in any other
capacity and afford to the Holders access to information so preserved by it, all
to such extent, if any, and in such manner as shall be required by the Trust
Indenture Act; provided, however, that no such list need be furnished so long as
the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY.
Not later than in each year, commencing , , the
------- ------- ----
Trustee shall transmit to the Holders, the Commission and each securities
exchange upon which any Securities are listed, a report, dated as of the next
preceding , with respect to any events and other matters described in
------
Section 313(a) of the Trust Indenture Act, in such manner and to the extent
required by the Trust Indenture Act. The Trustee shall transmit to the Holders,
the Commission and each securities exchange upon which any Securities are
listed, and the Company shall file with the Trustee (within 30 days after filing
with the Commission in the case of reports which pursuant to the Trust Indenture
Act must be filed with the Commission and furnished to the Trustee) and transmit
to the Holders, such other information, reports and other documents, if any, at
such times and in such manner, as shall be required by the Trust Indenture Act.
The Company shall notify the Trustee of the listing of any Securities on any
securities exchange or of the delisting thereof.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person,
or convey or otherwise transfer or lease its properties and assets substantially
as an entirety to any Person, unless
(a) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a Person organized and validly existing under the laws of
the United States, any State thereof or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and
63
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and premium, if any, and interest, if
any, on all Outstanding Securities and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, or other transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transactions have been
complied with.
SECTION 1102. SUCCESSOR PERSON SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company
into any other Person conveyance, or other transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 1101, the successor Person by such consolidation or into which the
Company is merged or the Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities Outstanding hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities, all as provided in Article Eleven; or
(b) to add one or more covenants of the Company or other provisions
for the benefit of all Holders or for the benefit of the Holders of, or to
remain in effect only so long as there shall be Outstanding, Securities of
one or more specified series, or to surrender any right or power herein
conferred upon the Company; or
(c) to add any additional Events of Default with respect to all or any
series of Securities Outstanding hereunder; or
64
(d) to change or eliminate any provision of this Indenture or to add
any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of the
Holders of Securities of any series (other than any series the terms of
which permit such change, elimination or addition) Outstanding on the date
of such indenture supplemental hereto in any material respect, such change,
elimination or addition shall become effective with respect to such series
only pursuant to the provisions of Section 1202 hereof or when no Security
of such series remains Outstanding; or
(e) to provide collateral security for all or part of the Securities;
or
(f) to establish the form or terms of Securities of any series as
contemplated by Sections 201 and 301; or
(g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and
replacement thereof and for the giving of notice to, and the solicitation
of the vote or consent of, the holders thereof, and for any and all other
matters incidental thereto; or
(h) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 911(b); or
(i) to provide for the procedures required to permit the Company to
utilize, at its option, a noncertificated system of registration for all,
or any series of, the Securities; or
(j) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of Securities
shall be payable, (2) all or any series of Securities may be surrendered
for registration of transfer, (3) all or any series of Securities may be
surrendered for exchange and (4) notices and demands to or upon the Company
in respect of all or any series of Securities and this Indenture may be
served; or
(k) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other changes to the provisions hereof or to add
other provisions with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall not
adversely affect the interests of the Holders of Securities of any series
in any material respect.
Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of this
Indenture or at any time thereafter shall be amended and
(x) if any such amendment shall require one or more changes to
any provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
65
changes or incorporate such provisions by reference or otherwise, this
Indenture shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the Company and the
Trustee may, without the consent of any Holders, enter into an
indenture supplemental hereto to effect or evidence such changes or
additional provisions; or
(y) if any such amendment shall permit one or more changes to, or
the elimination of, any provisions hereof which, at the date of the
execution and delivery hereof or at any time thereafter, are required
by the Trust Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent
of any Holders, enter into an indenture supplemental hereto to
evidence such amendment hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under this Indenture, considered as one class, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or modifying
in any manner the rights of the Holders of Securities of such series under the
Indenture; provided, however, that if there shall be Securities of more than one
series Outstanding hereunder and if a proposed supplemental indenture shall
directly affect the rights of the Holders of Securities of one or more, but less
than all, of such series, then the consent only of the Holders of a majority in
aggregate principal amount of the Outstanding Securities of all series so
directly affected, considered as one class, shall be required; and provided,
further, that no such supplemental indenture shall:
(a) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon (or the amount of any
installment of interest thereon) or change the method of calculating such
rate or reduce any premium payable upon the redemption thereof, or reduce
the amount of the principal of a Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 802, or change the coin or currency (or other property), in
which any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity of any Security (or, in the case of
redemption, on or after the Redemption Date), without, in any such case,
the consent of the Holder of such Security, or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of the Holders of which is required
for any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with any provision of this
Indenture or of any default hereunder and its consequences, or reduce the
requirements of Section 1304 for quorum or voting, without, in any such
66
case, the consent of the Holders of each Outstanding Security of such
series, or
(c) modify any of the provisions of this Section, Section 607 or
Section 813 with respect to the Securities of any series, except to
increase the percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause
shall not be deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant changes in this
Section, or the deletion of this proviso, in accordance with the
requirements of Sections 911(b) and 1201(h).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof. A waiver by a
Holder of such Holder's right to consent under this Section shall be deemed to
be a consent of such Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 901) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby. Any supplemental indenture permitted by this Article may
restate this Indenture in its entirety, and, upon the execution and delivery
thereof, any such restatement shall supersede this Indenture as theretofore in
effect for all purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
67
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE.
