-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FwPVik9X5QOMvej1KP6/xB3bDRpcmV8z6531Ms+a/WVEXlvsjsVsVkQivqAPWVw0 ML/GcjR9P9LhQyRru3P9tA== 0000912057-96-019322.txt : 19960903 0000912057-96-019322.hdr.sgml : 19960903 ACCESSION NUMBER: 0000912057-96-019322 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19960830 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OTTER TAIL POWER CO CENTRAL INDEX KEY: 0000075129 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 410462685 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-11153 FILM NUMBER: 96624273 BUSINESS ADDRESS: STREET 1: 215 S CASCADE ST STREET 2: PO BOX 496 CITY: FERGUS FALLS STATE: MN ZIP: 56538-0496 BUSINESS PHONE: 2187398200 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1996. REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- OTTER TAIL POWER COMPANY (Exact name of registrant as specified in its charter) MINNESOTA 41-0462685 (State or other (I.R.S. Employer jurisdiction of incorporation Identification No.) or organization)
215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 (218) 739-8200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) -------------------------- A.E. ANDERSON Vice President, Finance 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 (218) 739-8200 (Name, address, including zip code, and telephone number, including area code, of agent for service) COPIES TO: GARY L. TYGESSON RICHARD W. ASTLE Dorsey & Whitney LLP Sidley & Austin Pillsbury Center South Suite 4300 220 South Sixth Street One First National Plaza Minneapolis, Minnesota 55402 Chicago, Illinois 60603
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS REGISTRANT SHALL DETERMINE BASED ON MARKET CONDITIONS. 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. / / 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. / / If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act of 1933, check the following box. / / CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE Debt Securities........................... $50,000,000(2) 100% $50,000,000 $17,242
(1) Estimated in accordance with Rule 457 solely for purposes of computing the registration fee. (2) Or, in the case of debt securities issued at an original issue discount, such greater principal amount as shall result in an aggregate offering price of the amount set forth above. 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 OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. PROSPECTUS SUBJECT TO COMPLETION, DATED AUGUST 30, 1996 $50,000,000 OTTER TAIL POWER COMPANY DEBT SECURITIES ------------------ Otter Tail Power Company (the "Company") may offer from time to time up to $50,000,000 aggregate initial offering price of its debt securities, including First Mortgage Bonds and unsecured notes, debentures or other evidences of indebtedness (collectively referred to as "Debt Securities"), in one or more series, at prices and on terms to be determined at the time of sale. The terms of the Debt Securities in respect of which this Prospectus is being delivered, including, where applicable, the series designation, the principal amount of the series, the maturity, the provisions for redemption and sinking fund payments and other provisions, together with the terms of offering of such Debt Securities, will be set forth in the supplement accompanying this Prospectus (the "Prospectus Supplement"). The Company may sell the Debt Securities to or through underwriters or dealers, directly to other purchasers or through agents. See "Plan of Distribution." The Prospectus Supplement will set forth the names of any underwriters, dealers or agents, any applicable commissions, discounts or allowances and the net proceeds to the Company from such sale. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is . AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at Seven World Trade Center, Suite 1300, New York, New York 10048 and 1400 Citicorp Center, 500 West Madison Street, Chicago, Illinois 60601. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. The Company has filed with the Commission a registration statement on Form S-3 with respect to the Debt Securities (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement, which may be inspected without charge at the Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of which may be obtained from the Commission at prescribed rates. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission under the Exchange Act (File No. 0-368) are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 1996. All other documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Debt Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained herein or in a document all or part of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and the Prospectus Supplement to the extent that a statement contained herein or therein or in any documents subsequently filed with the Commission which also is or is deemed to be incorporated by reference herein or therein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus or the Prospectus Supplement. The Company will provide without charge to any person to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (not including exhibits thereto unless such exhibits are specifically incorporated by reference into the information that the Registration Statement incorporates). Requests for such copies should be directed to Jay D. Myster, Secretary, Otter Tail Power Company, 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, telephone number: (218) 739-8200. 2 THE COMPANY The Company is an operating public utility engaged in the production, transmission, distribution and sale of electric energy in western Minnesota, eastern North Dakota and northeastern South Dakota. The territory served by the Company's electric utility operations is predominantly agricultural, including a part of the Red River Valley. By customer category, 52.2% of 1995 electric revenues was derived from commercial and industrial customers, 31.9% from residential customers and 15.9% from other sources, including municipalities, farms and power pools. The Company, through its subsidiaries, is also engaged in other businesses located in the upper midwest region of the United States which are referred to in this Prospectus as Health Services Operations, Manufacturing Operations and Other Business Operations. Health Services Operations consist of certain businesses acquired beginning in 1993, including a diagnostic medical imaging company, a management company for a number of diagnostic medical imaging companies, and a medical imaging company that sells and services diagnostic medical imaging equipment and associated supplies and accessories. Manufacturing Operations include businesses acquired beginning in 1990 in such areas as metal parts stamping and fabrication, agricultural equipment and plastic pipe extrusion. Other Business Operations include businesses involved in such areas as electrical and telephone construction contracting, radio broadcasting, waste incinerating and telephone/cable television utility. The Company derived approximately 38% of its consolidated operating revenues from these other businesses during 1995, approximately 31% during 1994 and approximately 27% during 1993. The Company was incorporated in 1907 under the laws of the State of Minnesota. Its principal executive office is located at 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, telephone number: (218) 739-8200. USE OF PROCEEDS The net proceeds to be received by the Company from the issue and sale of the Debt Securities offered hereby will be used to repay short-term and other indebtedness, to redeem one or more outstanding series of First Mortgage Bonds and/or Cumulative Preferred Shares and for general corporate purposes. See "Construction Program and Financing." CONSTRUCTION PROGRAM AND FINANCING The Company is continually expanding, replacing and improving its electric utility facilities. During 1995, the Company invested approximately $28,327,000 for additions to its electric utility properties. Capital expenditures of approximately $4,000,000 were made in Health Services Operations, $4,000,000 in Manufacturing Operations and $2,000,000 in Other Business Operations by Company subsidiaries during 1995. Total capital expenditures for the Company and its subsidiaries during the five-year period 1996-2000 are estimated to be approximately $171,000,000. Of this amount, $14,000,000 is for Health Services Operations, $9,000,000 for Manufacturing Operations and $7,000,000 for Other Business Operations. The Company estimates that during the five years 1996 through 2000 it will invest for electric utility construction approximately $141,000,000 (including allowance for funds used during construction). The Company continuously reviews options for increasing its generating capacity, but at this time has no firm plans for additional base load generating plant construction. The majority of electric utility expenditures for the five-year period 1996 through 2000 will be for work related to the Company's transmission and distribution system. The Company estimates that funds currently on hand, combined with funds internally generated in the next five years, will be sufficient to meet all sinking fund payments for First Mortgage Bonds and to provide for the majority of its 1996-2000 electric utility construction program expenditures. Additional short-term or long-term financing will be required in the period 1996-2000 in connection 3 with a portion of the Company's estimated capital project expenditures, the maturity of First Mortgage Bonds and a Long-Term Lease Obligation ($21,000,000), in the event the Company decides to refund or retire early any of its presently outstanding debt or Cumulative Preferred Shares or for other corporate purposes. The foregoing estimates of capital expenditures and funds internally generated may be subject to substantial changes due to unforeseen factors, such as changed economic conditions, competitive conditions, technological changes, new environmental and other governmental regulations, changed tax laws and rate regulation, and acquisitions by subsidiaries. RATIOS OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31, ----------------------------------------------------- 1991 1992 1993 1994 1995 --------- --------- --------- --------- --------- Ratios of Earnings to Fixed Charges..................................... 4.38 4.06 3.98 4.23 3.96 SIX MONTHS ENDED JUNE 30, -------------------- 1995 1996 --------- --------- Ratios of Earnings to Fixed Charges..................................... 4.04 4.10
For purposes of computing the ratio of earnings to fixed charges: (i) earnings consist of consolidated net income to which has been added total income tax expense and fixed charges; and (ii) fixed charges consist of interest on long-term debt and other interest charges and amortization of debt expense, premium and discount. DESCRIPTION OF FIRST MORTGAGE BONDS GENERAL If the Debt Securities are issued as First Mortgage Bonds, those First Mortgage Bonds will be issued in one or more series under the Company's Indenture of Mortgage dated as of July 1, 1936 to First Trust National Association (formerly named First Trust Company of Saint Paul and First Trust Company, Inc.) (the "corporate Trustee") and Louis S. Headley (James A. Ehrenberg having succeeded as individual Trustee), as Trustees (the "First Mortgage Indenture Trustees"), as supplemented by forty-five supplemental indentures (the "Prior Supplemental Indentures," the twenty-first of which, the "Revised Indenture," revised and restated the provisions of said Indenture of Mortgage as theretofore amended and supplemented), and as proposed to be further supplemented by each new supplemental indenture (a "New Supplemental Indenture") creating a new series of First Mortgage Bonds. Said Indenture of Mortgage, as so supplemented and as so to be supplemented, is herein called the "First Mortgage Indenture." As used herein, the term "New First Mortgage Bonds" refers to any new series of First Mortgage Bonds in respect of which this Prospectus is being delivered. The summaries of the First Mortgage Indenture set forth below do not purport to be complete and are subject to the detailed provisions of the First Mortgage Indenture, a copy of which is filed with the Commission as an exhibit to the Registration Statement and is incorporated in this section by reference. Capitalized terms used in this section which are not otherwise defined in this Prospectus shall have the meanings ascribed to them in the First Mortgage Indenture. Whenever particular provisions or terms defined in the First Mortgage Indenture are referred to in this section, such provisions or definitions are incorporated by reference as part of the statements made in this section, and such statements are qualified in their entirety by such reference. References to article and section numbers herein, unless otherwise indicated, are references to article and section numbers of the First Mortgage Indenture. TERMS OF NEW FIRST MORTGAGE BONDS Reference is made to the Prospectus Supplement for a description of the following terms and other information with respect to the New First Mortgage Bonds: (1) the designation and aggregate principal amount of the New First Mortgage Bonds; (2) the date on which the New First Mortgage Bonds will mature; (3) the rate per annum at which the New First Mortgage Bonds will bear interest and the date from which such interest will accrue; (4) the dates on which such interest will be payable; 4 and (5) any redemption provisions, sinking fund provisions or other specific terms applicable to the New First Mortgage Bonds. The holders of the outstanding First Mortgage Bonds do not have the right to tender such First Mortgage Bonds to the Company for repurchase upon the Company's becoming involved in a highly leveraged transaction or change of control involving the Company, and the Company does not currently intend to afford the holders of the New First Mortgage Bonds such a right. The New First Mortgage Bonds will be issued only in fully registered form, without coupons, in the denominations of $1,000 and any integral multiple thereof. The New First Mortgage Bonds will be exchangeable in the manner provided in the First Mortgage Indenture. No charge will be made by the Company for any exchange or transfer of New First Mortgage Bonds, other than for stamp taxes or other governmental charges, if any, applicable thereto. Principal of and any premium or interest on the New First Mortgage Bonds will be payable at the office of the corporate Trustee in St. Paul, Minnesota, except that interest may, at the option of the Company, be paid by checks or drafts payable to the registered holders of the New First Mortgage Bonds of such series mailed to such holders at their addresses appearing on the registry books of the corporate Trustee. The Company is not required to make transfers or exchanges of New First Mortgage Bonds for a period of 10 days next preceding any interest payment date for the New First Mortgage Bonds or any date for the selection of New First Mortgage Bonds to be redeemed. SINKING FUND The First Mortgage Indenture establishes a sinking fund into which the Company will deposit with the corporate Trustee on December 1 in each of the years that the New First Mortgage Bonds will be outstanding (commencing with the December 1 in the calendar year following the calendar year in which the New First Mortgage Bonds are issued except to the extent, if any, that the New First Mortgage Bonds will be issued to refund First Mortgage Bonds of a prior series) an amount equal to 1% of the greatest aggregate principal amount of the New First Mortgage Bonds at any time theretofore outstanding (after deducting the principal amount of any New First Mortgage Bonds refunded by the issuance of First Mortgage Bonds of another series), to be used not later than the following February 1 for the partial redemption of the New First Mortgage Bonds; provided, however, that such sinking fund requirement may be satisfied in whole or in part by surrendering to the corporate Trustee for cancellation the New First Mortgage Bonds reacquired by the Company at the amount which would have been required to effect on the following February 1 the redemption through the sinking fund of the New First Mortgage Bonds so delivered. Similar sinking funds have been established with respect to all series of First Mortgage Bonds now outstanding. (Section 8 of the Thirty-first, Forty-second and Forty-fourth Supplemental Indentures; Section 17 of the Thirty-ninth Supplemental Indenture; and Sections 8 and 17 of the Forty-third and Forty-fifth Supplemental Indentures.) DEPRECIATION REQUIREMENT The First Mortgage Indenture establishes a depreciation requirement equivalent to 2.5% per annum of the average amount of depreciable fundable property for the period for which the requirement is calculated. Provision is made for the deposit each year with the corporate Trustee of cash equal to the excess of (i) the depreciation requirement for the preceding year over (ii) the aggregate of amounts expended for fundable property during the preceding year limited, however, to the cost of fundable property retired during such preceding year. In lieu of depositing cash, the Company may elect to utilize net fundable property not theretofore utilized for any purpose of the First Mortgage Indenture. The Company is entitled to satisfy its depreciation requirement for any year by the application of any depreciation credit remaining from prior years. Cash deposited on account of the depreciation requirement for any year may be withdrawn against net fundable property or against a depreciation credit arising within three years after the deposit. Cash not so withdrawn may be applied by the Company to reimburse the Company for its cost in acquiring First Mortgage Bonds (but not in an amount exceeding the principal of and premium, if any, payable upon the voluntary redemption of such First Mortgage Bonds) or may be applied, and under certain circumstances must be set aside by 5 the corporate Trustee to be applied, to the payment of the principal of First Mortgage Bonds either at maturity or upon redemption (if and to the extent then subject to redemption). (Sections 2.01(34), 6.02, 6.05, 9.03, 11.01 and 11.02 of the First Mortgage Indenture.) SECURITY AND PRIORITY The First Mortgage Indenture constitutes, in the opinion of Dorsey & Whitney LLP, counsel for the Company, a direct first mortgage lien upon substantially all of the physical property, franchises and leases of the Company subject only to permitted encumbrances. The First Mortgage Indenture contains provisions subjecting to the lien thereof physical property, franchises and leases which the Company may subsequently acquire, subject, however, to permitted encumbrances and to liens existing or placed upon such property at the time of acquisition thereof by the Company. The First Mortgage Indenture obligates the Company not to create prior or parity liens or permit such liens to exist, except for permitted encumbrances, liens existing at date of acquisition on property acquired and purchase money mortgages created by the Company. (Granting Clauses of the First Mortgage Indenture; Sections 2.01(29) and 8.05 of the Revised Indenture.) The New First Mortgage Bonds will rank equally and ratably (except as to any sinking fund which may be established for the exclusive benefit of one or more particular series of First Mortgage Bonds) with all First Mortgage Bonds regardless of series at any time issued or outstanding under the First Mortgage Indenture. ISSUANCE OF THE NEW FIRST MORTGAGE BONDS AND OF ADDITIONAL FIRST MORTGAGE BONDS Additional First Mortgage Bonds (including the New First Mortgage Bonds) may be issued under the First Mortgage Indenture in principal amounts limited only as follows: (1) not to exceed 60% of the cost or fair value, whichever is less, of net fundable property certified to the corporate Trustee as having been constructed or otherwise acquired after December 31, 1957 and not otherwise utilized for any purpose of the First Mortgage Indenture; (2) not to exceed the amount of cash deposited with the corporate Trustee for such purpose; or (3) not to exceed the principal amount of First Mortgage Bonds previously issued under the First Mortgage Indenture which have been retired or are then being retired and which have not theretofore been utilized for any purpose of the First Mortgage Indenture or are not otherwise disqualified for such use; provided, however, that, unless such additional First Mortgage Bonds are being issued against other First Mortgage Bonds (retired or being retired), the Company's net operating earnings (after deducting the depreciation requirement) for a period of twelve consecutive calendar months within the fifteen calendar months immediately preceding the calendar month in which the application for the authentication and delivery of the First Mortgage Bonds is made shall have been at least equal to two times the annual interest charges upon all First Mortgage Bonds then to be outstanding and indebtedness of the Company, if any, secured by a lien prior to or on a parity with the lien of the First Mortgage Indenture. Such net operating earnings consist basically of the Company's operating income before income taxes. As of December 31, 1995, net operating earnings were 3.96 times such interest charges, and after the sale of the New First Mortgage Bonds (assuming an 8% interest rate), would be 3.14 times such interest charges. (Section 2.01(33) and Article VI of the Revised Indenture.) The New First Mortgage Bonds will be issued under item (1) or (3) above. As of December 31, 1995, the Company had certified under the First Mortgage Indenture net fundable property in excess of $30,000,000, which is available for the issuance of First Mortgage Bonds under item (1) above (entitling the Company to issue at least $19,000,000 principal amount of additional First Mortgage Bonds on the basis of net fundable property). As of December 31, 1995, the Company also was entitled to issue in excess of $100,000,000 principal amount of First Mortgage Bonds on the basis of First Mortgage Bonds theretofore retired, as described under item (3) above. 6 WITHDRAWAL OF CERTAIN CASH Cash deposited with the corporate Trustee as the basis for the issuance of additional First Mortgage Bonds may be withdrawn by the Company in the amount of 60% of the lesser of the cost or fair value of net fundable property not theretofore utilized for any purpose under the First Mortgage Indenture. Other cash held under the First Mortgage Indenture may be withdrawn by the Company in the amount of 100% of the lesser of the cost or fair value of net fundable property not theretofore utilized for any purpose under the First Mortgage Indenture. (Sections 6.05 and 11.01 of the First Mortgage Indenture.) DIVIDEND COVENANT The Company will covenant in each New Supplemental Indenture that so long as any of the New First Mortgage Bonds issued thereunder remain outstanding, the Company will not declare or pay dividends on its Common Shares (other than dividends payable in Common Shares) or make any other distribution in respect of its Common Shares unless, after giving effect thereto, the sum of all such dividends and distributions subsequent to December 31, 1976 will not exceed $8,000,000 plus the Company's net income available for Common Shares accrued after that date. Each New Supplemental Indenture will further provide that in computing such net income there shall be deducted, as an additional depreciation charge, for each year after 1976, the amount, if any, by which the First Mortgage Indenture depreciation requirement exceeds the depreciation charges against such net income actually made by the Company on account of its depreciable fundable property. The same or a less restrictive covenant applies to all of the currently outstanding series of First Mortgage Bonds. Under the most restrictive of these covenants, $9,686,000 of retained earnings of the Company at December 31, 1995 were not available for dividends or other distributions on the Common Shares. (Section 9 of the Thirty-first, Forty-second and Forty-fourth Supplemental Indentures; Section 18 of the Thirty-ninth Supplemental Indenture; and Sections 9 and 18 of the Forty-third and Forty-fifth Supplemental Indentures.) MODIFICATION OF THE FIRST MORTGAGE INDENTURE In general, modifications or alterations of the First Mortgage Indenture and of the rights or obligations of the Company and of the Bondholders may, with the approval of the Company, be made at Bondholders' meetings upon the affirmative vote of 75% of the Bondholders entitled to vote thereat with respect to matters involved. Provisions relating to such modifications or alterations are subject to certain conditions designed to safeguard the position of the Bondholders and the First Mortgage Indenture Trustees with respect to certain matters of basic importance, including payment of principal of and any premium and interest on the First Mortgage Bonds and creation of liens ranking prior to or on a parity with the lien of the First Mortgage Indenture. (Article XII of the First Mortgage Indenture.) DEFAULT PROVISIONS The First Mortgage Indenture provides that the following constitute "events of default": (a) default in the payment of interest on any First Mortgage Bond for 60 days; or (b) default in the payment of principal of any First Mortgage Bond; or (c) default in the due performance or observance of any other covenant or condition for 60 days after written notice thereof; or (d) institution of bankruptcy, insolvency or similar proceedings. The First Mortgage Indenture Trustees are required to give notice to the Bondholders of all defaults known to the First Mortgage Indenture Trustees unless such defaults have been cured before the giving of such notice or unless (except in the case of a default in the payment of principal of or any premium or interest on any of the First Mortgage Bonds, or in the payment of moneys into any sinking fund for the First Mortgage Bonds) the First Mortgage Indenture Trustees, in good faith, determine that withholding of such notice is in the interests of the Bondholders. In case of an event of default, the First Mortgage Indenture Trustees may, and upon the request of the holders of at least 25% of the aggregate principal amount of the First Mortgage Bonds then outstanding shall, declare the principal of all First Mortgage Bonds then outstanding to be due and payable and, subject to the rights of the First Mortgage Indenture Trustees to receive adequate 7 indemnification, take all needful steps for the protection of the holders of such First Mortgage Bonds upon the conditions and with the effect provided in the First Mortgage Indenture. Compliance with certain provisions of the First Mortgage Indenture is required to be evidenced by various certificates filed by the Company with the corporate Trustee; however, no periodic evidence is required to be furnished as to the absence of events of default. (Article VIII and Sections 13.01, 13.02, 13.04 and 15.02 of the First Mortgage Indenture.) CONCERNING THE FIRST MORTGAGE INDENTURE TRUSTEES First Trust National Association is corporate Trustee and James A. Ehrenberg, an officer of the corporate Trustee, is individual Trustee under the First Mortgage Indenture. The First Mortgage Indenture provides that the holders of a majority in principal amount of the First Mortgage Bonds outstanding may direct the First Mortgage Indenture Trustees to take action under the First Mortgage Indenture, but under certain circumstances the First Mortgage Indenture Trustees may decline to follow such direction or to exercise certain of their powers. Moreover, the First Mortgage Indenture Trustees are under no obligation to take such action unless furnished with indemnity satisfactory to the corporate Trustee against all expenses and liability. (Section 13.20 of the First Mortgage Indenture.) The corporate Trustee acts as agent for participants in the Company's Automatic Dividend Reinvestment and Share Purchase Plan. In the ordinary course of business, affiliates of the corporate Trustee have engaged, and may in the future engage, in commercial banking transactions with the Company and its affiliates. The corporate Trustee is also the Debenture Indenture Trustee under the Debenture Indenture (each as defined below). As such, the corporate Trustee would have a conflicting interest for purposes of the Trust Indenture Act if an Event of Default were to occur under the First Mortgage Indenture or the Debenture Indenture. In either such case, the corporate Trustee may be required to eliminate such conflicting interest by resigning as the corporate Trustee or the Debenture Indenture Trustee. There are other instances under the Trust Indenture Act which would require the resignation of the corporate Trustee, such as an affiliate of the corporate Trustee acting as underwriter with respect to any of the Debt Securities. DESCRIPTION OF DEBENTURES GENERAL The Debt Securities may be issued in one or more series under the Indenture (For Unsecured Debt Securities) (the "Debenture Indenture") between the Company and First Trust National Association, as Trustee (the "Debenture Indenture Trustee"). The Debt Securities issued under the Debenture Indenture (the "Debentures") will be unsecured obligations of the Company and shall not be afforded any protection under the First Mortgage Indenture, pursuant to which various series of First Mortgage Bonds have been, and may hereafter be, issued. The First Mortgage Indenture does not limit the aggregate amount of First Mortgage Bonds that may be issued except as described under "Description of First Mortgage Bonds -- Issuance of the New First Mortgage Bonds and of Additional First Mortgage Bonds." As of June 30, 1996, approximately $125,000,000 of First Mortgage Bonds were outstanding. The summaries of the Debenture Indenture set forth below do not purport to be complete and are subject to the detailed provisions of the Debenture Indenture, a copy of which is filed with the Commission as an exhibit to the Registration Statement and is incorporated in this section by reference. Capitalized terms used in this section which are not otherwise defined in this Prospectus shall have the meanings ascribed to them in the Debenture Indenture. Whenever particular provisions or terms defined in the Debenture Indenture are referred to in this section, such provisions or definitions are incorporated by reference as part of the statements made in this section, and such 8 statements are qualified in their entirety by such reference. References to article and section numbers herein, unless otherwise indicated, are references to article and section numbers of the Debenture Indenture. TERMS OF DEBENTURES Reference is made to the Prospectus Supplement for a description of the following terms and other information with respect to the series of Debentures in respect of which this Prospectus is being delivered: (1) the title of such series of Debentures; (2) any limit on the aggregate principal amount of such Debentures or the series of which they are a part; (3) the Person or Persons to whom interest on the Debentures of such series shall be payable if other than the Persons in whose names such Debentures are registered; (4) the date or dates on which the principal of any of such Debentures will be payable; (5) the rate or rates (which may be fixed or variable) and/or the method of determination of such rate or rates at which any of such Debentures will bear interest, if any, the date or dates from which any such interest will accrue, the Interest Payment Dates on which any such interest will be payable and the Regular Record Date for any such interest payable on any Interest Payment Date; (6) the place or places where (i) the principal of or any premium or interest on any of such Debentures will be payable, (ii) registration of transfer of such Debentures may be effected, (iii) exchanges of such Debentures may be effected and (iv) notices and demands to or upon the Company in respect of such Debentures may be served; the Security Registrar for such Debentures and, if such is the case, that the principal of such Debentures shall be payable without presentment or surrender thereof; (7) 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 any of such Debentures may be redeemed, in whole or in part, at the option of the Company; (8) the obligation or obligations, if any, of the Company to redeem or purchase any of such Debentures pursuant to any sinking fund or other mandatory redemption provisions or at the option of the 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 any of such Debentures shall be redeemed or purchased, in whole or in part, pursuant to such obligation, and applicable exceptions to the requirements of a notice of redemption in the case of mandatory redemption or redemption at the option of the Holder; (9) the denominations in which any of such Debentures will be issuable, if other than denominations of $1,000 and any integral multiple thereof; (10) if other than the currency of the United States, the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on any of such Debentures will be payable; (11) if the principal of or any premium or interest on any of such Debentures is to be payable, at the election of the Company or the Holder thereof, in a coin or currency other than in which such Debentures are stated to be payable, the period or periods within which and the terms and conditions upon which, such election is to be made; (12) if the principal of or any premium or interest on such Debentures is to be payable, or is 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; (13) if the amount payable in respect of principal of or any premium or interest on any of such Debentures may be determined with reference to an index or other fact or event ascertainable outside the Debenture Indenture, the manner in which such amounts will be determined; (14) if other than the principal amount thereof, the portion of the principal amount of any of such Debentures which shall be payable upon declaration of acceleration of the Maturity thereof; (15) any addition to the Events of Default applicable to any of such Debentures and any addition to the covenants of the Company for the benefit of the Holders of such Debentures; (16) the terms, if any, pursuant to which such Debentures may be converted into or exchanged for shares of capital stock or other securities of the Company or any other Person; (17) the obligations or instruments, if any, which shall be considered to be Eligible Obligations in respect of such Debentures 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 Debentures after the satisfaction and discharge thereof; (18) if such Debentures are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Debentures to transfer 9 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 Debentures; (19) if such Debentures are to be issuable as bearer securities; (20) any limitations on the rights of the Holders of such Debentures to transfer or exchange such Debentures or to obtain the registration of transfer thereof, and if a service charge will be made for the registration of transfer or exchange of such Debentures, the amount or terms thereof; (21) any exceptions to the provisions governing payments due on legal holidays or any variations in the definition of Business Day with respect to such Debentures; and (22) any other terms of such Debentures of such series, or any Tranche thereof, not inconsistent with the provisions of the Debenture Indenture. (Section 301) Debentures may be sold at a substantial discount below their principal amount. Certain special United States federal income tax considerations applicable to Debentures sold at an original issue discount may be described in the applicable Prospectus Supplement. In addition, certain special United States federal income tax or other considerations applicable to any Debentures which are denominated in a currency or currency unit other than Dollars may be described in the applicable Prospectus Supplement. Except as may otherwise be described in the Prospectus Supplement, the covenants contained in the Debenture Indenture would not afford Holders of Debentures protection in the event of a highly-leveraged transaction or change of control involving the Company. FORM, EXCHANGE AND TRANSFER Unless otherwise specified in the applicable Prospectus Supplement, Debentures of each series will be issuable only in fully registered form without coupons and in denominations of $1,000 and any integral multiple thereof. (Sections 201 and 302) At the option of the Holder, subject to the terms of the Debenture Indenture and the limitations applicable to global securities, Debentures of any series will be exchangeable for other Debentures of the same series, of any authorized denomination and of like tenor and aggregate principal amount. (Section 305) Subject to the terms of the Debenture Indenture and the limitations applicable to global securities, Debentures may be presented for exchange as provided above for registration of transfer (duly endorsed or accompanied by a duly executed instrument of transfer) at the office of the Security Registrar or at the office of any transfer agent designated by the Company for such purpose. Unless otherwise indicated, no service charge will be made for any registration of transfer or exchange of Debentures, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Every Debenture presented or surrendered for registration of transfer or exchange shall (if so required by the Company, the Debenture Indenture Trustee or the Security Registrar) be duly endorsed or accompanied by an executed written instrument of transfer in form satisfactory to the Company, the Debenture Indenture Trustee or the Security Registrar. (Section 305) Any transfer agent (in addition to the Security Registrar) initially designated by the Company for any Debenture will be named in the applicable Prospectus Supplement. The Company may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that the Company will be required to maintain a transfer agent in each Place of Payment for the Debentures of each series. The Company may perform all functions of any office or agency. (Section 602) The Company shall not be required to execute or register the transfer of or the exchange of any Debenture, or any Tranche thereof, during a period of 15 days preceding the notice to be given identifying the Debentures called for redemption, or any Debentures so selected for redemption, in whole or in part, except the unredeemed portion of any such Debenture being redeemed in part. (Section 305) 10 PAYMENT AND PAYING AGENT Unless otherwise indicated in the applicable Prospectus Supplement, payment of interest on a Debenture on any Interest Payment Date will be made to the person in whose name such Debenture (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. (Section 307) Unless otherwise indicated in the applicable Prospectus Supplement, principal of and any premium and interest on the Debentures of a particular series will be payable at the office of such Paying Agent or Paying Agents as the Company may designate for such purpose from time to time. Unless otherwise indicated in the applicable Prospectus Supplement, the corporate trust office of the Debenture Indenture Trustee in New York, New York will be designated as the Company's sole Paying Agent for payment with respect to Debentures of each series. Any other Paying Agents initially designated by the Company for the Debentures of a particular series will be named in the applicable Prospectus Supplement. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agent or approve a change in the office through which any Paying Agent acts, except that the Company will be required to maintain a Paying Agent in each Place of Payment for the Debentures of a particular series. (Section 602) Any moneys deposited by the Company with the Trustee or any Paying Agent for the payment of the principal of or any premium or interest on any Debenture which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be paid to the Company, and the Holder of such Debenture, as an unsecured general creditor and not as a Holder, thereafter may look only to the Company for payment thereof. (Section 603) REDEMPTION Any terms for the optional or mandatory redemption of Debentures will be set forth in the applicable Prospectus Supplement or a supplement thereto. Except as shall otherwise be provided in the applicable Prospectus Supplement with respect to Debentures that are redeemable at the option of the Holder, Debentures will be redeemable only upon notice by mail not less than 30 days nor more than 60 days prior to the date fixed for redemption, and, if less than all the Debentures of a series, or any Tranche thereof, are to be redeemed, the particular Debentures to be redeemed will be selected by the Securities Registrar by such method as shall be provided for any particular series, or in the absence of any such provision, by such method of random selection as the Security Registrar deems fair and appropriate. (Sections 403 and 404) Any notice of redemption at the option of the Company may state that such redemption will be conditional upon receipt by the Paying Agent or Agents, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and any premium and interest on such Debentures and that if such money has not been so received, such notice will be of no force and effect and the Company will not be required to redeem such Debentures. (Section 404) CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER Under the terms of the Debenture Indenture, the Company may not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless (i) the corporation 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 existing under the laws of any domestic jurisdiction and shall expressly assume the Company's obligations on the Debentures and under the Debenture Indenture, (ii) immediately after giving effect to the transaction, no Event of Default shall have occurred and be continuing and (iii) the Company will have delivered to the Debenture Indenture Trustee an Officer's Certificate and an Opinion of Counsel as provided in the Debenture Indenture. (Section 1101) 11 EVENTS OF DEFAULT Each of the following will constitute an Event of Default under the Debenture Indenture with respect to Debentures of any series: (a) failure to pay any interest on any Debentures of such series within 60 days after the same becomes due and payable; (b) failure to pay principal of or premium, if any, on any Debenture of such series within three Business Days after the same becomes due and payable; (c) failure to perform or breach of any other covenant or warranty of the Company in the Debenture Indenture (other than a covenant or warranty of the Company in the Debenture Indenture solely for the benefit of one or more series of Debentures other than such series) for 60 days after written notice to the Company by the Debenture Indenture Trustee, or to the Company and the Debenture Indenture Trustee by the Holders of at least 33% in principal amount of the Debentures of such series Outstanding under the Debenture Indenture as provided in the Debenture Indenture; (d) certain events of bankruptcy, insolvency or reorganization; and (e) any other Event of Default specified in the applicable Prospectus Supplement with respect to Debentures of a particular series. (Section 801) An Event of Default with respect to a series of Debentures may not necessarily constitute an Event of Default with respect to the Debentures of any other series issued under the Debenture Indenture. If an Event of Default with respect to any series of Debentures occurs and is continuing, then either the Debenture Indenture Trustee or the Holders of not less than 33% in principal amount of the Outstanding Debentures of such series may declare the principal amount (or if the Debentures of such series are Discount Securities, such portion of the principal amount thereof as may be specified in the applicable Prospectus Supplement) of all of the Debentures of such series to be due and payable immediately; provided, however, that if an Event of Default occurs and is continuing with respect to more than one series of Debentures, the Debenture Indenture Trustee or the Holders of not less than 33% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make such declaration of acceleration and not the Holders of the Debentures of any one of such series. (Section 802) Subject to the provisions of the Debenture Indenture relating to the duties of the Debenture Indenture Trustee in case an Event of Default shall occur and be continuing, the Debenture Indenture Trustee will be under no obligation to exercise any of its rights or powers under the Debenture Indenture at the request or direction of any Holder, unless such Holder shall have offered to the Debenture Indenture Trustee reasonable security or indemnity. (Section 903) Subject to such provisions of the indemnification of the Debenture Indenture Trustee, the Holders of a majority in principal amount of the Outstanding Debentures of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Indenture Trustee, or exercising any trust or power conferred on the Debenture Indenture Trustee, with respect to the Debentures of that series. (Section 812) No Holder of a Debenture of any series will have any right to institute any proceeding with respect to the Debenture Indenture, or for the appointment of a receiver or a trustee, or for any other remedy thereunder, unless (i) such Holder has previously given written notice to the Debenture Indenture Trustee of a continuing Event of Default with respect to the Debentures of such series, (ii) the Holders of not less than a majority in aggregate principal amount of the Outstanding Debentures of such series have made written request to the Debenture Indenture Trustee, and such Holder or Holders have offered reasonable indemnity to the Debenture Indenture Trustee, to institute such proceeding as trustee and (iii) the Debenture Indenture Trustee has failed to institute such proceeding, and has not received from the Holders of a majority in aggregate principal amount of the Outstanding Debentures of that series a direction inconsistent with such request, within 60 days after such notice, request and offer. (Section 807) However, such limitations do not apply to a suit instituted 12 by a Holder of a Debenture for the enforcement of payment of the principal of or any premium or interest on such Debenture on or after the applicable due date specified in such Debenture. (Section 808) The Company will be required to furnish to the Debenture Indenture Trustee annually, not later than October 1 in each year, a statement by an appropriate officer as to such officer's knowledge of the Company's compliance with all conditions and covenants under the Debenture Indenture, such compliance to be determined without regard to any period of grace or requirement of notice under the Debenture Indenture. (Section 606) RIGHT TO CURE At any time after the declaration of acceleration with respect to the Debentures of any series has been made and before a judgment or decree for payment of the money due has been obtained, the Event or Events of Default giving rise to such declaration of acceleration will, without further act, be deemed to have been waived, and such declaration and its consequences will, without further act, be deemed to have been rescinded and annulled, if (a) the Company has paid or deposited with the Debenture Indenture Trustee a sum sufficient to pay (1) all overdue interest, if any, on all Debentures of such series; (2) the principal of and premium, if any, on any Debentures of such series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Debentures; (3) interest upon overdue interest, if any, at the rate or rates prescribed therefor in such Debentures, to the extent that payment of such interest is lawful; and (4) all amounts due to the Debenture Indenture Trustee under the Debenture Indenture; and (b) any other Event or Events of Default with respect to the Debentures of such series, other than the non-payment of the principal of the Debentures of such series which has become due solely by such declaration of acceleration, have been cured or waived as provided in the Debenture Indenture. (Section 802) MODIFICATION AND WAIVER Without the consent of any Holder of Debentures, the Company and the Debenture Indenture Trustee may enter into one or more supplemental indentures to the Debenture Indenture for any of the following purposes: (a) to evidence the assumption by any permitted successor to the Company of the covenants of the Company in the Debenture Indenture and the Debentures; or (b) to add one or more covenants of the Company or other provisions for the benefit of the Holders of all or any series of Outstanding Debentures or to surrender any right or power conferred upon the Company by the Debenture Indenture; or (c) to add any additional Events of Default with respect to all or any series of Outstanding Debentures; or (d) to change or eliminate any provision of the Debenture Indenture or to add any new provision to the Debenture Indenture, provided that if such change, elimination or addition will adversely affect the interests of the Holders of Debentures of any series in any material respect, such change, elimination or addition will become effective with respect to such series only when the consent of the Holders of such series so affected has been obtained or when there is no Debenture of such series remaining Outstanding under the Debenture Indenture; or (e) to provide collateral security for the Debentures; or (f) to establish the form or terms of Debentures of any series as permitted by the Debenture Indenture; 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 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 of a separate or successor 13 Debenture Indenture Trustee under the Debenture Indenture with respect to the Debentures of one or more series and to add or to change any of the provisions of the Debenture Indenture as shall be necessary to provide for or to facilitate the administration of the trusts under the Debenture Indenture by more than one trustee; or (i) to provide for the procedures required to permit the utilization of a noncertificated system of registration for any series of Debentures; or (j) to change any place where (1) the principal of and any premium and interest on any Debentures shall be payable, (2) any Debentures may be surrendered for registration of transfer or exchange and (3) notices and demands to or upon the Company in respect of Debentures and the Debenture Indenture may be served; or (k) to cure any ambiguity, to correct or supplement any defective or inconsistent provision or to make or change any other provisions with respect to matters and questions arising under the Debenture Indenture, provided such changes or additions shall not adversely affect the interests of the Holders of Debentures of any series in any material respect. (Section 1201) The Holders of not less than a majority in aggregate principal amount of the Outstanding Debentures of any series may waive compliance by the Company with certain restrictive provisions of the Debenture Indenture. (Section 607) The Holders of not less than a majority in principal amount of the Outstanding Debentures of any series may waive any past default under the Debenture Indenture with respect to such series, except a default in the payment of principal, premium or interest and certain covenants and provisions of the Debenture Indenture that cannot be modified or be amended without the consent of the Holder of each Outstanding Debenture of such series affected. (Section 813) Without limiting the generality of the foregoing, if the Trust Indenture Act is amended after the date of the Debenture Indenture in such a way as to require changes to the Debenture Indenture or the incorporation therein of additional provisions or so as to permit changes to, or the elimination of, provisions which, at the date of the Debenture Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in the Debenture Indenture, the Debenture Indenture will be deemed to have been amended so as to conform to such amendment or to effect such changes or elimination, and the Company and the Debenture Indenture Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to evidence or effect such amendment. (Section 1201) Except as provided above, the consent of the Holders of not less than a majority in aggregate principal amount of the Debentures of all series then Outstanding, considered as one class, is required for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of, the Debenture Indenture pursuant to one or more supplemental indentures; provided, however, that if less than all of the series of Debentures Outstanding are directly affected by a proposed supplemental indenture, then the consent only of the Holders of a majority in aggregate principal amount of Outstanding Debentures of all series so directly affected, considered as one class, will be required; and provided, further, that if the Debentures of any series have been issued in more than one Tranche and if the proposed supplemental indenture directly affects the rights of the Holders of one or more, but less than all, such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Debentures of all Tranches so directly affected, considered as one class, will be required; and provided further, that no such supplemental indenture may (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Debenture, 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 any Discount Security that would be due and payable upon a declaration of acceleration of Maturity or change the coin or currency (or other property) in which any Debenture 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 Debenture (or, in the case of redemption, on or after the redemption date) without, in any such case, the consent of the Holder of such Debenture, (b) reduce the percentage in principal amount of the Outstanding Debentures of any series, or any 14 Tranche thereof, 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 the Debenture Indenture or any default thereunder and its consequences, or reduce the requirements for quorum or voting, without, in any such case, the consent of the Holder of each Outstanding Debenture of such series or Tranche, or (c) modify certain of the provisions of the Debenture Indenture relating to supplemental indentures, waivers of certain covenants and waivers of past defaults with respect to the Debentures of any series, or any Tranche thereof, without the consent of the Holder of each Outstanding Debenture affected thereby. A supplemental indenture which changes or eliminates any covenant or other provision of the Debenture Indenture which has expressly been included solely for the benefit of one or more particular series of Debentures or one or more Tranches thereof, or modifies the rights of the Holders of Debentures of such series or Tranches with respect to such covenant or other provision, will be deemed not to affect the rights under the Debenture Indenture of the Holders of the Debentures of any other series or Tranche. (Section 1202) The Debenture Indenture provides that in determining whether the Holders of the requisite principal amount of the Outstanding Debentures have given any request, demand, authorization, direction, notice, consent or waiver under the Debenture Indenture as of any date, or whether or not a quorum is present at a meeting of Holders, (i) Debentures owned by the Company or any other obligor upon the Debentures or any Affiliate of the Company or of such other obligor (unless the Company, such Affiliate or such obligor owns all Securities Outstanding under the Debenture Indenture, or all Outstanding Debentures of each such series and each such Tranche, as the case may be, determined without regard to this clause (i)) shall be disregarded and deemed not to be Outstanding; (ii) 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 as provided in the Debenture Indenture; and (iii) the principal amount of a Debenture denominated in one or more foreign currencies or a composite currency that will be deemed to be Outstanding will be the Dollar equivalent, determined as of such date in the manner prescribed for such Debenture, of the principal amount of such Debenture (or, in the case of a Debenture described in clause (ii) above, of the amount described in such clause). (Section 101) If the Company shall solicit from Holders any request, demand, authorization, direction, notice, consent, election, waiver or other Act, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, election, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, election, 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 Debentures have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, direction, waiver or other Act, and for that purpose the Outstanding Debentures 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 Debenture and the Holder of every Debenture 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 Debenture Indenture Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Debenture. (Section 104) DEFEASANCE Unless otherwise indicated in the applicable Prospectus Supplement, any Debenture, or any portion of the principal amount thereof, will be deemed to have been paid for purposes of the Debenture Indenture, and, at the Company's election, the entire indebtedness of the Company in respect thereof will be deemed to have been satisfied and discharged, if there has been irrevocably deposited with the Debenture Indenture Trustee or any Paying Agent (other than the Company), in 15 trust: (a) money in an amount which will be sufficient, or (b) Eligible Obligations (as described below), which do not contain provisions permitting the redemption or other prepaying 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 monies which, together with money, if any, deposited with or held by the Debenture Indenture Trustee or such Paying Agent, will be sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay when due the principal of and any premium and interest due and to become due on such Debentures or portions thereof. (Section 701) For this purpose, unless otherwise indicated in the applicable Prospectus Supplement, Eligible Obligations include direct obligations of, or obligations unconditionally guaranteed by, the United States, entitled to the benefit of the full faith and credit thereof, and certificates, depositary receipts or other instruments which evidence a direct ownership interest in such obligations or in any specific interest or principal payments due in respect thereof. (Section 101) While the Company knows of no legal precedent on point, it is possible that, for federal income tax purposes, any deposit contemplated in the preceding paragraph could be treated as a taxable exchange of the related securities for an issue of obligations of the trust or a direct interest in the cash and securities held in the trust. In that case, Holders of such securities would recognize gain or loss as if the trust obligations or the cash or securities deposited, as the case may be, had actually been received by them in exchange for their securities. In addition, such Holders thereafter would be required to recognize for federal income tax purposes a share of the income, gain or loss of the trust. The amount so required to be recognized could be different from the amount that would be recognized in the absence of such deposit. Prospective investors are urged to consult their own tax advisors as to the specific consequences to them of any such deposit. RESIGNATION OF DEBENTURE INDENTURE TRUSTEE The Debenture Indenture Trustee may resign at any time by giving written notice thereof to the Company or may be removed at any time by Act of the Holders of a majority in principal amount of Debentures then Outstanding delivered to the Debenture Indenture Trustee and the Company. No resignation or removal of the Debenture Indenture Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the Debenture Indenture. 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 a Debenture Indenture Trustee appointed by Act of the Holders of a majority in principal amount of the Outstanding Debentures, if the Company has delivered to the Trustee a resolution of its Board of Directors appointing a successor trustee and such successor has accepted such appointment in accordance with the terms of the Debenture Indenture, the Debenture Indenture Trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee in accordance with the Debenture Indenture. (Section 910) NOTICES Notices to Holders of Debentures will be given by mail to the addresses of such Holders as they may appear in the Security Register. (Section 106) TITLE The Company, the Debenture Indenture Trustee and any agent of the Company or the Debenture Indenture Trustee may treat the Person in whose name a Debenture is registered as the absolute owner thereof (whether or not such Debenture may be overdue) for the purpose of making payment and for all other purposes. (Section 308) GOVERNING LAW The Debenture Indenture and the Debentures will be governed by, and construed in accordance with, the laws of the State of New York, except to the extent the law of any other jurisdiction shall be mandatorily applicable. (Section 112) 16 LIMITATION ON SUITS The Debenture Indenture limits a Holder's right to institute any proceeding with respect to the Debenture Indenture, the appointment of a receiver or trustee, or for any other remedy under the Debenture Indenture. (Section 807) MAINTENANCE OF PROPERTIES The Debenture Indenture provides that 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 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 605) CONCERNING THE DEBENTURE INDENTURE TRUSTEE See "Description of First Mortgage Bonds -- Concerning the First Mortgage Indenture Trustees" for a description of certain relationships between the Debenture Indenture Trustee and the Company. GLOBAL SECURITIES Some or all of the Debentures of any series may be represented, in whole or in part, by one or more global securities (each, a "Global Security") which will have an aggregate principal amount equal to that of the Debentures represented thereby. Each Global Security will be registered in the name of a depositary (the "Depositary") or a nominee thereof identified in the applicable Prospectus Supplement, will be deposited with such Depositary or nominee or a custodian therefor and will bear a legend regarding the restrictions on exchanges and registration of transfer thereof referred to below and any such other matters as may be provided for pursuant to the Debenture Indenture. As long as the Depositary, or its nominee, is the registered holder of a Global Security, the Depositary or such nominee, as the case may be, will be considered the sole owner and holder of such Global Security and the Debentures represented thereby for all purposes under the Debenture Indenture. Except in limited circumstances, owners of beneficial interests in a Global Security will not be entitled to have such Global Security or any Debentures represented thereby registered in their names, will not receive or be entitled to receive physical delivery of certificated Debentures in exchange therefor and will not be considered to be the owners or holders of such Global Security or any Debentures represented thereby for any purpose under the Debentures or the Debenture Indenture. All payments of principal of and any premium and interest on a Global Security will be made to the Depositary or its nominee, as the case may be, as the Holder thereof. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial interests in a Global Security. Ownership of beneficial interests in a Global Security will be limited to institutions that have accounts with the Depositary or its nominee ("participants") and to persons that may hold beneficial interests through participants. In connection with the issuance of any Global Security, the Depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of Debentures represented by the Global Security to the accounts of its participants. Ownership of beneficial interests in a Global Security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by the Depositary (with respect to participants' interests) or any such participant (with respect to interests of persons held by such participants on their behalf). Payments, transfers, exchanges and other matters relating to beneficial interests in a Global Security may be subject to various policies and procedures adopted by the Depositary from time to time. Neither the Company, the Debenture Indenture Trustee nor any of their respective agents 17 will have any responsibility or liability for any aspect of the Depositary's or any participant's records relating to, or for payments made on account of, beneficial interests in a Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial interests. PLAN OF DISTRIBUTION The Company may sell the Debt Securities to or through underwriters or dealers, directly to other purchasers or through agents. The Company may also directly solicit offers to purchase the Debt Securities. The Prospectus Supplement will set forth the terms of the offering, including the name or names of any underwriters, dealers or agents, the purchase price or prices of the Debt Securities offered thereby, the proceeds to the Company from the sale of such Debt Securities, any initial public offering price, any underwriting discount or commission and any discounts, concessions or commissions allowed or reallowed or paid by any underwriter to other dealers. Any initial public offering price and any discounts, concessions or commissions allowed or reallowed or paid to dealers may be changed from time to time. If so indicated in the Prospectus Supplement, the Company may authorize underwriters, dealers or other persons acting as the Company's agents to solicit offers by certain institutions to purchase the Debt Securities offered thereby directly from the Company pursuant to contracts providing for payment and delivery on a future date. Such contracts will be subject only to the conditions set forth in the Prospectus Supplement, which will also set forth the commission payable for solicitation of such contracts. Underwriters, dealers and agents who participate in the distribution of the Debt Securities may be entitled under agreements to be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. The Company does not intend to apply for the listing of the Debt Securities on any national securities exchange. The Prospectus Supplement will indicate whether any underwriter, dealer or agent intends to make a market in the Debt Securities offered thereby. No assurance can be given as to the liquidity of any trading market in the Debt Securities. LEGAL OPINIONS Legal matters with respect to the Debt Securities will be passed upon for the Company by Dorsey & Whitney LLP, Minneapolis, Minnesota, and for any underwriters, dealers, purchasers or agents by Sidley & Austin, Chicago, Illinois. The statements as to matters of law and legal conclusions made under "Description of First Mortgage Bonds -- Security and Priority" are made on the authority of Dorsey & Whitney LLP. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which is incorporated herein by reference, and have been so incorporated in reliance upon such report given upon their authority as experts in accounting and auditing. 18 - ------------------------------------------- ------------------------------------------- - ------------------------------------------- ------------------------------------------- NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY IN ANY CIRCUMSTANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------------------ TABLE OF CONTENTS
PAGE ----- Available Information.......................... 2 Incorporation of Certain Documents by Reference..................................... 2 The Company.................................... 3 Use of Proceeds................................ 3 Construction Program and Financing............. 3 Ratios of Earnings to Fixed Charges............ 4 Description of First Mortgage Bonds............ 4 Description of Debentures...................... 8 Plan of Distribution........................... 18 Legal Opinions................................. 18 Experts........................................ 18
$50,000,000 OTTER TAIL POWER COMPANY ------------------------ DEBT SECURITIES ------------------------ - ------------------------------------------- ------------------------------------------- - ------------------------------------------- ------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The expenses in connection with the offering described in this Registration Statement, other than underwriting discounts and commissions, are: SEC registration fee............................................. $ 17,242 Minnesota mortgage registration tax.............................. 35,000 Mortgage recording fees.......................................... 7,500 Legal fees and expenses.......................................... 75,000 Printing and engraving expenses.................................. 20,000 Accountants' fees and expenses................................... 15,000 Rating agency fees and expenses.................................. 17,000 Blue Sky and Legal Investment fees and expenses (including legal fees)..................................................... 7,500 Trustee's fees and expenses...................................... 5,500 Miscellaneous expenses........................................... 5,258 --------- Total.......................................................... $ 205,000* --------- ---------
- ------------------------ *All fees and expenses, other than the SEC registration fee, are estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Minnesota Statutes Section 302A.521 contains detailed provisions for indemnification of directors and officers of domestic or foreign corporations under certain circumstances and subject to certain limitations. Article VIII of the Bylaws of the Company contains provisions for indemnification of its directors and officers consistent with the provisions of Minnesota Statutes, Section 302A.521. Article X of the Company's Restated Articles of Incorporation provides that a director shall not be liable to the Company or its shareholders for monetary damages for a breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Company or its shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Sections 302A.559 or 80A.23 of the Minnesota Statutes, (iv) for any transaction for which the director derived an improper personal benefit, or (v) for any act or omission occurring prior to the date when said Article X became effective. The Company has obtained insurance policies indemnifying the Company and the Company's directors and officers against certain civil liabilities and related expenses. Reference is made to Section 9 of the Underwriting Agreement filed as Exhibit 1-A hereto for a description of the indemnification arrangements for this offering. ITEM 16. LIST OF EXHIBITS
PREVIOUSLY FILED --------------------------- AS EXHIBIT NUMBER FILE NO. NO. DESCRIPTION - ---------- ------------ ------------- ------------------------------------------------------------------------ 1-A --Form of Underwriting Agreement for First Mortgage Bonds. 1-B --Form of Underwriting Agreement for Debentures. 4-D-1 2-14209 2-B-1 -- Twenty-First Supplemental Indenture from the Company to First Trust Company of Saint Paul and Russell M. Collins, as Trustees, dated as of July 1, 1958. 4-D-2 2-14209 2-B-2 -- Twenty-Second Supplemental Indenture dated as of July 15, 1958.
II-1
PREVIOUSLY FILED --------------------------- AS EXHIBIT NUMBER FILE NO. NO. DESCRIPTION - ---------- ------------ ------------- ------------------------------------------------------------------------ 4-D-3 33-32499 4-D-6 -- Thirty-First Supplemental Indenture dated as of February 1, 1973. 4-D-4 33-32499 4-D-7 -- Thirty-Second Supplemental Indenture dated as of January 18, 1974. 4-D-5 2-66914 2-L-13 -- Thirty-Ninth Supplemental Indenture dated as of October 15, 1979. 4-D-6 33-46070 4-D-11 -- Forty-Second Supplemental Indenture dated as of December 1, 1990. 4-D-7 33-46070 4-D-12 -- Forty-Third Supplemental Indenture dated as of February 1, 1991. 4-D-8 33-46070 4-D-13 -- Forty-Fourth Supplemental Indenture dated as of September 1, 1991. 4-D-9 Form 8-K 4-D-15 -- Forty-Fifth Supplemental Indenture dated as of July 1, 1992. dated 7/24/92 4-D-10 --Form of Supplemental Indenture for First Mortgage Bonds. 4-D-11 -- Indenture (For Unsecured Debt Securities) from the Company to First Trust National Association, as Trustee. 5-A --Opinion and consent of Dorsey & Whitney LLP. 12-A --Calculation of Ratios of Earnings to Fixed Charges. 23-A-1 --Consent of Deloitte & Touche LLP. 23-A-2 --Consent of Dorsey & Whitney LLP (included in Exhibit 5-A). 24-A --Powers of Attorney. 25-A-1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of First Trust National Association, as corporate Trustee under the First Mortgage Indenture. 25-A-2 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-2 of James A. Ehrenberg, as individual Trustee under the First Mortgage Indenture. 25-A-3 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of First Trust National Association, as Trustee under the Indenture (For Unsecured Debt Securities).
ITEM 17. UNDERTAKINGS 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: (a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (b) To reflect in the prospectus any facts or events arising after the effective date of this 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 this Registration Statement. Notwithstanding the foregoing, any increase or decrease in II-2 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 Commission pursuant to Rule 424(b) under the Securities Act of 1933 if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (c) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this 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. The undersigned registrant hereby undertakes 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 this Registration Statement 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. 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 foregoing provisions described above under Item 15, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act 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 Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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. II-3 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 Fergus Falls, State of Minnesota, on August 30, 1996. OTTER TAIL POWER COMPANY By /s/_A. E. ANDERSON_________________ A. E. Anderson Vice President, Finance and Treasurer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on August 30, 1996.
SIGNATURE AND TITLE - ---------------------------------------------------- John C. MacFarlane Chairman, President and Chief Executive Officer (principal executive officer) and Director A. E. Anderson Vice President, Finance and Treasurer (principal financial officer) By /s/A. E. ANDERSON Jeffrey J. Legge A. E. Anderson Controller Pro Se and (principal accounting officer) Attorney-in-Fact Thomas M. Brown, Director Dayle Dietz, Director Dennis R. Emmen, Director Maynard D. Helgaas, Director Arvid R. Liebe, Director Kenneth L. Nelson, Director Nathan I. Partain, Director Robert N. Spolum, Director
II-4 EXHIBIT INDEX
PREVIOUSLY FILED --------------------------- AS EXHIBIT NUMBER FILE NO. NO. DESCRIPTION PAGE - ---------- ------------ ------------- ----------------------------------------------------------------- ----- 1-A -- Form of Underwriting Agreement for First Mortgage Bonds....... 1-B --Form of Underwriting Agreement for Debentures.................. 4-D-1 2-14209 2-B-1 -- Twenty-First Supplemental Indenture from the Company to First Trust Company of Saint Paul and Russell M. Collins, as Trustees, dated as of July 1, 1958............................. 4-D-2 2-14209 2-B-2 -- Twenty-Second Supplemental Indenture dated as of July 15, 1958........................................................... 4-D-3 33-32499 4-D-6 -- Thirty-First Supplemental Indenture dated as of February 1, 1973........................................................... 4-D-4 33-32499 4-D-7 -- Thirty-Second Supplemental Indenture dated as of January 18, 1974........................................................... 4-D-5 2-66914 2-L-13 -- Thirty-Ninth Supplemental Indenture dated as of October 15, 1979........................................................... 4-D-6 33-46070 4-D-11 -- Forty-Second Supplemental Indenture dated as of December 1, 1990........................................................... 4-D-7 33-46070 4-D-12 -- Forty-Third Supplemental Indenture dated as of February 1, 1991........................................................... 4-D-8 33-46070 4-D-13 -- Forty-Fourth Supplemental Indenture dated as of September 1, 1991........................................................... 4-D-9 Form 8-K 4-D-15 -- Forty-Fifth Supplemental Indenture dated as of July 1, 1992... dated 7/24/92 4-D-10 -- Form of Supplemental Indenture for First Mortgage Bonds....... 4-D-11 -- Indenture (For Unsecured Debt Securities) from the Company to First Trust National Association, as Trustee................... 5-A --Opinion and consent of Dorsey & Whitney LLP.................... 12-A --Calculation of Ratios of Earnings to Fixed Charges............. 23-A-1 --Consent of Deloitte & Touche LLP............................... 23-A-2 -- Consent of Dorsey & Whitney LLP (included in Exhibit 5-A)..... 24-A --Powers of Attorney............................................. 25-A-1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of First Trust National Association, as corporate Trustee under the First Mortgage Indenture......................................................
PREVIOUSLY FILED --------------------------- AS EXHIBIT NUMBER FILE NO. NO. DESCRIPTION PAGE - ---------- ------------ ------------- ----------------------------------------------------------------- ----- 25-A-2 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-2 of James A. Ehrenberg, as individual Trustee under the First Mortgage Indenture.......... 25-A-3 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 on Form T-1 of First Trust National Association, as Trustee under the Indenture (For Unsecured Debt Securities)....................................................
EX-1.A 2 EXHIBIT 1-A UNDERWRITING AGREEMENT EXHIBIT 1-A OTTER TAIL POWER COMPANY FIRST MORTGAGE BONDS UNDERWRITING AGREEMENT [Date} To the Representatives named in Schedule I hereto of the Underwriters named in Schedule II hereto Dear Sirs: Otter Tail Power Company, a Minnesota corporation (the "Company"), proposes to sell to the underwriters named in Schedule II hereto (the "Underwriters"), for whom you are acting as representatives (the "Representatives"), the principal amount of its First Mortgage Bonds identified in Schedule I hereto (the "Securities"), to be issued under the Company's Indenture of Mortgage dated as of July 1, 1936, as supplemented by all supplemental indentures executed prior to the date hereof (collectively, the "Indenture"), between the Company and First Trust National Association (formerly named First Trust Company of Saint Paul and First Trust Company, Inc.) and Louis S. Headley (James A. Ehrenberg, successor Individual Trustee), as trustees (the "Trustees"), including the Supplemental Indenture creating the Securities (the "Supplemental Indenture"). If the firm or firms listed in Schedule II hereto include only the firm or firms named as Representatives in Schedule I hereto, then the terms "Underwriters" and "Representatives," as used herein, shall each be deemed to refer to such firm or firms. 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to, and agrees with, each Underwriter that: (a) The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended (the "Act"), and has filed with the Securities and Exchange Commission (the "Commission") a registration statement on such Form (the file number of which is set forth in Schedule I hereto), which has become effective, for the registration under the Act of $50,000,000 aggregate initial offering price of the Company's debt securities, including the Securities. Such registration statement, as amended at the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all other material respects with such Rule. The Company proposes to file with the Commission pursuant to Rule 424 under the Act a supplement to the form of prospectus included in such registration statement relating to the Securities and the plan of distribution thereof and has previously advised the Representatives of all further information (financial and other) with respect to the Company to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the time it was declared effective by the Commission, is hereinafter called the "Registration Statement"; such prospectus, in the form in which it appears in the Registration Statement, is hereinafter called the "Basic Prospectus"; and the Basic Prospectus as supplemented by such prospectus supplement, in the form in which the same shall be filed (or transmitted for filing) with the Commission pursuant to such Rule 424, is hereinafter called the "Final Prospectus." Any preliminary form of the Final Prospectus which has heretofore been filed (or transmitted for filing) with the Commission pursuant to such Rule 424 is hereinafter called a "Preliminary Final Prospectus." Any reference herein to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the date of this Agreement, or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be, so incorporated by reference. (b) As of the time when the Registration Statement became effective, as of the date hereof, as of the time when any post-effective amendment to the Registration Statement becomes effective (if such effectiveness is prior to the termination of the offering of the Securities), as of the time when the Company's latest Annual Report on Form 10-K is filed with the Commission (if such filing is after January 1, 1997 and prior to the termination of the offering of the Securities), as of the time when the Final Prospectus is first filed (or transmitted for filing) pursuant to Rule 424 under the Act, as of the time when any supplement to the Final Prospectus is filed (or transmitted for filing) with the Commission (if such filing is prior to the termination of the offering of the Securities) and at the Closing Date (as hereinafter defined): (i) the Registration Statement, as amended as of any such time, the Final Prospectus, as amended or supplemented as of any such time, and the Indenture complied or will comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the respective rules thereunder; and (ii) neither the Registration Statement, as amended as of any such time, nor the Final Prospectus, as amended or supplemented as of any such time, contained or will contain any untrue statement of a material fact or omitted or will omit to state any material fact required to be stated therein or necessary to make - 2 - the statements therein, in the light of the circumstances under which they were made, not misleading; PROVIDED, HOWEVER, that the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statements of Eligibility (Forms T-1 and T-2) under the Trust Indenture Act of the Trustees or the trustee under the Company's Indenture (For Unsecured Debt Securities) dated as of _________________, 1996 (the "Debenture Indenture") or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus, or any amendment thereto or supplement thereof, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for use in connection with the preparation of the Registration Statement or the Final Prospectus. (c) The Public Utilities Commission of Minnesota (the "Minnesota Commission") has entered one or more orders authorizing, among other things, (i) the Company's proposed capital structure after the issuance and sale by the Company of the Securities and other securities therein mentioned and (ii) the issue and sale of the Securities by the Company on terms and conditions not inconsistent with the terms and conditions set forth in or contemplated by this Agreement or any Delayed Delivery Contract (as hereinafter defined) as hereinafter provided; and no further approval, authorization, consent, certificate or order of any state or federal commission or regulatory authority is necessary with respect to the execution and delivery of the Indenture or the issue and sale of the Securities as contemplated herein and in any Delayed Delivery Contract (except that the sale of the Securities in certain jurisdictions may be subject to the securities or "Blue Sky" laws thereof). A true and complete copy of such order or orders of the Minnesota Commission has been delivered to the Representatives. 2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of the Securities set forth opposite such Underwriter's name in Schedule II hereto, except that if Schedule I hereto provides for the sale of the Securities pursuant to delayed delivery arrangements, the respective principal amounts of the Securities to be purchased by each of the Underwriters shall be as set forth in Schedule II hereto, less the respective principal amounts of Contract Securities (as hereinafter defined) determined as provided below. Securities to be purchased by the Underwriters are hereinafter called the "Underwriters' Securities" and Securities to be purchased pursuant to Delayed Delivery Contracts are hereinafter called "Contract Securities." At the time of the purchase of the Underwriters' Securities, the Company will pay to the Representatives, for the respective accounts of the Underwriters, the aggregate underwriting commission in respect thereof set forth in Schedule I hereto by accepting from the Underwriters in payment for the Underwriters' Securities certified or official bank check or checks payable to the order of the Company in the funds set forth in Schedule I hereto in an amount equal to the aggregate initial price to public of the Underwriters' Securities set forth in Schedule I hereto, less - 3 - such underwriting commission, unless the Representatives and the Company shall agree on another manner of payment. If so provided in Schedule I hereto, the Underwriters are authorized to solicit offers to purchase the Securities from the Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts") substantially in the form of Schedule III hereto, but with such changes therein as the Company may authorize or approve. If so provided, the Underwriters will endeavor to make such arrangements and, as compensation therefor, the Company will pay to the Representatives, for the respective accounts of the Underwriters, on the Closing Date, by certified or official bank check payable in the funds set forth in Schedule I hereto, the delayed delivery fee set forth in Schedule I hereto with respect to the Securities for which Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be solicited from and made only with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions. The Company will enter into Delayed Delivery Contracts in all cases where sales of Contract Securities arranged by the Underwriters have been previously approved by the Company, but, except as the Company may otherwise agree, each such Delayed Delivery Contract must be for not less than the minimum principal amount set forth in Schedule I hereto and the aggregate principal amount of the Contract Securities may not exceed the maximum aggregate principal amount set forth in Schedule I hereto. The Underwriters will not have any responsibility in respect of the validity or performance of Delayed Delivery Contracts. The respective principal amounts of the Securities to be purchased by each Underwriter as set forth in Schedule II hereto shall be reduced by an amount which shall bear the same proportion to the aggregate principal amount of the Contract Securities as the principal amount of the Securities so set forth opposite the name of such Underwriter bears to the aggregate principal amount of the Securities set forth in Schedule II hereto, except to the extent that the Representatives shall determine that such reduction shall be otherwise than in such proportion and shall so advise the Company in writing; PROVIDED, HOWEVER, that the aggregate principal amount of the Securities to be purchased by all Underwriters pursuant to this Agreement shall be the aggregate principal amount of the Securities set forth in Schedule II hereto, less the aggregate principal amount of the Contract Securities. 3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwriters' Securities shall be made in the funds, at the office, on the date and at the time specified in Schedule I hereto, which date and time may be accelerated or postponed by agreement between the Representatives and the Company or as provided in Section 10 (such date and time of delivery and payment for the Underwriters' Securities being herein called the "Closing Date"). Delivery of the Underwriters' Securities shall be made to the Representatives, for the respective accounts of the Underwriters, against payment by the several Underwriters through the Representatives of the purchase price therefor to or upon the order of the Company by certified or official bank check or checks payable in such funds. Certificates for the Underwriters' Securities shall be registered in such names and in such denominations as the Representatives may request not less than three full business days in advance of the Closing Date. - 4 - The Company agrees to have the Underwriters' Securities available for inspection, checking and packaging by the Representatives in New York, New York not later than 1:00 p.m. on the business day prior to the Closing Date. 4. OFFERING BY UNDERWRITERS. It is understood that the several Underwriters propose to offer the Securities for sale as set forth in the Final Prospectus. 5. AGREEMENTS. The Company agrees with the several Underwriters that: (a) Prior to the termination of the offering of the Securities, the Company will not file with the Commission any amendment to the Registration Statement or any supplement (including the Final Prospectus) of the Basic Prospectus unless the Company shall have furnished the Representatives a copy for their review prior to filing. Subject to the preceding sentence, the Company will cause the Final Prospectus to be filed (or transmitted for filing) with the Commission pursuant to Rule 424 under the Act. The Company will promptly advise the Representatives (i) when the Final Prospectus shall have been filed (or transmitted for filing) with the Commission pursuant to such Rule 424, (ii) when any amendment to the Registration Statement relating to the Securities shall have become effective, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment to or supplement of the Final Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the institution or threatening of any proceeding for such purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or of the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event has occurred as a result of which the Final Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend or supplement the Registration Statement or the Final Prospectus to comply with the Act, the Exchange Act or the respective rules thereunder, the Company promptly will prepare and file with the Commission, subject to the first sentence of paragraph (a) of this Section 5, an amendment or supplement which will correct such statement or omission or an amendment or supplement which will effect such compliance. (c) As soon as practicable, but not later than 45 days after the end of the 12-month period beginning at the end of the current fiscal quarter of the Company, the Company will make generally available to its security holders and to the Representatives an earnings statement (which need not be audited) of the Company and its consolidated subsidiaries which will satisfy the provisions of Section 11(a) of the Act. - 5 - (d) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, (i) one signed copy of the registration statement as originally filed (including exhibits thereto other than exhibits incorporated by reference therein) and of each amendment thereto which shall become effective on or prior to the Closing Date, (ii) one conformed copy for each Underwriter of the registration statement as originally filed (including exhibits thereto other than exhibits incorporated by reference therein) and of each amendment thereto which shall become effective on or prior to the Closing Date and (iii) so long as delivery of a prospectus relating to the Securities by an Underwriter or dealer may be required by the Act, as many copies of any Preliminary Final Prospectus and the Final Prospectus and any amendments thereto and supplements thereof as the Representatives may reasonably request. The Company will pay the expenses of printing or otherwise producing all documents relating to the offering of the Securities and all other costs and taxes incident to the issuance and original delivery of the Securities. (e) The Company will cooperate with the Underwriters, and will reimburse the Underwriters for their expenses (including the reasonable fees and disbursements of Sidley & Austin), in arranging for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may reasonably designate, will use its best efforts to maintain such qualifications in effect so long as required for the distribution of the Securities and will reimburse the Underwriters for their expenses (including the reasonable fees and disbursements of Sidley & Austin) in arranging for the determination of the legality of the Securities for purchase by institutional investors; PROVIDED, HOWEVER, that the Company shall not be obligated hereby to execute or file any general consent to service of process under the laws of any jurisdiction or to qualify to do business as a foreign corporation in any jurisdiction. (f) Until the business day following the Closing Date, the Company will not, without the consent of the Representatives, offer, sell or contract to sell, or announce the offering of, any debt securities covered by the Registration Statement or any other registration statement filed by the Company under the Act. 6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the Underwriters to purchase the Underwriters' Securities shall be subject to the accuracy in all material respects of the representations and warranties of the Company contained herein as of the date hereof, as of the time of the effectiveness of any amendment to the Registration Statement (including the filing of any document incorporated by reference therein) filed after the date hereof and prior to the Closing Date and as of the Closing Date, to the accuracy in all material respects of the statements of the Company made in any certificates delivered pursuant to the provisions hereof, to the performance in all material respects by the Company of its obligations hereunder and to the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time after the date hereof and prior to the Closing Date, shall have been issued and no proceedings for such purpose shall have been instituted or, to the best - 6 - knowledge of the Company, threatened; and the Final Prospectus shall have been filed (or transmitted for filing) with the Commission pursuant to Rule 424 under the Act not later than 5:00 p.m., Chicago time, on the business day following the date hereof. (b) The Supplemental Indenture shall have become, and the Indenture shall be, qualified under the Trust Indenture Act. (c) There shall be in full force and effect one or more orders of the Minnesota Commission authorizing, among other things, (i) the Company's proposed capital structure after the issuance and sale by the Company of the Securities and other securities therein mentioned and (ii) the issue and sale of the Securities by the Company on terms and conditions not inconsistent with the terms and conditions set forth in or contemplated by this Agreement and any Delayed Delivery Contract, and containing no provisions unacceptable to the Representatives, it being agreed that the order or orders of the Minnesota Commission heretofore issued as described in paragraph (c) of Section 1 contain no such unacceptable provisions. (d) The Company shall have furnished to the Representatives the opinion, dated the Closing Date, of Dorsey & Whitney LLP, counsel for the Company, to the effect that: (i) the Company is a duly organized and validly existing corporation in good standing under the laws of the State of Minnesota and is duly qualified to transact business as a foreign corporation and is in good standing in the States of North Dakota and South Dakota; (ii) the Company is a public utility as defined in the statutes of the States of Minnesota, North Dakota and South Dakota and is authorized by its Articles of Incorporation, as amended, to carry on the business in which it is engaged, as set forth in the Final Prospectus; the Company has the legal right to function and operate as an electric utility in the States of Minnesota, North Dakota and South Dakota; and the Company is subject as to rates, issuance of securities, service and other matters to the jurisdiction of certain authorities as and to the extent stated in such Annual Report under the caption "Business--General Regulation"; (iii) except for municipalities having an aggregate population of less than 15,000, according to the 1990 census, the Company has valid and subsisting franchises covering all municipalities with more than 1,000 population, according to the 1990 census, which authorize the Company to carry on the respective utility businesses in which it is engaged in the municipalities covered by such franchises; (iv) except as to property acquired subsequent to the execution and delivery of the Supplemental Indenture, the Company has good and - 7 - sufficient title to all property described or referred to in, and purported to be conveyed by, the Indenture (except (A) such property as may have been disposed of and released from the lien thereof in accordance with the terms thereof and (B) one or more parcels of land having an aggregate book value, exclusive of removable improvements, of less than $1,000,000), subject only to the lien of the Indenture, to exceptions and reservations specifically set forth therein and to permitted encumbrances as therein defined (in rendering which opinion, such counsel may rely on the opinions of local counsel and on a certificate of the Company setting forth the properties owned by the Company which are not described in the Indenture and the book value of such properties exclusive of removable improvements thereon upon which such counsel believes it may properly rely, provided it so states in such opinion); the description in the Indenture of such property is adequate to constitute the Indenture a lien thereon; the Indenture, subject only to exceptions and reservations specifically set forth therein and to permitted encumbrances as therein defined, constitutes a valid, perfected and direct first mortgage lien on such property, which includes substantially all of the fixed property of the Company, and on the franchises and permits of the Company pertaining to the operation of its property; all fixed property, and all franchises and permits pertaining to the operation of its property, acquired by the Company after the execution and delivery of the Supplemental Indenture will, upon such acquisition, become subject to the lien of the Indenture to the extent provided therein, subject, however, to permitted encumbrances, to liens, defects and limitations, if any, existing or placed thereon at the time of acquisition thereof by the Company and to any rights or equities of others attaching under local law; and the Indenture is enforceable in accordance with its terms for the benefit of the holders of the Securities and other First Mortgage Bonds outstanding thereunder from time to time, except as such enforcement may be limited by (i) laws affecting certain of the remedies provided by the Indenture which do not, in the opinion of such counsel, materially interfere with the practical realization of the benefits and the security provided by the Indenture and without which remedies the Indenture contains adequate provisions for realizing upon the benefits and the security intended to be provided thereby, (ii) bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally or (iii) general principles of equity; (v) the Indenture is qualified under the Trust Indenture Act; (vi) the Indenture (including the Supplemental Indenture) has been duly filed for recordation and otherwise filed, indexed or cross-indexed, and any financing statements with respect thereto required under the Uniform Commercial Code have been filed, in such manner and in such - 8 - places as are required by law in order to give constructive notice of, establish, preserve and protect the lien of the Indenture on all property of the Company of every kind described in and conveyed by the Indenture; (vii) the Indenture (including the Supplemental Indenture) is in due and proper form, has been duly and validly authorized by all necessary corporate action, has been duly and validly executed and delivered and is a valid instrument legally binding on the Company; (viii) the Securities are in due and proper form; the issue and sale of the Securities by the Company in accordance with the terms of this Agreement and any Delayed Delivery Contracts have been duly and validly authorized by the necessary corporate action; the Securities, when duly executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, in the case of the Underwriters' Securities, or by the purchasers thereof pursuant to Delayed Delivery Contracts, in the case of any Contract Securities, will constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally or by general principles of equity, and will be secured by the lien of and entitled to the benefits provided by the Indenture (subject to the exception stated above); and the Securities and the Indenture conform as to legal matters with the statements concerning them made in the Final Prospectus, and such statements accurately set forth the matters respecting the Securities and the Indenture required to be set forth in the Final Prospectus; (ix) the order or orders of the Minnesota Commission referred to in paragraph (c) of this Section 6 have been duly entered and, to the best knowledge of such counsel, are still in force and effect; and no further approval, authorization, consent, certificate or order of any state or federal commission or regulatory authority is necessary with respect to the execution and delivery of the Indenture or the issue and sale of the Securities as contemplated herein and in any Delayed Delivery Contracts (except that the sale of the Securities in certain jurisdictions may be subject to the securities or "Blue Sky" laws thereof); (x) the Registration Statement and any amendments thereto filed under the Act (including the documents which upon filing by the Company with the Commission will be incorporated by reference in the Registration Statement) prior to the Closing Date have become effective under the Act; to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement, as so amended, has been issued and - 9 - no proceedings for such purpose have been instituted or threatened; and the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, as of their respective effective or issue dates (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need express no opinion), complied as to form in all material respects with the applicable requirements of the Act, the Exchange Act and the respective rules thereunder; and although such counsel assumes no responsibility for the accuracy, completeness or fairness of statements contained in the Registration Statement, or any amendment thereto, or the Final Prospectus, or any amendment thereto or supplement thereof, except as expressly stated in such counsel's opinion pursuant to the requirements of this paragraph (d), such counsel has no reason to believe that the Registration Statement, at the date of this Agreement, or any amendment thereto, at the time it became effective (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need express no opinion), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Final Prospectus, or any amendment thereto or supplement thereof, as of their respective issue dates (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need express no opinion), included any 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, in the light of the circumstances under which they were made, not misleading; (xi) this Agreement and any Delayed Delivery Contracts have been duly authorized by all requisite corporate action, executed and delivered by the Company; (xii) neither the issue and sale of the Securities nor the consummation of any of the other transactions herein contemplated, including the fulfillment of the terms hereof or of any Delayed Delivery Contracts, will conflict with, result in a breach of or constitute a default under the Articles of Incorporation, as amended, or By-laws of the Company or any indenture or other agreement or instrument known to such counsel and to which the Company is a party or by which the Company or any of its property is bound; (xiii) to the best knowledge of such counsel, there is no legal or governmental proceeding and no franchise, contract or other document of a character required to be described in the Registration Statement or the Final Prospectus, or to be filed as an exhibit to the Registration Statement, which is not described or filed as required; - 10 - (xiv) the statements contained in the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, which are expressed therein to have been made on the authority of such counsel have been reviewed by them and, as to matters of law and legal conclusions, are correct; and (xv) the Company has a duly authorized share capitalization as set forth under the caption "Capitalization" in the consolidated balance sheet of the Company at December 31,_____ included in the Company's Annual Report on Form 10-K for the year ended December 31,_____and incorporated by reference in the Final Prospectus or any amendment thereto or supplement thereof. (e) The Company shall have furnished to the Representatives the opinion, dated the Closing Date, of Jay D. Myster, Senior Vice President, Governmental and Legal of the Company, to the effect that: (i) except as disclosed in the Final Prospectus as then amended or supplemented, there are no actions, suits, investigations or proceedings at law or in equity or before or by any court, public board or body pending or, to the best knowledge of such counsel, threatened against the Company or any subsidiary, wherein an unfavorable decision, ruling or finding would have a material adverse effect on the transactions contemplated by this Agreement, the Registration Statement and the Final Prospectus or on the validity or enforceability against the Company of this Agreement, the Indenture or the Securities; (ii) to the best knowledge of such counsel, the descriptions included in the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, as of their respective effective or issue dates, of statutes, legal and other governmental proceedings and of franchises, contracts and other documents are accurate and fairly present the information required to be shown; (iii) each of Minnesota Dakota Generating Company ("MDGC"), Mid-States Development, Inc. ("MDI"), Quadrant Co. ("QC"), Diagnostic Medical Systems, Inc. ("DMSI") and North Central Utilities, Inc. ("NCUI") is a duly organized and validly existing corporation in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to carry on its business as now conducted; and (iv) all of the issued and outstanding capital stock of MDGC is validly issued, fully paid and non-assessable and (except for directors' qualifying shares) is owned beneficially and of record by the Company free - 11 - and clear of all liens, pledges and encumbrances and all of the issued and outstanding capital stock of each of MDI, QC and NCUI is validly issued, fully paid and non-assessable and is owned beneficially and of record by MDGC free and clear of all liens, pledges and encumbrances; and all of the issued and outstanding capital stock of DMSI is validly issued, fully paid and non-assessable and is owned beneficially and of record by MDI free and clear of all liens, pledges and encumbrances. (f) The Representatives shall have received from Sidley & Austin, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to the issue and sale of the Securities, the Indenture, any Delayed Delivery Contracts, the Registration Statement, the Final Prospectus, each amendment thereto or supplement thereof, if any, and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. For purposes of their opinion, Sidley & Austin shall be entitled to rely upon the opinion of Dorsey & Whitney LLP, counsel for the Company, as to matters governed by Minnesota law, and shall be entitled to rely upon such opinion as to the organization and existence of the Company. (g) The Company shall have furnished to the Representatives a certificate, dated the Closing Date, of the Company, signed by its President or any Vice President and by its principal financial or accounting officer, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, and this Agreement and that: (i) the representations and warranties of the Company contained in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has in all material respects complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; (ii) the order or orders of the Minnesota Commission referred to in paragraph (c) of this Section 6 have been duly entered and are still in full force and effect; (iii) no stop order suspending the effectiveness of the Registration Statement, as amended prior to the Closing Date, has been issued and no proceedings for such purpose have been instituted or, to the best knowledge of the Company, threatened; and (iv) since the date of the most recent financial statements included in the Final Prospectus, there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Com- - 12 - pany and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, and no dividends (other than regular quarterly dividends on the Company's Cumulative Preferred Shares and Common Shares) have been declared or paid on, or other distribution declared or made on, the outstanding shares of the Company, except in each case as set forth or contemplated in the Final Prospectus. (h) At the Closing Date, Deloitte & Touche LLP shall have furnished to the Representatives a letter, dated the Closing Date, in form and substance reasonably satisfactory to the Representatives, confirming that they are independent accountants within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that: (i) in their opinion the audited consolidated financial statements and financial statement schedules included or incorporated by reference in the Registration Statement and the Final Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder; (ii) on the basis of a reading of the latest unaudited consolidated financial statements made available by the Company, the carrying out of certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter, a reading of the minutes of the meetings of the shareholders and the Board of Directors (and any committees thereof) of the Company and its subsidiaries and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to the date of the most recent audited consolidated financial statements included or incorporated by reference in the Final Prospectus, nothing came to their attention which caused them to believe that: (A) any unaudited consolidated financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder; or such unaudited consolidated financial statements are not prepared on a basis substantially consistent with that of the audited consolidated financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus; - 13 - (B) with respect to the interim period subsequent to the date of the most recent consolidated financial statements (other than any capsule information), audited or unaudited, included or incorporated by reference in the Registration Statement and the Final Prospectus: there were any changes at a specified date (not more than five business days prior to the date of such letter) in the long-term debt (other than any purchases of First Mortgage Bonds for sinking fund purposes) or capital stock (other than any purchases pursuant to the Automatic Dividend Reinvestment and Share Purchase Plan or of Cumulative Preferred Shares for sinking fund purposes) of the Company, or any decrease in the net assets of the Company, as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated by reference in the Registration Statement and the Final Prospectus; or for the period from the date of such most recent consolidated financial statements to such specified date, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated operating revenues, consolidated operating income, consolidated net income or net income per average common share outstanding of the Company; except in all instances for changes or decreases which the Registration Statement and the Final Prospectus disclose have occurred or may occur or which are set forth in such letter; and (C) they have performed certain other specified procedures as a result of which they have determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company) set forth in the Registration Statement and the Final Prospectus, including Exhibit 12-A to the Registration Statement, agrees with the accounting records of the Company, excluding any questions of legal interpretation. (i) Subsequent to the respective dates as of which information is given in the Registration Statement and the Final Prospectus, there shall not have been (i) any change or decrease of the character referred to in paragraph (h)(ii)(B) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company, the effect of which, in any case referred to in clause (i) or (ii), is, in the reasonable judgment of the Representatives, so material and adverse as to make it - 14 - impractical or inadvisable to proceed with the offering or the delivery of the Securities as contemplated by the Registration Statement and the Final Prospectus. (j) Subsequent to the execution of this Agreement, there shall not have been any decrease in the ratings of any of the Company's debt securities by Moody's Investors Service, Inc., Standard & Poor's Ratings Group or Fitch Investors Services. (k) The Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwriters have been approved by the Company. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and their counsel, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by telephone or telegraph, promptly confirmed in writing. 7. CONDITIONS TO THE OBLIGATION OF THE COMPANY. The obligation of the Company to deliver the Securities shall be subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time after the date hereof and prior to the Closing Date, shall have been issued and no proceedings for such purpose shall have been instituted or, to the best knowledge of the Company, threatened. (b) The Supplemental Indenture shall have become, and the Indenture shall be, qualified under the Trust Indenture Act. (c) There shall be in full force and effect one or more orders of the Minnesota Commission authorizing, among other things, (i) the Company's proposed capital structure after the issuance and sale by the Company of the Securities and other securities therein mentioned and (ii) the issue and sale of the Securities by the Company on terms and conditions not inconsistent with the terms and conditions set forth in or contemplated by this Agreement or any Delayed Delivery Contract, and containing no provisions unacceptable to the Company, it being agreed that the order or orders of the Minnesota Commission heretofore issued as described in paragraph (c) of Section 1 contain no such unacceptable provisions. If any of the conditions specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Agreement, this Agreement and the obligation of the Company to deliver the Securities hereunder may be canceled at, or at any time prior to, the - 15 - Closing Date by the Company. Notice of such cancellation shall be given to the Representatives in writing or by telephone or telegraph, promptly confirmed in writing. 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Underwriters' Securities as provided herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 is not satisfied, because any condition to the obligation of the Company set forth in Section 7 is not satisfied, because of any termination pursuant to Section 11 or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally, upon demand, for all out-of-pocket expenses (including the reasonable fees and disbursements of Sidley & Austin) which shall have been reasonably incurred by them in connection with the proposed purchase and sale of the Securities. 9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which it or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions, suits or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement as originally filed, or in any amendment thereto, covering the registration of the Securities, or in the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any amendment thereto or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified person for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability, action, suit or proceeding; PROVIDED, HOWEVER, that (i) the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for use in connection with the preparation thereof, or arises out of or is based upon the Statements of Eligibility (Forms T-1 and T-2) under the Trust Indenture Act of the Trustees or the trustee under the Debenture Indenture, and (ii) such indemnity with respect to the Basic Prospectus or any Preliminary Final Prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any such loss, claim, damage or liability purchased the Securities which are the subject thereof if such person did not receive a copy of the Final Prospectus (or the Final Prospectus as amended or supplemented), excluding documents incorporated therein by reference, at or prior to the confirmation of the sale of such Securities to such person in any case where such delivery is required by the Act and the untrue statement or the omission of a material fact contained in the Basic Prospectus or any Preliminary Final Prospectus was corrected in the Final Prospectus (or the Final Prospectus as amended or supplemented), provided that the Company shall have deliv- - 16 - ered the Final Prospectus (or the Final Prospectus as amended or supplemented) in a timely manner and in sufficient quantities, as provided in Section 5(d), to permit such delivery by the Underwriters. This agreement of indemnity will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person who controls the Company within the meaning of the Act or the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for use in connection with the preparation of the documents referred to in such foregoing indemnity. This agreement of indemnity will be in addition to any liability which any Underwriter may otherwise have. (c) Promptly after receipt by any person indemnified under this Section 9 of notice of the commencement of any action, suit or proceeding, such person will, if a claim in respect thereof is to be made against an indemnifying party under this Section 9, notify such indemnifying party in writing of the commencement thereof; but the omission so to notify such indemnifying party will not relieve it from any liability which it may have to any indemnified person otherwise than under this Section 9. In case any such action, suit or proceeding is brought against any person indemnified under this Section 9 and such indemnified person notifies an indemnifying party of the commencement thereof, such indemnifying party will be entitled to participate therein and, to the extent that it may elect by written notice delivered to such indemnified person promptly after receiving the aforesaid notice from such indemnified person, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person; PROVIDED, HOWEVER, that if the defendants in any such action, suit or proceeding include both such indemnified person and such indemnifying party and such indemnified person shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified persons which are different from or in addition to the defenses available to such indemnifying party, the indemnified person or persons shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action, suit or proceeding on behalf of such indemnified person or persons. Upon receipt of notice from such indemnifying party to such indemnified person of the former's election so to assume the defense of such action, suit or proceeding and approval by such indemnified person of counsel, such indemnifying party will not be liable to such indemnified person under this Section 9 for any legal or other expenses subsequently incurred by such indemnified person in connection with the defense thereof unless (i) such indemnified person shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that such indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of indemnification under paragraph (a) of this Section 9), (ii) such indemnifying party shall not have employed counsel reasonably satisfactory to such indemnified person to represent such indemnified person within a reasonable time after notice of commencement of such action, suit or proceeding or (iii) such indemnifying party shall have authorized the employment of counsel for such indemnified person at the expense of such indemnifying party; - 17 - PROVIDED, HOWEVER, that if clause (i) or (iii) above is applicable, the liability of such indemnifying party shall be only in respect of the counsel specifically referred to in such clause (i) or (iii). (d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in paragraph (a) of this Section 9 shall be due in accordance with its terms but for any reason shall be held by a court to be unavailable from the Company on grounds of policy or otherwise, the Company and the Underwriters shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending against the same) to which the Company and one or more of the Underwriters may be subject in such proportion that the Underwriters shall be responsible for the portion represented by the percentage which the aggregate underwriting commission shall bear to the aggregate initial price to public specified in Schedule I hereto of the Underwriters' Securities and the Company shall be responsible for the balance; PROVIDED, HOWEVER, that (i) in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting commission applicable to the Securities purchased by such Underwriter hereunder and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person who controls an Underwriter within the meaning of the Act or the Exchange Act shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of the Act or the Exchange Act, each director of the Company and each officer of the Company who shall have signed the Registration Statement shall have the same rights to contribution as the Company, subject in each case to clause (ii) of the preceding sentence. Any person entitled to contribution shall, promptly after receipt of notice of the commencement of any action, suit or proceeding against such person in respect of which a claim for contribution may be made against a party or parties under this paragraph (d), notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties shall not relieve such party or parties from any other obligation it or they may have otherwise than under this paragraph (d). 10. DEFAULT BY AN UNDERWRITER. If one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated, severally, to purchase and pay for (in the respective proportions which the principal amount of the Securities set forth opposite their respective names in Schedule II hereto bears to the aggregate principal amount of the Securities set forth opposite the names of all the nondefaulting Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate principal amount of the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of the Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities; and if the nondefaulting Underwriters shall not purchase all the Securities or if other arrangements satisfactory to the Representatives and the Company for the purchase of all - 18 - the Securities shall not be made within 48 hours after such default, this Agreement will terminate without any liability on the part of any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as described in this Section 10 under circumstances where this Agreement shall not be terminated, the Closing Date shall be postponed for such period, not exceeding seven days, as the Representatives and the Company shall determine in order that the required changes in the Registration Statement and the Final Prospectus, or in any other documents or arrangements, may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. 11. TERMINATION. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by written notice given to the Company prior to delivery of and payment for the Underwriters' Securities, if prior to such time (i) trading in the Company's Common Shares shall have been suspended by the Commission or the National Association of Securities Dealers, Inc. or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium shall have been declared by Federal, New York State or Minnesota authorities or (iii) there shall have occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the reasonable judgment of the Representatives, impracticable to market the Securities. 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements, representations, warranties, indemnities and other statements of the Company, of the Representatives and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter, any Representative, the Company or any of the directors, officers or controlling persons referred to in Section 9, and will survive delivery of and payment for the Securities. The provisions of Sections 8 and 9 shall survive the termination or cancellation of this Agreement. 13. NOTICES. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telegraphed and confirmed to them at the address specified in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, Attention: Vice President, Finance. 14. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons, directors and officers referred to in Section 9, and no other person will have any right or obligation hereunder; and no other person (including a purchaser, as such, from any Underwriter of the Securities) shall acquire or have any rights under or by virtue of this Agreement. 15. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when - 19 - so executed and delivered, shall be deemed to be an original; and all of which counterparts shall, taken together, constitute one and the same Agreement. 16. APPLICABLE LAW. This Agreement will be governed by and construed in accordance with the laws of the State of Minnesota. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, OTTER TAIL POWER COMPANY By _____________________________ The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto. By: _______________________________________________ For themselves and the other several Underwriters, if any, named in Schedule II to the foregoing Agreement. - 20 - SCHEDULE I Underwriting Agreement dated Registration Statement No. 333- Representatives of the Underwriters: Address of Representatives: Title, Purchase Price and Description of the Securities: Title: First Mortgage Bonds,___% Series of____ Principal amount: Purchase price: ____%, plus accrued interest, if any, from_______ Funds for payment: Underwriting commission (including aggregate dollar amount): Initial price to public:____%, plus accrued interest, if any, from____ Maturity: Interest payment dates: Sinking fund provisions: Optional redemption provisions: Other provisions: Closing Date, Time and Location: Delayed Delivery Arrangements: SCHEDULE II PRINCIPAL AMOUNT OF UNDERWRITER SECURITIES TO BE PURCHASED - ----------- -------------------------- SCHEDULE III DELAYED DELIVERY CONTRACT _______________, 19__ Otter Tail Power Company 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 Dear Sirs: The undersigned hereby agrees to purchase from Otter Tail Power Company (the "Company"), and the Company agrees to sell to the undersigned, on _______________, 19__ (the "Delivery Date"), $____________ principal amount of the Company's First Mortgage Bonds, _____% Series of _____ (the "Securities") offered by the Company's Final Prospectus dated _______________, 19__ (as amended or supplemented), receipt of a copy of which is hereby acknowledged, at a purchase price of _____% of the principal amount thereof, plus accrued interest, if any, thereon from _______________, 19__, to the date of payment and delivery, and on the further terms and conditions set forth in this contract. Payment for the Securities to be purchased by the undersigned hereunder shall be made on or before 11:00 a.m., Minneapolis time, on the Delivery Date to or upon the order of the Company in ____________________ funds at the office of First Trust National Association, First Trust Center, St. Paul, Minnesota 55101, upon delivery to the undersigned of the Securities in definitive fully registered form and in such authorized denominations and registered in such names as the undersigned may request by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date. If no request is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of the Securities to be purchased by the undersigned hereunder. The obligation of the undersigned to take delivery of and make payment for the Securities on the Delivery Date, and the obligation of the Company to sell and deliver the Securities on the Delivery Date, shall be subject to the conditions (and neither party shall incur any liability by reason of the failure thereof) that (1) the purchase of the Securities to be made by the undersigned hereunder, which purchase the undersigned represents is not prohibited on the date hereof, shall not on the Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company, on or before the Delivery Date, shall have sold to certain underwriters (the "Underwriters") such principal amount of the Securities as is to be sold to them pursuant to the Underwriting Agreement referred to in the Final Prospectus mentioned above. Promptly after completion of such sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinions of counsel for the Company delivered to the Underwriters in connection therewith. The obligation of the undersigned to take delivery of and make payment for the Securities hereunder, and the obligation of the Company to cause the Securities to be sold and delivered, shall not be affected by the failure of any purchaser to take delivery of and make payment for the Company's Otter Tail Power Company July__, 19__ Page 2 First Mortgage Bonds, _____% Series of _____, pursuant to other contracts similar to this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that acceptance of this contract and other similar contracts is in the Company's sole discretion and, without limiting the foregoing, need not be on a first come, first served basis. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This contract will become a binding agreement between the Company and the undersigned, as of the date first above written, when such counterpart is so mailed or delivered. This agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. Very truly yours, ___________________________________ (Name of Purchaser) By_________________________________ (Signature and Title of Officer) ___________________________________ ___________________________________ (Address) Accepted: OTTER TAIL POWER COMPANY By____________________________________ (Authorized Signature) - 2 - EX-1.B 3 EXHIBIT 1-B UNDERWRITING AGREEMENT EXHIBIT 1-B OTTER TAIL POWER COMPANY DEBENTURES UNDERWRITING AGREEMENT [Date] To the Representatives named in Schedule I hereto of the Underwriters named in Schedule II hereto Dear Sirs: Otter Tail Power Company, a Minnesota corporation (the "Company"), proposes to sell to the underwriters named in Schedule II hereto (the "Underwriters"), for whom you are acting as representatives (the "Representatives"), the principal amount of its debt securities identified in Schedule I hereto (the "Securities"), to be issued under the Company's Indenture (For Unsecured Debt Securities) dated as of ___________, 1996 (1) (the "Indenture"), between the Company and _________________, as trustee (the "Trustee").(2) If the firm or firms listed in Schedule II hereto include only the firm or firms named as Representatives in Schedule I hereto, then the terms "Underwriters" and "Representatives," as used herein, shall each be deemed to refer to such firm or firms. 1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to, and agrees with, each Underwriter that: (a) The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended (the "Act"), and has filed with the Securities and Exchange Commission (the "Commission") a registration statement on such Form (the file number of which is set forth in Schedule I hereto), which has become effective, for the registration under the Act of $50,000,000 aggregate initial offering price of the Company's debt securities, including the Securities. Such registration statement, as amended at the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all other material respects with such Rule. The Company proposes to file with the Commission pursuant to Rule 424 under the Act a supplement to the form of - ------------------------------- (1) If previously supplemented, add: "as supplemented by all supplemental indentures executed prior to the date hereof". (2) If the Securities are created by Supplemental Indenture, an appropriate reference would be added here and in Sections 6(b), 6(d)(v), 6(d)(vii) and 7(b). prospectus included in such registration statement relating to the Securities and the plan of distribution thereof and has previously advised the Representatives of all further information (financial and other) with respect to the Company to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the time it was declared effective by the Commission, is hereinafter called the "Registration Statement"; such prospectus, in the form in which it appears in the Registration Statement, is hereinafter called the "Basic Prospectus"; and the Basic Prospectus as supplemented by such prospectus supplement, in the form in which the same shall be filed (or transmitted for filing) with the Commission pursuant to such Rule 424, is hereinafter called the "Final Prospectus." Any preliminary form of the Final Prospectus which has heretofore been filed (or transmitted for filing) with the Commission pursuant to such Rule 424 is hereinafter called a "Preliminary Final Prospectus." Any reference herein to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before the date of this Agreement, or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be, so incorporated by reference. (b) As of the time when the Registration Statement became effective, as of the date hereof, as of the time when any post-effective amendment to the Registration Statement becomes effective (if such effectiveness is prior to the termination of the offering of the Securities), as of the time when the Company's latest Annual Report on Form 10-K is filed with the Commission (if such filing is after January 1, 1997 and prior to the termination of the offering of the Securities), as of the time when the Final Prospectus is first filed (or transmitted for filing) pursuant to Rule 424 under the Act, as of the time when any supplement to the Final Prospectus is filed (or transmitted for filing) with the Commission (if such filing is prior to the termination of the offering of the Securities) and at the Closing Date (as hereinafter defined): (i) the Registration Statement, as amended as of any such time, the Final Prospectus, as amended or supplemented as of any such time, and the Indenture complied or will comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the respective rules thereunder; and (ii) neither the Registration Statement, as amended as of any such time, nor the Final Prospectus, as amended or supplemented as of any such time, contained or will contain any untrue statement of a material fact or omitted or will - 2 - omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; PROVIDED, HOWEVER, that the Company makes no representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statements of Eligibility (Forms T-1 and T-2) under the Trust Indenture Act of the Trustee or the trustees under the Company's Indenture of Mortgage dated as of July 1, 1936, as supplemented (the "Mortgage"), or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus, or any amendment thereto or supplement thereof, in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for use in connection with the preparation of the Registration Statement or the Final Prospectus. (c) The Public Utilities Commission of Minnesota (the "Minnesota Commission") has entered one or more orders authorizing, among other things, (i) the Company's proposed capital structure after the issuance and sale by the Company of the Securities and other securities therein mentioned and (ii) the issue and sale of the Securities by the Company on terms and conditions not inconsistent with the terms and conditions set forth in or contemplated by this Agreement or any Delayed Delivery Contract (as hereinafter defined) as hereinafter provided; and no further approval, authorization, consent, certificate or order of any state or federal commission or regulatory authority is necessary with respect to the execution and delivery of the Indenture or the issue and sale of the Securities as contemplated herein and in any Delayed Delivery Contract (except that the sale of the Securities in certain jurisdictions may be subject to the securities or "Blue Sky" laws thereof). A true and complete copy of such order or orders of the Minnesota Commission has been delivered to the Representatives. 2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of the Securities set forth opposite such Underwriter's name in Schedule II hereto, except that if Schedule I hereto provides for the sale of the Securities pursuant to delayed delivery arrangements, the respective principal amounts of the Securities to be purchased by each of the Underwriters shall be as set forth in Schedule II hereto, less the respective principal amounts of Contract Securities (as hereinafter defined) determined as provided below. Securities to be purchased by the Underwriters are hereinafter called the "Underwriters' Securities" and Securities to be purchased pursuant to Delayed Delivery Contracts are hereinafter called "Contract Securities." At the time of the purchase of the Underwriters' Securities, the Company will pay to the Representatives, for the respective accounts of the Underwriters, the aggregate underwriting commission in respect thereof set forth in Schedule I hereto by accepting from the Underwriters in payment for the Underwriters' Securities certified or official bank check or checks payable to the order of the Company in the funds set forth in Schedule I hereto in an amount equal to the aggregate initial price to public of the Underwriters' Securities set forth in Schedule I hereto, less - 3 - such underwriting commission, unless the Representatives and the Company shall agree on another manner of payment. If so provided in Schedule I hereto, the Underwriters are authorized to solicit offers to purchase the Securities from the Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts") substantially in the form of Schedule III hereto, but with such changes therein as the Company may authorize or approve. If so provided, the Underwriters will endeavor to make such arrangements and, as compensation therefor, the Company will pay to the Representatives, for the respective accounts of the Underwriters, on the Closing Date, by certified or official bank check payable in the funds set forth in Schedule I hereto, the delayed delivery fee set forth in Schedule I hereto with respect to the Securities for which Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be solicited from and made only with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions. The Company will enter into Delayed Delivery Contracts in all cases where sales of Contract Securities arranged by the Underwriters have been previously approved by the Company, but, except as the Company may otherwise agree, each such Delayed Delivery Contract must be for not less than the minimum principal amount set forth in Schedule I hereto and the aggregate principal amount of the Contract Securities may not exceed the maximum aggregate principal amount set forth in Schedule I hereto. The Underwriters will not have any responsibility in respect of the validity or performance of Delayed Delivery Contracts. The respective principal amounts of the Securities to be purchased by each Underwriter as set forth in Schedule II hereto shall be reduced by an amount which shall bear the same proportion to the aggregate principal amount of the Contract Securities as the principal amount of the Securities so set forth opposite the name of such Underwriter bears to the aggregate principal amount of the Securities set forth in Schedule II hereto, except to the extent that the Representatives shall determine that such reduction shall be otherwise than in such proportion and shall so advise the Company in writing; PROVIDED, HOWEVER, that the aggregate principal amount of the Securities to be purchased by all Underwriters pursuant to this Agreement shall be the aggregate principal amount of the Securities set forth in Schedule II hereto, less the aggregate principal amount of the Contract Securities. 3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwriters' Securities shall be made in the funds, at the office, on the date and at the time specified in Schedule I hereto, which date and time may be accelerated or postponed by agreement between the Representatives and the Company or as provided in Section 10 (such date and time of delivery and payment for the Underwriters' Securities being herein called the "Closing Date"). Delivery of the Underwriters' Securities shall be made to the Representatives, for the respective accounts of the Underwriters, against payment by the several Underwriters through the Representatives of the purchase price therefor to or upon the order of the Company by certified or official bank check or checks payable in such funds. Certificates for the Underwriters' Securities shall be registered in such names and in such denominations as the Representatives may request not less than two full business days in advance of the Closing Date. - 4 - The Company agrees to have the Underwriters' Securities available for inspection, checking and packaging by the Representatives in New York, New York not later than 1:00 p.m. on the business day prior to the Closing Date. 4. OFFERING BY UNDERWRITERS. It is understood that the several Underwriters propose to offer the Securities for sale as set forth in the Final Prospectus. 5. AGREEMENTS. The Company agrees with the several Underwriters that: (a) Prior to the termination of the offering of the Securities, the Company will not file with the Commission any amendment to the Registration Statement or any supplement (including the Final Prospectus) of the Basic Prospectus unless the Company shall have furnished the Representatives a copy for their review prior to filing. Subject to the preceding sentence, the Company will cause the Final Prospectus to be filed (or transmitted for filing) with the Commission pursuant to Rule 424 under the Act. The Company will promptly advise the Representatives (i) when the Final Prospectus shall have been filed (or transmitted for filing) with the Commission pursuant to such Rule 424, (ii) when any amendment to the Registration Statement relating to the Securities shall have become effective, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment to or supplement of the Final Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the institution or threatening of any proceeding for such purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or of the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event has occurred as a result of which the Final Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend or supplement the Registration Statement or the Final Prospectus to comply with the Act, the Exchange Act or the respective rules thereunder, the Company promptly will prepare and file with the Commission, subject to the first sentence of paragraph (a) of this Section 5, an amendment or supplement which will correct such statement or omission or an amendment or supplement which will effect such compliance. (c) As soon as practicable, but not later than 45 days after the end of the 12-month period beginning at the end of the current fiscal quarter of the Company, the Company will make generally available to its security holders and to the Representatives an earnings statement (which need not be audited) of the Company and its consolidated subsidiaries which will satisfy the provisions of Section 11(a) of the Act. - 5 - (d) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, (i) one signed copy of the registration statement as originally filed (including exhibits thereto other than exhibits incorporated by reference therein) and of each amendment thereto which shall become effective on or prior to the Closing Date, (ii) one conformed copy for each Underwriter of the registration statement as originally filed (including exhibits thereto other than exhibits incorporated by reference therein) and of each amendment thereto which shall become effective on or prior to the Closing Date and (iii) so long as delivery of a prospectus relating to the Securities by an Underwriter or dealer may be required by the Act, as many copies of any Preliminary Final Prospectus and the Final Prospectus and any amendments thereto and supplements thereof as the Representatives may reasonably request. The Company will pay the expenses of printing or otherwise producing all documents relating to the offering of the Securities and all other costs and taxes incident to the issuance and original delivery of the Securities. (e) The Company will cooperate with the Underwriters, and will reimburse the Underwriters for their expenses (including the reasonable fees and disbursements of Sidley & Austin), in arranging for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may reasonably designate, will use its best efforts to maintain such qualifications in effect so long as required for the distribution of the Securities and will reimburse the Underwriters for their expenses (including the reasonable fees and disbursements of Sidley & Austin) in arranging for the determination of the legality of the Securities for purchase by institutional investors; PROVIDED, HOWEVER, that the Company shall not be obligated hereby to execute or file any general consent to service of process under the laws of any jurisdiction or to qualify to do business as a foreign corporation in any jurisdiction. (f) Until the business day following the Closing Date, the Company will not, without the consent of the Representatives, offer, sell or contract to sell, or announce the offering of, any debt securities covered by the Registration Statement or any other registration statement filed by the Company under the Act. 6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of the Underwriters to purchase the Underwriters' Securities shall be subject to the accuracy in all material respects of the representations and warranties of the Company contained herein as of the date hereof, as of the time of the effectiveness of any amendment to the Registration Statement (including the filing of any document incorporated by reference therein) filed after the date hereof and prior to the Closing Date and as of the Closing Date, to the accuracy in all material respects of the statements of the Company made in any certificates delivered pursuant to the provisions hereof, to the performance in all material respects by the Company of its obligations hereunder and to the following additional conditions: (a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time after the date hereof and prior to the Closing Date, shall have been issued and no proceedings for such purpose shall have been instituted or, to the best knowledge of the Company, threatened; and the Final Prospectus shall have been filed (or - 6 - transmitted for filing) with the Commission pursuant to Rule 424 under the Act not later than 5:00 p.m., Chicago time, on the business day following the date hereof. (b) The Indenture shall be qualified under the Trust Indenture Act. (c) There shall be in full force and effect one or more orders of the Minnesota Commission authorizing, among other things, (i) the Company's proposed capital structure after the issuance and sale by the Company of the Securities and other securities therein mentioned and (ii) the issue and sale of the Securities by the Company on terms and conditions not inconsistent with the terms and conditions set forth in or contemplated by this Agreement and any Delayed Delivery Contract, and containing no provisions unacceptable to the Representatives, it being agreed that the order or orders of the Minnesota Commission heretofore issued as described in paragraph (c) of Section 1 contain no such unacceptable provisions. (d) The Company shall have furnished to the Representatives the opinion, dated the Closing Date, of Dorsey & Whitney LLP, counsel for the Company, to the effect that: (i) the Company is a duly organized and validly existing corporation in good standing under the laws of the State of Minnesota and is duly qualified to transact business as a foreign corporation and is in good standing in the States of North Dakota and South Dakota; (ii) the Company is a public utility as defined in the statutes of the States of Minnesota, North Dakota and South Dakota and is authorized by its Articles of Incorporation, as amended, to carry on the business in which it is engaged, as set forth in the Final Prospectus; the Company has the legal right to function and operate as an electric utility in the States of Minnesota, North Dakota and South Dakota; and the Company is subject as to rates, issuance of securities, service and other matters to the jurisdiction of certain authorities as and to the extent stated in such Annual Report under the caption "Business--General Regulation"; (iii) except for ______ municipalities having an aggregate population of less than 15,000, according to the 1990 census, the Company has valid and subsisting franchises covering all municipalities with more than 1,000 population, according to the 1990 census, which authorize the Company to carry on the respective utility businesses in which it is engaged in the municipalities covered by such franchises; (iv) the Indenture is qualified under the Trust Indenture Act; (v) the Indenture is in due and proper form, has been duly and validly authorized by all necessary corporate action, has been duly and - 7 - validly executed and delivered and is a valid instrument legally binding on the Company; (vi) the form and terms of the Securities have been established in conformity with the provisions of the Indenture, and the Securities are in due and proper form; the issue and sale of the Securities by the Company in accordance with the terms of this Agreement and any Delayed Delivery Contracts have been duly and validly authorized by the necessary corporate action; the Securities, when duly executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, in the case of the Underwriters' Securities, or by the purchasers thereof pursuant to Delayed Delivery Contracts, in the case of any Contract Securities, will constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally or by general principles of equity, and will be entitled to the benefits provided by the Indenture (subject to the exception stated above); and the Securities and the Indenture conform as to legal matters with the statements concerning them made in the Final Prospectus, and such statements accurately set forth the matters respecting the Securities and the Indenture required to be set forth in the Final Prospectus; (vii) the order or orders of the Minnesota Commission referred to in paragraph (c) of this Section 6 have been duly entered and, to the best knowledge of such counsel, are still in force and effect; and no further approval, authorization, consent, certificate or order of any state or federal commission or regulatory authority is necessary with respect to the execution and delivery of the Indenture or the issue and sale of the Securities as contemplated herein and in any Delayed Delivery Contracts (except that the sale of the Securities in certain jurisdictions may be subject to the securities or "Blue Sky" laws thereof); (viii) the Registration Statement and any amendments thereto filed under the Act (including the documents which upon filing by the Company with the Commission will be incorporated by reference in the Registration Statement) prior to the Closing Date have become effective under the Act; to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement, as so amended, has been issued and no proceedings for such purpose have been instituted or threatened; and the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, as of their respective effective or issue dates (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need express no opinion), complied as to form in all material respects with the - 8 - applicable requirements of the Act, the Exchange Act and the respective rules thereunder; and although such counsel assumes no responsibility for the accuracy, completeness or fairness of statements contained in the Registration State- ment, or any amendment thereto, or the Final Prospectus, or any amendment thereto or supplement thereof, except as ex- pressly stated in such counsel's opinion pursuant to the requirements of this paragraph (d), such counsel has no reason to believe that the Registration Statement, at the date of this Agreement, or any amendment thereto, at the time it became effective (other than the financial state- ments and other financial and statistical information con- tained therein, as to which such counsel need express no opinion), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Final Prospectus, or any amendment thereto or supplement thereof, as of their respective issue dates (other than the financial statements and other finan- cial and statistical information contained therein, as to which such counsel need express no opinion), included any 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, in the light of the circum- stances under which they were made, not misleading; (ix) this Agreement and any Delayed Delivery Contracts have been duly authorized by all requisite corporate action, executed and delivered by the Company; (x) neither the issue and sale of the Securities nor the consummation of any of the other transactions herein contemplated, including the fulfillment of the terms hereof or of any Delayed Delivery Contracts, will conflict with, result in a breach of or constitute a default under the Articles of Incorporation, as amended, or By-laws of the Company or any indenture or other agreement or instrument known to such counsel and to which the Company is a party or by which the Company or any of its property is bound; (xi) to the best knowledge of such counsel, there is no legal or governmental proceeding and no franchise, contract or other document of a character required to be described in the Registration Statement or the Final Prospectus, or to be filed as an exhibit to the Registration Statement, which is not described or filed as required; (xii) the statements contained in the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, which are expressed therein to have been made on the authority of such counsel have been reviewed by them and, as to matters of law and legal conclusions, are correct; and - 9 - (xiii) the Company has a duly authorized share capitalization as set forth under the caption "Capitalization" in the consolidated balance sheet of the Company at December 31, _____ included in the Company's Annual Report on Form 10-K for the year ended December 31, ____ and incorporated by reference in the Final Prospectus or any amendment thereto or supplement thereof. (e) The Company shall have furnished to the Representatives the opinion, dated the Closing Date, of Jay D. Myster, Senior Vice President, Governmental and Legal of the Company, to the effect that: (i) except as disclosed in the Final Prospectus as then amended or supplemented, there are no actions, suits, investigations or proceedings at law or in equity or before or by any court, public board or body pending or, to the best knowledge of such counsel, threatened against the Company or any subsidiary, wherein an unfavorable decision, ruling or finding would have a material adverse effect on the transactions contemplated by this Agreement, the Registration Statement and the Final Prospectus or on the validity or enforceability against the Company of this Agreement, the Indenture or the Securities; (ii) to the best knowledge of such counsel, the descriptions included in the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, as of their respective effective or issue dates, of statutes, legal and other governmental proceedings and of franchises, contracts and other documents are accurate and fairly present the information required to be shown; (iii) each of Minnesota Dakota Generating Company ("MDGC"), Mid-States Development, Inc. ("MDI"), Quadrant Co. ("QC"), Diagnostic Medical Systems, Inc. ("DMSI") and North Central Utilities, Inc. ("NCUI") is a duly organized and validly existing corporation in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to carry on its business as now conducted; and (iv) all of the issued and outstanding capital stock of MDGC is validly issued, fully paid and non-assessable and (except for directors' qualifying shares) is owned beneficially and of record by the Company free and clear of all liens, pledges and encumbrances; all of the issued and outstanding capital stock of each of MDI, QC and NCUI is validly issued, fully paid and non- assessable and is owned beneficially and of record by MDGC free and clear of all liens, pledges and encumbrances; and all of the issued and outstanding capital stock of DMSI is validly issued, fully paid - 10 - and non-assessable and is owned beneficially and of record by MDI free and clear of all liens, pledges and encumbrances. (f) The Representatives shall have received from Sidley & Austin, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to the issue and sale of the Securities, the Indenture, any Delayed Delivery Contracts, the Registration Statement, the Final Prospectus, each amendment thereto or supplement thereof, if any, and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. For purposes of their opinion, Sidley & Austin shall be entitled to rely upon the opinion of Dorsey & Whitney LLP, counsel for the Company, as to matters governed by Minnesota law, and shall be entitled to rely upon such opinion as to the organization and existence of the Company. (g) The Company shall have furnished to the Representatives a certificate, dated the Closing Date, of the Company, signed by its President or any Vice President and by its principal financial or accounting officer, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus and each amendment thereto or supplement thereof, if any, and this Agreement and that: (i) the representations and warranties of the Company contained in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has in all material respects complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; (ii) the order or orders of the Minnesota Commission referred to in paragraph (c) of this Section 6 have been duly entered and are still in full force and effect; (iii) no stop order suspending the effectiveness of the Registration Statement, as amended prior to the Closing Date, has been issued and no proceedings for such purpose have been instituted or, to the best knowledge of the Company, threatened; and (iv) since the date of the most recent financial statements included in the Final Prospectus, there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, and no dividends (other than regular quarterly dividends on the Company's Cumulative Preferred Shares and Common Shares) have been declared or paid on, or other distribution declared or made on, the outstanding shares of the - 11 - Company, except in each case as set forth or contemplated in the Final Prospectus. (h) At the Closing Date, Deloitte & Touche LLP shall have furnished to the Representatives a letter, dated the Closing Date, in form and substance reasonably satisfactory to the Representatives, confirming that they are independent accountants within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that: (i) in their opinion the audited consolidated financial statements and financial statement schedules included or incorporated by reference in the Registration Statement and the Final Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder; (ii) on the basis of a reading of the latest unaudited consolidated financial statements made available by the Company, the carrying out of certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter, a reading of the minutes of the meetings of the shareholders and the Board of Directors (and any committees thereof) of the Company and its subsidiaries and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to the date of the most recent audited consolidated financial statements included or incorporated by reference in the Final Prospectus, nothing came to their attention which caused them to believe that: (A) any unaudited consolidated financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the published rules and regulations thereunder; or such unaudited consolidated financial statements are not prepared on a basis substantially consistent with that of the audited consolidated financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus; (B) with respect to the interim period subsequent to the date of the most recent consolidated financial statements (other than any capsule information), audited or unaudited, included or incorporated by reference in the Registration - 12 - Statement and the Final Prospectus: there were any changes at a specified date (not more than five business days prior to the date of such letter) in the long-term debt (other than any purchases of First Mortgage Bonds for sinking fund purposes) or capital stock (other than any purchases pursuant to the Automatic Dividend Reinvestment and Share Purchase Plan or of Cumulative Preferred Shares for sinking fund purposes) of the Company, or any decrease in the net assets of the Company, as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated by reference in the Registration Statement and the Final Prospectus; or for the period from the date of such most recent consolidated financial statements to such specified date, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated operating revenues, consolidated operating income, consolidated net income or net income per average common share outstanding of the Company; except in all instances for changes or decreases which the Registration Statement and the Final Prospectus disclose have occurred or may occur or which are set forth in such letter; and (C) they have performed certain other specified procedures as a result of which they have determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company) set forth in the Registration Statement and the Final Prospectus, including Exhibit 12-A to the Registration Statement, agrees with the accounting records of the Company, excluding any questions of legal interpretation. (i) Subsequent to the respective dates as of which information is given in the Registration Statement and the Final Prospectus, there shall not have been (i) any change or decrease of the character referred to in paragraph (h)(ii)(B) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the business or properties of the Company, the effect of which, in any case referred to in clause (i) or (ii), is, in the reasonable judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or the delivery of the Securities as contemplated by the Registration Statement and the Final Prospectus. (j) Subsequent to the execution of this Agreement, there shall not have been any decrease in the ratings of any of the Company's debt securities by Moody's Investors Service, Inc., Standard & Poor's Ratings Group or Fitch Investors Services. - 13 - (k) The Company shall have accepted Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwriters have been approved by the Company. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and their counsel, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by telephone or telegraph, promptly confirmed in writing. 7. CONDITIONS TO THE OBLIGATION OF THE COMPANY. The obligation of the Company to deliver the Securities shall be subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement, as amended from time to time after the date hereof and prior to the Closing Date, shall have been issued and no proceedings for such purpose shall have been instituted or, to the best knowledge of the Company, threatened. (b) The Indenture shall be qualified under the Trust Indenture Act. (c) There shall be in full force and effect one or more orders of the Minnesota Commission authorizing, among other things, (i) the Company's proposed capital structure after the issuance and sale by the Company of the Securities and other securities therein mentioned and (ii) the issue and sale of the Securities by the Company on terms and conditions not inconsistent with the terms and conditions set forth in or contemplated by this Agreement or any Delayed Delivery Contract, and containing no provisions unacceptable to the Company, it being agreed that the order or orders of the Minnesota Commission heretofore issued as described in paragraph (c) of Section 1 contain no such unacceptable provisions. If any of the conditions specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Agreement, this Agreement and the obligation of the Company to deliver the Securities hereunder may be canceled at, or at any time prior to, the Closing Date by the Company. Notice of such cancellation shall be given to the Representatives in writing or by telephone or telegraph, promptly confirmed in writing. 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Underwriters' Securities as provided herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 is not satisfied, because any condition to the obligation of the Company set forth in Section 7 is not satisfied, because of any termination pursuant to Section 11 or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally, upon demand, for all - 14 - out-of-pocket expenses (including the reasonable fees and disbursements of Sidley & Austin) which shall have been reasonably incurred by them in connection with the proposed purchase and sale of the Securities. 