If the terms of any particular series of Securities shall have been
established in a Board Resolution or an Officer's Certificate as contemplated by
Section 301, and not in an indenture supplemental hereto, additions to, changes
in or the elimination of any of such terms may be effected by means of a
supplemental Board Resolution or Officer's Certificate, as the case may be,
delivered to, and accepted by, the Trustee; provided, however, that such
supplemental Board Resolution or Officer's Certificate shall not be accepted by
the Trustee or otherwise be effective unless all conditions set forth in this
Indenture which would be required to be satisfied if such additions, changes or
elimination were contained in a supplemental indenture shall have been
appropriately satisfied. Upon the acceptance thereof by the Trustee, any such
supplemental Board Resolution or Officer's Certificate shall be deemed to be a
"supplemental indenture" for purposes of Section 1204 and 1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of one or more, or all, series may
be called at any time and from time to time pursuant to this Article to make,
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series for any purpose specified in
Section 1301, to be held at such time and at such place in the Borough of
Manhattan, The City of New York, as the Trustee shall determine, or, with
the approval of the Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more
than 180 days prior to the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of the
Holders of Securities of one or more, or all, series by the Company or by
the Holders of 33% in aggregate principal amount of all of such series,
68
considered as one class, for any purpose specified in Section 1301, by
written request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have given the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in such other place as shall
be determined or approved by the Company, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one or more, or all,
series shall be valid without notice if the Holders of all Outstanding
Securities of such series are present in person or by proxy and if
representatives of the Company and the Trustee are present, or if notice is
waived in writing before or after the meeting by the Holders of all
Outstanding Securities of such series, or by such of them as are not
present at the meeting in person or by proxy, and by the Company and the
Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities of one
or more, or all, series a Person shall be (a) a Holder of one or more
Outstanding Securities of such series, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to attend any meeting of Holders of Securities of
any series shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of the series with respect to which a meeting
shall have been called as hereinbefore provided, considered as one class, shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of such series, considered as one class, the Persons
entitled to vote such specified percentage in principal amount of the
Outstanding Securities of such series, considered as one class, shall constitute
a quorum. In the absence of a quorum within one hour of the time appointed for
any such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for such period as may be determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for such
period as may be determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Except as provided by Section 1305(e),
notice of the reconvening of any meeting adjourned for more than 30 days shall
be given as provided in Section 1302(a) not less than 10 days prior to the date
69
on which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by Section 1202, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of the
series with respect to which such meeting shall have been called, considered as
one class; provided, however, that, except as so limited, any resolution with
respect to any action which this Indenture expressly provides may be taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of such series, considered as one
class, may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of such series, considered as one class.
Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities of the series with respect to which such meeting shall
have been held, whether or not present or represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS;
CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may be in person
or by proxy; and, to the extent permitted by law, any such proxy shall
remain in effect and be binding upon any future Holder of the Securities
with respect to which it was given unless and until specifically revoked by
the Holder or future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
such Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be proved
in the manner specified in Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section 104 or
other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1302(b), in
which case the Company or the Holders of Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting
70
shall be elected by vote of the Persons entitled to vote a majority in
aggregate principal amount of the Outstanding Securities of all series
represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one vote
for each $1 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting
shall have no right to vote, except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 1302 at which a quorum
is present may be adjourned from time to time by Persons entitled to vote a
majority in aggregate principal amount of the Outstanding Securities of all
series represented at the meeting, considered as one class; and the meeting
may be held as so adjourned without further notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the Holders
or of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities, of the series with respect to which the
meeting shall have been called, held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports of all
votes cast at the meeting. A record of the proceedings of each meeting of
Holders shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING.
In lieu of a vote of Holders at a meeting as hereinbefore contemplated
in this Article, any request, demand, authorization, direction, notice, consent,
waiver or other action may be made, given or taken by Holders by written
instruments as provided in Section 104.
71
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest, if any, on any Securities, or any part thereof, or
for any claim based thereon or otherwise in respect thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or agreement
under this Indenture, against any incorporator, stockholder, officer or
director, as such, past, present or future of the Company or of any predecessor
or successor corporation (either directly or through the Company or a
predecessor or successor corporation), whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Securities are solely corporate obligations, and that no
personal liability whatsoever shall attach to, or be incurred by, any
incorporator, stockholder, officer or director, past, present or future, of the
Company or of any predecessor or successor corporation, either directly or
indirectly through the Company or any predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants or agreements contained in this Indenture or in any
of the Securities or to be implied herefrom or therefrom, and that any such
personal liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of this Indenture and the
issuance of the Securities.
-------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
72
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
Minnesota Power, Inc.
By:
------------------------------------
, Trustee
----------------------
By:
------------------------------------
EXHIBIT 4(D)2
MINNESOTA POWER, INC.
OFFICER'S CERTIFICATE
, the of Minnesota Power, Inc. (the "Company"),
------------- ---------
pursuant to the authority granted in the Board Resolutions of the Company dated
, 200 , and Sections 201 and 301 of the Indenture defined herein, does
- -------- --
hereby certify to (the "Trustee"), as Trustee under the
--------------------
Indenture of the Company (For Unsecured Debt Securities) dated as of ,
--------
200 (the "Indenture") that:
--
1. The securities of the first series to be issued under the Indenture
shall be designated "[ % Series Senior Notes due ]
---- -- ----------
[Floating Rate Senior Notes due ]" (the "Senior Notes of the First
----
Series"). All capitalized terms used in this certificate which are not
defined herein but are defined in the form of Senior Notes of the
First Series attached hereto as Exhibit A shall have the meanings set
forth in such Exhibit A; all other capitalized terms used in this
certificate which are not defined herein but are defined in the
Indenture shall have the meanings set forth in the Indenture;
2. The Senior Notes of the First Series shall be limited in aggregate
principal amount to $ at any time Outstanding, except as
-----------
contemplated in Section 301(b) of the Indenture;
3. The Senior Notes of the First Series shall mature and the principal
shall be due and payable together with all accrued and unpaid interest
thereon on , ;
--------- ----
4. The Senior Notes of the First Series shall bear interest as provided
in the form set forth in Exhibit A hereto;
5. The principal (and premium, if any) and each installment of interest
on the Senior Notes of the First Series shall be payable at, and
registration and registration of transfers and exchanges in respect of
the Senior Notes of the First Series may be effected at, the office or
agency of the Company in The City of New York; provided that payment
of interest may be made at the option of the Company by check mailed
to the address of the persons entitled thereto. Notices and demands to
or upon the Company in respect of the Senior Notes of the First Series
may be served at the office or agency of the Company in The City of
New York. The Corporate Trust Office of the Trustee will initially be
the agency of the Company for such payment, registration and
registration of transfers and exchanges and service of notices and
demands and the Company hereby appoints the Trustee as its agent for
all such purposes; provided, however, that the Company reserves the
right to change, by one or more Officer's Certificates any such office
or agency and such agent. The Trustee will be the Security Registrar
and the Paying Agent for the Senior Notes of the First Series;
6. [ Redemption provisions, if any, should be inserted];
7. [The Senior Notes of the First Series will be originally issued in
global form payable to Cede & Co. and will, unless and until the
Senior Notes of the First Series are exchanged in whole or in part for
certificated Senior Notes of the First Series registered in the names
of various beneficial holders thereof (in accordance with the
conditions set forth in the legend appearing in the form of the Senior
Notes of the First Series, set forth in Exhibit A hereto), contain
restrictions on transfer, substantially as described in such form;]
8. No service charge shall be made for the registration of transfer or
exchange of the Senior Notes of the First Series; provided, however,
that the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection
with the exchange or transfer;
9. If the Company shall make any deposit of money and/or Government
Obligations with respect to any Senior Notes of the First Series, or
any portion of the principal amount thereof, as contemplated by
Section 701 of the Indenture, the Company shall not deliver an
Officer's Certificate described in clause (z) in the first paragraph
of said Section 701 unless the Company shall also deliver to the
Trustee, together with such Officer's Certificate, either:
(A) an instrument wherein the Company, notwithstanding the
satisfaction and discharge of its indebtedness in respect of the
Senior Notes of the First Series, shall assume the obligation (which
shall be absolute and unconditional) to irrevocably deposit with the
Trustee or Paying Agent such additional sums of money, if any, or
additional Government Obligations (meeting the requirements of Section
701), if any, or any combination thereof, at such time or times, as
shall be necessary, together with the money and/or Government
Obligations theretofore so deposited, to pay when due the principal of
and premium, if any, and interest due and to become due on such Senior
Notes of the First Series or portions thereof, all in accordance with
and subject to the provisions of said Section 701; provided, however,
that such instrument may state that the obligation of the Company to
make additional deposits as aforesaid shall be subject to the delivery
to the Company by the Trustee of a notice asserting the deficiency
accompanied by an opinion of an independent public accountant of
nationally recognized standing, selected by the Trustee, showing the
calculation thereof; or
(B) an Opinion of Counsel to the effect that, as a result of a
change in law occurring after the date of this certificate, the
Holders of such Senior Notes of the First Series, or portions of the
principal amount thereof, will not recognize income, gain or loss for
United States federal income tax purposes as a result of the
satisfaction and discharge of the Company's indebtedness in respect
thereof and will be subject to United States federal income tax on the
same amounts, at the same times and in the same manner as if such
satisfaction and discharge had not been effected.