9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which it or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions, suits or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement as originally filed, or in any amendment thereto, covering the registration of the Securities, or in the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any amendment thereto or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified person for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability, action, suit or proceeding; PROVIDED, HOWEVER, that (i) the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for use in connection with the preparation thereof, or arises out of or is based upon the Statements of Eligibility (Forms T-1 and T-2) under the Trust Indenture Act of the Trustee or the trustees under the Mortgage, and (ii) such indemnity with respect to the Basic Prospectus or any Preliminary Final Prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any such loss, claim, damage or liability purchased the Securities which are the subject thereof if such person did not receive a copy of the Final Prospectus (or the Final Prospectus as amended or supplemented), excluding documents incorporated therein by reference, at or prior to the confirmation of the sale of such Securities to such person in any case where such delivery is required by the Act and the untrue statement or the omission of a material fact contained in the Basic Prospectus or any Preliminary Final Prospectus was corrected in the Final Prospectus (or the Final Prospectus as amended or supplemented), provided that the Company shall have delivered the Final Prospectus (or the Final Prospectus as amended or supplemented) in a timely manner and in sufficient quantities, as provided in Section 5(d), to permit such delivery by the Underwriters. This agreement of indemnity will be in addition to any liability which the Company may otherwise have. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person who controls the Company within the meaning of the Act or the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for use in connection with the preparation of the - 15 - documents referred to in such foregoing indemnity. This agreement of indemnity will be in addition to any liability which any Underwriter may otherwise have. (c) Promptly after receipt by any person indemnified under this Section 9 of notice of the commencement of any action, suit or proceeding, such person will, if a claim in respect thereof is to be made against an indemnifying party under this Section 9, notify such indemnifying party in writing of the commencement thereof; but the omission so to notify such indemnifying party will not relieve it from any liability which it may have to any indemnified person otherwise than under this Section 9. In case any such action, suit or proceeding is brought against any person indemnified under this Section 9 and such indemnified person notifies an indemnifying party of the commencement thereof, such indemnifying party will be entitled to participate therein and, to the extent that it may elect by written notice delivered to such indemnified person promptly after receiving the aforesaid notice from such indemnified person, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person; PROVIDED, HOWEVER, that if the defendants in any such action, suit or proceeding include both such indemnified person and such indemnifying party and such indemnified person shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified persons which are different from or in addition to the defenses available to such indemnifying party, the indemnified person or persons shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action, suit or proceeding on behalf of such indemnified person or persons. Upon receipt of notice from such indemnifying party to such indemnified person of the former's election so to assume the defense of such action, suit or proceeding and approval by such indemnified person of counsel, such indemnifying party will not be liable to such indemnified person under this Section 9 for any legal or other expenses subsequently incurred by such indemnified person in connection with the defense thereof unless (i) such indemnified person shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that such indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of indemnification under paragraph (a) of this Section 9), (ii) such indemnifying party shall not have employed counsel reasonably satisfactory to such indemnified person to represent such indemnified person within a reasonable time after notice of commencement of such action, suit or proceeding or (iii) such indemnifying party shall have authorized the employment of counsel for such indemnified person at the expense of such indemnifying party; PROVIDED, HOWEVER, that if clause (i) or (iii) above is applicable, the liability of such indemnifying party shall be only in respect of the counsel specifically referred to in such clause (i) or (iii). (d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in paragraph (a) of this Section 9 shall be due in accordance with its terms but for any reason shall be held by a court to be unavailable from the Company on grounds of policy or otherwise, the Company and the Underwriters shall contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending against the same) to which the Company and one or more of the Underwriters may be subject in such proportion that the Underwriters shall be responsible for the portion represented by the percentage which the - 16 - aggregate underwriting commission shall bear to the aggregate initial price to public specified in Schedule I hereto of the Underwriters' Securities and the Company shall be responsible for the balance; PROVIDED, HOWEVER, that (i) in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting commission applicable to the Securities purchased by such Underwriter hereunder and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person who controls an Underwriter within the meaning of the Act or the Exchange Act shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of the Act or the Exchange Act, each director of the Company and each officer of the Company who shall have signed the Registration Statement shall have the same rights to contribution as the Company, subject in each case to clause (ii) of the preceding sentence. Any person entitled to contribution shall, promptly after receipt of notice of the commencement of any action, suit or proceeding against such person in respect of which a claim for contribution may be made against a party or parties under this paragraph (d), notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties shall not relieve such party or parties from any other obligation it or they may have otherwise than under this paragraph (d). 10. DEFAULT BY AN UNDERWRITER. If one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated, severally, to purchase and pay for (in the respective proportions which the principal amount of the Securities set forth opposite their respective names in Schedule II hereto bears to the aggregate principal amount of the Securities set forth opposite the names of all the nondefaulting Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate principal amount of the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of the Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities; and if the nondefaulting Underwriters shall not purchase all the Securities or if other arrangements satisfactory to the Representatives and the Company for the purchase of all the Securities shall not be made within 48 hours after such default, this Agreement will terminate without any liability on the part of any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as described in this Section 10 under circumstances where this Agreement shall not be terminated, the Closing Date shall be postponed for such period, not exceeding seven days, as the Representatives and the Company shall determine in order that the required changes in the Registration Statement and the Final Prospectus, or in any other documents or arrangements, may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. - 17 - 11. TERMINATION. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by written notice given to the Company prior to delivery of and payment for the Underwriters' Securities, if prior to such time (i) trading in the Company's Common Shares shall have been suspended by the Commission or the National Association of Securities Dealers, Inc. or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such Exchange, (ii) a banking moratorium shall have been declared by Federal, New York State or Minnesota authorities or (iii) there shall have occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the reasonable judgment of the Representatives, impracticable to market the Securities. 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements, representations, warranties, indemnities and other statements of the Company, of the Representatives and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter, any Representative, the Company or any of the directors, officers or controlling persons referred to in Section 9, and will survive delivery of and payment for the Securities. The provisions of Sections 8 and 9 shall survive the termination or cancellation of this Agreement. 13. NOTICES. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telegraphed and confirmed to them at the address specified in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, Attention: Vice President, Finance. 14. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons, directors and officers referred to in Section 9, and no other person will have any right or obligation hereunder; and no other person (including a purchaser, as such, from any Underwriter of the Securities) shall acquire or have any rights under or by virtue of this Agreement. 15. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original; and all of which counterparts shall, taken together, constitute one and the same Agreement. 16. APPLICABLE LAW. This Agreement will be governed by and construed in accordance with the laws of the State of Minnesota. - 18 - If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, OTTER TAIL POWER COMPANY By ____________________________________ The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto. By: ___________________________________ For themselves and the other several Underwriters, if any, named in Schedule II to the foregoing Agreement. - 19 - SCHEDULE I Underwriting Agreement dated ____________________________ Registration Statement No. 333-__________________________ Representatives of the Underwriters: Address of Representatives: Title, Purchase Price and Description of the Securities: Title: Principal amount: Purchase price: Funds for payment: Underwriting commission (including aggregate dollar amount): Initial price to public: Maturity: Interest payment dates: Sinking fund provisions: Optional redemption provisions: Other provisions: ___________________________ Closing Date, Time and Location: Delayed Delivery Arrangements: SCHEDULE II PRINCIPAL AMOUNT OF UNDERWRITERS SECURITIES TO BE PURCHASED - ------------ -------------------------- SCHEDULE III DELAYED DELIVERY CONTRACT _______________, 19__ Otter Tail Power Company 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 Dear Sirs: The undersigned hereby agrees to purchase from Otter Tail Power Company (the "Company"), and the Company agrees to sell to the undersigned, on _______________, 19__ (the "Delivery Date"), $____________ principal amount of the Company's [insert description of Debentures] (the "Securities") offered by the Company's Final Prospectus dated _______________, 19__ (as amended or supplemented), receipt of a copy of which is hereby acknowledged, at a purchase price of _____% of the principal amount thereof, plus accrued interest, if any, thereon from _______________, 19__, to the date of payment and delivery, and on the further terms and conditions set forth in this contract. Payment for the Securities to be purchased by the undersigned hereunder shall be made on or before 11:00 a.m., Minneapolis time, on the Delivery Date to or upon the order of the Company in ____________________ funds at the office of _______________________________________, upon delivery to the undersigned of the Securities in definitive fully registered form and in such authorized denominations and registered in such names as the undersigned may request by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date. If no request is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of the Securities to be purchased by the undersigned hereunder. The obligation of the undersigned to take delivery of and make payment for the Securities on the Delivery Date, and the obligation of the Company to sell and deliver the Securities on the Delivery Date, shall be subject to the conditions (and neither party shall incur any liability by reason of the failure thereof) that (1) the purchase of the Securities to be made by the undersigned hereunder, which purchase the undersigned represents is not prohibited on the date hereof, shall not on the Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company, on or before the Delivery Date, shall have sold to certain underwriters (the "Underwriters") such principal amount of the Securities as is to be sold to them pursuant to the Underwriting Agreement referred to in the Final Prospectus mentioned above. Promptly after completion of such sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinions of counsel for the Company delivered to the Underwriters in connection therewith. [If more than one series of Debentures, then insert: The obligation of the undersigned to take delivery of and make payment for the Securities hereunder, and the obligation of the Company to cause the Securities to be sold and delivered, shall not be affected by the failure of any purchaser to take delivery of and make payment for the Company's [insert description of other series of Debentures], pursuant to other contracts similar to this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that acceptance of this contract and other similar contracts is in the Company's sole discretion and, without limiting the foregoing, need not be on a first come, first served basis. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This contract will become a binding agreement between the Company and the undersigned, as of the date first above written, when such counterpart is so mailed or delivered. This agreement shall be governed by, and construed in accordance with, the laws of the State of Minnesota. Very truly yours, ___________________________________ (Name of Purchaser) By _________________________________ (Signature and Title of Officer) ___________________________________ ___________________________________ (Address) Accepted: OTTER TAIL POWER COMPANY By ____________________________________ (Authorized Signature) EX-4.D-10 4 FORM OF SUPPLEMENTAL INDENTURE EXHIBIT 4-D-10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OTTER TAIL POWER COMPANY TO FIRST TRUST NATIONAL ASSOCIATION AND JAMES A. EHRENBERG AS TRUSTEES _________________ FORM OF SUPPLEMENTAL INDENTURE _________________ DATED AS OF _________________ SUPPLEMENTAL TO FIRST MORTGAGE, DATED AS OF JULY 1, 1936, AS AMENDED BY FORTY- SUPPLEMENTAL INDENTURES DATED VARIOUSLY MARCH 1, 1939 THROUGH - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - TABLE OF CONTENTS ----------------- PAGE Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recitals as to A. Execution and delivery of Original Indenture and appointment of successor individual Trustees. . . . . . . . . . . . . . . . . . . . 1 B. Execution and delivery of first forty- Supplemental Indentures; Indenture completely revised by Twenty-first Supplemental Indenture (the "Revised Indenture") and further revised by subsequent Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . 1 C. Outstanding Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . 3 D. Determination to create a new series of Bonds, sometimes called the "Series of ", issuable only in fully registered form . . . . . . 3 E. Proposed issuance of $ principal amount of Series Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . 4 F. Performance of conditions precedent to this Supplemental Indenture . 4 ARTICLE I. CREATION OF AND TERMS OF THE SERIES OF SECTION 1. Series created; limited to $ principal amount. . . . . . . 4 SECTION 2. Issuable only as fully registered Bonds; dates; maturity; rate of and dates of interest payments; places of payment. . . 4 SECTION 3. Denominations and numbering. . . . . . . . . . . . . . . . . . 5 SECTION 4. Form of Bonds. . . . . . . . . . . . . . . . . . . . . . . . . 5 SECTION 5. Temporary Bonds shall be printed; definitive Bonds may be printed or lithographed on steel engraved borders or printed. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 6. Temporary Bonds issuable as fully registered Bonds subject to all of the provisions of Section 4.09 of the Revised Indenture and definitive Bonds having all of the benefits, except as noted, of Section 4.06 of the Revised Indenture; no charge for transfer or exchange of Bonds except as noted. . . . . . . . . 10 - ii PAGE SECTION 7. Optional redemption of Bonds; redemption of Bonds through the sinking fund provided by Section 8 and from the net proceeds accruing from certain sales of mortgaged property; Article VII of Revised Indenture supplemented with respect only to Bonds of the Series of . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 8. Sinking fund for Bonds of all series while any Bonds of the Series of are outstanding. . . . . . . . . . . . . 13 SECTION 9. Restriction on payment of dividends on Common Shares while any Bonds of the Series of are outstanding. . . . . 15 ARTICLE II. MISCELLANEOUS SECTION 10. All provisions of this Supplemental Indenture are part of the Original Indenture as heretofore revised; Original Indenture as heretofore revised not modified except as expressly set forth herein . . . . . . . . . . . . . 15 SECTION 11. Severability of provisions . . . . . . . . . . . . . . . . . . 16 SECTION 12. Execution in counterparts. . . . . . . . . . . . . . . . . . . 16 SECTION 13. Exempt from Minnesota State Transfer Tax . . . . . . . . . . . 16 Signatures, witnesses and acknowledgments. . . . . . . . . . . . . . . . . 17 - THIS FORTY- SUPPLEMENTAL INDENTURE is made as of by OTTER TAIL POWER COMPANY, a Minnesota corporation, with its principal office and post office address at 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, party of the first part (the "Company"), and FIRST TRUST NATIONAL ASSOCIATION, a national association, with its principal office and post office address at First Trust Center, St. Paul, Minnesota 55101, and James A. Ehrenberg of St. Paul, Minnesota, whose post office address is in care of First Trust National Association, parties of the second part (the "Trustees"). RECITALS: A. The Company made, executed and delivered to First Trust National Association (formerly named First Trust Company of Saint Paul and First Trust Company, Inc.) (the "corporate Trustee") and Louis S. Headley (the "individual Trustee"), as Trustees, an Indenture of Mortgage dated as of the 1st day of July, 1936 (the "Original Indenture"), in and by which Original Indenture the Company conveyed and mortgaged to the Trustees all of the property then owned or to be thereafter acquired by the Company (except as therein otherwise expressly provided) to secure the First Mortgage Bonds (the "Bonds") of the Company consisting of one or more series and not limited as to the aggregate principal amount thereof to be at any time issued and outstanding (except as therein expressly provided) thereunder. Louis S. Headley was succeeded as individual Trustee by Russell M. Collins on January 10, 1951. Russell M. Collins was succeeded as individual Trustee by D. L. Doyon on April 24, 1964. D. L. Doyon was succeeded as individual Trustee by James A. Ehrenberg on April 27, 1982. B. The Company made, executed and delivered to the corporate Trustee and the then acting individual Trustee, as Trustees, the following Supplemental Indentures, each supplementing the Original Indenture and all prior Supplemental Indentures: First Supplemental Indenture dated March 1, 1939 Second Supplemental Indenture dated September 1, 1941 Third Supplemental Indenture dated September 15, 1941 Fourth Supplemental Indenture dated November 1, 1941 Fifth Supplemental Indenture dated December 29, 1941 Sixth Supplemental Indenture dated August 1, 1944 Seventh Supplemental Indenture dated October 14, 1944 Eighth Supplemental Indenture dated November 15, 1944 - 2 Ninth Supplemental Indenture dated July 15, 1947 Tenth Supplemental Indenture dated August 13, 1947 Eleventh Supplemental Indenture dated October 1, 1947 Twelfth Supplemental Indenture dated April 29, 1948 Thirteenth Supplemental Indenture dated August 1, 1948 Fourteenth Supplemental Indenture dated April 22, 1949 Fifteenth Supplemental Indenture dated September 15, 1950 Sixteenth Supplemental Indenture dated October 27, 1950 Seventeenth Supplemental Indenture dated February 27, 1951 Eighteenth Supplemental Indenture dated October 27, 1952 Nineteenth Supplemental Indenture dated December 1, 1953 Twentieth Supplemental Indenture dated March 1, 1957 Twenty-first Supplemental Indenture dated July 1, 1958 Twenty-second Supplemental Indenture dated July 15, 1958 Twenty-third Supplemental Indenture dated November 30, 1960 Twenty-fourth Supplemental Indenture dated January 16, 1961 Twenty-fifth Supplemental Indenture dated August 29, 1963 Twenty-sixth Supplemental Indenture dated October 23, 1963 Twenty-seventh Supplemental Indenture dated October 8, 1965 Twenty-eighth Supplemental Indenture dated March 1, 1971 Twenty-ninth Supplemental Indenture dated May 1, 1971 Thirtieth Supplemental Indenture dated December 1, 1972 Thirty-first Supplemental Indenture dated February 1, 1973 Thirty-second Supplemental Indenture dated January 18, 1974 Thirty-third Supplemental Indenture dated December 1, 1974 Thirty-fourth Supplemental Indenture dated November 1, 1975 Thirty-fifth Supplemental Indenture dated April 1, 1977 Thirty-sixth Supplemental Indenture dated July 1, 1978 Thirty-seventh Supplemental Indenture dated November 1, 1978 Thirty-eighth Supplemental Indenture dated October 1, 1979 Thirty-ninth Supplemental Indenture dated October 15, 1979 Fortieth Supplemental Indenture dated November 1, 1980 Forty-first Supplemental Indenture dated August 1, 1989 Forty-second Supplemental Indenture dated December 1, 1990 Forty-third Supplemental Indenture dated February 1, 1991 Forty-fourth Supplemental Indenture dated September 1, 1991 Forty-fifth Supplemental Indenture dated July 1, 1992. In and by these Supplemental Indentures the Company conveyed and mortgaged to the Trustees in the trust established by the Original Indenture the additional properties described in such Supplemental Indentures, made amendments to the Original Indenture and added other covenants and agreements to the covenants and agreements of the Company contained in the Original Indenture as theretofore amended. The Twenty-first Supplemental Indenture (hereinafter called the "Revised Indenture") - 3 revised and restated all of the provisions of Articles One to Twenty-two, both inclusive, of the Original Indenture, as theretofore amended and supplemented, and all of the provisions of the Supplemental Indentures prior thereto, except the Granting Clauses thereof, and of the resolutions creating the series of Bonds of the Company then outstanding. Certain of the provisions were further revised by the Twenty-second Supplemental Indenture and the Thirty-second Supplemental Indenture. The Original Indenture as amended, supplemented and revised by all of the indentures supplemental thereto is referred to as the "Indenture". C. The indebtedness of the Company now outstanding and secured by the Indenture consists of the following First Mortgage Bonds: PRINCIPAL SERIES AMOUNT 8 3/4 % Series of 1997. . . . . . . . . . . . . . . . . 7 1/4 % Series of 2002. . . . . . . . . . . . . . . . . 7 5/8 % Series of 2003. . . . . . . . . . . . . . . . . 6.00%--6.80% Pollution Control. . . . . . . . . . . . . (Big Stone Project) Series 1991 . . . . . . . . . . . 8 1/8 % Pollution Control . . . . . . . . . . . . . . . (Coyote Project) Series B . . . . . . . . . . . . . . 6.00%-6.90% Pollution Control . . . . . . . . . . . . . (Coyote Project) Series 1991. . . . . . . . . . . . . 8 3/4 % Series of 2021. . . . . . . . . . . . . . . . . 8 1/4 % Series of 2022. . . . . . . . . . . . . . . . . D. Pursuant to power reserved by the Company in the Indenture, the Company has determined, by appropriate action of its Board of Directors, to create in and by this Forty- Supplemental Indenture a new series of Bonds to be known and designated as the % Series of (sometimes hereinafter called the "Series of "), the Bonds of which series are to be known and designated as "First Mortgage Bonds, % Series of " and are hereinafter sometimes called the "Series of Bonds", which series of Bonds is limited to $ aggregate principal amount thereof and which will be issuable only in fully registered form without coupons, and the Company desires in and by this Forty- Supplemental Indenture further to supplement the Indenture by setting forth the terms of and matters in respect of the Series of Bonds, all as required or permitted by the Indenture. E. The Company is about to issue under the Indenture, as hereby supplemented, the $ principal amount of the Series of Bonds. - 4 F. The execution, acknowledgment and delivery of this Forty- Supplemental Indenture have been in all respects duly authorized by action duly taken by the Board of Directors of the Company, and all things necessary to make this Forty- Supplemental Indenture the valid, binding and legal obligation of the Company have been done and performed. NOW, THEREFORE, THIS INDENTURE WITNESSETH: That for and in consideration of the purchase and acceptance of the Bonds issued or to be issued under the Indenture, as the same may be amended or supplemented from time to time, by the several and various persons who have and will by such purchase and acceptance from time to time become holders thereof and in further consideration of the sum of One Dollar ($1.00), lawful money of the United States of America, to the Company duly paid by the Trustees at or before the execution and delivery of this Forty- Supplemental Indenture, the receipt and sufficiency of which is acknowledged by the Company, the Company and the Trustees have executed and delivered this Forty- Supplemental Indenture and do hereby agree and declare as follows: ARTICLE I. CREATION OF AND TERMS OF THE SERIES OF SECTION 1. There is hereby created and authorized a series of Bonds of the Company issuable under and secured by the Indenture, which series will be known and designated as the % Series of , and the Bonds of which series shall be known and designated as the "First Mortgage Bonds, % Series of ", which series shall be limited to $ aggregate principal amount of Bonds. SECTION 2. Each First Mortgage Bond, % Series of shall be issuable only as a fully registered Bond without coupons and shall be dated as of the interest payment date thereof to which interest was paid next preceding the date of issue, unless (a) issued on an interest payment date to which interest was paid, in which event it shall be dated as of the date of issue, or (b) issued prior to the occurrence of the first interest payment date on which interest is to be paid, in which event it shall be dated . All Bonds of such series shall mature , and shall draw interest at the rate of % per annum (computed on the basis of a 360-day year of twelve 30-day months), payable semi-annually on the day of and of each year. All Bonds of such Series shall be payable, as to principal, premium, if any, and interest, at the office or - 5 agency of the Company in the City of St. Paul, Minnesota (presently the office of First Trust National Association in said City), except that interest may be paid at the option of the Company by checks or drafts payable to the registered holders of the Bonds as they appear on the books maintained by the corporate Trustee pursuant to Section 4.10 of the Revised Indenture mailed to such holders at their addresses appearing on such books. The Company shall not be required (i) to make transfers or exchanges of Bonds of such Series for a period of ten days next preceding any interest payment date or next preceding any selection of such Bonds to be redeemed, or (ii) to register the transfer or exchange of any Bond so selected for redemption in whole or in part except, in the case of any Bonds selected for redemption in part, the portion thereof not to be redeemed. SECTION 3. Definitive Bonds of the Series of shall be issuable in denominations of $1,000 or any multiple thereof as may be executed by the Company and delivered to the corporate Trustee for authentication and delivery. Bonds of such Series may be issued in temporary form in denominations of $1,000 or any multiple thereof as the Company may direct in a writing addressed to the corporate Trustee, which temporary Bonds shall be fully registered without coupons and shall be in the same form as the definitive Bonds, except that the word "temporary" shall be inserted in the title of said Bonds. The definitive Bonds shall be appropriately lettered and numbered. The temporary Bonds shall be lettered "T" and numbered consecutively beginning with the number "1". SECTION 4. The form of the Bonds of the Series of and of the certificate of the corporate Trustee to be endorsed on all such Bonds shall be as follows: (FORM OF BONDS) (FACE) No. $ OTTER TAIL POWER COMPANY First Mortgage Bond, % Series of FOR VALUE RECEIVED, Otter Tail Power Company, a corporation of the State of Minnesota (hereinafter called the "Company"), promises to pay to or registered assigns on the principal sum of Dollars in lawful money of the United States of America and to pay interest thereon to the registered holder hereof from the date hereof at the rate of per centum ( %) per annum (computed on the - 6 basis of a 360-day year of twelve 30-day months) in like money, semi-annually on the day of and of each year, until the payment of said principal sum. The principal hereof, premium, if any, and interest hereon shall be paid at the office or agency of the Company in the City of St. Paul, Minnesota (presently the office of First Trust National Association in said City), except that interest may be paid at the option of the Company by check or draft payable to the registered holder hereof appearing on the registry books maintained by the corporate Trustee mailed to the registered holder hereof at his address appearing on such books. THIS BOND IS CONTINUED ON THE REVERSE SIDE HEREOF AND THE ADDITIONAL PROVISIONS THERE SET FORTH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. This Bond shall not be valid or become obligatory for any purpose unless and until the certificate endorsed hereon shall have been executed by the corporate Trustee under the Indenture. IN WITNESS WHEREOF, Otter Tail Power Company has caused this Bond to be signed by the manual or facsimile signature of its President or one of its Vice Presidents, and its corporate seal to be affixed hereto or a facsimile thereof to be imprinted or engraved hereon and attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries. Dated: OTTER TAIL POWER COMPANY By ------------------------------------- PRESIDENT Attest: - ------------------------------------- SECRETARY (REVERSE) This Bond is one of an authorized series of Bonds of the Company hereinafter specified and is one of an authorized issue of Bonds of the Company known generally as its First Mortgage Bonds, issued or to be issued in one or more series in accordance with and equally secured by an indenture of mortgage dated as of July 1, 1936, duly executed and delivered by the Company to First Trust National Association (formerly named First - 7 Trust Company of Saint Paul and First Trust Company, Inc.), a national association, and Louis S. Headley (to whom James A. Ehrenberg is the successor), as Trustees, and any and all indentures supplemental thereto, to which indenture, as amended, revised and supplemented by the indentures supplemental thereto (hereinafter called the "Indenture"), reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights of the holders of said Bonds and of the Trustees and of the Company with respect to such security and the terms and conditions upon which the said Bonds are and are to be issued and secured. The different series of said Bonds may mature at different dates, may bear interest at different rates and may otherwise vary as provided in the Indenture. This Bond is one of the series designated "First Mortgage Bonds, % Series of " created by the Forty- Supplemental Indenture dated as of . At the option of the Company and upon the notice and in the manner and with the effect provided in the Indenture, any or all of the Bonds of the Series of , of which this is one, may be redeemed by the Company at any time and from time to time upon payment of the percentages of the principal amount thereof set forth in the following table under the heading "General Redemption Price":
IF REDEEMED DURING THE TWELVE MONTHS' PERIOD BEGINNING GENERAL GENERAL GENERAL REDEMPTION REDEMPTION REDEMPTION PRICE PRICE PRICE - ---------- ---------- ---------- ---------- ---------- ----------
(GENERAL REDEMPTION PRICES ARE TO BE INSERTED IN EACH BOND IN CONFORMITY WITH THE SCHEDULE OF GENERAL REDEMPTION PRICES IN THE FIRST PARAGRAPH OF SECTION 7.) together, in each case, with accrued interest to the redemption date; PROVIDED, HOWEVER, that no Bonds of the Series of shall be redeemed prior to directly or indirectly from the proceeds of or in anticipation of any refunding operation involving the incurring of debt which has an effective interest cost to the Company, computed in accordance with generally accepted financial practice, of less than % per annum. The Bonds of the Series of (a) shall be redeemed by the Company from time to time to the extent and upon the notice and in the manner and with the effect provided in the Indenture from funds in the sinking fund provided by the Indenture, and (b) may be redeemed by the Company at - 8 any time and from time to time at the option of the Company and upon the notice and in the manner and with the effect provided in the Indenture from the net proceeds accruing from certain sales of mortgaged property as more fully provided in the Indenture, upon payment of the percentages of the principal amount thereof set forth in the following table under the heading "Special Redemption Price":
IF REDEEMED DURING THE TWELVE MONTHS' PERIOD BEGINNING SPECIAL SPECIAL SPECIAL REDEMPTION REDEMPTION REDEMPTION PRICE PRICE PRICE - ---------- ---------- ---------- ---------- ---------- ----------
(SPECIAL REDEMPTION PRICES ARE TO BE INSERTED IN EACH BOND IN CONFORMITY WITH THE SCHEDULE OF SPECIAL REDEMPTION PRICES IN THE SECOND PARAGRAPH OF SECTION 7.) together, in each case, with accrued interest to the redemption date. If an event of default as defined in the Indenture shall occur, the principal of this Bond may become and be declared due and payable in the manner and with the effect provided in the Indenture. No holder of this Bond shall have any right to institute any suit or proceeding for the foreclosure of the Indenture or for any other remedy thereunder, except to the extent and in the manner set forth in the Indenture. The Indenture contains provisions permitting the modification thereof within the limits set forth therein, with the assent of the holders of seventy-five per cent (75%) in aggregate principal amount of the outstanding Bonds of all series, but does not permit (a) the extension of the maturity of any Bond or of any installment of principal or interest thereon or the reduction of the principal thereof or of any installment of such principal or of the rate or rates of interest or of any premium thereon without the consent of the holder thereof, (b) the creation by the Company of any mortgage or other similar lien ranking prior to or on a parity with the lien of the Indenture, (c) the modification of provisions pertaining to one or more, but less than all, of the series of Bonds then outstanding without the additional consent of the holders of at least seventy-five per cent (75%) of the principal amount of the Bonds of each series so affected, or (d) the reduction in the percentage of the principal amount of Bonds upon the consent of the holders of which modifications may be made as aforesaid. This Bond is transferable by the registered holder hereof in person or by attorney duly authorized in writing, at the office of First Trust National - 9 Association, St. Paul, Minnesota, on registry books kept for such purpose at such office and upon surrender and cancellation of this Bond. No charge will be made by the Company for any exchange or transfer of this Bond, other than for stamp taxes or other governmental charges, if any, applicable thereto. The Company shall not be required (i) to transfer or exchange this Bond for a period of ten days next preceding any interest payment date hereon or next preceding any applicable selection of Bonds to be redeemed, or (ii) to register the transfer or exchange of this Bond if so selected for redemption in whole or in part except, if selected for redemption in part, the portion hereof not to be redeemed. Upon any such transfer, a new Bond or Bonds of the same series of Bonds of which this Bond is one, and for the same aggregate principal amount, will be issued to the transferee therefor. No recourse shall be had for the payment of the principal of or the interest on this Bond or for any claim based hereon or otherwise in respect hereof or of the Indenture or of any agreement supplemental thereto against any subscriber to the capital stock, incorporator or any past, present or future stockholder, officer or director of the Company or of any predecessor or successor corporation, either directly or through the Company or any predecessor or successor corporation or any receiver or trustee in bankruptcy, whether by virtue of any constitution or statute or rule of law or by the enforcement of any assessment or penalty or stock subscription or otherwise, all such liability, whether at common law or in equity or by statute or constitution or otherwise, being, to the extent permitted by law, by the acceptance and as a part of the consideration for the issuance hereof, expressly waived and released by the registered holder hereof. - 10 (FORM OF TRUSTEE'S CERTIFICATE) This is to certify that this is one of the Bonds of the series designated therein described in the within mentioned Indenture. FIRST TRUST NATIONAL ASSOCIATION, Corporate Trustee By -------------------------------------- ITS AUTHORIZED SIGNER SECTION 5. The temporary Bonds of the Series of shall be printed. The definitive Bonds of such Series may be in the form of fully engraved Bonds or Bonds printed or lithographed on steel engraved borders or Bonds printed. SECTION 6. Temporary Bonds of the Series of shall, notwithstanding anything contained in Section 4.09 of the Revised Indenture, be issuable only as fully registered Bonds without coupons and shall be subject to all of the provisions of said Section 4.09. The definitive Bonds of such Series shall have all of the benefits of Section 4.06 (exclusive of subparagraphs (a), (c) and (d) thereof) of the Revised Indenture. Notwithstanding anything contained in Section 4.11 of the Revised Indenture, the Company, at its option, may require the payment of a sum sufficient to reimburse it for any stamp tax or other governmental charge incident to the transfer or exchange of Bonds of the Series of but may not require payment of any further sum for Bonds issued upon such transfer or exchange. Bonds of the Series of shall be executed on behalf of the Company by the manual or facsimile signature of its President or a Vice President under its corporate seal (which may be a facsimile thereof), attested by the manual or facsimile signature of its Secretary or an Assistant Secretary. SECTION 7. At the option of the Company and upon the notice and in the manner and with the effect provided in Article VII of the Revised Indenture as supplemented by this Section 7, any or all of the Bonds of the Series of may be redeemed by the Company at any time and from time to time upon payment of the percentages of the principal amount thereof set forth in the following table under the heading "General Redemption Price": - 11
IF REDEEMED DURING THE TWELVE MONTHS' PERIOD BEGINNING GENERAL GENERAL GENERAL REDEMPTION REDEMPTION REDEMPTION PRICE PRICE PRICE - ---------- ---------- ---------- ---------- ---------- ----------
together, in each case, with accrued interest to the redemption date; PROVIDED, HOWEVER, that no Bonds of the Series of shall be redeemed pursuant to this paragraph of this Section 7 prior to directly or indirectly from the proceeds of or in anticipation of any refunding operation involving the incurring of debt which has an effective interest cost to the Company, computed in accordance with generally accepted financial practice, of less than % per annum. The Bonds of the Series of (a) shall be redeemed by the Company from time to time to the extent and upon the notice and in the manner and with the effect provided in Article VII of the Revised Indenture as supplemented by this Section 7 from funds in the sinking fund provided by Section 8 hereof, and (b) may be redeemed by the Company at any time and from time to time at the option of the Company and upon the notice and in the manner and with the effect provided in Article VII of the Revised Indenture as supplemented by this Section 7 from the net proceeds accruing from mortgaged property sold or transferred, whether voluntarily or involuntarily, by the Company to any municipality, governmental agency or public authority, upon payment of the percentages of the principal amount thereof set forth in the following table under the heading "Special Redemption Price": - 12
IF REDEEMED DURING THE TWELVE MONTHS' PERIOD BEGINNING SPECIAL SPECIAL SPECIAL REDEMPTION REDEMPTION REDEMPTION PRICE PRICE PRICE - ---------- ---------- ---------- ---------- ---------- ----------
together, in each case, with accrued interest to the redemption date. No Bonds of the Series of redeemed pursuant to this paragraph of this Section 7 shall be reissued or otherwise utilized under any of the provisions of the Indenture, and no Bonds of any series whatsoever shall be issued in lieu thereof. If Bonds of the Series of are to be redeemed as provided in this Section 7, notice of redemption shall be given by first class mail, postage prepaid, by or on behalf of the Company, not less than thirty (30) nor more than sixty (60) days prior to the date of redemption, to the registered holders of all Bonds to be redeemed, at their respective addresses appearing upon the books maintained by the corporate Trustee pursuant to Section 4.10 of the Revised Indenture. Any notice which is mailed as herein provided shall be conclusively presumed to have been properly and sufficiently given on the date of such mailing, whether or not the registered holder receives the notice. In any case, failure to give due notice by mail, or any defect in the notice, to the registered holder of any Bond of the Series of designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Bond of such Series. In case of any redemption of Bonds of the Series of by the corporate Trustee pursuant to the provisions of the Indenture or any indenture supplemental thereto, notice of redemption shall be given in a similar manner by the corporate Trustee. Notwithstanding any provision of Article VII of the Revised Indenture, no publication of notice of redemption of Bonds of the Series of shall be required by the Indenture. - 13 Except as provided in the immediately preceding paragraph, the provisions of Article VII of the Revised Indenture shall in all respects apply to any redemption to which this Section 7 applies. Nothing in this Section 7 contained shall affect the manner of giving notice of the redemption of Bonds of the Company of any series other than Bonds of the Series of . SECTION 8. (a) So long as any of the Bonds of the Series of are outstanding, there shall be a sinking fund for the benefit of the outstanding Bonds of all series into which the Company shall pay to the corporate Trustee on the first day of December of each year an amount in cash equal to 1% of the greatest aggregate principal amount at any time theretofore outstanding of Bonds of each series of which at the date of payment there are Bonds outstanding, provided that there shall first be deducted from such aggregate principal amount the aggregate principal amount of the Bonds of any such series which have theretofore been refunded by the issuance of Bonds of another series, provided, that the Company shall not be required to make payment into the sinking fund with respect to any series of Bonds created after the date hereof until the first day of December in the calendar year following the calendar year in which such Bonds were issued except to the extent, if any, that Bonds of such additional series were issued to refund Bonds of a prior series. Whenever there are more than one series of Bonds outstanding on a first day of December on which an obligation accrues to the Company to make a payment into the sinking fund, the Trustees upon receipt of the payment by the Company on account of such obligation shall allocate such payment to each of the series of Bonds outstanding in the proportion of the net aggregate principal amount which the Bonds of such series included in the computation of such sinking fund payment bears to the aggregate principal amount of the Bonds of all series included in such computation. Sinking fund moneys shall be held by the Trustees as a part of the mortgaged property and for the benefit of the Bonds of the series to which the same shall be allocated by the Trustees as herein provided. (b) The first payment into the sinking fund which the Company shall pay with respect to Bonds of the Series of shall be made on the first day of December, . Moneys in the sinking fund for the benefit of the Bonds of the Series of shall be applied, not later than February 1 of each year, (i) to the redemption of Bonds of such Series by lot, in accordance with the provisions of Article VII of the Revised Indenture as - 14 supplemented by Section 7 hereof, at the Special Redemption Prices set forth in the second paragraph of Section 7 hereof, plus, in each case, accrued interest to the redemption date, or (ii) to the redemption of Bonds of such Series at the aforesaid Special Redemption Prices ratably from the holders of all thereof in the proportions which the principal amount of Bonds of such Series held by each holder bears to the principal amount of all Bonds of such Series then outstanding, computed to the nearest unit of Bonds of the denomination of $1,000. The Company shall provide from funds not constituting a part of the trust estate for the premium and/or accrued interest, if any, paid or required in connection with any such redemption. Any unused portion of moneys in the sinking fund shall be carried over for the benefit of Bonds of the applicable series and used with the next payment into the sinking fund. The Company may elect whether to redeem such Bonds by lot or pro rata; provided that in the event that the Company does not by any December 15 elect the manner in which moneys in the sinking fund are to be applied to the redemption of Bonds of such Series, any moneys in the sinking fund applicable to such Series shall be applied by the Trustees to the redemption of Bonds of such Series by lot. No Bonds of whatsoever series redeemed pursuant to the sinking fund established by this Section 8 shall be reissued or otherwise utilized under any of the provisions of the Indenture, and no Bonds of any series whatsoever shall be issued in lieu thereof. (c) In lieu of depositing cash with the corporate Trustee to be held and applied by it as a part of the sinking fund for the Bonds of the Series of , the Company may reacquire and deliver to the corporate Trustee Bonds of such Series at the amount which would have been required to effect the redemption through the sinking fund of the Bonds so delivered on the February 1 next following such delivery. Any such Bonds so delivered to the corporate Trustee shall be accompanied by an officers' certificate stating (i) that such Bonds have been duly issued and outstanding and have been reacquired by the Company, (ii) that none of such Bonds has theretofore been made the basis for the authentication of Bonds or for the withdrawal of cash or has otherwise been utilized under any of the provisions of the Indenture, and (iii) that such Bonds are delivered to the corporate Trustee in lieu of cash required to be deposited in the sinking fund for Bonds of such Series. All Bonds so delivered shall be cancelled and destroyed by the corporate Trustee and shall not be made the basis for the authentication of Bonds or for the withdrawal of cash or otherwise utilized under any of the provisions of the Indenture. - 15 SECTION 9. So long as any of the Bonds of the Series of shall be outstanding, the Company will not (i) declare or pay, or set apart any funds for the payment of, any dividends (other than dividends payable in Common Shares of the Company) on any Common Shares of the Company, or (ii) make any other distribution, by reduction of capital or otherwise, in respect of any Common Shares of the Company, unless, immediately after giving effect thereto, the sum of (1) the aggregate amounts declared and paid or payable as, or set apart for, dividends (other than dividends payable in Common Shares of the Company) on the Common Shares of the Company subsequent to December 31, 1976, and (2) the aggregate amounts otherwise distributed (taken at cost to the Company or fair value at time of distribution, whichever is higher) in respect of the Common Shares of the Company subsequent to December 31, 1976, will not be in excess of $8,000,000 plus the net income of the Company available for Common Shares accrued subsequent to December 31, 1976. The Company's net income available for Common Shares shall be determined in accordance with generally accepted accounting principles; provided, however, that solely for the purpose of computing such net income, and not otherwise, there shall be deducted from such net income of the Company for each calendar year after the year 1976, as an additional depreciation charge, the amount, if any, by which the depreciation requirement of the Company (as defined in Section 2.01(34) of the Revised Indenture) for such year exceeds the depreciation charges actually made by the Company for such year on account of its depreciable fundable property. ARTICLE II. MISCELLANEOUS SECTION 10. All of the provisions of this Forty- Supplemental Indenture shall be deemed to be a part of the Indenture, and shall bind and benefit the Company, the Trustees and the holders of the Bonds, or a specified series thereof where the provisions are with respect to such series only, and the Trustees and the holders of the Bonds shall have the same remedies for a breach of any of the provisions of this Forty- Supplemental Indenture as are provided in the Indenture with respect to a breach of any of the provisions of the Indenture. Nothing herein contained, - 16 except as herein otherwise expressly provided, shall be taken or construed as modifying, altering, amending or changing any of the terms, covenants, provisions, conditions or limitations contained in the Indenture, and all of the terms, conditions, provisions, covenants and limitations of the Indenture, as supplemented by this Forty- Supplemental Indenture, are expressly ratified, approved, confirmed and assumed by the Company, and all thereof shall bind the Company, its successors and assigns, and shall inure to the benefit of the Company, its successors and assigns. SECTION 11. In case any one or more of the provisions of this Forty- Supplemental Indenture shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Forty- Supplemental Indenture, but this Forty- Supplemental Indenture shall be construed and enforced as if such illegal or invalid provision or provisions had not been contained herein. SECTION 12. This Forty- Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which is, and shall be taken, accepted and received by the parties hereto, and by all other persons, as an original, and all thereof shall together evidence and constitute one and the same agreement. SECTION 13. This Forty- Supplemental Indenture is exempt from the Minnesota State Transfer Tax. - 17 IN WITNESS WHEREOF, Otter Tail Power Company has caused this Forty- Supplemental Indenture to be signed in its name and behalf by its President or one of its Vice Presidents, and its corporate seal to be hereunto affixed and attested by its Secretary or one of its Assistant Secretaries; First Trust National Association has caused this Forty- Supplemental Indenture to be signed in its name and behalf by its President or one of its Vice Presidents, and its corporate seal to be hereunto affixed and attested by one of its Assistant Secretaries; and James A. Ehrenberg has hereunto set his hand and seal, all as of the day and year first above written. OTTER TAIL POWER COMPANY By -------------------------------------- VICE PRESIDENT, FINANCE Attest: - ------------------------------------- SECRETARY FIRST TRUST NATIONAL ASSOCIATION By -------------------------------------- VICE PRESIDENT Attest: - ------------------------------------- ASSISTANT SECRETARY -------------------------------------- James A. Ehrenberg - 18 STATE OF MINNESOTA SS. COUNTY OF OTTER TAIL On this day of , before me, a Notary Public in and for said County and State, personally appeared A. E. ANDERSON and JAY D. MYSTER, to me personally known to be the Vice President, Finance and the Secretary, respectively, of Otter Tail Power Company, one of the corporations described in and that executed the within instrument, who, being by me duly sworn, did say that they are, respectively, the Vice President, Finance and Secretary of said corporation, and that the seal affixed to said instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and said A. E. ANDERSON and JAY D. MYSTER acknowledged said instrument to be the free act and deed of said corporation. -------------------------------------- STATE OF MINNESOTA SS. COUNTY OF RAMSEY On this day of , before me, a Notary Public in and for said County and State, personally appeared and , to me personally known to be a Vice President and an Assistant Secretary, respectively, of First Trust National Association, one of the corporations described in and that executed the within instrument, who, being by me duly sworn, did say that they are, respectively, a Vice President and an Assistant Secretary of said corporation, and that the seal affixed to said instrument is the corporate seal of said corporation and 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. -------------------------------------- - 19 STATE OF MINNESOTA SS. COUNTY OF RAMSEY On this day of , before me, a Notary Public in and for said County and State, personally appeared JAMES A. EHRENBERG, to me personally known to be the person who is described in and who executed the within instrument, who, being by me duly sworn, acknowledged to me that he executed the same as his free act and deed. -------------------------------------- This instrument was drafted by: Dorsey & Whitney LLP 220 South Sixth Street, Minneapolis, Minnesota 55402 - EX-4.D-11 5 EXHIBIT 4-D-11 INDENTURE EXHIBIT 4-D-11 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OTTER TAIL POWER COMPANY TO FIRST TRUST NATIONAL ASSOCIATION, TRUSTEE -------------- INDENTURE (FOR UNSECURED DEBT SECURITIES) DATED AS OF _______ 1, 1996 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OTTER TAIL POWER COMPANY RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND INDENTURE, DATED AS OF _________ 1, 1996 TRUST INDENTURE ACT SECTION INDENTURE SECTION Section 310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . .909 (a)(2). . . . . . . . . . . . . . . . . . . . . . . . . .909 (a)(3). . . . . . . . . . . . . . . . . . . . . . . . 