10. The Senior Notes of the First Series shall have such other terms and
provisions as are provided in the form set forth in Exhibit A hereto,
and shall be issued in substantially such form;
11. The undersigned has read all of the covenants and conditions contained
in the Indenture relating to the issuance of the Senior Notes of the
First Series and the definitions in the Indenture relating thereto and
in respect of which this certificate is made;
12. The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents
accompanying this certificate, and upon discussions by the undersigned
with officers and employees of the Company familiar with the matters
set forth herein;
2
13. In the opinion of the undersigned, he has made such examination or
investigation as is necessary to express an informed opinion whether
or not such covenants and conditions have been complied with; and
14. In the opinion of the undersigned, such conditions and covenants and
conditions precedent, if any (including any covenants compliance with
which constitutes a condition precedent) to the authentication and
delivery of the Senior Notes of the First Series requested in the
accompanying Company Order have been complied with.
3
IN WITNESS WHEREOF, I have executed this Officer's Certificate this
day of , 200 .
- ---- ---- --
4
NO.
---------------
CUSIP NO.
----------
[FORM OF FACE OF SENIOR NOTE]
[(SEE LEGEND AT THE END OF THIS SECURITY FOR
RESTRICTIONS ON TRANSFERABILITY AND CHANGE OF FORM)]
MINNESOTA POWER, INC.
[ % SENIOR NOTES, DUE , ] [FLOATING RATE SENIOR NOTES DUE ]
--- --------- ---- ---
MINNESOTA POWER, INC., a corporation duly organized and existing under
the laws of the State of Minnesota (herein referred to as the "Company", which
term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to [Cede & Co.] or
registered assigns, the principal sum of Dollars on
--------------------
, and to pay interest on said principal sum, from ,
- ------------ -----------
200 , or from the most recent Interest Payment Date to which interest has been
--
paid or duly provided for, [semi-annually on and of each year,
---- ----
commencing , 200 , at the rate of % per annum] [quarterly on
----------- -- ----
, , and of each year, commencing , at the
- ------ ------- ------- ------- --------
per annum interest rate determined by ] until the principal hereof is
---------
paid or made available for payment. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. Interest on the Securities of this series will accrue from
, 200 , to the first Interest Payment Date, and thereafter will
- ----------- --
accrue from the last Interest Payment Date to which interest has been paid or
duly provided for. In the event that any Interest Payment Date is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of such delay) with the same force and effect as if made on
the Interest Payment Date. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be a day preceding [the 15th day of the calendar
month next preceding] such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture referred to on the reverse hereof.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in The City of New York in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that, at the option of the Company, interest
on this Security may be paid by check mailed to the address of the person
entitled thereto, as such address shall appear on the Security Register.
A-1
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
MINNESOTA POWER, INC.
By:
-------------------------------------
ATTEST:
- -----------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
, as Trustee
----------------------------
By:
-------------------------------------
Authorized Signatory
A-2
[FORM OF REVERSE OF SENIOR NOTE]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of , 200 (herein, together with any
---- --
amendments thereto, called the "Indenture", which term shall have the meaning
assigned to it in such instrument), between the Company and , as
----------------
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture, including
the Board Resolutions and Officer's Certificate filed with the Trustee on
, 200 creating the series designated on the face hereof, for a
- ----------- --
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $ .
-----------
[Formula for calculation of interest, if applicable, should be
inserted]
[Redemption provisions, if any, should be inserted]
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security upon compliance with certain conditions set
forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of a majority in aggregate principal
amount of the Securities of all series at the time Outstanding in respect of
which an Event of Default shall have occurred and be continuing shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of Securities of all series at the time Outstanding in respect
of which an Event of Default shall have occurred and be continuing a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
A-3
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor and of authorized denominations,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the absolute
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-4
[LEGEND
Unless and until this Security is exchanged in whole or in part for
certificated Securities registered in the names of the various beneficial
holders hereof as then certified to the Trustee by The Depository Trust Company
(55 Water Street, New York, New York) or its successor (the "Depositary"), this
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Unless this certificate is presented by an authorized representative
of the Depositary to the Company or its agent for registration of transfer,
exchange or payment, and any certificate to be issued is registered in the name
of Cede & Co., or such other name as requested by an authorized representative
of the Depositary and any amount payable thereunder is made payable to Cede &
Co., or such other name, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.
This Security may be exchanged for certificated Securities registered
in the names of the various beneficial owners hereof if (a) the Depositary is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, or (b) the Company
elects to issue certificated Securities to beneficial owners. Any such exchange
shall be made upon receipt by the Trustee of a Company Order therefor and
certificated Securities of this series shall be registered in such names and in
such denominations as shall be certified to the Company and the Trustee by the
Depositary.]
A-5
EXHIBIT 5(A)
MINNESOTA POWER / 30 west superior street / duluth, minnesota 55802-2093 /
www.mnpower.com
Philip R. Halverson - vice president, general counsel and secretary
218-723-3964
fax 218-723-3960
e-mail phalverson@mnpower.com July 20, 2000
Minnesota Power, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Ladies and Gentlemen:
Referring to the proposed issuance and sale from time to time by
Minnesota Power, Inc. (Company) of one or more proposed new series of the
Company's first mortgage bonds (Bonds) and unsecured debt securities (Debt
Securities) in a principal amount not to exceed in the aggregate $400,000,000,
as contemplated in the registration statement on Form S-3 to be filed by the
Company with the Securities and Exchange Commission under the Securities Act of
1933, as amended, on or about the date hereof, I am of the opinion that:
1. The Company is a corporation validly organized and existing under
the laws of the State of Minnesota.
2. With respect to those Bonds which are to be issued at any one
time (Offered Bonds), all action necessary to make the Offered Bonds valid,
legal and binding obligations of the Company will have been taken when:
(a) The Minnesota Public Utilities Commission (MPUC) shall have
issued an order or orders authorizing the issuance and sale of
the Offered Bonds;
(b) At a meeting or meetings of the Company's Board of Directors or
Executive Committee of the Board of Directors (i) action shall
have been taken to approve and authorize (a) the issuance and
sale of the Offered Bonds, and (b) the execution and delivery of
an appropriate Supplemental Indenture to the Company's Mortgage
and Deed of Trust, dated as of September 1, 1945 (Mortgage), with
Irving Trust Company (now The Bank of New York) and Richard H.
West (Douglas J. MacInnes, successor), as Trustees, as
supplemented, and (ii) any other action necessary to the
consummation of the proposed issuance and sale of the Offered
Bonds shall have been taken;
(c) The aforementioned Supplemental Indenture shall have been duly
executed and delivered to the parties thereto; and
(d) The Offered Bonds shall have been issued and delivered for the
consideration contemplated in the registration statement and any
prospectus supplement relating to the Offered Bonds and in
accordance with the provisions of the Company's Mortgage, as
heretofore supplemented and to be further supplemented by the
aforementioned Supplemental Indenture.
3. With respect to those Debt Securities which are to be issued at
any one time (Offered Debt Securities), all requisite action necessary to
make the Offered Debt Securities valid, legal and binding obligations of
the Company shall have been taken when:
(a) The MPUC shall have issued an order or orders authorizing the
issuance and sale of the Offered Debt Securities;
(b) At a meeting or meetings of the Company's Board of Directors or
the Executive Committee of the Board of Directors (i) action
shall have been taken to approve and authorize (a) the issuance
and sale of the Offered Debt Securities, and (b) the execution
and delivery of an indenture (Indenture) pursuant to which the
Debt Securities are to be issued and an appropriate Officer's
Certificate (Certificate) under the Indenture and (ii) any other
action necessary to the consummation of the proposed issuance and
sale of the Offered Debt Securities shall have been taken;
(c) The Indenture shall have been duly executed and delivered by an
appropriate officer of the Company and by the trustee thereunder;
and
(d) The Certificate shall have been duly executed and delivered by an
appropriate officer of the Company; and
(e) The Offered Debt Securities shall have been duly executed,
authenticated, issued and delivered for the consideration
contemplated in the registration statement and any prospectus
supplement relating to the Offered Debt Securities and in
accordance with the provisions of the Indenture, as heretofore
supplemented and to be further supplemented by the aforementioned
Certificate.
I am a member of the Minnesota Bar and do not hold myself out as an
expert on the laws of any other jurisdiction. As to all matters of Minnesota
law, Thelen Reid & Priest LLP is hereby authorized to rely upon this opinion to
the same extent as if this opinion had been addressed to them.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. I also consent to the reference to me in the Prospectus
included in the Registration Statement under the captions "Experts" and "Legal
Opinions."