914(b) (a)(4). . . . . . . . . . . . . . . . . . . . Not Applicable (b) . . . . . . . . . . . . . . . . . . . . . . . . . . .908 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .910 Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . .913 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . .913 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . .913 Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 1001 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 1001 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . 1001 Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 1002 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . 1002 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . 1002 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . 1002 Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 1002 (a)(4). . . . . . . . . . . . . . . . . . . . . . . . . .606 (b) . . . . . . . . . . . . . . . . . . . . . Not Applicable (c)(1). . . . . . . . . . . . . . . . . . . . . . . . . .102 (c)(2). . . . . . . . . . . . . . . . . . . . . . . . . .102 (c)(3). . . . . . . . . . . . . . . . . . . . Not Applicable (d) . . . . . . . . . . . . . . . . . . . . . Not Applicable (e) . . . . . . . . . . . . . . . . . . . . . . . . . . .102 Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . .901 . . . . . . . . . . . . . . . . . . . . . . . . . . . .903 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . .902 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . .901 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . .901 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . .814 Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . .812 . . . . . . . . . . . . . . . . . . . . . . . . . . . .813 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . .802 . . . . . . . . . . . . . . . . . . . . . . . . . . . .812 (a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . .813 (a)(2) . . . . . . . . . . . . . . . . . . . Not Applicable (b) . . . . . . . . . . . . . . . . . . . . . . . . . . .808 Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . .803 (a)(2). . . . . . . . . . . . . . . . . . . . . . . . . .804 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . .603 Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . .107 TABLE OF CONTENTS RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE ONE Definitions and Other Provisions of General Application SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . 1 "Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . 2 "Authenticating Agent" . . . . . . . . . . . . . . . . . . . 2 "Authorized Officer" . . . . . . . . . . . . . . . . . . . . 2 "Board of Directors" . . . . . . . . . . . . . . . . . . . . 2 "Board Resolution" . . . . . . . . . . . . . . . . . . . . . 2 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . 3 "Commission" . . . . . . . . . . . . . . . . . . . . . . . . 3 "Company" . . . . . . . . . . . . . . . . . . . . . . . . . . 3 "Company Request" or "Company Order" . . . . . . . . . . . . 3 "Corporate Trust Office" . . . . . . . . . . . . . . . . . . 3 "corporation" . . . . . . . . . . . . . . . . . . . . . . . . 3 "Defaulted Interest" . . . . . . . . . . . . . . . . . . . . 3 "Discount Security" . . . . . . . . . . . . . . . . . . . . . 3 "Dollar" or "$" . . . . . . . . . . . . . . . . . . . . . . . 3 "Eligible Obligations" . . . . . . . . . . . . . . . . . . . 4 "Event of Default" . . . . . . . . . . . . . . . . . . . . . 4 "Governmental Authority" . . . . . . . . . . . . . . . . . . 4 "Government Obligations" . . . . . . . . . . . . . . . . . . 4 "Holder". . . . . . . . . . . . . . . . . . . . . . . . . . . 4 "Indenture" . . . . . . . . . . . . . . . . . . . . . . . . . 4 "Interest Payment Date" . . . . . . . . . . . . . . . . . . . 5 "Maturity" . . . . . . . . . . . . . . . . . . . . . . . . . 5 "Officer's Certificate" . . . . . . . . . . . . . . . . . . . 5 "Opinion of Counsel" . . . . . . . . . . . . . . . . . . . . 5 "Outstanding" . . . . . . . . . . . . . . . . . . . . . . . . 5 "Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . 6 "Periodic Offering" . . . . . . . . . . . . . . . . . . . . . 7 "Person". . . . . . . . . . . . . . . . . . . . . . . . . . . 7 "Place of Payment" . . . . . . . . . . . . . . . . . . . . . 7 "Predecessor Security" . . . . . . . . . . . . . . . . . . . 7 "Redemption Date" . . . . . . . . . . . . . . . . . . . . . . 7 "Redemption Price" . . . . . . . . . . . . . . . . . . . . . 7 "Regular Record Date" . . . . . . . . . . . . . . . . . . . . 7 - i - "Required Currency" . . . . . . . . . . . . . . . . . . . . . 7 "Responsible Officer" . . . . . . . . . . . . . . . . . . . . 7 "Securities" . . . . . . . . . . . . . . . . . . . . . . . . 7 "Security Register" and "Security Registrar" . . . . . . . . 7 "Special Record Date" . . . . . . . . . . . . . . . . . . . . 8 "Stated Interest Rate" . . . . . . . . . . . . . . . . . . . 8 "Stated Maturity" . . . . . . . . . . . . . . . . . . . . . . 8 "Tranche" . . . . . . . . . . . . . . . . . . . . . . . . . . 8 "Trust Indenture Act" . . . . . . . . . . . . . . . . . . . . 8 "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . 8 "United States" . . . . . . . . . . . . . . . . . . . . . . . 8 SECTION 102. Compliance Certificates and Opinions. . . . . . . . 8 SECTION 103. Form of Documents Delivered to Trustee. . . . . . . 9 SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . 10 SECTION 105. Notices, Etc. to Trustee and Company. . . . . . . . 12 SECTION 106. Notice to Holders of Securities; Waiver. . . . . . 13 SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . 14 SECTION 108. Effect of Headings and Table of Contents. . . . . . 14 SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . 14 SECTION 110. Separability Clause. . . . . . . . . . . . . . . . 14 SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . 14 SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . 14 SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . 14 ARTICLE TWO Security Forms SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . 15 SECTION 202. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . 15 ARTICLE THREE The Securities SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . 16 SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . 20 SECTION 303. Execution, Authentication, Delivery and Dating. . . 20 SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . 23 SECTION 305. Registration, Registration of Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . 23 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . 25 SECTION 307. Payment of Interest; Interest Rights Preserved. . . 26 - ii - SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . 27 SECTION 309. Cancellation by Security Registrar. . . . . . . . . 27 SECTION 310. Computation of Interest. . . . . . . . . . . . . . 28 SECTION 311. Payment to Be in Proper Currency. . . . . . . . . . 28 ARTICLE FOUR Redemption of Securities SECTION 401. Applicability of Article. . . . . . . . . . . . . . 28 SECTION 402. Election to Redeem; Notice to Trustee. . . . . . . 29 SECTION 403. Selection of Securities to Be Redeemed. . . . . . . 29 SECTION 404. Notice of Redemption. . . . . . . . . . . . . . . . 30 SECTION 405. Securities Payable on Redemption Date. . . . . . . 31 SECTION 406. Securities Redeemed in Part. . . . . . . . . . . . 31 ARTICLE FIVE Sinking Funds SECTION 501. Applicability of Article. . . . . . . . . . . . . . 32 SECTION 502. Satisfaction of Sinking Fund Payments with Securities. . . . . . . . . . . . . . . . . . . . . 32 SECTION 503. Redemption of Securities for Sinking Fund. . . . . 33 ARTICLE SIX Covenants SECTION 601. Payment of Principal, Premium and Interest. . . . . 33 SECTION 602. Maintenance of Office or Agency. . . . . . . . . . 34 SECTION 603. Money for Securities Payments to Be Held in Trust. . . . . . . . . . . . . . . . . . . . . . . 34 SECTION 604. Corporate Existence. . . . . . . . . . . . . . . . 36 SECTION 605. Maintenance of Properties. . . . . . . . . . . . . 36 SECTION 606. Annual Officer's Certificate as to Compliance. . . 36 SECTION 607. Waiver of Certain Covenants. . . . . . . . . . . . 37 - iii - ARTICLE SEVEN Satisfaction and Discharge SECTION 701. Satisfaction and Discharge of Securities. . . . . . 37 SECTION 702. Satisfaction and Discharge of Indenture. . . . . . 40 SECTION 703. Application of Trust Money. . . . . . . . . . . . . 40 ARTICLE EIGHT Events of Default; Remedies SECTION 801. Events of Default. . . . . . . . . . . . . . . . . 41 SECTION 802. Acceleration of Maturity; Rescission and Annulment. . . . . . . . . . . . . . . . . . . . . 43 SECTION 803. Collection of Indebtedness and Suits for Enforcement by Trustee. . . . . . . . . . . . . . . 44 SECTION 804. Trustee May File Proofs of Claim. . . . . . . . . . 45 SECTION 805. Trustee May Enforce Claims Without Possession of Securities. . . . . . . . . . . . . . . . . . . . . 45 SECTION 806. Application of Money Collected. . . . . . . . . . . 46 SECTION 807. Limitation on Suits. . . . . . . . . . . . . . . . 46 SECTION 808. Unconditional Right of Holders to Receive Principal, Premium and Interest. . . . . . . . . . 47 SECTION 809. Restoration of Rights and Remedies. . . . . . . . . 47 SECTION 810. Rights and Remedies Cumulative. . . . . . . . . . . 47 SECTION 811. Delay or Omission Not Waiver. . . . . . . . . . . . 48 SECTION 812. Control by Holders of Securities. . . . . . . . . . 48 SECTION 813. Waiver of Past Defaults. . . . . . . . . . . . . . 48 SECTION 814. Undertaking for Costs. . . . . . . . . . . . . . . 49 SECTION 815. Waiver of Stay or Extension Laws. . . . . . . . . . 49 ARTICLE NINE The Trustee SECTION 901. Certain Duties and Responsibilities. . . . . . . . 50 SECTION 902. Notice of Defaults. . . . . . . . . . . . . . . . . 51 SECTION 903. Certain Rights of Trustee. . . . . . . . . . . . . 51 SECTION 904. Not Responsible for Recitals or Issuance of Securities. . . . . . . . . . . . . . . . . . . . . 53 SECTION 905. May Hold Securities. . . . . . . . . . . . . . . . 53 - iv - SECTION 906. Money Held in Trust. . . . . . . . . . . . . . . . 53 SECTION 907. Compensation and Reimbursement. . . . . . . . . . . 53 SECTION 908. Disqualification; Conflicting Interests. . . . . . 54 SECTION 909. Corporate Trustee Required; Eligibility. . . . . . 54 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. . . . . . . . . . . . . . . . . . . . . . 59 SECTION 914. Co-trustees and Separate Trustees. . . . . . . . . 59 SECTION 915. Appointment of Authenticating Agent. . . . . . . . 61 ARTICLE TEN Holders' Lists and Reports by Trustee and Company SECTION 1001. Lists of Holders. . . . . . . . . . . . . . . . . . 63 SECTION 1002. Reports by Trustee and Company. . . . . . . . . . . 63 ARTICLE ELEVEN Consolidation, Merger, Conveyance or Other Transfer SECTION 1101. Company May Consolidate, Etc., Only on Certain Terms. . . . . . . . . . . . . . . . . . . 64 SECTION 1102. Successor Corporation Substituted. . . . . . . . . 64 ARTICLE TWELVE Supplemental Indentures SECTION 1201. Supplemental Indentures Without Consent of Holders. . . . . . . . . . . . . . . . . . . . . 65 SECTION 1202. Supplemental Indentures With Consent of Holders. . . . . . . . . . . . . . . . . . . . . 67 SECTION 1203. Execution of Supplemental Indentures. . . . . . . . 68 SECTION 1204. Effect of Supplemental Indentures. . . . . . . . . 69 SECTION 1205. Conformity With Trust Indenture Act. . . . . . . . 69 SECTION 1206. Reference in Securities to Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . 69 SECTION 1207. Modification Without Supplemental Indenture. . . . 69 - v - ARTICLE THIRTEEN Meetings of Holders; Action Without Meeting SECTION 1301. Purposes for Which Meetings May Be Called. . . . . 70 SECTION 1302. Call, Notice and Place of Meetings. . . . . . . . . 70 SECTION 1303. Persons Entitled to Vote at Meetings. . . . . . . . 71 SECTION 1304. Quorum; Action. . . . . . . . . . . . . . . . . . . 71 SECTION 1305. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings. . . . . . . . . . . . . . . . . . . . 72 SECTION 1306. Counting Votes and Recording Action of Meetings. . . . . . . . . . . . . . . . . . . . . . 73 SECTION 1307. Action Without Meeting. . . . . . . . . . . . . . . 74 ARTICLE FOURTEEN Immunity of Incorporators, Stockholders, Officers and Directors SECTION 1401. Liability Solely Corporate. . . . . . . . . . . . . 74 TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . 75 ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 76 - vi - INDENTURE, dated as _________, 1996 between OTTER TAIL POWER COMPANY, a corporation duly organized and existing under the laws of the State of Minnesota (herein called the "Company"), having its principal office at 215 South Cascade Street, P.O. Box 496, Fergus Falls, Minnesota 56538, and First Trust National Association, a national banking association organized and existing under the laws of the United States of America, having its principal corporate trust office at First Trust Center, 180 East Fifth Street, St. Paul, Minnesota 55101, 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"), 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 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 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 Nine, are defined in that Article. "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 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 or any other duly authorized officer of the Company. "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. - 2 - "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. "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 at First Trust Center, 180 East Fifth Street, St. Paul, Minnesota 55101. "CORPORATION" means a corporation, association, 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, and "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. - 3 - "ELIGIBLE OBLIGATIONS" means: (a) with respect to Securities denominated in Dollars, Government Obligations; or (b) with respect to Securities denominated in a currency other than Dollars or in a composite currency, such other obligations or instruments as shall be specified with respect to such Securities, as contemplated by Section 301. "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 thereof, or any department, agency, authority or other instrumentality of any of the foregoing. "GOVERNMENT OBLIGATIONS" means: (a) direct obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by, the United States 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 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 particular series of Securities established as contemplated by Section 301. - 4 - "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 by the Trustee or delivered to the Trustee 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; 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 or Tranche, 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 and each such Tranche, as the case may be, determined without regard to this - 5 - clause (x)) 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; (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; and (z) the principal amount of any Security which is denominated in a currency other than Dollars or in a composite currency that shall be deemed to be Outstanding for such purposes shall be the amount of Dollars which could have been purchased by the principal amount (or, in the case of a Discount Security, the Dollar equivalent on the date determined as set forth below of the amount determined as provided in (y) above) of such currency or composite currency evidenced by such Security in each such case certified to the Trustee in an Officer's Certificate, based (1) on the average of the mean of the buying and selling spot rates quoted by three banks which are members of the New York Clearing House Association selected by the Company in effect at 11:00 A.M. (New York time) in The City of New York on the fifth Business Day preceding any such determination or (2) if on such fifth Business Day it shall not be possible or practicable to obtain such quotations from such three banks, on such other quotations or alternative methods of determination which shall be as consistent as practicable with the method set forth in (1) above; 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. - 6 - "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 upon the issuance of such Securities. "PERSON" means any individual, corporation, partnership, joint venture, trust or unincorporated organization or any Governmental Authority thereof. "PLACE OF PAYMENT", when used with respect to the Securities of any series, or Tranche thereof, 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 or Tranche are payable. "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. "REQUIRED CURRENCY" has the meaning specified in Section 311. "RESPONSIBLE OFFICER", when used with respect to the Trustee, means any officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "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. - 7 - "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 the Company's obligations in respect of which 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). "TRANCHE" means a group of Securities which (a) are of the same series and (b) have identical terms except as to principal amount and/or date of issuance. "TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act of 1939, as amended, 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 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, if requested by the Trustee, 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 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 - 8 - 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. 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. - 9 - 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 "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 - 10 - 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 individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The principal amount (except as otherwise contemplated in clause (y) of the 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, or any Tranche thereof, 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, or any Tranche thereof, 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 or Tranche. - 11 - (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, by Company Order, 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, 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, telex 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 registered mail, charges prepaid, to the applicable address set opposite 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: First Trust National Association First Trust Center 180 East Fifth Street Saint Paul, Minnesota 55101 Attention: Corporate Trust Officer Telephone: (612) 244-0738 Facsimile: (612) 244-0712 - 12 - If to the Company, to: Otter Tail Power Company 215 South Cascade Street P. O. Box 496 Fergus Falls, Minnesota 56538-0496 Attention: Vice President, Finance Telephone: (218) 739-8200 Facsimile: (218) 739-8895 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, telex or other direct written electronic means, on the date of transmission, and if transmitted by registered mail, on the date of receipt. 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, and not earlier than the earliest date, 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. - 13 - 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 held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 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 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 any Tranche thereof, or in the Board Resolution or Officer's Certificate which establishes the terms of the Securities of - 14 - such series or Tranche, 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, except that if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day in each case with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, 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. Unless otherwise specified as contemplated by Section 301, 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: - 15 - This is one of the Securities of the series designated therein referred to in the within mentioned Indenture. First Trust National Association, Trustee By: ------------------------------------ Authorized Officer 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. 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, or any Tranche thereof, 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, or any Tranche thereof, is payable or any formula or other method or other means by which such date or dates shall be determined, by reference to - 16 - 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, or any Tranche thereof, 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 formula 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; (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, or any Tranche thereof, shall be payable, (2) registration of transfer of Securities of such series, or any Tranche thereof, may be effected, (3) exchanges of Securities of such series, or any Tranche thereof, may be effected and (4) notices and demands to or upon the Company in respect of the Securities of such series, or any Tranche thereof, and this Indenture may be served; the Security Registrar and any Paying Agent or Agents for such series or Tranche; 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, or any Tranche thereof, 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, or any Tranche thereof, 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, or any Tranche thereof, 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; - 17 - (i) the denominations in which Securities of such series, or any Tranche thereof, shall be issuable if other than denominations of $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, or any Tranche thereof, shall be payable (if other than in Dollars); (k) if the principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, 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, or any Tranche thereof, 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; (m) if the amount payable in respect of principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, may be determined with reference to an index or other fact or event ascertainable outside of 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, or any Tranche thereof, 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, or any Tranche thereof, in addition to those set forth in Article Six; - 18 - (p) the terms, if any, pursuant to which the Securities of such series, or any Tranche thereof, 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 Eligible Obligations in respect of the Securities of such series, or any Tranche thereof, 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, or any Tranche thereof, are to be issued in global form, (1) 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, (2) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of temporary form and (3) any and all other matters incidental to such Securities; (s) if the Securities of such series, or any Tranche thereof, 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, or any Tranche thereof, 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, or any Tranche thereof, 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, or any Tranche thereof; and (v) any other terms of the Securities of such series, or any Tranche thereof, 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, or any Tranche thereof, shall be specified in a Company Order or that - 19 - 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. SECTION 302. DENOMINATIONS. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, the Securities of each series shall be issuable in denominations of $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, or any Tranche thereof, 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 and 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 of the Company 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. 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 (1) establishing such terms or (2) 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 - 20 - 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: (1) 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; (2) 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 (3) 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, subject, as to enforcement, to 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 of such Securities (provided 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 (2) and (3) 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 - 21 - (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, subject, as to enforcement, to 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, 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 rules, regulations or orders 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 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, or any Tranche thereof, 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, or any Tranche thereof, 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 for herein executed by the Trustee or its agent by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder - 22 - 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 and 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, or any Tranche thereof, 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, or any Tranche thereof, after the preparation of definitive Securities of such series or Tranche, the temporary Securities of such series or Tranche shall be exchangeable, without charge to the Holder thereof,for definitive Securities of such series or Tranche 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, the Company shall, except as aforesaid, execute and the Trustee shall authenticate and deliver in exchange therefor definitive Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount. Until exchanged in full as hereinabove provided, temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and Tranche 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 or any Tranche thereof, a - 23 - 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 or Tranche 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 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, or any Tranche or Tranches thereof, 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, or any Tranche thereof, upon surrender for registration of transfer of any Security of such series or Tranche at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, 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 and Tranche, 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, or any Tranche thereof, any Security of such series or Tranche may be exchanged at the option of the Holder, for one or more new Securities of the same series and Tranche, 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. - 24 - Unless otherwise specified as contemplated by Section 301 with respect to Securities of any series, or any Tranche thereof, 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, or any Tranche thereof, during a period of 15 days immediately preceding the date notice is to be given identifying the serial numbers of the Securities of such series or Tranche 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. 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 Tranche, 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 Tranche, 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 - 25 - 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, or any Tranche thereof, 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 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 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 - 26 - 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 accrue, which were carried by such other Security. SECTION 308. PERSONS DEEMED OWNERS. 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 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 - 27 - 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, or any Tranche thereof, 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 on the basis of the actual number of days elapsed within any month in relation to the deemed 30 days of such month. SECTION 311. PAYMENT TO BE IN PROPER CURRENCY. In the case of the Securities of any series, or any Tranche thereof, 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. ARTICLE FOUR REDEMPTION OF SECURITIES SECTION 401. APPLICABILITY OF ARTICLE. Securities of any series, or any Tranche thereof, which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except - 28 - as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche) 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, or any Tranche thereof, are to be redeemed, the particular Securities to be redeemed shall be selected by the Security Registrar from the Outstanding Securities of such series or Tranche not previously called for redemption, by such method as shall be provided for any particular series or Tranche, or, in the absence of any such provision, by such method of random selection as the Security Registrar shall deem fair and appropriate and which may, in any case, provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of such series or Tranche or any integral multiple thereof) of the principal amount of Securities of such series or Tranche of a denomination larger than the minimum authorized denomination for Securities of such series or Tranche; 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, or any Tranche thereof, 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 Security Registrar, 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 Security Registrar shall promptly notify the Company and the Trustee 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 - 29 - 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. 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, (c) if less than all the Securities of any series or Tranche 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, (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, and (g) 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 - 30 - Securities. In the 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 - 31 - authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities of the same series and Tranche, 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. 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, or any Tranche thereof, except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series, or any Tranche thereof, 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, or any Tranche thereof, is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, or any Tranche thereof, 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 or Tranche 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 or Tranche in respect of which a mandatory sinking fund payment is to be made and (b) may apply as a credit Securities of such series or Tranche which have been (1) 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 (2) repurchased by the Company in the open market, by tender offer or otherwise, in each case in satisfaction of all or any part of such mandatory sinking fund payment; 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. - 32 - 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, or any Tranche thereof, 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 or Tranche; (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; (d) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by the payment of cash; (e) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by delivering and crediting Securities of such series or Tranche 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 or Tranche shall be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 40 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. - 33 - SECTION 602. MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain in each Place of Payment for the Securities of each series, or any Tranche thereof, 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 any Tranche thereof, 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, or any Tranche thereof, 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 or Tranche, 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. 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, or any Tranche thereof, 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 -34- 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, or any Tranche thereof, 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 sums 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, or any Tranche thereof, 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 failure, 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. 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, if any, has become due and payable shall -35- 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 October 1 in each year, commencing October 1, 1997, 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 Company, as to 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. -36- 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, or any Tranche thereof, 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 and Tranches 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. ARTICLE SEVEN SATISFACTION AND DISCHARGE SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES. 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, Eligible 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, -37- 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 or Tranche, such Securities or portions thereof shall have been selected by the Security Registrar 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 Eligible Obligations deposited in accordance with this Section shall be held in trust, as provided in Section 703; (y) if Eligible Obligations shall have been deposited, an Opinion of Counsel that the obligations so deposited constitute Eligible 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 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 Eligible 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 of 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, 603 -38- and 604) 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, or any Tranche thereof, 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 or Tranche. 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 sixty (60) day period commencing with the date of the deposit of moneys or Eligible 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, 403, 404, 406, 503 (as to notice of redemption), 602, 603, 907, 909, 910 and 915 and this Article Seven shall survive. The Company shall pay, and shall indemnify the Trustee or any Paying Agent with which Eligible Obligations shall have been deposited as provided in this Section against, any tax, fee or other charge imposed on or assessed against such Eligible Obligations or the principal or interest received in respect of such Eligible 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. 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 Eligible Obligations, or combination -39- 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 it, 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, 403, 404, 406, 503 (as to notice of redemption), 602, 603, 907, 909, 910 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 Eligible Obligations held by the Trustee pursuant to Section 703. SECTION 703. APPLICATION OF TRUST MONEY. Neither the Eligible Obligations nor the money deposited pursuant to Section 701, nor the principal or interest payments on any such Eligible Obligations, shall be -40- withdrawn or used for any purpose other than, and such Eligible Obligations and money deposited and the principal and interest payments on any such Eligible Obligations shall be held in trust for, the payment of the principal of and premium, if any, and 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 Eligible Obligations, if not then needed for such purpose, shall, to the extent practicable, be invested in Eligible 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 60 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 within three Business Days after its Maturity; 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 -41- solely for the benefit of one or more series of Securities other than such series) for a period of 60 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 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 -42- 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 ANNULMENT. If an Event of Default shall have occurred and be continuing with respect to Securities of any series at the time Outstanding, then in every such case the Trustee or the Holders of not less than 33% in principal amount of the Outstanding Securities of such series may declare the principal amount (or, if any of the Securities of such series are Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof as contemplated by Section 301) of all of the Securities of such series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon receipt by the Company of notice of such declaration such principal amount (or specified amount) shall become immediately due and payable; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Securities, the Trustee or the Holders of not less than 33% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class (and not the Holders of the Securities of any one of such series), may make such declaration of acceleration. 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 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 thereon at the rate or rates prescribed therefor in such Securities; -43- (3) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities; (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 non-payment 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. 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. -44- 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. 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. -45- 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 Company. 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 all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class, 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; (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 -46- (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 -47- 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 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 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 (a) such direction shall not be in conflict with any rule of law or with this Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not, in the Trustee's sole discretion, be adequate, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 813. WAIVER OF PAST DEFAULTS. The Holders of not less than a majority in 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 -48- (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, 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; 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. -49- ARTICLE NINE THE TRUSTEE SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during the continuance of an Event of Default with respect to Securities of any series, (1) the Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default with respect to Securities of any series shall have occurred and be continuing, the Trustee shall exercise, with respect to Securities of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (l) this clause (c) shall not be construed to limit the effect of clause (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with -50- the direction of the Holders of a majority in principal amount of the Outstanding Securities of any one or more series, as provided herein, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and (4) 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. (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 clause (c) of Section 801, no such notice to Holders shall be given until at least 75 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 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 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 -51- 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; (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; and (h) except as otherwise provided in Section 801, the Trustee shall not be charged with knowledge of any Event of Default 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 Event of Default or (2) written notice of such Event of Default shall have been given -52- to the Trustee by the Company, any other obligor on such Securities or by any Holder of such Securities. 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 or the Trustee, 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. 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 or investment of 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 -53- that any such expense, disbursement or advance may be attributable to its negligence, willful misconduct or bad faith; and (c) indemnify the Trustee 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 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, willful misconduct or bad faith. 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, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder. 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 -54- 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. (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 -55- (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, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities or (B) subject to Section 814, any Holder who has been a bona fide Holder for at least six months may, on behalf of itself 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 (B) in clause (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. (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 -56- pursuant to subsection (e) of this Section, if the Company shall have delivered to the Trustee (1) a Board Resolution appointing a successor Trustee, effective as of a date specified therein, and (2) 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 clause (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, 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 such 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 -57- 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 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, 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 clause (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 corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation 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 -58- 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 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 or such obligor 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 or such obligor 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 -59- 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 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; -60- (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, or any Tranche thereof, which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series or Tranche issued upon original issuance, 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 or the Commonwealth of Puerto Rico, 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 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. -61- 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 Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, in accordance with, and subject to the provisions of Section 907. 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, or any Tranche thereof, shall be made pursuant to this Section, the Securities of such series or Tranche 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. First Trust National Association, 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 -62- 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 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 March 1 and September 1 in each year, commencing March 1, 1997, 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 July 1 in each year, commencing July 1, 1997, the Trustee shall transmit to the Holders and the Commission a report, dated as of the next preceding May 1, 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 and the Commission, and the Company shall file with the Trustee (within thirty (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. -63- 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 corporation, or convey or otherwise transfer or lease its properties and assets substantially as an entirety to any Person, unless (a) the corporation 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 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 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 and treating any indebtedness for borrowed money which becomes an obligation of the Company as a result of such transaction as having been incurred by the Company at the time of 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 CORPORATION SUBSTITUTED. Upon any consolidation by the Company with or merger by the Company into any other corporation or any 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 corporation formed 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 -64- 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 one or more specified Tranches thereof, 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 (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 or Tranche Outstanding on the date of such indenture supplemental hereto in any material respect, such change, elimination or addition shall become effective (1) with respect to such series or Tranche only pursuant to the provisions of Section 1202 hereof or (2) when no Security of such series or Tranche remains Outstanding; or (e) to provide collateral security for all but not part of the Securities; or (f) to establish the form or terms of Securities of any series or Tranche 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 -65- 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 clause (b) of Section 911; or (i) to provide for the procedures required to permit the Company to utilize, at its option, a non-certificated system of registration for all, or any series or Tranche 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, or any Tranche thereof, shall be payable, (2) all or any series of Securities, or any Tranche thereof, may be surrendered for registration of transfer, (3) all or any series of Securities, or any Tranche thereof, may be surrendered for exchange and (4) notices and demands to or upon the Company in respect of all or any series of Securities, or any Tranche thereof, 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 or Tranche 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 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 -66- (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; 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 if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches 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 -67- (b) reduce the percentage in principal amount of the Outstanding Securities of any series or any Tranche thereof, 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 case, the consent of the Holders of each Outstanding Security of such series or Tranche, or (c) modify any of the provisions of this Section, Section 607 or Section 813 with respect to the Securities of any series, or any Tranche thereof, or 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 clause (b) of Section 911 and clause (h) of Section 1201. 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 of one or more Tranches thereof, or which modifies the rights of the Holders of Securities of such series or Tranches 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 or Tranche. 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. -68- 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. SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities of any series, or any Tranche thereof, 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, or any Tranche thereof, 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 or Tranche. 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 pursuant to a Board Resolution 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. -69- 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, or any Tranche or Tranches thereof, 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 or Tranches. 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, or any Tranche or Tranches thereof, 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, or any Tranche or Tranches thereof, by the Company or by the Holders of 33% in aggregate principal amount of all of such series and Tranches, 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 and Tranches 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 clause (a) of this Section. (c) Any meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, shall be valid without notice if the Holders of all Outstanding Securities of such series or Tranches are present in person or by proxy and if representatives of the Company and the Trustee are -70- 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, or any Tranche or Tranches thereof, a Person shall be (a) a Holder of one or more Outstanding Securities of such series or Tranches, 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 or Tranches by such Holder or Holders. The only Persons who shall be entitled to attend any meeting of Holders of Securities of any series or Tranche 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 and Tranches 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 and Tranches; 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 and Tranches, considered as one class, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, 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 and Tranches, 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 clause (e) of Section 1305, notice of the reconvening of any meeting adjourned for more than 30 days shall be given as provided in clause (a) of Section 1302 not less than ten days prior to the date 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 and Tranches which shall constitute a quorum. -71- 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 and Tranches 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 and Tranches, 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 and Tranches, 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 and Tranches 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 -72- called by the Company or by Holders as provided in clause (b) of Section 1302, in which case the Company or the Holders of Securities of the series and Tranches 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 shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches 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 and Tranches 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 and Tranches 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. -73- 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. 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. -74- IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. OTTER TAIL POWER COMPANY By: ------------------------------------- ATTEST: - ---------------------- FIRST TRUST NATIONAL ASSOCIATION, TRUSTEE By: ------------------------------------- ATTEST: - ----------------------- -75- STATE OF MINNESOTA ) ) ss. COUNTY OF OTTER TAIL ) On the ____ day of _________, 1996, before me personally came ___________________, to me known, who, being by me duly sworn, did depose and say that he is the _________ of Otter Tail Power Company, the corporation described in and which executed the foregoing instrument; that he knows the seal of said corporation, that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority, acknowledging the instrument to be the free act and deed of said corporation. -------------------------------------------------- Notary Public [Notarial Seal] STATE OF ______ ) ) ss. COUNTY OF _____ ) On the ___ day of __________, 1996, before me personally came __________, to me known, who, being by me duly sworn, did depose and say that he is a __________ of First Trust National Association, the national banking association described in and which executed the foregoing instrument; that he knows the seal of said national banking association; that the seal affixed to said instrument is the seal of said national banking association; that it was so affixed by authority of the Board of Directors of said national banking association, and that he signed his name thereto by like authority, acknowledging the instrument to be the free act and deed of said national banking association. -------------------------------------------------- Notary Public [Notarial Seal] -76- EX-5.A 6 EXHIBIT 5-A REGISTRATION STATEMENT EXHIBIT 5-A Otter Tail Power Company 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 Ladies and Gentlemen: Reference is made to the proposed issuance and sale from time to time by Otter Tail Power Company, a Minnesota corporation (the "Company"), of not to exceed $50,000,000 aggregate initial offering price of its debt securities (the "New Debt Securities") and the Company's Registration Statement on Form S-3 (the "Registration Statement") with respect to such proposed issuance and sale to be filed with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The New Debt Securities may be issued as First Mortgage Bonds (the "New First Mortgage Bonds") pursuant to the provisions of the Company's Indenture of Mortgage dated as of July 1, 1936 to First Trust Company of Saint Paul (now named First Trust National Association) and Louis S. Headley (James A. Ehrenberg, successor individual Trustee), Trustees, and the supplemental indentures thereto, including the supplemental indenture creating a series of New First Mortgage Bonds (such Indenture as so supplemented being hereinafter called the "First Mortgage Indenture"), or as notes, debentures or other evidences of indebtedness (the "New Debentures") pursuant to the Company's Indenture (For Unsecured Debt Securities) to be entered into with First Trust National Association, Trustee (such Indenture, as the same may be supplemented from time to time, including any supplemental indenture creating a series of New Debentures, being hereinafter called the "Debenture Indenture"). We are familiar with the proceedings to date with respect to the proposed issuance and sale of the New Debt Securities and have examined such records, documents and matters of law and satisfied ourselves as to such matters of fact as we have considered relevant for the purposes of this opinion. Based upon such examination, we are of the opinion that: (1) The Company is duly incorporated, validly existing and in good standing under the laws of the State of Minnesota. Otter Tail Power Company Page 2 (2) The Company is a public utility, as defined in the statutes of the States of Minnesota, North Dakota and South Dakota, is fully authorized to conduct its business in the States of Minnesota, North Dakota and South Dakota as a public utility and, as such public utility, is subject to the jurisdiction of the Minnesota Public Utilities Commission with respect to the issuance of its securities and to the jurisdiction of the North Dakota Public Service Commission with respect to the issuance of certain of its securities. (3) Each series of New First Mortgage Bonds will be legally issued and binding obligations of the Company, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by general principles of equity, when: (a) the Registration Statement, as finally amended (including any necessary post-effective amendment), shall have become effective under the Securities Act and the First Mortgage Indenture, including the supplemental indenture creating such series of New First Mortgage Bonds, shall have been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"); (b) a Prospectus Supplement with respect to the series of New First Mortgage Bonds then being distributed shall have been filed (or transmitted for filing) with the SEC pursuant to Rule 424 under the Securities Act; (c) the Company's Board of Directors (or a duly authorized committee designated by such Board) shall have adopted the final resolutions fixing the terms of such series of New First Mortgage Bonds, approving the final form of supplemental indenture relating to such series (including the form of New First Mortgage Bonds of such series set forth therein), approving the final form of Underwriting Agreement or Bond Purchase Agreement, as the case may be, relating to the sale of the New First Mortgage Bonds of such series and requesting authentication and delivery of the New First Mortgage Bonds of such series under the First Mortgage Indenture; (d) the supplemental indenture creating such series of New First Mortgage Bonds shall have been duly executed, acknowledged and delivered by the parties thereto and duly recorded and filed in accordance with applicable laws of the States of Minnesota, North Dakota and South Dakota; Otter Tail Power Company Page 3 (e) such series of New First Mortgage Bonds shall have been duly executed and authenticated and shall have been duly delivered to the purchasers thereof upon payment of the agreed consideration therefor; (f) the New First Mortgage Bonds of such series shall have been issued and sold in accordance with the resolutions of the Board of Directors (or the duly authorized committee designated by such Board) and in accordance with the appropriate Order or Orders of the Minnesota Public Utilities Commission; (g) the requirements of the securities laws of the various states in which the New First Mortgage Bonds of such series are to be offered shall have been satisfied; and (h) all statutory fees and taxes imposed upon or by reason of the issuance and sale of the New First Mortgage Bonds of such series shall have been paid. (4) Each series of New Debentures will be legally issued and binding obligations of the Company, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by general principles of equity, when: (a) the Registration Statement, as finally amended (including any necessary post-effective amendment), shall have become effective under the Securities Act and the Debenture Indenture, including any supplemental indenture creating such series, shall have been qualified under the Trust Indenture Act; (b) a Prospectus Supplement with respect to the series of New Debentures then being distributed shall have been filed (or transmitted for filing) with the SEC pursuant to Rule 424 under the Securities Act; (c) the Company's Board of Directors (or a duly authorized committee designated by such Board) shall have adopted the final resolutions fixing the terms of such series of New Debentures, approving the final form of Debenture Indenture and the final form of supplemental indenture or officers' certificate relating to such series (including the form of New Debentures of such series set forth therein) and approving the final form of Underwriting Agreement or Bond Purchase Agreement, as the case may be, relating to the sale of the New Debentures of such series; Otter Tail Power Company Page 4 (d) the Debenture Indenture, including any supplemental indenture or officers' certificate creating such series, shall have been duly executed, acknowledged and delivered by the parties thereto; (e) such series of New Debentures shall have been duly executed and authenticated and shall have been duly delivered to the purchasers thereof upon payment of the agreed consideration therefor; (f) the New Debentures of such series shall have been issued and sold in accordance with the resolutions of the Board of Directors (or the duly authorized committee designated by such Board) and in accordance with the appropriate Order or Orders of the Minnesota Public Utilities Commission; (g) the requirements of the securities laws of the various states in which the New Debentures of such series are to be offered shall have been satisfied; and (h) all statutory fees and taxes imposed upon or by reason of the issuance and sale of the New Debentures of such series shall have been paid. We hereby consent to the filing of this opinion as Exhibit 5-A to the Registration Statement and to the reference to our Firm under the caption "Legal Opinions" in the Prospectus comprising a part of the Registration Statement. Dated: August 30, 1996 Very truly yours, /s/ Dorsey & Whitney LLP EX-12.A 7 EXHIBIT 12-A EXHIBIT 12-A OTTER TAIL POWER COMPANY CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