Sincerely,
/s/ Philip R. Halverson
Philip R. Halverson
2
EXHIBIT 5(B)
THELEN REID & PRIEST LLP
NEW YORK ATTORNEYS AT LAW
SAN FRANCISCO 40 WEST 57TH STREET
WASHINGTON, D.C. NEW YORK, N.Y. 10019-4097
LOS ANGELES TEL (212) 603-2000 FAX (212) 603-2001
SAN JOSE www. thelenreid.com
July 20, 2000
Minnesota Power, Inc.
30 West Superior Street
Duluth, Minnesota 55802
Ladies and Gentlemen:
Referring to the proposed issuance and sale from time to time by
Minnesota Power, Inc. (Company) of one or more proposed new series of the
Company's first mortgage bonds (Bonds) and unsecured debt securities (Debt
Securities) in a principal amount not to exceed in the aggregate $400,000,000,
as contemplated in the registration statement on Form S-3 to be filed by the
Company with the Securities and Exchange Commission under the Securities Act of
1933, as amended, on or about the date hereof, we are of the opinion that:
1. The Company is a corporation validly organized and existing under
the laws of the State of Minnesota.
2. With respect to those Bonds which are to be issued at any one
time (Offered Bonds), all action necessary to make the Offered Bonds valid,
legal and binding obligations of the Company will have been taken when:
(a) The Minnesota Public Utilities Commission (MPUC) shall have
issued an order or orders authorizing the issuance and sale of
the Offered Bonds;
(b) At a meeting or meetings of the Company's Board of Directors or
Executive Committee of the Board of Directors (i) action shall
have been taken to approve and authorize (a) the issuance and
sale of the Offered Bonds, and (b) the execution and delivery of
an appropriate Supplemental Indenture to the Company's Mortgage
and Deed of Trust, dated as of September 1, 1945 (Mortgage), with
Irving Trust Company (now The Bank of New York) and Richard H.
West (Douglas J. MacInnes, successor), as Trustees, as
supplemented, and (ii) any other action necessary to the
consummation of the proposed issuance and sale of the Offered
Bonds shall have been taken;
(c) The aforementioned Supplemental Indenture shall have been duly
executed and delivered to the parties thereto; and
(d) The Offered Bonds shall have been issued and delivered for the
consideration contemplated in the registration statement and any
prospectus supplement relating to the Offered Bonds and in
accordance with the provisions of the Company's Mortgage, as
heretofore supplemented and to be further supplemented by the
aforementioned Supplemental Indenture.
3. With respect to those Debt Securities which are to be issued at
any one time (Offered Debt Securities), all requisite action necessary to
make the Offered Debt Securities valid, legal and binding obligations of
the Company shall have been taken when:
(a) The MPUC shall have issued an order or orders authorizing the
issuance and sale of the Offered Debt Securities;
(b) At a meeting or meetings of the Company's Board of Directors or
the Executive Committee of the Board of Directors (i) action
shall have been taken to approve and authorize (a) the issuance
and sale of the Offered Debt Securities, and (b) the execution
and delivery of an indenture (Indenture) pursuant to which the
Debt Securities are to be issued and an appropriate Officer's
Certificate (Certificate) under the Indenture and (ii) any other
action necessary to the consummation of the proposed issuance and
sale of the Offered Debt Securities shall have been taken;
(c) The Indenture shall have been duly executed and delivered by an
appropriate officer of the Company and by the trustee thereunder;
and
(d) The Certificate shall have been duly executed and delivered by an
appropriate officer of the Company; and
(e) The Offered Debt Securities shall have been duly executed,
authenticated, issued and delivered for the consideration
contemplated in the registration statement and any prospectus
supplement relating to the Offered Debt Securities and in
accordance with the provisions of the Indenture, as heretofore
supplemented and to be further supplemented by the aforementioned
Certificate.
We are members of the New York Bar and do not hold ourselves out as
experts on the laws of the State of Minnesota. As to all matters governed by the
laws of the State of Minnesota, we have relied with your consent upon an opinion
of even date herewith addressed to you by Philip R. Halverson, Esq., Vice
President, General Counsel and Secretary of the Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to us in the Prospectus
included in the Registration Statement under the caption "Legal Opinions."
Very truly yours,
/S/ THELEN REID & PRIEST LLP
THELEN REID & PRIEST LLP
2
EXHIBIT 12
MINNESOTA POWER, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND
SUPPLEMENTAL RATIOS OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31,
-------------------------------------------------
SIX MONTHS
ENDED
JUNE 30,
1995 1996 1997 1998 1999 2000
--------- --------- --------- ---------- -------- ---------
(millions except ratios)
Income from Continuing Operations Per
Consolidated Statement of Income $ 61.9 $ 69.2 $ 77.6 $ 88.5 $ 68.0 $ 94.6
Add (Deduct)
Current Income Tax Expense 13.4 31.4 44.7 52.9 70.5 72.3
Deferred Income Tax Expense (Benefit) (11.3) (9.8) 3.2 2.7 (11.3) (12.2)
Deferred Investment Tax Credits (0.9) (2.0) (1.3) (1.6) (1.5) (0.7)
Undistributed Income From Less Than
50% Owned Equity Investments (9.1) (11.0) (13.9) (14.1) (0.6) -
Minority Interest 0.2 3.3 2.3 2.0 1.8 -
--------- --------- --------- ---------- -------- ---------
54.2 81.1 112.6 130.4 126.9 154.0
--------- --------- --------- ---------- -------- ---------
Fixed Charges
Interest on Long-Term Debt 45.7 52.4 50.4 48.5 48.4 25.3
Capitalized Interest 1.4 1.5 1.5 1.0 0.7 0.4
Other Interest Charges - Net 7.9 10.2 14.3 17.1 12.0 6.9
Interest Component of All Rentals 3.7 2.5 3.7 5.7 4.8 3.9
Distributions on Redeemable Preferred
Securities of Subsidiary - 4.7 6.0 6.0 6.0 3.0
--------- --------- --------- ---------- -------- ---------
Total Fixed Charges 58.7 71.3 75.9 78.3 71.9 39.5
--------- --------- --------- ---------- -------- ---------
Earnings Before Income Taxes and Fixed
Charges (Excluding Capitalized Interest)$ 111.5 $ 150.9 $ 187.0 $ 207.7 $ 198.1 $ 193.1
========= ========= ========= ========== ======== =========
Ratio of Earnings to Fixed Charges 1.90 2.12 2.46 2.65 2.76 4.89
========= ========= ========= ========== ======== =========
Earnings Before Income Taxes and Fixed
Charges (Excluding Capitalized Interest)$ 111.5 $ 150.9 $ 187.0 $ 207.7 $ 198.1 $ 193.1
Supplemental Charges 13.5 14.4 12.0 14.5 15.4 7.4
--------- --------- --------- ---------- -------- ---------
Earnings Before Income Taxes and Fixed
and Supplemental Charges (Excluding
Capitalized Interest) $ 125.0 $ 165.3 $ 199.0 $222.2 $ 213.5 $ 200.5
========= ========= ========= ========== ======== =========
Total Fixed Charges $ 58.7 $ 71.3 $ 75.9 $ 78.3 $ 71.9 $ 39.5
Supplemental Charges 13.5 14.4 12.0 14.5 15.4 7.4
--------- --------- --------- ---------- -------- ---------
Fixed and Supplemental Charges $ 72.2 $ 85.7 $ 87.9 $ 92.8 $ 87.3 $ 46.9
========= ========= ========= ========== ======== =========
Supplemental Ratio of Earnings to
Fixed Charges (1) 1.73 1.93 2.26 2.39 2.45 4.28
========= ========= ========= ========== ======== =========
- ------------------------
(1) The supplemental ratio of earnings to fixed charges includes Minnesota
Power's obligation under a contract with Square Butte Electric
Cooperative which extends through 2027, pursuant to which Minnesota
Power is entitled to approximately 71% of the output of a 455-megawatt
coal-fired generating unit. Minnesota Power is obligated to pay its pro
rata share of Square Butte's costs based on output entitlement from the
unit. Minnesota Power's payment obligation is suspended if Square Butte
fails to deliver any power, whether produced or purchased, for a period
of one year. Square Butte's fixed costs consist primarily of debt
service. Variable operating costs include the price of coal purchased
from BNI Coal, Ltd., under a long-term contract.
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 17, 2000, relating to the
financial statements and financial statement schedule, which appear in Minnesota
Power, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, MN
July 19, 2000
EXHIBIT 25(A)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------
-----------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One Wall Street, New York, New York 10286
(Address of principal executive offices) (Zip code)
-----------------
MINNESOTA POWER, INC.
(Exact name of obligor as specified in its charter)
Minnesota 41-0418150
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
30 West Superior Street
Duluth, Minnesota 55802
(Address of principal executive offices) (Zip code)
-----------------
FIRST MORTGAGE BONDS*
(Title of the indenture securities)
- ------------------------
*Specific title(s) to be determined in connection with sale(s) of First
Mortgage Bonds.
ITEM 1. GENERAL INFORMATION.*
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Superintendent of Banks of the 2 Rector Street, New York, N.Y. 10006
State of New York and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation 550 17th Street, N.W., Washington,
New York Clearing House Association D.C. 20429
New York, N.Y. 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 2.)