For the Six Months Year Ended December 31 Ended June 30 ----------------------------------------------------------------- ------------------------- 1991 1992 1993 1994 1995 1995 1996 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Consolidated Net Income 1 $26,095,565 $26,538,112 $27,369,011 $28,474,794 $28,945,442 $14,043,713 $16,011,605 Add: Income Taxes: Above the line $14,827,734 $14,024,432 $14,331,210 $15,930,736 $16,583,504 $9,139,136 $8,849,516 Below the line $405,188 ($154,468) ($286,878) ($49,702) ($424,947) ($643,326) ($534,531) TOTAL INCOME TAX EXPENSE 2 $15,232,922 $13,869,964 $14,044,332 $15,881,034 $16,158,557 $8,495,810 $8,314,985 Add: Total Interest* 3 $12,236,597 $13,222,271 $13,880,870 $13,749,080 $15,222,444 $7,402,651 $7,850,535 ADJUSTED EARNINGS 4 $53,565,084 $53,630,347 $55,294,213 $58,104,908 $60,326,443 $29,942,174 $32,177,125 (1)+(2)+(3) Ratio of Earnings to Fixed Charges 4.38 4.06 3.98 4.23 3.96 4.04 4.10 (4) DIVIDED BY (3)
* Includes interest on long-term debt, other interest charges and amortization of debt expense, premium and discount. EX-23.A-1 8 EXHIBIT 23-A-1 INDEPENDENT AUDITORS' CONSENT EXHIBIT 23-A-1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Otter Tail Power Company on Form S-3 of our report dated January 29, 1996 incorporated by reference in the Annual Report Form 10-K of Otter Tail Power Company for the year ended December 31, 1995 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP Minneapolis, Minnesota August 30, 1996 EX-24.A 9 POWER OF ATTORNEY EXHIBIT 24-A POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints John C. MacFarlane, Jay D. Myster, Andrew E. Anderson and Charles E. Brunko, and each or any one of them, his/her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign the Registration Statement on Form S-3, and any and all amendments (including post-effective amendments) thereto, for the offer and sale of up to $50,000,000 aggregate initial offering price of Debt Securities of Otter Tail Power Company and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, this Power of Attorney has been signed on the 15TH day of JULY, 1996, by the following persons: /S/ JOHN C. MACFARLANE /S/ MAYNARD D. HELGAAS - ------------------------- ------------------------- John C. MacFarlane Maynard D. Helgaas /S/ ANDREW E. ANDERSON /S/ ARVID R. LIEBE - ------------------------- ------------------------- Andrew E. Anderson Arvid R. Liebe /S/ JEFFREY J. LEGGE /S/ KENNETH L. NELSON - ------------------------- ------------------------- Jeffrey J. Legge Kenneth L. Nelson /S/ THOMAS M. BROWN /S/ NATHAN I. PARTAIN - ------------------------- ------------------------- Thomas M. Brown Nathan I. Partain /S/ DAYLE DIETZ /S/ ROBERT N. SPOLUM - ------------------------- ------------------------- Dayle Dietz Robert N. Spolum /S/ DENNIS R. EMMEN - ------------------------- Dennis R. Emmen EX-25.A-1 10 FORM T-1 EXHIBIT 25-A-1 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) . . . [ ] FIRST TRUST NATIONAL ASSOCIATION (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) United States 41-0257700 (State of Incorporation) (I.R.S. Employer Identification No.) First Trust Center 180 East Fifth Street St. Paul, Minnesota 55101 (Address of Principal Executive Offices) (Zip Code) OTTER TAIL POWER COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Minnesota 41-0462685 (State of Incorporation) (I.R.S. Employer Identification No.) 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 (Address of Principal Executive Offices) (Zip Code) ___% FIRST MORTGAGE BONDS (TITLE OF THE INDENTURE SECURITIES) GENERAL 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. Comptroller of the Currency Washington D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None See Note following Item 16. ITEMS 3-15 ARE NOT APPLICABLE BECAUSE TO THE BEST OF THE TRUSTEE'S KNOWLEDGE THE OBLIGOR IS NOT IN DEFAULT UNDER ANY INDENTURE FOR WHICH THE TRUSTEE ACTS AS TRUSTEE. 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this statement of eligibility and qualification. 1. Copy of Articles of Association. 2. Copy of Certificate of Authority to Commence Business. 3. Authorization of the Trustee to exercise corporate trust powers. 4. Copy of existing By-Laws. 5. Copy of each Indenture referred to in item 4. 6. The consents of the trustee required by Section 321(b) of the Act. 7. Copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. NOTE The answers to this statement insofar as such answers relate to what persons are owners of 10% or more of the voting securities of the obligor or its affiliates, and what persons are controlling, controlled by or under common control with, the obligor or its affiliates, are based upon information furnished to the trustee by the obligor. While the trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, First Trust National Association, a National Trust Association organized and existing under the laws of the United States, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul and State of Minnesota on the 27th day of August, 1996. FIRST TRUST NATIONAL ASSOCIATION /s/ James A. Ehrenberg - ------------------------------ James A. Ehrenberg Senior Vice President /s/ Diane Chalupsky - ------------------------------ Diane Chalupsky Assistant Secretary Exhibit 1 FIRST TRUST NATIONAL ASSOCIATION I, Elizabeth Becker, the Secretary of First Trust National Association, a national banking association organized under the laws of the United States, hereby certify that the attached copy of the Articles of Association of First Trust National Association is full, true and complete copy of the original. I further certify that such Articles of Association have not been revoked and remain in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of First Trust National Association to be affixed hereto this 18th day of February, 1992. (Corporate Seal) /s/ Elizabeth Becker ---------------------------- Elizabeth Becker Secretary Sworn to before me this 18th day of February, 1992. /s/ Jeanne M. Erickson - --------------------------------- Notary Public certified/bylaws [logo] FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION FIRST. The title of the Association, which shall carry on the business of banking under the laws of the United States, shall be "First Trust National Association". Notwithstanding the foregoing, however, the Associaton shall not engage in any banking activities other than those within the scope of 12 U.S.C. Section 92a, and 12 C.F.R. 9, without the prior written approval of the Comptroller of the Currency. SECOND. The main office of the Association shall be in Saint Paul, County of Ramsey, State of Minnesota. The general business of the Association shall be conducted at its main office and branches. THIRD. The board of directors of the Association shall consist of not less than five nor more than 25 members. At any meeting of the shareholders held for the purpose of electing directors, or changing the number thereof, the number of directors may be determined by a majority votes cast by the shareholders in person or by proxy. Between meetings of the shareholders held for the purpose of electing directors, the board of directors by a majority vote of the full board may increase the size of the board by not more than four directors in any one year, but not to more than a total of 25 directors, and fill any vacancy created on the board. A majority of the board of directors shall be necessary to constitute a quorum for the transaction of business at any directors' meeting. Each director during the full term of directorship, shall own a minimum of One Thousand Dollars ($1,000.00) par value of stock of the Association, or an equivalent interest in stock of First Bank System, Inc. FOURTH. The regular annual meeting of the shareholders of the Association shall be held at its main office, or other convenient place duly authorized by the board of directors, on such day of each year as is specified therefore in the Bylaws, but if no election is held on that day, it may be held on any subsequent day according to such lawful rules as may be prescribed by the board of directors. FIFTH. The amount of capital stock of the Association shall be divided into 10,000 shares of common stock at the par value of One Hundred Dollars ($100.00) each; but such capital stock may be increased or decreased from time to time, in accordance with the provisions of the laws of the United States. If the capital stock is increased by the sale of additional shares thereof, each shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of each capital stock owned by each such shareholder at the time FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION the increase is authorized by the shareholders, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized. The board of directors shall have the power to prescribe a reasonable period of time within which the pre-emptive rights to subscribe to the new shares of capital stock must be exercised. If the capital stock is increased by a stock dividend, each shareholder shall be entitled to such shareholder's proportionate amount of such increase in accordance with the number of shares of capital stock owned by such shareholder at the time the increase is authorized by the shareholders, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. In the event such debt obligations are convertible to capital stock of the Association, each shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of capital stock owned by such shareholder one month prior to the issuance of capital stock in satisfaction of such convertible debt obligations. SIXTH. The board of directors shall appoint one of its members as the Association's chief executive officer (however titled) who shall have and exercise the rights and responsibilities of "president" as established by law. Such chief executive officer shall be chairman of the board, unless the board appoints another director to be chairman. The board shall have the power to appoint (or provide for the appointment of) such officers and employees as may be required to transact the business of the Association; to fix the salaries to be paid to such officers and employees of the Association; and to dismiss any of such officers or employees and appoint others to take their places. The board of directors shall have the power to define the duties of officers and employees of the Association and to require adequate bonds from them for the faithful performance of their duties; to regulate the manner in which any increase of the capital of the Association shall be made; to make all Bylaws that may be lawful for the general regulation of the business of the Association and the management of its affairs; and generally to do and perform all acts that may be lawful for a board of directors to do and perform. -2- FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION SEVENTH. The board of directors shall have the power to change the location of the main office of the Association to any other place within the limits of Saint Paul, Minnesota, without the approval of the shareholders of the Association but subject to the approval of the Comptroller of the Currency; and shall have the power to change the location of any branch or branches of the Association to any other location, without the approval of the shareholders of the Association but subject to the approval of the Comptroller of the Currency. EIGHTH. The Association shall have succession from the date of its organization certificate until such time as it be dissolved by the act of its shareholders in accordance with the provisions of the laws of the United States, or until its franchise becomes forfeited by reason of violation of law, or until terminated by either a general or a special act of Congress, or until its affairs be placed in the hands of a receiver and finally wound up by such receiver. NINTH. The board of directors of the Association, or any three or more shareholders owning, in the aggregate, not less than ten percent of the stock of the Association, may call a special meeting of shareholders at any time. Provided, however, that unless otherwise provided by law, not less than ten days prior to the date fixed for any such meeting, a notice of the time, place, and purpose of the meeting shall be given by first-class mail, postage prepaid, to all shareholders of record of the Association at their respective addresses as shown upon the books of the Association. TENTH. Any action required to be taken at a meeting of the shareholders or directors or any action which may be taken at a meeting of the shareholders or directors may be taken without a meeting if consent in writing, setting forth the action as taken shall be signed by all the shareholders or directors entitled to vote with respect to the matter thereof. Such action shall be effective on the date on which the last signature is placed on the writing, or such earlier date as is set forth therein. ELEVENTH. Meetings of the board of directors or shareholders, regular or special, may be held by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can simultaneously hear each other, and participation in such meeting by such aforementioned means shall constitute presence in person at such meeting. TWELFTH. Any person, such person's heirs, executors, or administrators, may be indemnified or reimbursed by the Association for reasonable expenses actually incurred in connection with any action, suit or proceeding, civil or -3- FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION criminal to which such person or such person's heirs, executors, or administrators shall be made a party by reason of such person being or having been a director, advisory director, officer, employee, or agent of the Association or of any firm, corporation, or organization which such person served in any such capacity at the request of the Association. Provided, however, that no person shall be so indemnified or reimbursed in relation to any matter in such action, suit or proceeding as to which such person shall finally be adjudged to have been guilty of or liable for gross negligence, willful misconduct or criminal acts in the performance of such person's duties to the Association. And, provided further, that no person shall be so indemnified or reimbursed in relation to any matter in such action, suit, or proceeding which has been made the subject of a compromise settlement except with the approval of a court of competent jurisdiction, or the holders of record of a majority of the outstanding shares of the Association, or the board of directors acting by vote of directors not parties to the same or substantially the same action, suit or proceeding, constituting a majority of the whole number of directors. The foregoing right of indemnification or reimbursement shall not be exclusive of other rights to which such persons, their heirs, executors, or administrators, may be entitled as a matter of law. The Association may, upon the affirmative vote of a majority of its board of directors, purchase insurance for the purpose of indemnifying its directors, advisory directors, officers, employees and agents to the extent that such indemnification is allowed in the preceding paragraph. Such insurance shall not provide coverage of liability for any formal order issued by a regulatory authority assessing civil money penalties against an officer, director or employee. Further, such insurance may, but need not be, for the benefit of all directors, advisory directors, officers, employees or agents. Expenses incurred by an officer, director or employee in defending a civil or criminal action, suit or proceeding may be paid by the Association in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such individual or officer to repay such amount if it shall ultimately be determined that such individual is not entitled to be indemnified by the Association. Prior to the advancement of any such expenses, the board of directors shall determine in writing that all of the following conditions are met: (1) the officer, director or employee has a substantial likelihood of prevailing on the merits; (2) in the event the officer, director or employee does not prevail, he or she will have the financial capability to reimburse the Association; and (3) payment of such expenses by the Association will not adversely affect bank safety and soundness. If at any time the board of directors believes, or should reasonably believe, that any of the above conditions are not met, the -4- FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION Association shall cease paying such expenses. Further, the Association shall enter into a written agreement with the director, officer or employee specifying the conditions under which such individual shall reimburse the Association. THIRTEENTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of the Association, unless the vote of the holders of a greater amount of stock is required by law and in that case by the vote of the holders of such greater amount. The notice of any shareholders' meeting at which an amendment to the Articles of Association of the Association is to be considered, shall be given as hereinabove set forth. ---- ---- ---- -5- Exhibit 2 OFFICE OF COUNTY RECORDER RAMSEY COUNTY, MINNESOTA I, JOHN C. MCLAUGHLIN, County Recorder of said County and State, do hereby certify that I have compared the foregoing paper photograph with the original record now remaining in this office, and that the same is a correct photographic transcript therefrom and of the whole of said original record as the same appears in Ramsey County Records as Document Number 2426124. (County Recorder Seal) In Witness Whereof, I have hereunto subscribed my name and affixed my official seal of the City of St. Paul, in said County, this 4th day of February, A.D. 1988 JOHN C. MCLAUGHLIN, County Recorder By: Barbara Vikliman Deputy ------------------------- ROS201 COMPTROLLER OF THE CURRENCY TREASURY DEPARTMENT OF THE UNITED STATES Washington, D.C. WHEREAS, satisfactory evidence has been presented to the Comptroller of the Currency that FIRST TRUST COMPANY, INC., located in ST. PAUL State of MINNESOTA has complied with all provisions of the states of the United States required to be complied with before being authorized to commence the business of banking as a National Banking Association. NOW, THEREFORE. Thereby certify that the above named association is authorized to commence the business of banking as a National Banking Association under the title "FIRST TRUST NATIONAL ASSOCIATION" effective DECEMBER 31, 1987 ( SEAL ) In testimony whereof, witness my signature and seal of office this 31st day of December 1987 Charter No. 21467 /s/ Robert R. Klinzing ------------------------------- Robert R. Klinzing Deputy Comptroller of the Currency Midwestern District Exhibit 3 Comptroller of the Currency Administrator of National Banks Midwestern District 2345 Grand Avenue, Suite 700 Kansas City, Missouri 64105 December 31, 1987 Mr. Mark W. Sheffert Chairman of the Board & CEO First Trust National Association First Trust Center 180 East Fifth Street St. Paul, Minnesota 55101 Dear Mr. Sheffert: The Office of the Comptroller of the Currency has received, reviewed, and found no exception to the documents submitted by your bank to complete the conversion process. Your charter certificate is enclosed. You are authorized to commence business as a national trust association on December 31, 1987. This national trust company will not engage in any banking activities other than those within the scope of 12 U.S.C. 92a, and 12 C.F.R. 9, without the prior written approval of the OCC. This letter also hereby constitutes official authorization by the Office to exercise fiduciary powers. A separate fiduciary powers permit will be sent under separate cover by the Trust Activities Division in Washington, D.C. Sincerely, /s/ Thomas C. McAllister - ---------------------------- Thomas C. McAllister Director for Analysis Midwestern District - ------------------------------------------------------------------------------ Comptroller of the Currency Administrator of National Banks - ------------------------------------------------------------------------------ Washington, D.C. 20219 TRUST CERTIFICATE WHEREAS, FIRST TRUST NATIONAL ASSOCIATION, located in St. Paul, State of Minnesota, being a National Banking Association, organized under the statutes of the United States, has made application for authority to act as fiduciary; AND WHEREAS, applicable provisions of the statutes of the United States authorize the grant of such authority; NOW THEREFORE, I hereby certify that the said association was granted the authority to act in all fiduciary capacities permitted by such statutes, effective December 31, 1987. ( SEAL ) IN TESTIMONY WHEREOF, witness my signature and seal of Office this Eighth day of September 1989. /s/ ROBERT L. CLARKE -------------------------------- ROBERT L. CLARKE COMPTROLLER OF THE CURRENCY CHARTER NO. 21467 Exhibit 4 FIRST TRUST NATIONAL ASSOCIATION I, Elizabeth Becker, the Secretary of First Trust National Association, a national banking association organized under the laws of the United States, hereby certify that the attached copy of the Bylaws of First Trust National Association is a full, true and complete copy of the original. I further certify that such Bylaws have not been revoked and remain in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of First Trust National Association to be affixed hereto this 27th day of July, 1993. (Corporate Seal) /s/ Elizabeth Becker ---------------------------- Elizabeth Becker Secretary Sworn to before me this 27th day of July, 1993. /s/ Jeanne M. Erickson - ------------------------------ Notary Public certified/bylaws [logo] FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1.1. ANNUAL MEETING. The annual meeting of the shareholders, for the election of directors and the transaction of other business, shall be held at a time and place as the Chairman or President may designate. Notice of such meeting shall be given at least ten days prior to the date thereof, to each shareholder of the Association. If, for any reason, an election of directors is not made on the designated day, the election shall be held on some subsequent day, as soon thereafter as practicable, with prior notice thereof. Section 1.2. SPECIAL MEETINGS. Except as otherwise specially provided by law, special meetings of the shareholders may be called for any purpose, at any time by a majority of the board of directors, or by any shareholder or group of shareholders owning at least ten percent of the outstanding stock. Every such special meeting, unless otherwise provided by law, shall be called upon not less than ten days prior notice stating the purpose of the meeting. Section 1.3. NOMINATIONS FOR DIRECTORS. Nominations for election to the board of directors may be made by the board of directors or by any shareholder. Section 1.4. PROXIES. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing. Proxies shall be valid only for one meeting and any adjournments of such meeting and shall be filed with the records of the meeting. Section 1.5. QUORUM. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association. - 1 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE II Section 2.1. BOARD OF DIRECTORS. The board of directors (hereinafter referred to as the "board"), shall have power to manage and administer the business and affairs of the Association. All authorized corporate powers of the Association shall be vested in and may be exercised by the board. Section 2.2 POWERS. In addition to the foregoing, the board of directors shall have and may exercise all of the powers granted to or conferred upon it by the Articles of Association, the Bylaws and by law. Section 2.3. NUMBER. The board shall consist of a number of members to be fixed and determined from time to time by resolution of the board or the shareholders at any meeting thereof, in accordance with the Articles of Association. Section 2.4 ORGANIZATION MEETING. The newly elected board shall meet for the purpose of organizing the new board and electing and appointing such officers of the Association as may be appropriate. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within thirty days thereafter. If, at the time fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting until a quorum is obtained. Section 2.5 REGULAR MEETINGS. The regular meetings of the board shall be held, without notice, as the Chairman or President may designate and deem suitable. Section 2.6 SPECIAL MEETINGS. Special meetings of the board may be called by the Chairman or the President of the Association, or at the request of two or more directors. Each member of the board shall be given notice stating the time and place of each such meeting. Section 2.7. QUORUM. A majority of the directors shall constitute a quorum at any meeting, except when otherwise provided by law; but fewer may adjourn any meeting. Unless otherwise provided, once a quorum is established, any act by a majority of those constituting the quorum shall be the act of the board. Section 2.8. VACANCIES. When any vacancy occurs among the directors, the remaining members of the board may appoint a director to fill such vacancy at any regular meeting of the board, or at a special meeting called for that purpose. - 2 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE III Section 3.1. ADVISORY BOARD OF DIRECTORS. The board may appoint persons, who need not be directors, to serve as advisory directors on an advisory board of directors established with respect to the business affairs of either this Association alone or the business affairs of a group of affiliated organizations of which this Association is one. Advisory directors, shall have such powers and duties as may be determined by the board, provided, that the board's responsibility for the business and affairs of this Association shall in no respect be delegated or diminished. Section 3.2 AUDIT COMMITTEE. The board shall appoint an Audit Committee which shall consist of at least two Directors which are not active officers or employees of the Association. The Audit Committee shall direct and review audits of the Association's fiduciary activities. The members of the Audit Committee shall be appointed each year and shall continue to act until their successors are named. The Audit Committee shall have power to adopt its own rules and procedures and to do those things which in the judgment of such Committee are necessary or helpful with respect to the exercise of its functions or the satisfaction of its responsibilities. Section 3.3 EXECUTIVE COMMITTEE. The board may appoint an Executive Committee which shall consist of at least three directors and which shall have, and may exercise, all the powers of the board between meetings of the board or otherwise when the board is not meeting. Section 3.4 OTHER COMMITTEES. The board may appoint, from time to time, committees of one or more persons who need not be directors, for such purposes and with such powers as the board may determine. In addition, either the Chairman or the President may appoint, from time to time, committees of one or more officers, employees, agents or other persons, for such purposes and with such powers as either the Chairman or the President deems appropriate and proper. Whether appointed by the board, the Chairman, or the President, any such Committee shall at all times be subject to the direction and control of the board. - 3 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS Section 3.5. MEETINGS, MINUTES AND RULES. An advisory board of directors and/or committee shall meet as necessary in consideration of the purpose of the advisory board of directors or committee, and shall maintain minutes in sufficient detail to indicate actions taken or recommendations made; unless required by the members, discussions, votes or other specific details need not be reported. An advisory board of directors or a committee may, in consideration of its purpose, adopt its own rules for the exercise of any of its functions or authority. ARTICLE IV OFFICERS AND EMPLOYEES Section 4.1 CHAIRMAN OF THE BOARD. The board may appoint one of its members to be Chairman of the board to serve at the pleasure of the board. The Chairman shall supervise the carrying out of the policies adopted or approved by the board; shall have general executive powers, as well as the specific powers conferred by these Bylaws; shall also have and may exercise such powers and duties as from time to time may be conferred upon or assigned by the board. Section 4.2 PRESIDENT. The board may appoint one of its members to be President of the Association. In the absence of the Chairman, the President shall preside at any meeting of the board. The President shall have general executive powers, and shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the Office of President, or imposed by these Bylaws. The President shall also have and may exercise such powers and duties as from time to time may be conferred or assigned by the Board. Section 4.3 VICE PRESIDENT. The board may appoint one or more Vice Presidents who shall have such powers and duties as may be assigned by the board and to perform the duties of the President on those occasions when the President is absent, including presiding at any meeting of the board in the absence of both the Chairman and the President. Section 4.4 SECRETARY. The board shall appoint a Secretary, or other designated officer who shall be Secretary of the board and of the Association, and shall keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these Bylaws to be given; shall be custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records of all transactions of the Association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the Secretary, or imposed by these Bylaws; and shall also perform such other duties as may be assigned from time to time, by the Board. - 4 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS Section 4.5 OTHER OFFICERS. The board may appoint, and may authorize the Chairman or the President to appoint, any officer as from time to time may appear to the board, the Chairman or the President to be required or desirable to transact the business of the Association. Such officers shall exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon or assigned to them by these Bylaws, the board, the Chairman or the President. Section 4.6 TENURE OF OFFICE. The Chairman or the President and all other officers shall hold office for the current year for which the board was elected, unless they shall resign, become disqualified, or be removed. Any vacancy occurring in the Office of Chairman or President shall be filled promptly by the board. Any officer elected by the board or appointed by the Chairman or the President may be removed at any time, with or without cause, by the affirmative vote of a majority of the board or, if such officer was appointed by the Chairman or the President, by the Chairman or the President, respectively. ARTICLE V STOCK Section 5.1. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to such person's shares, succeed to all rights of the prior holder of such shares. Each certificate of stock shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. ARTICLE VI CORPORATE SEAL Section 6.1. The Chairman, the President, the Secretary, any Assistant Secretary or other officer designed by the board, the Chairman, or the President, shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form: [SEAL] - 5 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE VII MISCELLANEOUS PROVISIONS Section 7.1 EXECUTION OF INSTRUMENTS. All agreements, checks, drafts, orders, indentures, notes, mortgages, deeds, conveyances, transfers, endorsements, assignments, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, guarantees, proxies and other instruments or documents may be signed, countersigned, executed, acknowledged, endorsed, verified, delivered or accepted on behalf of the Association, whether in a fiduciary capacity or otherwise, by any officer of the Association, or such employee or agent as may be designated from time to time by the board by resolution, or by the Chairman or the President by written instrument, which resolution or instrument shall be certified as in effect by the Secretary or an Assistant Secretary of the Association. The provisions of this section are supplementary to any other provision of the Articles of Association or Bylaws. Section 7.2. RECORDS. The Articles of Association, the Bylaws and the proceedings of all meetings of the shareholders, the board, and standing committees of the board, shall be recorded in appropriate minute books provided for the purpose. The minutes or each meeting shall be signed by the Secretary, or other officer appointed to act as Secretary of the meeting. Section 7.3. TRUST FILES. There shall be maintained in the Association files all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged. Section 7.4. TRUST INVESTMENTS. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and according to law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under law. Section 7.5 NOTICE. Whenever notice is required by the Articles of Association, the Bylaws or law, such notice shall be by mail, postage prepaid, telegram, in person, or by any other means by which such notice can reasonably be expected to be received, using the address of the person to receive such notice, or such other personal data, as may appear on the records of the Association. Prior notice shall be proper if given not more than 30 days nor less than 10 days prior to the event for which notice is given. - 6 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE VIII INDEMNIFICATION Section 8.1. The association shall indemnify to the full extent permitted by, and in the manner permissible under, the Articles of Association and the laws of the United States of America, as applicable and as amended from time to time, any person made, or threatened to be made, a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was a director, advisory director, officer or employee of the Association, or any predecessor of the Association, or served any other enterprise as a director or officer at the request of the Association or any predecessor of the Association. Section 8.2 The board in its discretion may, on behalf of the Association, indemnify any person, other than a director, advisory director, officer or employee, made a party to any action, suit or proceeding by reason of the fact that such person is or was an agent of the Association or any predecessor of the Association serving in such capacity at the request of the Association or any predecessor of the Association. ARTICLE IX BYLAWS: INTERPRETATION AND AMENDMENT Section 9.1. These Bylaws shall be interpreted in accordance with and subject to appropriate provisions of law, and may be amended, altered or repealed, at any regular or special meeting of the board. Section 9.2. A copy of the Bylaws, with all amendments, shall at all times be kept in a convenient place at the main office of the Association, and shall be open for inspection to all shareholders during Association hours. --- --- --- - 7 - Exhibit 6 CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: August 27, 1996 FIRST TRUST NATIONAL ASSOCIATION /s/ James A. Ehrenberg -------------------------------- James A. Ehrenberg Senior Vice President Exhibit 7 Board of Governors of the Federal Reserve System OMB Number: 7100-0036 Federal Deposit Insurance Corporation OMB Number: 3064-0052 Office of the Comptroller of the Currency OMB Number: 1557-0081 Expires March 31, 1999 Federal Financial Institutions Examination Council - -------------------------------------------------------------------------------- /1/ [LOGO] Please refer to page 1, Table of Contents, for the required disclosure of estimated burden. - -------------------------------------------------------------------------------- CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC OFFICES ONLY AND TOTAL ASSETS OF LESS THAN $100 MILLION - FFIEC 034 (960630) Report at the close of business June 30, 1996 ----------- (RCRI 9999) This report is required by law: 12 U.S.C. Section 324 (State member banks); 12 U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161 (National banks). This report form is to be filed by banks with domestic offices only. Banks with branches and consolidated subsidiaries in U.S. territories and possessions, Edge or Agreement subsidiaries, foreign branches, consolidated foreign subsidiaries, or International Banking Facilities must file FFIEC 031. - -------------------------------------------------------------------------------- NOTE: The Reports of Condition and Income must be signed by an authorized officer and the Report of Condition must be attested to by not less than two directors (trustees) for State nonmember banks and three directors for State member and National banks. I, MERITA D. SCHOLLMEIER, ASSISTANT SECRETARY --------------------------------------------------- Name and Title of Officer Authorized to Sign Report of the named bank do hereby declare that these Reports of Condition and Income (including the supporting schedules) have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. /s/ Merita D. Schollmeier - ----------------------------------------------- Signature of Officer Authorized to Sign Report 7/11/96 - ----------------------------------------------- Date of Signature - ----------------------------------------------- The Reports of Condition and Income are to be prepared in accordance with Federal regulatory authority instructions. NOTE: These instructions may in some cases differ from generally accepted accounting principles. We, the undersigned directors (trustees), attest to the correctness of this Report of Condition (including the supporting schedules) 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 appropriate Federal regulatory authority and is true and correct. /s/ - ----------------------------------------------- Director (Trustee) /s/ - ----------------------------------------------- Director (Trustee) /s/ - ----------------------------------------------- Director (Trustee) - -------------------------------------------------------------------------------- For Banks Submitting Hard Copy Report Forms: STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal Reserve District Bank. STATE NONMEMBER BANKS: Return the original only in the SPECIAL RETURN ADDRESS ENVELOPE PROVIDED. If express mail is used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. NATIONAL BANKS: Return the original only in the SPECIAL RETURN ADDRESS ENVELOPE PROVIDED. If express mail is used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. - -------------------------------------------------------------------------------- FDIC Certificate Number /9/0/3/1/9/ ----------- (RCRI 9050) CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC OFFICES ONLY AND TOTAL ASSETS LESS THAN $100 MILLION - -------------------------------------------------------------------------------- TABLE OF CONTENTS SIGNATURE PAGE COVER REPORT OF INCOME Schedule RI - Income Statement.................................... RI-1, 2, 3 Schedule RI-A - Changes in Equity Capital......................... RI-3 Schedule RI-B - Charge-offs and Recoveries and Changes in Allowance for Loan and Lease Losses.................. RI-4, 5 Schedule RI-C - Applicable Income Taxes by Taxing Authority....... RI-5 Schedule RI-E - Explanations...................................... RI-5,6 REPORT OF CONDITION Schedule RC - Balance Sheet....................................... RC-1,2 Schedule RC-B - Securities........................................ RC-3,4 Schedule RC-C - Loans and Lease Financing Receivables: Part I. Loans and Leases ....................................... RC-5,6 Part II. Loans to Small Businesses and Small Farms (included in the forms for June 30, only).............................. RC-6a, 6b Schedule RC-E - Deposit Liabilities .............................. RC-7,8 Schedule RC-F - Other Assets ..................................... RC-9 Schedule RC-G - Other Liabilities................................. RC-9 Schedule RC-K - Quarterly Averages................................ RC-10 Schedule RC-L - Off-Balance Sheet Items........................... RC-11,12 Schedule RC-M - Memoranda......................................... RC-13,14 Schedule RC-N - Past Due and Nonaccrual Loans, Leases, and Other Assets.................................................... RC-15 Schedule RC-O - Other Data for Deposit Insurance Assessments..................................................... RC-16,17 Schedule RC-R - Regulatory Capital ............................... RC-18,19 Optional Narrative Statement Concerning the Amounts Reported in the Reports of Condition and Income................. RC-20 Special Report (TO BE COMPLETED BY ALL BANKS) Schedule RC-J - Repricing Opportunities (sent only to and to be completed only by savings banks) DISCLOSURE OF ESTIMATED BURDEN The estimated average burden associated with this information collection is 32.2 hours per respondent and is estimated to vary from 15 to 230 hours per response, depending on individual circumstances. burden estimates include the time for reviewing instructions, gathering and maintaining data in the required form, and completing the information collection, but exclude the time for compiling and maintaining business records in the normal course of a respondent's activities. Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, D.C. 20503, and to one of the following: SECRETARY Board of Governors of the Federal Reserve System Washington, D.C. 20851 LEGISLATIVE AND REGULATORY ANALYSIS DIVISION Office of the Comptroller of the Currency Washington, D.C. 20219 ASSISTANT EXECUTIVE SECRETARY Federal Deposit Insurance Corporation Washington, D.C. 20429 For information or assistance, national and state nonmember banks should contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington, D.C. 20429, toll free on (800) 688-FDIC(3342), Monday through Friday between 8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their Federal Reserve District Bank. CONSOLIDATED REPORT OF INCOME FOR THE PERIOD JANUARY 1, 1996 - JUNE 30, 1996 ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE BASIS IN THOUSANDS OF DOLLARS. SCHEDULE RI - INCOME STATEMENT
I180 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------ 1. Interest Income: a. Interest and fee income on loans (1,2): RIAD (1) Total loans (to be completed only by those banks with less than ---- $25 million in total assets)____________________________________________ 4010. . 0 1.a.1 The following four items are to be completed only by those banks with $25 million or more in total assets (1,2) (2) Real estate loans________________________________________________________ 4246. . N/A 1.a.2 (3) Installment loans________________________________________________________ 4247. . N/A 1.a.3 (4) Credit cards and related plans___________________________________________ 4248. . N/A 1.a.4 (5) Commercial (time and demand) and all other loans_________________________ 4249. . N/A 1.a.5 b. Income from lease financing receivables______________________________________ 4065. . 0 1.b c. Interest income on balances due from depository institutions (3)_____________ 4115. . 77 1.c d. Interest and dividend income on securities: (1) Securities issued by states and political subdivisions in the U.S.: (a) Taxable securities__________________________________________________ 4506. . 0 1.d.1a (b) Tax-exempt securities_______________________________________________ 4507. . 11 1.d.1b (2) U.S. Government and other debt securities_______________________________ 3660. . 0 1.d.2 (3) Equity securities (including investments in mutual funds)_______________ 3659. . 23 1.d.3 e. Interest income from trading assets__________________________________________ 4069. . 0 1.e f. Interest income on federal funds sold (4) and securities purchased under agreements to resell_________________________________________________________ 4020. . 24 1.f g. Total interest income (sum of items 1.a through 1.f)_________________________ 4107. . 135 1.g
_________________ (1) See instructions for loan classifications used in this schedule. (2) The $25 million asset size test is generally based on the total assets reported on the June 30, 1995 Report of Condition. (3) Includes interest income on time certificates of deposit not held for trading. (4) Report interest income on "term federal funds sold" in Schedule R1, Item 1.a, "Interest and fee income on loans." 4 Schedule RI - Continued
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 2. Interest expense: a. Interest on deposits: (1) Transaction accounts (NOW accounts, ATS accounts, and RIAD Year-to-date telephone and preauthorized transfer accounts) ______________4508. . 0 . . . . . . . . 2.a.1 (2) Nontransaction accounts: (a) Money market deposit accounts (MMDAs) ___________________4509. . 0 . . . . . . . . 2.a.2 (b) Other savings deposits __________________________________4511. . 0 . . . . . . . . 2.a.2b (c) Time certificates of deposit of $ 100,000 or more _______4174. . 0 . . . . . . . . 2.a.2c (d) All other time deposits (1) _____________________________4512. . 0 . . . . . . . . 2.a.2d b. Expense of federal funds purchased (2) and securities sold under agreements to repurchase __________________________________4180. . 219 . . . . . . . . 2.b c. Interest on demand notes issued to the U.S. Treasury, trading liabilities, and on other borrowed money ________________________4185. . 0 . . . . . . . . 2.c d. Interest on mortgage indebtedness and obligations under capitalized leases ______________________________________________4072. . 0 . . . . . . . . 2.d e. Interest on subordinated notes and debentrues ___________________4200. . 0 . . . . . . . . 2.e f. Total interest expense (sum of items 2.a through 2.e) ___________4073. . 219 . . . . . . . . 2.f 3. Net interest income (item 1.g minus 2.f) ___________________________4074. . . . . . . . . . . . ( 84) 3. 4. Provisions a. Provision for loan and lease losses _____________________________4230. . . . . . . . . . . . 0 4.a b. Provision for allocated transfer risk ___________________________4243. . . . . . . . . . . . 0 4.b 5. Noninterest income: a. Service charges on deposit accounts _____________________________4080. . 0 . . . . . . . . 5.a b. Other noninterest income: (1) Other fee income ____________________________________________5407. . 51,150 . . . . . . . . 5.b.1 (2) All other noninterest income * ______________________________5408. . 14,960 . . . . . . . . 5.b.2 c. Total noninterest income (sum of items 5.a and 5.b) _____________4079. . . . . . . . . . . . 66,110 5.c 6. a. Realized gains (losses) on held-to-maturity securities __________3521. . . . . . . . . . . . 0 6.a b. Realized gains (losses) on available-for-sale securities ________3196. . . . . . . . . . . . 0 6.b 7. Noninterest expense: a. Salaries and employee benefits __________________________________4135. . 24,074 . . . . . . . . 7.a b. Expenses of premises and fixed assets (net of rental income) (excluding salaries and employee benefits and mortgage interest) _______________________________________________________4217. . 3,830 . . . . . . . . 7.b c. Other noninterest expense * _____________________________________4092. . 16,555 . . . . . . . . 7.c d. Total noninterest expense (sum of items 7.a through 7.c) ________4093. . . . . . . . . . . . 44,459 7.d 8. Income (loss) before income taxes and extraordinary items and other adjustments (item 3 plus or minus items 4.a, 4.b, 5.c, 6.a, 6.b, and 7.d) _________________________________________________4301. . . . . . . . . . . . 21,567 8. 9. Applicable income taxes (on item 8)_________________________________4302. . . . . . . . . . . . 8,024 9. 10. Income (loss) before extraordinary items and other ajustments (item 8 minus 9) ___________________________________________________4300. . . . . . . . . . . . 13,543 10. 11. Extraordinary items and other adjustments: a. Extraordinary items and other adjustments, gross of income taxes * _________________________________________________________4310. . 0 . . . . . . . . 11.a b. Applicable income taxes (on item 11.a) * ________________________4315. . 0 . . . . . . . . 11.b c. Extraordinary items and other adjustments, net of income taxes (item 11.a minus 11.b) _____________________________4320. . . . . . . . . . . . 0 11.c 12. Net income (loss) (sum of items 10 and 11.c)________________________4340. . . . . . . . . . . . 13,543 12.
- --------------- (1) Includes interest expense on open-account time deposits of $ 100,000 or more. (2) Report the expense of "term federal funds purchased" in Schedule RI, item 2.c, "Interest on demand notes issued to the U.S. Treasure, trading liabilities and other borrowed money." * Describe on Schedule RI-E - Explanations. 5 Schedule RI - Continued
I181 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ MEMORANDA RIAD 1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired ---- Year-to-date after August 7, 1986, that is not deductible for federal income tax purposes ____________4513. . 0 M.1 2. Income from the sale and servicing of mutual funds and annuities (included in Schedule RI, item 8) ____________________________________________________________________8431. . 0 M.2 3. Estimated income on tax-exempt loans and leases to states and political subdivisions in the U.S. (reportable in Schedule RC-C, part I, items 7 and 9) included in Schedule RI, items 1.a and 1.b, above (excludes income on tax-exempt securities) ________4313. . 0 M.3 4. Number of full-time equivalent employees on payroll at end of current period (round to NUMBER nearest whole number) ___________________________________________________________________4150. . 1,097 M.4 5. Cash dividends declared during the calendar year to date (to be reported only with March, June, and September Reports of Income) ___________________________________________4475. . 4,000 M.5 6. To be completed by banks with $25 million or more in total assets and with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans. (2) Interest and fee income on agricultural loans (1) (included in item 1.a above) __________4251. . 0 M.6 7. If the reporting bank has restated its balance sheet as a result of applying push down MM DD YY accounting this calendar year, report the date of the bank's acquisition ________________9106. . N/A M.7
- ----------------- (1) See instructions for loan classifications used in this schedule. (2) The $25 million asset size test and the five percent of total loans test are generally base on the total assets reported on the June 30, 1995 Report of Condition. Schedule RI-A - Changes in Equity Capital Schedule RI-A is to be reported with the December Report of Income. Indicate decreases and losses in parentheses.