ITEM 16. LIST OF EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
ss.229.10(d).
1. - A copy of the Organization Certificate of The Bank of New
York (formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration
Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to
Form T-1 filed with Registration Statement No. 33-29637.)
4. - A copy of the existing By-laws of the Trustee. (Exhibit 4
to Form T-1 filed with Registration Statement No. 33-31019.)
6. - The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. - A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
- ------------------------
*Pursuant to General Instruction B, the Trustee has responded only to Items
1, 2 and 16 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
NOTE
Inasmuch as this Form T-1 is being filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 18th day of July, 2000.
THE BANK OF NEW YORK
By: STEPHEN J. GIURLANDO
------------------------------------
Stephen J. Giurlando
Vice President
-2-
EXHIBIT 7
(Page 1 of 3)
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 2000, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin...................................... $ 3,843,465
Interest-bearing balances.................................... 5,718,219
Securities:
Held-to-maturity securities.................................. 821,842
Available-for-sale securities................................ 5,134,756
Federal funds sold and Securities
purchased under agreements to resell......................... 2,498,315
Loans and lease financing
receivables:
Loans and leases, net of unearned
income..................................................... 40,912,488
LESS: Allowance for loan and
lease losses............................................... 580,924
LESS: Allocated transfer risk
reserve.................................................... 12,597
Loans and leases, net of unearned
income, allowance, and reserve............................. 40,318,967
Trading Assets................................................. 8,658,971
Premises and fixed assets (including
capitalized leases).......................................... 725,709
Other real estate owned........................................ 7,309
Investments in unconsolidated subsid-
iaries and associated companies.............................. 225,206
Customers' liability to this bank on
acceptances outstanding...................................... 932,029
Intangible assets.............................................. 1,273,011
Other assets................................................... 2,796,228
------------
Total assets................................................... $72,954,027
============
EXHIBIT 7
(Page 2 of 3)
LIABILITIES
- -----------
Deposits:
In domestic offices.......................................... $27,563,469
Noninterest-bearing.......................................... 12,099,757
Interest-bearing............................................. 15,463,712
In foreign offices, Edge and
Agreement subsidiaries, and IBFs............................. 27,705,718
Noninterest-bearing.......................................... 849,483
Interest-bearing............................................. 26,856,235
Federal funds purchased and Securities
sold under agreements to repurchase ......................... 1,560,406
Demand notes issued to the U.S.
Treasury..................................................... 68,017
Trading liabilities............................................ 2,708,747
Other borrowed money:
With remaining maturity of one year or less.................. 1,397,051
With remaining maturity of more than
one year through three years .............................. 351
With remaining maturity of more than
three years................................................ 31,080
Bank's liability on acceptances
executed and outstanding..................................... 932,905
Subordinated notes and debentures.............................. 1,652,000
Other liabilities.............................................. 3,511,774
------------
Total liabilities.............................................. 67,131,518
------------
EQUITY CAPITAL
- --------------
Common stock................................................... 1,135,284
Surplus........................................................ 866,947
Undivided profits and capital
reserves..................................................... 3,894,578
Net unrealized holding gains (losses)
on available-for-sale securities............................. (46,911)
Cumulative foreign currency
translation adjustments...................................... (27,389)
------------
Total equity capital........................................... 5,822,509
------------
Total liabilities and equity capital........................... $72,954,027
============
EXHIBIT 7
(Page 3 of 3)
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Gerald L. Hassell ) Directors
Alan R. Griffith )
EXHIBIT 25(B)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM T-2
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF AN INDIVIDUAL
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------
-----------------
DOUGLAS J. MACINNES
(Name of Trustee)
101 Barclay Street
New York, New York 10286
(Business Address, Street, City, State) (Zip Code)
-----------------
MINNESOTA POWER, INC.
(Exact name of obligor as specified in its charter)
Minnesota 41-0418150
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
30 West Superior Street
Duluth, Minnesota 55802
(Address of principal executive offices) (Zip code)
-----------------
FIRST MORTGAGE BONDS*
(Title of the indenture securities)
- ------------------------
*Specific title(s) to be determined in connection with sale(s) of First
Mortgage Bonds.
ITEM 1. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.*
ITEM 11. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility
None.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, I,
Douglas J. MacInnes, have signed this statement of eligibility in The City of
New York and State of New York, on the 18th day of July, 2000.
DOUGLAS J. MACINNES
------------------------------------
Douglas J. MacInnes
- ------------------------
*Pursuant to General Instruction B, the Trustee has responded only to Items
1 and 11 of this form since to the best of the knowledge of the Trustee the
obligor is not in default under any indenture under which the Trustee is a
trustee.
-2-