I183 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Total equity capital originally reported in the December 31, 1995, Reports of RAID ---- Condition and Income _____________________________________________________________3215. . N/A 1. 2. Equity capital adjustments from amended Report of Income, net * __________________3216. . N/A 2. 3. Amended balance end of previous calendar year (sum of items 1 and 2) _____________3217. . N/A 3. 4. Net income (loss) (must equal Schedule RI, item 12) ______________________________4340. . N/A 4. 5. Sale, conversion, acquisition, or retirement of capital stock, net _______________4346. . N/A 5. 6. Changes incident to business combinations, net ___________________________________4356. . N/A 6. 7. LESS: Cash dividends declared on preferred stock _________________________________4470. . N/A 7. 8. LESS: Cash dividends declared on common stock ____________________________________4460. . N/A 8. 9. Cumulative effect of changes in accounting principles from prior years * (see instructions for this schedule) __________________________________________________4411. . N/A 9. 10. Corrections of material accounting errors from prior years *(see instructions for this schedule) ___________________________________________________________________4412. . N/A 10. 11. Change in net unrealized holding gains (losses) on available-for-sale securities__8433. . N/A 11. 12. Other transactions with parent holding company * (not included in item 5, 7, or 8 above) _________________________________________________________________________4415. . N/A 12. 13. Total equity capital end of current period (sum of items through 12) (must equal Schedule RC, item 28.a) __________________________________________________________3210. . N/A 13.
- --------------------- * Describe on Schedule RI-E -Explanations. 6 Schedule RI-B - Charge-Offs and Recoveries and Changes in Allowance for Loan and Lease Losses Part I. Charge-offs and Recoveries on Loans and Leases (1)
I186 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ -----------------------Calendar year-to-date------------------------ Column A Column B Charge-offs Recoveries ----------------------- ---------------------- RIAD RIAD ---- ---- 1. Real estate loans ____________________________________________4256. . 0 4257. . 0 1. 2. Installment loans ____________________________________________4258. . 0 4259. . 0 2. 3. Credit cards and related plans _______________________________4262. . 0 4263. . 0 3. 4. Commercial (time and demand) and all other loans______________4264. . 0 4265. . 0 4. 5. Lease financing receivables __________________________________4266. . 0 4267. . 0 5. 6. Total (sum of items 1 through 5) _____________________________4635. . 0 4605. . 0 6. Memoranda Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 1. To be completed by banks with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans. RIAD RIAD Agricultural loans included in part I,, items 1 ---- ---- through 4, above ____________________________________________4268. . 0 4269. . 0 M.1 2. Not applicable. 3. Not applicable. 4. Loans to finance commercial real estate, construction and land development activities (not secured by real RIAD RIAD estate) included in Schedule RI-B, part I, ---- ---- items 2 through 4, above ____________________________________5443. . 0 5444. . 0 M.4 5. Real estate loans (sum of Memorandum items 5.a through 5.e must equal Schedule RIAD RIAD Ri-B, part I, item 1, above): ---- ---- a. Construction and land development _______________________5445. . 0 5446. . 0 M.5.a b. Secured by farmland _____________________________________5447. . 0 5448. . 0 M.5.b c. Secured by 1-4 family residential properties: (1) Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit ______________________________5449. . 0 5450. . 0 M.5.c1 (2) All other loans secured by 1-4 family residential properties _____________________________5451. . 0 5452. . 0 M.5.c2 d. Secured by multifamily (5 or more) residential properties ______________________________________________5453. . 0 5454. . 0 M.5.d e. Secured by nonfarm nonresidential properties ____________5455. . 0 5456. . 0 M.5.e
- -------------- (1) See instructions for loan classifications used in this schedule. 7 Schedule RI - B - Continued Part II. Changes in Allowance for Loan and Lease Losses Part II is to be reported with the December Report of Income.
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ RIAD ---- 1. Balance originally reported in the December 31, 1995, Reports of Condition and Income___3124. . 0 1. 2. Recoveries (must equal part I, item 6, column B above)__________________________________4605. . N/A 2. 3. LESS: Charge-offs (must equal part I, item 6, column A above)__________________________4635. . N/A 3. 4. Provision for loan and lease losses (must equal Schedule RI, item 4.a)__________________4230. . 0 4. 5. Adjustments * (see instructions for this schedule)______________________________________4815. . 0 5. 6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC, item 4.b)_______________________________________________________________________________3123. . 0 6.
__________ * Describe on Schedule RI-E - Explanations. Schedule RI-C - Applicable Income Taxes by Taxing Authority
I189 < - Schedule RI-C is to be reported with the December Report of Income. Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ RIAD ---- 1. Federal_________________________________________________________________________________4780. . N/A 1. 2. State and local_________________________________________________________________________4790. . N/A 2. 3. Total (sum of items 1 and 2) (must equal sum of Schedule RI, items 9 and 11.b)__________4770. . N/A 3. RIAD ---- 4. Deferred portion of item 3___________________________4772. . N/A . . . . . . . . . . 4.
Schedule RI-E - Explanations Schedule RI-E is to be completed each quarter on a calendar year-to-date basis. Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and other adjustments in Schedule RI, and all significant items of other noninterest income and other noninterest expense in Schedule RI. (See instructions for details.)
I195 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 1. All other noninterest income (from Schedule RI, item 5.b.(2)) Report amounts that exceed 10% of Schedule RI, item 5.b.(2): RIAD Year-to-date ---- a. Net gains on other real estate owned________________________________________________5415. . N/A 1.a b. Net gains on sales of loans_________________________________________________________5416. . N/A 1.b c. Net gains on sales of premises and fixed assets_____________________________________5417. . N/A 1.c Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, item 5.b.(2): TEXT RIAD ---- ---- d. 4461: Expense Reimbursement fr Affiliates__________________________________________4461. . 13,602 1.d e. 4462: _____________________________________________________________________________4462. . N/A 1.e f. 4463: _____________________________________________________________________________4463. . N/A 1.f 2. Other noninterest expense (from Schedule RI, item 7.c): a. Amortization expense of intangible assets___________________________________________4531. . 255 2.a Report amounts that exceed 10% of Schedule RI, item 7.c: b. Net losses on other real estate owned_______________________________________________5418. . N/A 2.b c. Net losses on sales of loans________________________________________________________5419. . N/A 2.c d. Net losses on sales of premises and fixed assets____________________________________5420. . N/A 2.d Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, item 7.c: TEXT RIAD ---- ---- e. 4464: Data Processing Expense - Non Affiliate______________________________________4464. . 2,286 2.e f. 4467: Consulting Services Expense__________________________________________________4467. . 3,000 2.f g. 4468: _____________________________________________________________________________4468. . N/A 2.g
8 Schedule RI-E - continued
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary items and other adjustments): TEXT RIAD RIAD Year-to-date ---- ---- ---- a. (1) 4469: ________________________________________________ . . . . . . . . . 4469. . 0 3.a.1 (2) Applicable income tax effect__________________________4486 . . 0 . . . . . . . 3.a.2 b. (1) 4487: ________________________________________________ . . . . . . . . . 4487. . 0 3.b.1 (2) Applicable income tax effect__________________________4488 . . 0 . . . . . . . 3.b.2 c. (1) 4489: ________________________________________________ . . . . . . . . . 4489. . 0 3.c.1 (2) Applicable income tax effect__________________________4491 . . 0 . . . . . . . 3.c.2 4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2) (itemize and describe all adjustments): TEXT ---- a. 4492: ______________________________________________________________________________________4492. . N/A 4.a b. 4493: ______________________________________________________________________________________4493. . N/A 4.b 5. Cumulative effect of changes in accounting principles from prior years (from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles): TEXT ---- a. 4494: ______________________________________________________________________________________4494. . N/A 5.a b. 4495: ______________________________________________________________________________________4495. . N/A 5.b 6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10) (itemize and describe all corrections): TEXT ---- a. 4496: ______________________________________________________________________________________4496. . N/A 6.a b. 4497: ______________________________________________________________________________________4497. . N/A 6.b 7. Other transactions with parent holding company (from Schedule RI-A, item 12) (itemize and describe all such transactions): TEXT ---- a. 4498: ______________________________________________________________________________________4998. . N/A 7.a b. 4499: ______________________________________________________________________________________4499. . N/A 7.b 8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, item 5) (itemize and describe all adjustments): TEXT ---- a. 4521: ______________________________________________________________________________________4521. . N/A 8.a b. 4522: ______________________________________________________________________________________4522. . N/A 8.b I198 I199 < -
Other explanations (the space below is provided for bank to briefly describe, at its option, any other significant items affecting the Report of Income): No comment: X (RIAD 4769) Other explanations (please type or print clearly): (TEXT 4769) 9 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for June 30, 1996 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter. Schedule RC - Balance Sheet
C100 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS 1. Cash and balances due from depository institutions: RCON ---- a. Noninterest-bearing balances and currency and coin (1,2)__________________________0081. . 49,771 1.a b. Interest-bearing balances (3)_____________________________________________________0071. . 10,370 1.b 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A)________________________1754. . 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)______________________1773. . 1,061 2.b 3. Federal funds sold and securities purchased under agreements to resell: a. Federal funds sold (4)____________________________________________________________0276. . 0 3.a b. Securities purchased under agreements to resell (5)_______________________________0277. . 882 3.b 4. Loans and lease financing receivables: RCON a. Loans and leases, net of unearned income ---- (from Schedule RC-C)_______________________________2122 . . 0 . . . . . . . . . . . 4.a b. LESS: Allowance for loan and lease losses_________3123 . . 0 . . . . . . . . . . . 4.b c. LESS: Allocated transfer risk reserve_____________3128 . . 0 . . . . . . . . . . . 4.c d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c)_______________________________2125. . 0 4.d 5. Trading assets________________________________________________________________________3545. . 0 5. 6. Premises and fixed assets (including capitalized leases)______________________________2145. . 6,076 6. 7. Other real estate owned (from Schedule RC-M) 2150. . 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)________________________________________________________________________2130. . 0 8. 9. Customers' liability to this bank on acceptances outstanding__________________________2155. . 0 9. 10. Intangible assets (from Schedule RC-M)________________________________________________2143. . 1,020 10. 11. Other assets (from Schedule RC-F)_____________________________________________________2160. . 22,322 11. 12. a. Total assets (sum of items 1 through 11)__________________________________________2170. . 91,502 12.a b. Losses deferred pursuant to 12 U.S.C. 1823(j)_____________________________________0306. . 0 12.b c. Total assets and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 12.a and 12.b_____________________________________________________________________0307. . 91,502 12.c
- ------------- (1) Includes cash items in process of collection and unposted debits. (2) The amount reported in this item must be greater than or equal to the sum of Schedule RC-M, items 3.a and 3.b. (3) Includes time certificates of deposit not held for trading. (4) Report "term federal funds sold" in Schedule RC, item 4.a, "Loans and leases, net of unearned income", and in Schedule RC-C, part I. (5) Report securities purchased under agreements to resell that involve the receipt of immediately available funds and mature in one business day or roll over under a continuing contract in Schedule RC, item 3.a, "Federal funds sold." 10 Schedule RC - Continued
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES 13. Deposits RCON a. In domestic offices (sum of totals of ---- columns A and C from Schedule RC-E) ________________________________________________________2200. . 0 13.a RCON ---- (1) Noninterest-bearing (1) ________________________________________6631. . 0 . . . . . . . . . 13.a.1 (2) Interest-bearing _________________________________________________6636. . 0 . . . . . . . . 13.a.2 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs _______________________________ (1) Noninterest-bearing _____________________________________________________________________ (2) Interest-bearing ________________________________________________________________________ 14. Federal funds purchased and securities sold under agreements to repurchase: a. Federal funds purchased (2) _______________________________________________________________0278. . 0 14.a b. Securities sold under agreements to repurchase (3)_________________________________________0279. . 0 14.b 15. a. Demand notes issued to the U.S. Treasury ___________________________________________________2840. . 0 15.a b. Trading liabilities ________________________________________________________________________3548. . 0 15.b 16. Other borrowed money: a. With a remaining maturity of one year or less _____________________________________________2332. . 0 16.a b. With a remaining maturity of more than one year ___________________________________________2333. . 0 16.b 17. Mortgage indebtedness and obligations under capitalized leases ________________________________2910. . 0 17. 18. Bank's liability on acceptances executed and outstanding ______________________________________2920. . 0 18. 19. Subordinated notes and debentures _____________________________________________________________3200. . 0 19. 20. Other liabilities (from Schedule RC-G)_________________________________________________________2930. . 37,173 20. 21. Total liabilities (sum of items 13 through 20) ________________________________________________2948. . 37,173 21. 22. Limited-life preferred stock and related surplus ______________________________________________3282. . 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus _________________________________________________3838. . 0 23. 24. Common stock __________________________________________________________________________________3230. . 1,000 24. 25. Surplus (exclude all surplus related to preferred stock) ______________________________________3839. . 24,000 25. 26. a. Undivided profits and capital reserves _____________________________________________________3632. . 29,322 26.a b. Net unrealized holding gains (losses) on available-for-sale securities ____________________8434. . 7 26.b 27. Cumulative foreign currency translation adjustments ___________________________________________ 28. a. Total equity capital (sum of items 23 through 27) __________________________________________3210. . 54,329 28.a b. Losses deferred pursuant to 12 U.S.C. 1823 (j) ____________________________________________0306. . 0 28.b c. Total equity capital and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 28.a and 28.b) ______________________________________________________________3559. . 54,329 28.c 29. Total liabilities, limited-life preferred stock, equity capital, and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 21, 22, and 28.c) ________________________2257. . 91,502 29. Memorandum To be reported only with the March Report of Condition 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by the independent external auditors as of any date during 1995 _________________________________________________6724. . N/A M.1
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Director's examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ------- 1) Includes total demand deposits and noninterest-bearing time and savings deposits. 2) Report "term federal funds purchased" in Schedule RC, item 16, "other borrowed money." 3) Report securities sold under agreements to repurchase that involve the receipt of immediately available funds and mature in one business day or roll over under a continuing contract in Schedule RC, item 14.a, "Federal funds purchased." 11 Schedule RC-B - Securities Exclude assets held for trading
C110 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ Held-to-maturity Available-for-sale (Column A) (Column B) (Column C) (Column D) Amortized Costs Fair Value Amortized Cost Fair Value (1) ------------------- -------------- -------------- -------------------- RCON RCON RCON RCON ---- ---- ---- ---- 1. U.S. Treasury securities ______________________________________0211.. 0 0213.. 0 1286.. 0 1287.. 0 1. 2. U.S. Government agency and corporation obligations (exclude mortgage-backed securities): a. Issued by U.S. Government agencies (2) _________________________________1289.. 0 1290.. 0 1291.. 0 1293.. 0 2.a b. Issued by U.S. Government - sponsored agencies (3)________________________1294.. 0 1295.. 0 1297.. 0 1298.. 0 2.b 3. Securities issued by states and political subdivisions in the U.S.: a. General obligations __________________________1676.. 0 1677.. 0 1678.. 300 1679.. 311 3.a b. Revenue obligations __________________________1681.. 0 1686.. 0 1690.. 0 1691.. 0 3.b c. Industrial development and similar obligations __________________________________1694.. 0 1695.. 0 1696.. 0 1697.. 0 3.c 4. Mortgage-backed securities (MBS): a. Pass-through securities: (1) Guaranteed by GMMA ______________________1698.. 0 1699.. 0 1701.. 0 1702.. 0 4a1 (2) Issued by FMMA and FHLMC _________________1703.. 0 1705.. 0 1706.. 0 1707.. 0 4a2 (3) Other pass_through securities ____________1709.. 0 1710.. 0 1711.. 0 1713.. 0 4a3 b. Other mortgage-backed securities (Include CMOs, REMICs, and Stripped MBS): (1) Issued or guaranteed by FMMA, FHLMC, or GMMA __________________________1714.. 0 1715.. 0 1716.. 0 1717.. 0 4b1 (2) Collateralized by MBS issued or guaranteed by FMMA, FHLMC, or GMMA __________________________1718.. 0 1719.. 0 1731.. 0 1732.. 0 4b2 (3) All other mortgage-backed securities ______________________________1733.. 0 1734.. 0 1735.. 0 1736.. 0 4b3 5. Other debt securities ____________________________1774.. 0 1775.. 0 1776.. 0 1777.. 0 5. 6. Equity securities: a. Investments in mutual funds __________________ .. .. 1747.. 0 1748.. 0 6.a b. Other equity securities with readily determinable fair values_____________ .. .. 1749.. 0 1751.. 0 6.b c. All other equity securities(1) (includes Federal Reserve stock)______________ .. .. 1752.. 750 1753.. 750 6.c 7. Total (sum of items 1 through 6) (total of column A must equal Schedule RC item 2.a)(total of column D must equal Schedule RC, item 2.b)_______________1754.. 0 1771.. 0 1772..1,050 1773.. 1,061 7.
- --------- (1) Includes equity securities without readily determinable fair values at historical cost in item 6.c, column D. (2) Includes Small Business Administration "Guaranteed Loan Pool Certificates," U.S. Maritime Administration obligations, and Export-Import Bank participation certificates. (3) Includes obligations (other than mortgage-backed securities) issued by the Farm Credit System, the Federal Home Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Financing Corporation, Resolution Funding Corporation, the Student Loan Marketing Association, and the Tennessee Valley Authority. Schedule RC-B - Continued
Memoranda C112 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ RCON ---- 1. Pledged securities(1) _______________________________________________________________________________0416.. 0 M.1 2. Maturity and repricing data for debt securities (1,2,3) excluding those in nonaccrual status): a. Fixed rate debt securities with a remaining maturity of: (1) Three months or less ________________________________________________________________________0343.. 0 M.2.a1 (2) Over three months through 12 months _________________________________________________________0344.. 204 M.2.a2 (3) Over one year through five years ____________________________________________________________0345.. 107 M.2.a3 (4) Over five years _____________________________________________________________________________0346.. 0 M.2.a4 (5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through 2.a.(4)) ____________________________________________________________________________0347.. 311 M.2.a5 b. Floating rate debt securities with a repricing frequency of: (1) Quarterly or more frequently _______________________________________________________________4544.. 0 M.2.b1 (2) Annually or more frequently, but less frequently than quarterly _____________________________4545.. 0 M.2.b2 (3) Every five years or more frequently, but less frequently than annually ______________________4551.. 0 M.2.b3 (4) Less frequently than every five years _______________________________________________________4552.. 0 M.2.b4 (5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4))_____________________________________________________________________________4553.. 0 M.2.b5 c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total debt securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus nonaccrual debt securities included in Schedule RC-W, item 6, column C)_________________0393.. 311 M.2.c 3. Not applicable. 4. Held-to-maturity debt securities restructured and in compliance with modified terms (included in Schedule RC-B, items 3 through 5, column A, above) _____________________________________5365.. 0 M.4 5. Not applicable. 6. Floating rate debt securities with a remaining maturity of one year or less (1,3) (included in Memorandum items 2.b.(1) through 2.b.(4) above) _______________________________________5519.. 0 M.6 7. Amortized cost of held-to-maturity securities sold or transferred to available-for- sale or trading securities during the calendar year-to-date (report the amortized cost at date of sale or transfer) ____________________________________________________________________1778.. 0 M.7 8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale accounts in Schedule RC-B, item 4.b): a. Amortized cost __________________________________________________________________________________8780.. 0 M.8.a b. Fair value ______________________________________________________________________________________8781.. 0 M.8.b 9. Structured notes (included in the held-to maturity and available-for-sale accounts in Schedule RC-B, items 2, 3, and 5): a. Amortized cost __________________________________________________________________________________8782.. 0 M.9.a b. Fair value _____________________________________________________________________________________8783.. 0 M.9.b
- ------ 1) Includes held-to-maturity securities at amortized cost and available-for- sale securities at fair value. 2) Exclude equity securities, e.g., investments in mutual funds, Federal Reserve stock, common stock, and preferred stock. 3) Memorandum items 2 and 6 are not applicable to savings banks that must complete supplemental Schedule RC-J. 13 Schedule RC-C - Loans and Lease Financing Receivables Part I. Loans and Leases Do not deduct the allowance for loan and lease losses from amounts reported in this schedule. Report total loans and leases, net of unearned income. Exclude assets held for trading.
C115 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- RCON 1. Loans secured by real estate: ---- a. Construction and land development_____________________________________________________1415. . 0 1.a b. Secured by farmland (including farm residential and other improvements)_______________1420. . 0 1.b c. Secured by 1-4 family residential properties: (1) Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit____________________________________________________1797. . 0 1.c.1 (2) All other loans secured by 1-4 family residential properties: (a) Secured by first liens________________________________________________________5367. . 0 1.c.2a (b) Secured by junior liens_______________________________________________________5368. . 0 1.c.2b d. Secured by multifamily (5 or more) residential properties_____________________________1460. . 0 1.d e. Secured by nonfarm nonresidential properties__________________________________________1480. . 0 1.e 2. Loans to depository institutions_________________________________________________________1489. . 0 2. 3. Loans to finance agricultural production and other loans to farmers______________________1590. . 0 3. 4. Commercial and industrial loans__________________________________________________________1766. . 0 4. 5. Acceptances of other banks_______________________________________________________________1755. . 0 5. 6. Loans to individuals for household, family, and other personal expenditures (i.e., consumer loans) (includes purchased paper): a. Credit cards and related plans (includes check credit and other revolving credit plans)________________________________________________________________________________2008. . 0 6.a b. Other (includes single payment, installment, and all student loans)___________________2011. . 0 6.b 7. Obligations (other than securities and leases) of states and political subdivisions in the U.S. (includes nonrated industrial development obligations)_______________________2107. . 0 7. 8. All other loans (exclude consumer loans)_________________________________________________2080. . 0 8. 9. Lease financing receivables (net of unearned income)_____________________________________2165. . 0 9. 10. LESS: Any unearned income on loans reflected in items 1-8 above__________________________2123. . 0 10. 11. Total loans and leases, net of unearned income (sum of items 1 through 9 minus item 10) (must equal Schedule RC, item 4.a)___________________________________________________2122. . 0 11.
14 Schedule RC-C - Continued Part I. Continued Memoranda
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Loans (1) and leases restructured and in compliance with modified terms (included in Schedule RC-C, part I, above, and not reported as past due or nonaccrual in Schedule RCON RC-W, Memorandum item 1):________________________________________________________________---- a. Real estate loans_____________________________________________________________________1617. . 0 M.1.a b. All other loans and all lease financing receivables (exclude loans to individuals for household, family, and other personal expenditures)_______________________________8691. . 0 M.1.b 2. Maturity and repricing data for loans and leases (2) (excluding those in nonaccrual status): a. Fixed rate loans and leases with a remaining maturity of: (1) Three months or less______________________________________________________________0348. . 0 M.2.a1 (2) Over three months through 12 months_______________________________________________0349. . 0 M.2.a2 (3) Over one year through five years__________________________________________________0356. . 0 M.2.a3 (4) Over five years___________________________________________________________________0357. . 0 M.2.a4 (5) Total fixed rate loans and leases (sum of Memorandum items 2.a.(1) through 2.a.(4))__________________________________________________________________________0358. . 0 M.2.a5 b. Floating rate loans with a repricing frequency of: (1) Quarterly or more frequently______________________________________________________4554. . 0 M.2.b1 (2) Annually or more frequently, but less frequently than quarterly___________________4555. . 0 M.2.b2 (3) Every five years or more frequently, but less frequently than annually____________4561. . 0 M.2.b3 (4) Less frequently than every five years_____________________________________________4564. . 0 M.2.b4 (5) Total floating rate loans (sum of Memorandum items 2.b.(1) through 2.b.(4))_______4567. . 0 M.2.b5 c. Total loans and leases (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal the sum of total loans and leases, net, from Schedule RC-C, part I, Item 11, plus unearned income from Schedule RC-C, Part I, item 10, minus total nonaccrual loans and leases from Schedule RC-N, sum of items 1 through 5, column C)______________1479. . 0 M.2.c d. Floating rate loans with a remaining maturity of one year or less (included in memorandum items 2.b.(1) through 2.b.(4) above)_______________________________________A246. . 0 M.2.d 3. Reserved 4. Loans to finance commercial real estate, construction, and land development activities (not secured by real estate) included in Schedule RC-C, part I, items 4 and 8, page RC-5 (3)_________________________________________________________________________________2746. . 0 M.4 5. Loans and leases held for sale (included in Schedule RC-C, part I, above)________________5369. . 0 M.5 6. Adjustable rate closed-end loans secured by first liens on 1-4 family residential properties (included in Schedule RC-C, part I, Item 1.c.(2)(a), page RC-5)_______________5370. . 0 M.6
- ---------- (1) See instructions for loan classifications used in Memorandum Item 1. (2) Memorandum item 2 is not applicable to savings banks that must complete supplemental Schedule RC-J. (3) Exclude loans secured by real estate that are included in Schedule RC-C, part I, items 1.a through 1.e. 14a Schedule RC-C - Continued Part II. Loans to Small Businesses and Small Farms Schedule RC-C, Part II is to be reported only with the June Report of Condition. Report the number and amount currently outstanding as of June 30 of business loans with "original amounts" of $1,000,000 or less and farm loans with "original amounts" of $500,000 or less. The following guidelines should be used to determine the "original amount" of a loan: (1) For loans drawn down under lines of credit or loan commitments, the "original amount" of the loan is the size of the line of credit or loan commitment when the line of credit or loan commitment was most recently approved, extended, or renewed prior to the report date. However, if the amount currently outstanding as of the report date exceeds this size, the "original amount" is the amount currently outstanding on the report date. (2) For loan participations and syndications, the "original amount" of the loan participation or syndication is the entire amount of the credit originated by the lead lender. (3) For all other loans, the "original amount" is the total amount of the loan at origination or the amount currently outstanding as of the report date, whichever is larger.
C118 < - Loans to Small Businesses 1. Indicate in the appropriate box at the right whether all or substantially all of the dollar volume of your bank's "Loans secured by nonfarm nonresidential properties" reported in Schedule RC-C, part I, item 1.e, and all or substantially all of the dollar volume of your bank's "Commercial and industrial loans" reported in Schedule RC-C, part I, item 4, have original amounts of $100,000 or less (if your bank has no loans outstanding in both RCON YES NO of these two loan categories, place an "X" in the box marked "NO" and go to item 5; ---- --- -- otherwise, see instructions for further information.)_______________________________________6999. . X 1. If YES, complete items 2.a and 2.b below, skip items 3 and 4, and go to item 5. If NO and your bank has loans outstanding in either loan category, skip items 2.a and 2.b, complete items 3 and 4 below, and go to item 5. 2. Report the total number of loans currently outstanding for each of the following Schedule RC-C, part I, loan Number of Loans categories: ---------------------------- a. "Loans secured by nonfarm nonresidential properties" RCON reported in Schedule RC-C, part I, ---- item 1.e______________________________________________5562. . N/A 2.a b. "Commercial and industrial loans" reported in Schedule RC-C, part I, item 4__________________________________5563. . N/A 2.b
Dollar Amounts in Thousands - -------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------- (Column A) (Column B) Number of Loans Amount Currently Outstanding --------------------------- --------------------------------- 3. Number and amount currently outstanding of "Loans secured by nonfarm nonresidential properties" reported in Schedule RC-C, part I, item 1.e (sum of items 3.a though 3.c must RCON RCON be less than or equal to Schedule RC-C, part I, item 1.e): ---- ---- a. With original amounts of $100,000 or less____________________________________________________5564. . N/A 5565. . N/A 3.a b. With original amounts of more than $100,000 through $250,000___________________________________________________5566. . N/A 5567. . N/A 3.b c. With original amounts of more than $250,000 through $1,000,000_________________________________________________5568. . N/A 5569. . N/A 3.c 4. Number and amount currently outstanding of "Commercial and industrial loans" reported in Schedule RC-C, part I, item 4 (sum of items 4.a though 4.c must be less than or equal to RCON RCON Schedule RC-C, part I, item 4): ---- ---- a. With original amounts of $100,000 or less__________________5570. . N/A 5571. . N/A 4.a b. With original amounts of more than $100,000 through $250,000___________________________________________________5572. . N/A 5573. . N/A 4.b c. With original amounts of more than $250,000 through $1,000,000_________________________________________________5574. . N/A 5575. . N/A 4.c
14b Schedule RC-C - Continued Part II. Continued Agricultural Loans to Small Farms 5. Indicate in the appropriate box at the right whether all or substantially all of the dollar volume of your bank's "Loans secured by farmland (including farm residential and other improvements)" reported in Schedule RC-C, part I, item 1.b, and all or substantially all of the dollar volume of your bank's "Loans to finance agricultural production and other loans to farmers" reported in Schedule RC-C, part 1, item 3, have original amounts of $100,000 or less (if your bank has no loans outstanding in both of RCON YES NO these two loan categories, place an "X" in the box marked "NO" and do not complete items 7 ---- --- -- and 8; otherwise, see instructions for further information.)________________________________6860. . X 5. If YES, complete Items 6.a and 6.b below and do not complete items 7 and 8. if NO and your bank has loans outstanding in either loan category, skip items 6.a and 6.b and complete items 7 and 8 below. 6. Report the total number of loans currently outstanding for each of the following Schedule RC-C, part I, loan Number of Loans categories: ---------------------- a. "Loans secured by farmland (including farm residential RCON and other improvements)" reported in Schedule RC-C, ---- part I, item 1.b________________________________________5576. . N/A 6.a b. "Loans to finance agricultural production and other loans to farmers" reported in Schedule RC-C, part I, item 3__________________________________________________5577. . N/A 6.b
Dollar Amounts in Thousands - ---------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------- (Column A) (Column B) Number of Loans Amount Currently Outstanding ----------------------- ---------------------------- Number and amount currently outstanding of "Loans secured by farmland (including farm residential and other improvements)" reported in Schedule RC-C, part I, item 1.b (sum of items 7.a through 7.c must be less than or equal to Schedule RC-C, part I, item 1.b): RCON RCON a. With original amounts of $ 100,000 ---- ---- or less____________________________________________________5578. . N/A 5579. . N/A 7.a b. With original amounts of more than $ 100,000 through $ 250,000__________________________________________________5580. . N/A 5581. . N/A 7.b c. With original amounts of more than $ 250,000 through $ 500,000__________________________________________________5582. . N/A 5583. . N/A 7.c Number and amount currently outstanding of "Loans to finance agricultural production and other loans to farmers" reported in Schedule RC-C, part I, item 3 (sum of items 8.a through 8.c must be less than or equal to Schedule RC-C, part I, item 3): RCON RCON a. With original amounts of $ 100,000 ---- ---- or less____________________________________________________5584. . N/A 5585. . N/A 8.a b. With original amounts of more than $ 100,000 through $ 250,000__________________________________________________5586. . N/A 5587. . N/A 8.b c. With original amounts of more than $ 250,000 through $ 500,000__________________________________________________5588. . N/A 5589. . N/A 8.c
15
Schedule RC-E - Deposit Liabilities C125 < - Dollar Amount in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- ---------------Transaction Accounts-------------- --Nontransaction Accounts---- (Column A) (Column B) (Column C) Total transaction Memo: Total demand accounts (including total deposits (included in Total Nontransaction demand deposits) column A) accounts (including MMDAs) - ------------------------------------------ ------------------------- ---------------------- ---------------------------- RCON RCON RCON Deposits of: ---- ---- ---- 1. Individuals, partnerships and corporations__2201. . 0 2240. . 0 2346. . 0 1. 2. U.S. Government_____________________________2202. . 0 2280. . 0 2520. . 0 2. 3. States and political subdivisions in the U.S.____________________________________2203. . 0 2290. . 0 2530. . 0 3. 4. Commercial banks in the U.S. (including U.S. branches and agencies of foreign banks)_____2206. . 0 2310. . 0 2550. . 0 4. 5. Other depository institutions in the U.S.___2207. . 0 2312. . 0 2349. . 0 5. 6. Certified and official checks_______________2330. . 0 2330. . 0 . . . . . . . . . . . . 6. 7. Banks in foreign countries, foreign governments, and foreign official institutions________________________________2184. . 0 2185. . 0 2186. . 0 7. 8. Total (sum of items 1 through 7) (sum of columns A and C must equal Schedule RC, item 13.a)__________________________________2215. . 0 2210. . 0 2385. . 0 8.
Dollar Amount in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- Memoranda RCON ---- 1. Selected components of total deposits (i.e., sum of item 8, columns A and C): a. Total individual Retirement Accounts (IRAs) and Keogh Plan Accounts_________________6835. . 0 M.1.a b. Total brokered deposits_____________________________________________________________2365. . 0 M.1.b c. Fully insured brokered deposits (included in Memorandum item 1.b above): (1) Issued in denominations of less than $ 100,000__________________________________2343. . 0 M.1.c1 (2) Issued either in denominations of $ 100,000 or in denominations greater than $ 100,000 and participated out by the broker in shares of $ 100,000 or less_____2344. . 0 M.1.c2 d. Maturity data for brokered deposits: (1) Brokered deposits issued in denominations of less than $ 100,000 with a remaining maturity of one year or less (included in Memorandum item 1.c.(1) above)__________________________________________________________________A243. . 0 M.1.d1 (2) Brokered deposits issued in denominations of $ 100,000 or more with a remaining maturity of one year or less (included in Memorandum item 1.b above)______________________________________________________________________A244. . 0 M.1.d2 e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S. reported in item 3 above which are secured or collateralized as required under state law)__________________________________________________________________________5590. . 0 M.1.e 2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d must equal item 8, column C, above): a. Saving deposits: (1) Money Market deposit accounts (MMDAs)___________________________________________6810. . 0 M.2.a1 (2) Other savings deposits (excludes MMDAs)_________________________________________0352. . 0 M.2.a2 b. Total time deposits of less than $ 100,000__________________________________________6648. . 0 M.2.b c. Time certificates of deposit of $ 100,000 or more___________________________________6645. . 0 M.2.c d. Open-account time deposits of $ 100,000 or more_____________________________________6646. . 0 M.2.d 3. All NOW accounts (included in column A above)__________________________________________2398. . 0 M.3 4. Not applicable
16 Schedule RC-E - Continued
Dollar Amount in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- Memoranda (Continued) 5. Maturity and repricing data for time deposits of less than $ 100,000 (sum of Memorandum items 5.a(1) through 5.b(3) must equal Memorandum item 2.b above): (1) RCON a. Fixed rate time deposits of less than $ 100,000 with a remaining maturity of: ---- (1) Three months or less_________________________________________________________________A225. . 0 M.5.a1 (2) Over three months through 12 months__________________________________________________A226. . 0 M.5.a2 (3) Over one year________________________________________________________________________A227. . 0 M.5.a3 b. Floating rate time deposits of less than $ 100,000 with a repricing frequency of: (1) Quarterly or more frequently_________________________________________________________A228. . 0 M.5.b1 (2) Annually or more frequently, but less frequently than quarterly______________________A229. . 0 M.5.b2 (3) Less frequently than annually________________________________________________________A230. . 0 M.5.b3 c. Floating rate time deposits of less than $ 100,000 with a remaining maturity of one year or less (included in Memorandum items 5.b.(1) through 5.b.(3) above)____________A231. . 0 M.5.c 6. Maturity and repricing data for time deposits of $ 100,000 or more (i.e., time certificates of deposit of $ 100,000 or more and open-account time deposits of $ 100,000 or more) (sum of Memorandum items 6.a.(1) through 6.b.(4) must equal the sum of Memorandum items 2.c and 2.d above): (1) a. Fixed rate time deposits of $ 100,000 or more with a remaining maturity of: (1) Three months of less_________________________________________________________________A232. . 0 M.6.a1 (2) Over three months through 12 months__________________________________________________A233. . 0 M.6.a2 (3) Over one year through five years_____________________________________________________A234. . 0 M.6.a3 (4) Over five years______________________________________________________________________A235. . 0 M.6.a4 b. Floating rate time deposits of $ 100,000 or more with a repricing frequency of: (1) Quarterly or more frequently_________________________________________________________A236. . 0 M.6.b1 (2) Annually or more frequently, but less frequently than quarterly______________________A237. . 0 M.6.b2 (3) Every five years or more frequently, but less frequently than annually_______________A238. . 0 M.6.b3 (4) Less frequently than every five years________________________________________________A239. . 0 M.6.b4 c. Floating rate time deposits of $ 100,000 or more with a remaining maturity of one year or less (included in Memorandum items 6.b.(1) through 6.b.(4) above)____________A240. . 0 M.6.c
- ---------- (1) Memorandum items 5 and 6 are not applicable to savings banks that must complete supplemental Schedule RC-J. 17 Schedule RC-F - Other Assets
c130 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- 1. Income earned, not collected on loans (1)__________________________ 2164. . . . 0 1. 2. Net deferred tax assets (2)________________________________________ 2148. . . . 2,136 2. 3. Excess residential mortgage servicing fees receivable______________ 5371. . . . 0 3. 4. Other (itemize and describe amounts greater than $25,000 that exceed 25% OF this item____________________________________________ 2168. . . . 20,186 4. TEXT RCON ---- ---- a. 3549: Personal Trust Fees Receivable___________ 3549. . 7,982 . . . . . 4.a b. 3550:__________________________________________ 3550. . N/A . . . . . 4.b c. 3551:__________________________________________ 3551. . N/A . . . . . 4.c 5. Total (sum of items 1 through 4) (must equal Schedule RC, Item 11) 2160. . . . 22,322 5. Memorandum Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- 1. Deferred tax assets disallowed for regulatory capital purposes_____ 5610. . . . 0 M.1
Schedule RC-G - Other Liabilities
c135 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- 1. a. Interest accrued and unpaid on deposits (3)_____________________ 3645. . . . 0 1.a b. Other expenses accrued and unpaid (includes accrued income taxes payable)__________________________________________________ 3646. . . . 11,202 1.b 2. Net deferred tax liabilities (2)___________________________________ 3049. . . . 0 2. 3. Minority interest in consolidated subsidiaries_____________________ 3000. . . . 0 3. 4. Other (itemize and describe amounts greater than $25,000 that exceed 25% of this item)___________________________________________ 2938. . . . 25,971 4. TEXT RCON ---- ---- a. 3552: Escheatable Funds_________________________ 3552. . 21,532 . . . . . 4.a b. 3553: __________________________________________ 3553. . N/A . . . . . 4.b c. 3554: __________________________________________ 3554. . N/A . . . . . 4.c 5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) 2930. . . . 37,173 5.
- ---------- 1) Report income earned, not collected on securities (and on other assets) in item 4 of Schedule RC-F. 2) See discussion of deferred income taxes in Glossary entry on "income taxes." 3) For saving banks, includes "dividends" accrued and unpaid on deposits. 18 Schedule RC-K - Quarterly Averages (1)
c155 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- ASSETS 1. Interest-bearing balances due from depository institutions_________ 3381. . . . 8,372 1. 2. a. U.S. Treasury securities, U.S. Government agency and corporation obligations, and other debt securities (4) (excluding securities issued by states and political subdivisions in the U.S.)________ 3649. . . . 0 2.a b. Equity securities (5)(includes investments in mutual funds and Federal Reserve stock)__________________________________________ 3648. . . . 750 2.b 3. Securities issued by states and political subdivisions in the U.S. (4)____________________________________________________ 3383. . . . 300 3. 4. Federal funds sold and securities purchased under agreements to resell_____________________________________________________________ 3365. . . . 879 4. 5. Loans (2,3): a. Total loans, net of unearned income (to be completed by those banks with less than $25 million in assets)_____________________ 3360. . . . 0 5.a The following four items are to be completed only by those banks with $25 million or more in total assets. b. Real estate loans_______________________________________________ 3286. . . . 0 5.b c. Installment loans_______________________________________________ 3287. . . . 0 5.c d. Credit cards and related plans__________________________________ 3288. . . . 0 5.d e. Commercial (time and demand) and all other loans________________ 3289. . . . 0 5.e 6. Lease financing receivables (net of unearned income)_______________ 3484. . . . 0 6. 7. Total assets(6)____________________________________________________ 3368. . . . 80,488 7. LIABILITIES 8. Interest-bearing transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) (exclude demand deposits)___________________________________________________ 3485. . . . 0 8. 9. Nontransaction accounts: a. Money market deposit accounts (MMDAs)___________________________ 3486. . . . 0 9.a b. Other savings deposits__________________________________________ 3487. . . . 0 9.b c. Time certificates of deposit of $100,000 or more________________ 3345. . . . 0 9.c d. All other time deposits (include all time deposits of less than $100,000 and open-account time deposits of $100,000 or more)____ 3469. . . . 0 9.d 10. Federal funds purchased and securities sold under agreements to repurchase_________________________________________________________ 3353. . . . 0 10. Memorandum Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- 1. To be completed by banks with $25 million or more in total assets and with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans. (3) RCON ---- Agricultural loans included in items 5.b through 5.e above_________ 3379. . . . 0 M.1
- ---------- (1) For all items, banks have the option of reporting either (1) an average of daily figures for the quarter or (2) an average of weekly figures (i.e., the Wednesday of each week of the quarter). In addition, averages of four month-end figures (the last day of the preceding quarter and of each month of the currently-reported quarter) are allowed for items 2, 3, 5.a through 5.e, 6, 7, and Memorandum item 1. (2) See instructions for loan classifications used in this schedule. (3) The $25 million asset size test and the five percent of total loans test are generally based on the total assets and total loans reported on the June 30, 1995 Report of Condition. (4) Quarterly averages for all debt securities should be based on amortized cost. (5) Quarterly averages for all equity securities should be based on historical cost. (6) The quarterly average for total assets should reflect all debt securities (not held for trading) at amortized cost, equity securities with readily determinable fair values at the lower of cost or fair value, and equity securities without readily determinable fair values at historical cost. 19 Schedule RC-L - Off-Balance Sheet Items Please read carefully the instructions for the preparation of Schedule RC-L. Some of the amounts reported in Schedule RC-L are regarded as volume indicators and not necessarily as measures of risk.
c160 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- 1. Unused commitments: a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home equity lines_____________________________ 3814. . . . 0 1.a b. Credit card lines_______________________________________________ 3815. . . . 0 1.b c. Commercial real estate, construction, and land development: (1) Commitments to fund loans secured by real estate____________ 3816. . . . 0 1.c.1 (2) Commitments to fund loans not secured by real estate________ 6550. . . . 0 1.c.2 d. Securities underwriting_________________________________________ 3817. . . . 0 1.d e. Other unused commitments________________________________________ 3818. . . . 0 1.e 2. Financial standby letters of credit (1)____________________________ 3819. . . . 0 2. RCON a. Amount of financial standby letters of credit ---- conveyed to others_______________________________ 3820. . 0 . . . . . 2.a 3. Performance standby letters of credit (1)__________________________ 3821. . . . 0 3. RCON a. Amount of performance standby letters of credit ---- conveyed to others_______________________________ 3821. . 0 . . . . . 3.a 4. Commercial and similar letters of credit (1)_______________________ 3411. . . . 0 4. 5. Not applicable_____________________________________________________ 6. Participations in acceptances (as described in the instructions) acquired by the reporting (nonaccepting) bank______________________ 3429. . . . 0 6. 7. Securities borrowed________________________________________________ 3432. . . . 0 7. 8. Securities lent (including customers' securities lent where the customer is indemnified against loss by the reporting bank)________ 3433. . . . 0 8. 9. Loans transferred (i.e., sold or swapped) with recourse that have been treated as sold for Call Report purposes: a. FNMA and FHLMC residential mortgage loan pools: (1) Outstanding principal balance of mortgages as of the report date_________________________________________________ 3650. . . . 0 9.a.1 (2) Amount of recourse exposure on these mortgages as of the report date_________________________________________________ 3651. . . . 0 9.a.2 b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools: (1) Outstanding principal balance of mortgages transferred as of the report date_____________________________________________ 3652. . . . 0 9.b.1 (2) Amount of recourse exposure on these mortgages as of the report date_________________________________________________ 3653. . . . 0 9.b.2 c. Farmer Mac agricultural mortgage loan pools: (1) Outstanding principal balance of mortgages transferred as of the report date_____________________________________________ 3654. . . . 0 9.c.1 (2) Amount of recourse exposure on these mortgages as of the report date_________________________________________________ 3655. . . . 0 9.c.2 d. Small business obligations transferred with recourse under section 208 of the Riegle Community Development and Regulatory Improvement Act of 1994: (1) Outstanding principal balance of small business obligations transferred as of the report date___________________________ A249. . . . 0 9.d.1 (2) Amount of retained recourse on these obligations as of the report date_________________________________________________ A250. . . . 0 9.d.2 10. When-issued securities: a. Gross commitments to purchase___________________________________ 3434. . . . 0 10.a b. Gross commitments to sell_______________________________________ 3435. . . . 0 10.b 11. Spot foreign exchange contracts____________________________________ 8765. . . . 0 11. 12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and describe each component of this item over 25% of Schedule RC, item 28.a "total equity capital")______________ 3430. . . . 0 12. TEXT RCON ---- ---- a. 3555:__________________________________________ 3555. . N/A . . . . . 12.a b. 3556:__________________________________________ 3556. . 0 . . . . . 12.b c. 3557:__________________________________________ 3557. . N/A . . . . . 12.c d. 3558:__________________________________________ 3558. . N/A . . . . . 12.d
- ---------- 1) Do not report letters of credit as "contra" items in "Other assets" (Schedule RC-F) and "other liabilities" (Schedule RC-G). 20 Schedule RC-L - Continued Dollar Amounts in Thousands - -------------------------------------------------------------------------------- 13. All other off-balance sheet assets (exclude off-balance sheet derivatives) (itemize and describe each component of this item over 25% of Schedule RC, Item 28.a "Total equity capital")_____________________5591. . 0 13. TEXT RCOW ---- ---- a. 5592:_____________________5592 . . N/A . . . . . . 13.a b. 5593:_____________________5593 . . N/A . . . . . . 13.b c. 5594:_____________________5594 . . N/A . . . . . . 13.c d. 5595:_____________________5595 . . N/A . . . . . . 13.d
C161 < - Dollar Amounts in Thousands - -------------------------------------------------------------------------------------------------------------------------------- (Column A) (Column B) (Column C) (Column D) Equity Commodity Off-Balance Sheet Derivatives Position Interest Rate Foreign Exchange Derivative And Other Indicators Contracts Contracts Contracts Contracts - -------------------------------------------- ------------------ ------------------ ------------------ ------------------- 14. Gross amounts (e.g., notional amounts)(for each column, sum of items 14.a through 14.e must equal sum of items 15, 16a., and 16.b): RCON RCON RCON RCON ---- ---- ---- ---- a. Futures contracts___________________8693. . 0 8694. . 0 8695. . 0 8696. . 0 14.a b. Forward contracts___________________8697. . 0 8698. . 0 8699. . 0 8700. . 0 14.b c. Exchange-traded option contracts: (1) Written options_________________8701. . 0 8702. . 0 8703. . 0 8704. . 0 14.c1 (2) Purchased options_______________8705. . 0 8706. . 0 8707. . 0 8708. . 0 14.c2 d. Over-the-counter option contracts: (1) Written options_________________8709. . 0 8710. . 0 8711. . 0 8712. . 0 14.d1 (2) Purchased options_______________8713. . 0 8714. . 0 8715. . 0 8716. . 0 14.d2 e. Swaps_______________________________3450. . 0 3826. . 0 8719. . 0 8720. . 0 14.e 15. Total gross notional amount of derivative contracts held for trading_________________________________A126. . 0 A127. . 0 8723. . 0 8724. . 0 15. 16. Total gross notional amount of derivative contracts held for purposes other than trading: a. Contracts marked to market__________8725. . 0 8726. . 0 8727. . 0 8728. . 0 16.a b. Contracts not marked to market______8729. . 0 8730. . 0 8731. . 0 8732. . 0 16.b
Memoranda
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------ 1. Not applicable. 2. Not applicable. 3. Unused commitments with an original maturity exceeding one year that are reported in Schedule RC-L, items 1.a through 1.e, above (report only the RCON unused portions of commitments that are fee paid or otherwise legally ---- binding)_____________________________________________________________________3833. . 0 M.3
- ------------- 21 Schedule RC-M - Memoranda
C165 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Extensions of credit by the reporting bank to its executive officers, directors, principal shareholders, and their related interests as of the report date: a. Aggregate amount of all extensions of credit to all executive officers, directors, RCON ---- principal shareholders and their related interests_________________________________________6164. . 0 1.a b. Number of executive officers, directors, and principal shareholders to whom the amount of all extensions of credit by the reporting bank (including extensions of credit to related interests) equals or exceeds the RCON Number lesser of $ 500,000 or 5 percent of total capital as ---- ------ defined for this purpose in agency regulations_________6165. . 0 . . . . . 1.b 2. Not applicable 3. a. Noninterest-bearing balances due from commercial banks in the U.S. (included in RCON Schedule RC, item 1.a) (exclude balances due from Federal Reserve Banks and cash ---- items in process of collection)____________________________________________________________0050. . 49,374 3.a b. Currency and coin (included in Schedule RC, item 1.a)______________________________________0080. . 0 3.b 4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for RCON others (include both retained servicing and purchased servicing): ---- a. Mortgages serviced under a GNMA contract___________________________________________________5500. . 0 4.a b. Mortgages serviced under a FHLMC contract: (1) Serviced with recourse to servicer_____________________________________________________5501. . 0 4.b.1 (2) Serviced without recourse to servicer:_________________________________________________5502. . 0 4.b.2 c. Mortgages serviced under a FNMA contract: (1) Serviced under a regular option contract_______________________________________________5503. . 0 4.c.1 (2) Serviced under a special option contract_______________________________________________5504. . 0 4.c.2 d. Mortgages serviced under other servicing contracts_________________________________________5505. . 0 4.d 5. Not applicable. RCON 6. Intangible assets: ---- a. Mortgage servicing rights__________________________________________________________________3164. . 0 6.a b. Other identifiable intangible assets: (1) Purchased credit card relationships____________________________________________________5506. . 0 6.b.1 (2) All other identifiable intangible assets_______________________________________________5507. . 1,020 6.b.2 c. Goodwill___________________________________________________________________________________3163. . 0 6.c d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10)_____________________2143. . 1,020 6.d e. Amount of intangible assets (inluded in item 6.b.(2) above)that have been grandfathered or are otherwise qualifying for regulatory capital purposes__________________6442. . 0 6.e RCON 7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to ---- redeem the debt________________________________________________________________________________3295. . 0 7. RCON 8. a. Other real estate owned: ---- (1) Direct and indirect investments in real estate ventures________________________________5372. . 0 8.a.1 (2) All other real estate owned: (a) Construction and land development__________________________________________________5508. . 0 8.a.2a (b) Farmland___________________________________________________________________________5509. . 0 8.a.2b (c) 1-4 family residential properties__________________________________________________5510. . 0 8.a.2c (d) Multifamily (5 or more) residential properties_____________________________________5511. . 0 8.a.2d (e) Nonfarm nonresidential properties__________________________________________________5512. . 0 8.a.2e (3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7)______________2150. . 0 8.a.3 b. Investments in unconsolidated subsidiaries and associated companies: (1) Direct and Indirect investments in real estate ventures________________________________5374. . 0 8.b.1 (2) All other investments in unconsolidated subsidiaries and associated companies__________5375. . 0 8.b.2 (3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)______________2130. . 0 8.b.3 c. Total assets of unconsolidated subsidiaries and associated companies_______________________5376. . 0 8.c
22 Schedule RC-M - Continued
Dollar Amounts in Thousands - --------------------------------------------------------------------------------------------------------------------------------- RCON 9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC, ---- item 23, "Perpetual preferred stock and related surplus"_______________________________________3778. . 0 9. 10. Mutual fund and annuity sales during the quarter (include proprietary, private label, RCON and third party products): ---- a. Money market funds_________________________________________________________________________6441. . 0 10.a b. Equity securities funds____________________________________________________________________8427. . 0 10.b c. Debt securities funds______________________________________________________________________8428. . 0 10.c d. Other mutual funds_________________________________________________________________________8429. . 0 10.d e. Annuities__________________________________________________________________________________8430. . 0 10.e f. Sales of propietary mutual funds and annuities (included in items 10.a through 10.e above)________________________________________________________________________________8784. . 0 10.f Memorandum Dollar Amounts in Thousands - --------------------------------------------------------------------------------------------------------------------------------- 1. Interbank holdings of capital instruments (to be completed for the December report RCON only): ---- a. Reciprocal holdings of banking organizations' capital instruments__________________________3836. . N/A M.1.a b. Nonreciprocal holdings of banking organizations' capital instruments_______________________3837. . N/A M.1.b
23 Schedule RC-N - Past Due and Nonaccrual Loans (1), Leases, and Other Assets The FFIEC regards the information reported in all of Memorandum item 1, in items 1 through 7, column A, and in Memorandum items 2 through 4, column A, as confidential.
C170 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- -------(Column A)------- -------(Column B)------- -------(Column C)------- Past due 30 through 89 Past due 90 days or more Nonaccrual days and still accruing and still accruing ------------------------ ------------------------ ------------------------ RCON RCON RCON ---- ---- ---- 1. Real estate loans_________________________1210. . 0 1211. . 0 1212. . 0 1. 2. Installment loans_________________________1214. . 0 1215. . 0 1216. . 0 2. 3. Credit cards and related plans____________1218. . 0 1219. . 0 1220. . 0 3. 4. Commercial (time and demand) and all other loans_______________________________1222. . 0 1223. . 0 1224. . 0 4. 5. Lease financing receivables_______________1226. . 0 1227. . 0 1228. . 0 5. 6. Debt securities and other assets (exclude other real estate owned and other repossessed assets)_______________________3505. . 0 3506. . 0 3507. . 0 6. - ----------------------------------------------------------------------------------------------------------------------------------- Amounts reported in items 1 through 5 above include guaranteed and unguaranteed portions of past due and nonaccrual loans and leases. Report in item 7 below certain guaranteed loans and leases that have already been included in the amounts reported in items 1 through 5. 7. Loans and leases reported in items 1 through 5 above which are wholly or RCON RCON RCON partially guaranteed by the U.S. ---- ---- ---- Government_______________________________5612. . 0 5613. . 0 5614. . 0 7. a. Guaranteed portion of loans and leases included in item 7 above______________5615. . 0 5616. . 0 5617. . 0 7.a Memoranda C173 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Restructured loans and leases included in Schedule RC-N, items 1 through 5, above RCON RCON RCON (and not reported in Schedule RC-C, ---- ---- ---- Memorandum item 1)_______________________1658. . 0 1659. . 0 1661. . 0 M.1 2. To be completed by banks with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans: RCON RCON RCON Agricultural loans included in Schedule ---- ---- ---- RC-N, items 1 through 4, above___________1230. . 0 1231. . 0 1232. . 0 M.2 3. Loans to finance commercial real estate, construction, and land development activities (not secured by real estate) RCON RCON RCON included in Schedule RC-N, items 2 ---- ---- ---- through 4, above_________________________5421. . 0 5422. . 0 5423. . 0 M.3 4. Real estate loans (sum of Memorandum items 4.a through 4.e must equal RCON RCON RCON Schedule RC-N, item 1, above): ---- ---- ---- a. Construction and land development_____5424. . 0 5425. . 0 5426. . 0 M.4a b. Secured by farmland___________________5427. . 0 5428. . 0 5429. . 0 M.4b c. Secured by 1-4 family residential properties: (1) Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit___________________5430. . 0 5431. . 0 5432. . 0 M.4c1 (2) All other loans secured by 1-4 family residential properties_____5433. . 0 5434. . 0 5435. . 0 M.4c2 d. Secured by multifamily (5 or more) residential properties________________5436. . 0 5437. . 0 5438. . 0 M.4d e. Secured by nonfarm nonresidential properties____________________________5439. . 0 5440. . 0 5441. . 0 M.4e
- ---------- (1) See instructions for loan classification used in this schedule. 24 Schedule RC-O - Other Data for Deposit Insurance Assessments
C175 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- RCON 1. Unposted debits (see instructions): ---- a. Actual amount of all unposted debits__________________________________________________0030. . N/A 1.a OR b. Separate amount of unposted debits: (1) Actual amount of unposted debits to demand deposits_______________________________0031. . 0 1.b.1 (2) Actual amount of unposted debits to time and savings deposits (1)_________________0032. . 0 1.b.2 2. Unposted credits (see instructions): a. Actual amount of all unposted credits_________________________________________________3510. . N/A 2.a OR b. Separate amount of unposted credits: (1) Actual amount of unposted credits to demand deposits______________________________3512. . 0 2.b.1 (2) Actual amount of unposted credits to time and savings deposits (1)________________3514. . 0 2.b.2 3. Uninvested trust funds (cash) held in bank's own trust department (not included in total deposits)__________________________________________________________________________3520. . 0 3. 4. Deposits of consolidated subsidiaries (not included in total deposits): a. Demand deposits of consolidated subsidiaries__________________________________________2211. . 0 4.a b. Time and savings deposits (1) of consolidated subsidiaries____________________________2351. . 0 4.b c. Interest accrued and unpaid on deposits of consolidated subsidiaries__________________5514. . 0 4.c 5. Not applicable. Item 6 is not applicable to state nonmember banks that have not been authorized by the Federal Reserve to act as pass-through correspondents. 6. Reserve balance actually passed through to the Federal Reserve by the reporting bank on behalf of its respondent depository institutions that are also reflected as deposit liabilities of the reporting bank: RCON a. Amount reflected in demand deposits (included in Schedule RC-E, item 4 or 5, ---- column B)_____________________________________________________________________________2314. . 0 6.a b. Amount reflected in time and savings deposits (1) (included in Schedule RC-E, item 4 or 5, column A or C, but not column B)_________________________________________2315. . 0 6.b 7. Unamortized premiums and discounts on time and savings deposits:(1) a. Unamortized premiums__________________________________________________________________5516. . 0 7.a b. Unamortized discounts_________________________________________________________________5517. . 0 7.b 8. To be completed by banks with "Oakar deposits." Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s))____________________________________________________________________________5518. . N/A 8. 9. Deposits in lifeline accounts____________________________________________________________ . . . . . . . . . . 9. 10. Benefit-responsive "Depository Institution Investment Contracts" (included in total deposits)________________________________________________________________________________8432. . 0 10.
- ---------- (1) For FDIC insurance assessment purposes, "time and savings deposits" consists of nontransaction accounts and all transaction accounts other than demand deposits. 25 Schedule RC-O - Continued
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 11. Adjustments to demand deposits reported in Schedule RC-E for certain reciprocal demand balances: a. Amount by which demand deposits would be reduced if reciprocal demand balances RCON between the reporting bank and savings associations were reported on a net basis ---- rather than a gross basis in Schedule RC-E____________________________________________8785 0 11.a b. Amount by which demand deposits would be increased if reciprocal demand balances between the reporting bank and U.S. branches and agencies of foreign banks were reported on a gross basis rather than a net basis in Schedule RC-E____________________A181 0 11.b c. Amount by which demand deposits would be reduced if cash items in process of collection were included in the calculation of net reciprocal demand balances between the reporting bank and the domestic offices of U.S. banks and savings associations in Schedule RC-E_________________________________________________________A182 0 11.c Memoranda (To be completed each quarter except as noted) Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Total deposits of the bank (sum of Memorandum items 1.a.(1) and 1.b.(1) must equal Schedule RC, item 13.a): RCON a. Deposit accounts of $100,000 or less: ---- (1) Amount of deposit accounts of $100,000 or less_____________________________________2702. . 0 M.1.a1 RCON Number (2) Number of deposit accounts of $100,000 or less ---- ------ (to be completed for the June report only)____________3779. . 0 . . . . . . . . M.1.a2 b. Deposit accounts of more than $100,000: (1) Amount of deposit accounts of more than $100,000___________________________________2710. . 0 M.1.b1 RCON Number (2) Number of deposit accounts of more than ---- ------ $100,000______________________________________________2722. . 0 . . . . . . . . M.1.b2 2. Estimated amount of uninsured deposits of the bank: a. An estimate of your bank's uninsured deposits can be determined by multiplying the number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2) above by $100,000 and subtracting the result from the amount of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(1) above. Indicate in the appropriate box at right whether your bank has a method or procedure RCON YES NO for determining a better estimate of uninsured deposits than the estimate ---- --- -- described above_______________________________________________________________________6861. . X M.2.a b. If the box marked YES has been checked, report the estimate of uninsured deposits determined by using your bank's method or procedure___________________________________5597. . N/A M.2.b - ----------------------------------------------------------------------------------------------------------------------------------- C177 < -
Person to whom questions about the Reports of Condition and Income should be directed: (612) 973-3306 Diane F. Hamernik, Accountant - ------------------------------------------------------------------------------- Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902) 26 Schedule RC-R - Regulatory Capital This schedule must be completed by all banks as follows: Banks that reported total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1995, must complete items 2 through 9 and Memoranda items 1 and 2. Banks with assets of less than $1 billion must complete items 1 through 3 below or Schedule RC-R in its entirety, depending on their response to item 1 below. 1. Test for determining the extent to which Schedule RC-R must be completed. To be completed only by banks with total assets of less than $1 billion. Indicate in the appropriate box at the C180 < - right whether the bank has total capital RCON YES NO greater than or equal to eight percent of ---- --- -- adjusted total assets___________________________ 6056 X 1. For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for loan and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see instructions). If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked NO has been checked, the bank must complete the remainder of this schedule. A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than eight percent or that the bank is not in compliance with the risk-based capital guidelines.
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------- -------------------------------------------------- NOTE: All banks are required to complete (Column A) (Column B) items 2 and 3 below. See optional worksheet Subordinated Debt (1) and for items 3.a through 3.f. Intermediate Term Other Limited-Life Preferred Stock Capital Instruments 2. Subordinated debt (1) and other limited-life capital ------------------------- ---------------------- instruments (original weighted average maturity of at least five years) with a remaining maturity of: RCON RCON ---- ---- a. One year or less______________________________________3780. . 0 3786. . 0 2.a b. Over one year through two years_______________________3781. . 0 3787. . 0 2.b c. Over two years through three years____________________3782. . 0 3788. . 0 2.c d. Over three years through four years___________________3783. . 0 3789. . 0 2.d e. Over four years through five years____________________3784. . 0 3790. . 0 2.e f. Over five years_______________________________________3785. . 0 3791. . 0 2.f 3. Amounts used in calculating regulatory capital ratios (report amounts determined by the bank for its own internal regulatory capital analyses): a. Tier 1 capital_______________________________________________________________________8274. . 53,302 3.a b. Tier 2 capital_______________________________________________________________________8275. . 0 3.b c. Total risk-based capital_____________________________________________________________3792. . 53,302 3.c d. Excess allowance for loan and lease losses___________________________________________A222. . 0 3.d e. Risk-weighted assets_________________________________________________________________A223. . 48,961 3.e f. Average total assets_________________________________________________________________A224. . 79,461 3.f
Items 4-9 and Memoranda items 1 and 2 are to be completed by banks that answered NO to item 1 above and by banks with total assets of $1 billion or more.
------------------------------------------------------- (Column A) (Column B) Assets Recorded on the Credit Equivalent Amount Balance Sheet off-Balance Sheet items (2) ---------------------- --------------------------- 4. Assets and credit equivalent amounts of off-balance sheet items assigned to the Zero percent risk category: a. Assets recorded on the balance sheet: (1) Securities issued by, other claims on, and claims unconditionally guaranteed by, the U.S. RCON RCON Government and its agencies and other OECD ---- ---- central governments_______________________________3794. . N/A . . . . . . . . 4.a.1 (2) All other_________________________________________3795. . 750 . . . . . . . . 4.a.2 b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . . 3796. . N/A 4.b
- --------- (1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7. (2) Do not report in column B the risk-weighted amount of assets reported in column A. 27 Schedule RC-R - Continued
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------- 5. Assets and credit equivalent amounts of off-balance (Column A) (Column B) sheet items assigned to the 20 percent risk Assets Recorded on the Credit Equivalent Amount category: Balance Sheet off-Balance Sheet Items (1) ---------------------- --------------------------- a. Assets recorded on the balance sheet: (1) Claims conditionally guaranteed by the U.S. RCON RCON Government and its agencies and other OECD ---- ---- central governments_______________________________3798. . N/A . . . . . . . . 5.a.1 (2) Claims collateralized by securities issued by the U.S. Government and its agencies and other OECD central governments; by securities issued by U.S. Government-sponsored agencies; and by cash on deposit___________________________________3799. . N/A . . . . . . . . 5.a.2 (3) All other_________________________________________3800. . 50,953 . . . . . . . . 5.a.3 b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . 3801. . N/A 5.b 6. Assets and credit amount of off-balance sheet items assigned to the 50 percent risk category: a. Assets recorded on the balance sheet__________________3802. . 3 . . . . . . . . 6.a b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . 3803. . N/A 6.b 7. Assets and credit equivalent amounts of off-balance sheet items assigned to the 100 percent risk category: a. Assets recorded on the balance sheet__________________3804. . 39,789 . . . . . . . . 7.a b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . 3805. . N/A 7.b 8. On-balance sheet asset values excluded from the calculation of the risk-based capital ratio(2)___________3806. . 7 . . . . . . . . 8. 9. Total assets recorded on the balance sheet (sum of items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC, item 12.c plus items 4.b and 4.c)___________3807. . 91,502 . . . . . . . . 9.
Memoranda
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------- RCON 1. Current credit exposure across all off-balance sheet derivative contracts ---- covered by the risk-based capital standards_________________________________________8764. . N/A M.1
------------------------ With a remaining maturity of ------------------------- (Column A) (Column B) (Column C) Over one year One year or less through five years Over five years -------------------- ---------------------- ----------------------- 2. Notional principal amounts of off-balance sheet derivative contracts: (3) RCON RCON RCON ---- ---- ---- a. Interest rate contracts 3809. . N/A 8766. . N/A 8767 N/A M.2a b. Foreign exchange contracts 3812. . N/A 8769. . N/A 8770 N/A M.2b c. Gold contracts 8771. . N/A 8772. . N/A 8773 N/A M.2c d. Other precious metals contracts 8774. . N/A 8775. . N/A 8776 N/A M.2d e. other commodity contracts 8777. . N/A 8778. . N/A 8779 N/A M.2e f. Equity derivative contracts A000. . N/A A001. . N/A A002 N/A M.2f
- --------- (1) Do not report in column B the risk-weighted amount of assets reported in column A. (2) Include the difference between the fair value and the amortized cost of available-for-sale securities in item 8 and report the amortized cost of these securities in items 4 through 7 above. Item 8 also includes on-balance sheet asset values (or portions thereof) of off-balance sheet interest rate, foreign exchange rate, and commodity contracts and those contracts (e.g. future contracts) not subject to risk-based capital. Exclude from item 8 margin accounts and accrued receivables as well as any portion of the allowance for loan and lease losses in excess of the amount that may be included in Tier 2 capital. (3) Exclude foreign exchange contracts with an original maturity of 14 days or less and all futures contracts. 28 Optional Narrative Statement Concerning the Amounts Reported in the Reports of Condition and Income at close of business on June 30, 1996
FIRST TRUST NATIONAL ASSOCIATION ST. PAUL MN - -------------------------------------------------------------- ------------------------ ------------------------------- Legal Title of Bank City State The management of the reporting bank may, if it wishes, submit the truncated statement will appear as the bank's statement a brief narrative statement on the amounts reported in the both on agency computerized records and in computer-file re- Reports of Condition and Income. This optional statement will leases to the public. be made available to the public, along with the publicly available data in the Reports of Condition and Income, in re- All information furnished by the bank in the narrative state- sponse to any request for individual bank report data, How- ment must be accurate and not misleading. Appropriate efforts ever, the information reported in column A and in all of Memo- shall be taken by the submitting bank to ensure the statement's randum item 1 of Schedule RC-N is regarded as confidential and accuracy. The statement must be signed, in the space provided will not be released to the public. BANKS CHOOSING TO SUBMIT below, by a senior officer of the bank who thereby attests to THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES its accuracy. NOT CONTAIN THE NAMES OR OTHER IDENTIFICATION OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CON- If, subsequent to the original submission, material changes are FIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER INFORMATION submitted for the data reported in the Reports of Condition and THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD Income, the existing narrative statement will be deleted from COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not the files, and from disclosure; the bank, at its option, may to make a statement may check the "No comment" box below and replace it with a statement, under signature, appropriate to should make no entries of any kind in the space provided for the amended data. the narrative statement; i.e., DO NOT enter in this space such phrases as "No statement," "Not applicable," "N/A," "No The optional narrative statement will appear in agency records comment," and "None." and in release to the public exactly as submitted (or amended as described in the preceding paragraph) by the management of the bank (except for the truncation of statements exceeding The optional statement must be entered on this sheet. The the 750-character limit described above). THE STATEMENT WILL statement should not exceed 100 words. Further, regardless NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY of the number of words, the statement must not exceed 750 AGENCIES FOR ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT characters, including punctuation, indentation, and standard SHALL NOT SIGNIFY THAT ANY FEDERAL SUPERVISORY AGENCY HAS VERI- spacing between words and sentences. If any submission should FIED OR CONFIRMED THE ACCURACY OF THE INFORMATION CONTAINED exceed 750 characters, as defined, it will be truncated at 750 THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY PUBLIC characters with no notice to the submitting bank and RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE REPORTING BANK. - ----------------------------------------------------------------------------------------------------------------------------------- C171 C172 < -
No comment: X (RCON 6979) BANK MANAGEMENT STATEMENT (please type or print clearly) (TEXT 6980): -------------------------------------- ----------------- Signature of Executive Officer of Bank Date of Signature 29 THIS PAGE TO BE COMPLETED BY ALL BANKS - ------------------------------------------------------------------------------- OMB No. for OCC: 1557-0081 OMB No. for FDIC: 3064-0052 OMB No. for Federal Reserve: 7100-0036 Expiration Date: 03/31/99 SPECIAL REPORT (Dollar Amounts in Thousands) CLOSE OF BUSINESS DATE: FDIC Certificate Number: June 30, 1996 90319 C700 < - - ------------------------------------------------------------------------------- LOANS TO EXECUTIVE OFFICERS (complete as of each Call Report Date) - ------------------------------------------------------------------------------- The following information is required by Public Laws 90-44 and 102-242, but does not constitute a part of the Report of Condition. With each Report of Condition, these Laws require all banks to furnish a report of all loans or other extensions of credit to their executive officers made since the date of the previous Report of Condition. Data regarding individual loans or other extensions of credit are not required. If no such loans or other extensions of credit were made during the period, insert "none" against subitem (a). (Exclude the first $15,000 of indebtedness of each executive officer under bank credit card plan.) See sections 215.2 and 215.3 of Title 12 of the Code of Federal Regulations (Federal Reserve Board Regulation O) for the definitions of "Executive officer" and "extension of credit," respectively. Exclude loans and other extensions of credit to directors and principal shareholders who are not executive officers. - -------------------------------------------------------------------------------
RCON ---- a. Number of loans made to executive officers since the previous Call Report date__________3561. . NONE a b. Total dollar amount of above loans (in thousands of dollars)________________________3562. . 0 b c. Range of interest charged on above loans (example: 9-3/4% = 9.75)________________7701/7702. . 0.00% to 0.00% c
- ----------------------------------------------------------------------------------------------------------- SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT: DATE (Month, Day, Year): /s/ [ , Asst. Secretary] 7-12-96 - ----------------------------------------------------------------------------------------------------------- NAME AND TITLE OF PERSON TO WHOM INQUIRES MAY BE DIRECTED: (TEXT 8903) AREA CODE/PHONE NUMBER/EXTENSION (TEXT 8904) (612) 973-3306 Diane F. Hamernik, Accountant - -----------------------------------------------------------------------------------------------------------
EX-25.A-2 11 EXHIBIT 25-A-2 FORM T-2 EXHIBIT 25-A-2 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) . . . [ ] JAMES A. EHRENBERG ###-##-#### (NAME OF TRUSTEE) (SOCIAL SECURITY NUMBER) C/O FIRST TRUST NATIONAL ASSOCIATION 180 EAST FIFTH STREET SAINT PAUL, MINNESOTA 55101 (BUSINESS ADDRESS: STREET, CITY, STATE AND ZIP CODE) OTTER TAIL POWER COMPANY (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) Minnesota 41-0462685 (State of Incorporation) (I.R.S. Employer Identification No.) 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 (Address of Principal Executive Offices) (Zip Code) ___% FIRST MORTGAGE BONDS (TITLE OF THE INDENTURE SECURITIES) GENERAL 1. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None 2. TRUSTEESHIPS UNDER OTHER INDENTURES. If the trustee is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, file a copy of each such indenture as an exhibit and furnish the following information: (a) Title of the securities outstanding under each such other indenture. There is no such other indenture. (b) A brief statement of the facts relied upon by the trustee as a basis for the claim that no conflicting interest within the meaning of Section 310(b)(1) of the Act arises as a result of the trusteeship under such other indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. Not applicable. ITEMS 3-11 ARE NOT APPLICABLE BECAUSE TO THE BEST OF THE TRUSTEE'S KNOWLEDGE THE OBLIGOR IS NOT IN DEFAULT UNDER ANY INDENTURE FOR WHICH THE TRUSTEE ACTS AS TRUSTEE. NOTE The answers to this statement insofar as such answers relate to what persons are owners of 10% or more of the voting securities of the obligor or its affiliates, and what persons are controlling, controlled by or under common control with, the obligor or its affiliates, are based upon information furnished to the trustee by the obligor. While the trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, I JAMES A. EHRENBERG, have signed this statement of eligibility in the City of St. Paul and State of Minnesota on the 27th day of August, 1996. By /s/ James A. Ehrenberg ----------------------------------- (Signature of Trustee) James A. Ehrenberg EX-25.A-3 12 EXHIBIT 25-A-3 EXHIBIT 25-A-3 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)...[ ] FIRST TRUST NATIONAL ASSOCIATION (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) United States 41-0257700 (State of Incorporation) (I.R.S. Employer Identification No.) First Trust Center 180 East Fifth Street St. Paul, Minnesota 55101 (Address of Principal Executive Offices) (Zip Code) OTTER TAIL POWER COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Minnesota 41-0462685 (State of Incorporation) (I.R.S. Employer Identification No.) 215 South Cascade Street Box 496 Fergus Falls, Minnesota 56538-0496 (Address of Principal Executive Offices) (Zip Code) __% DEBENTURES (TITLE OF THE INDENTURE SECURITIES) GENERAL 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. Comptroller of the Currency Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None See Note following Item 16. Items 3-15 are not applicable because to the best of the Trustee's knowledge the obligor is not in default under any Indenture for which the Trustee acts as Trustee 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this statement of eligibility and qualification. 1. Copy of Articles of Association. 2. Copy of Certificate of Authority to Commence Business. 3. Authorization of the Trustee to exercise corporate trust powers. 4. Copy of existing By-Laws. 5. Copy of each Indenture referred to in item 4. 6. The consents of the trustee required by Section 321(b) of the Act 7. Copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority NOTE The answers to this statement insofar as such answers relate to what persons are owners of 10% or more of the voting securities of the obligor or its affiliates, and what persons are controlling, controlled by or under common control with, the obligor or its affiliates, are based upon information furnished to the trustee by the obligor. While the trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, First Trust National Association, a National Trust Association organized and existing under the laws of the United States, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul and State of Minnesota on the 27th day of August, 1996. FIRST TRUST NATIONAL ASSOCIATION /s/ James A. Ehrenberg - --------------------------------- James A. Ehrenberg Senior Vice President /s/ Diane Chalupsky - --------------------------------- Diane Chalupsky Assistant Secretary Exhibit 1 FIRST TRUST NATIONAL ASSOCIATION I, Elizabeth Becker, the Secretary of First Trust National Association, a national banking association organized under the laws of the United States, hereby certify that the attached copy of the Articles of Association of First Trust National Association is full, true and complete copy of the original. I further certify that such Articles of Association have not been revoked and remain in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of First Trust National Association to be affixed hereto this 18th day of February, 1992. (Corporate Seal) /s/ Elizabeth Becker ---------------------------- Elizabeth Becker Secretary Sworn to before me this 18th day of February, 1992. /s/ Jeanne M. Erickson - --------------------------------- Notary Public certified/bylaws [logo] FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION FIRST. The title of the Association, which shall carry on the business of banking under the laws of the United States, shall be "First Trust National Association". Notwithstanding the foregoing, however, the Associaton shall not engage in any banking activities other than those within the scope of 12 U.S.C. Section 92a, and 12 C.F.R. 9, without the prior written approval of the Comptroller of the Currency. SECOND. The main office of the Association shall be in Saint Paul, County of Ramsey, State of Minnesota. The general business of the Association shall be conducted at its main office and branches. THIRD. The board of directors of the Association shall consist of not less than five nor more than 25 members. At any meeting of the shareholders held for the purpose of electing directors, or changing the number thereof, the number of directors may be determined by a majority votes cast by the shareholders in person or by proxy. Between meetings of the shareholders held for the purpose of electing directors, the board of directors by a majority vote of the full board may increase the size of the board by not more than four directors in any one year, but not to more than a total of 25 directors, and fill any vacancy created on the board. A majority of the board of directors shall be necessary to constitute a quorum for the transaction of business at any directors' meeting. Each director during the full term of directorship, shall own a minimum of One Thousand Dollars ($1,000.00) par value of stock of the Association, or an equivalent interest in stock of First Bank System, Inc. FOURTH. The regular annual meeting of the shareholders of the Association shall be held at its main office, or other convenient place duly authorized by the board of directors, on such day of each year as is specified therefore in the Bylaws, but if no election is held on that day, it may be held on any subsequent day according to such lawful rules as may be prescribed by the board of directors. FIFTH. The amount of capital stock of the Association shall be divided into 10,000 shares of common stock at the par value of One Hundred Dollars ($100.00) each; but such capital stock may be increased or decreased from time to time, in accordance with the provisions of the laws of the United States. If the capital stock is increased by the sale of additional shares thereof, each shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of each capital stock owned by each such shareholder at the time FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION the increase is authorized by the shareholders, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized. The board of directors shall have the power to prescribe a reasonable period of time within which the pre-emptive rights to subscribe to the new shares of capital stock must be exercised. If the capital stock is increased by a stock dividend, each shareholder shall be entitled to such shareholder's proportionate amount of such increase in accordance with the number of shares of capital stock owned by such shareholder at the time the increase is authorized by the shareholders, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. In the event such debt obligations are convertible to capital stock of the Association, each shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of capital stock owned by such shareholder one month prior to the issuance of capital stock in satisfaction of such convertible debt obligations. SIXTH. The board of directors shall appoint one of its members as the Association's chief executive officer (however titled) who shall have and exercise the rights and responsibilities of "president" as established by law. Such chief executive officer shall be chairman of the board, unless the board appoints another director to be chairman. The board shall have the power to appoint (or provide for the appointment of) such officers and employees as may be required to transact the business of the Association; to fix the salaries to be paid to such officers and employees of the Association; and to dismiss any of such officers or employees and appoint others to take their places. The board of directors shall have the power to define the duties of officers and employees of the Association and to require adequate bonds from them for the faithful performance of their duties; to regulate the manner in which any increase of the capital of the Association shall be made; to make all Bylaws that may be lawful for the general regulation of the business of the Association and the management of its affairs; and generally to do and perform all acts that may be lawful for a board of directors to do and perform. -2- FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION SEVENTH. The board of directors shall have the power to change the location of the main office of the Association to any other place within the limits of Saint Paul, Minnesota, without the approval of the shareholders of the Association but subject to the approval of the Comptroller of the Currency; and shall have the power to change the location of any branch or branches of the Association to any other location, without the approval of the shareholders of the Association but subject to the approval of the Comptroller of the Currency. EIGHTH. The Association shall have succession from the date of its organization certificate until such time as it be dissolved by the act of its shareholders in accordance with the provisions of the laws of the United States, or until its franchise becomes forfeited by reason of violation of law, or until terminated by either a general or a special act of Congress, or until its affairs be placed in the hands of a receiver and finally wound up by such receiver. NINTH. The board of directors of the Association, or any three or more shareholders owning, in the aggregate, not less than ten percent of the stock of the Association, may call a special meeting of shareholders at any time. Provided, however, that unless otherwise provided by law, not less than ten days prior to the date fixed for any such meeting, a notice of the time, place, and purpose of the meeting shall be given by first-class mail, postage prepaid, to all shareholders of record of the Association at their respective addresses as shown upon the books of the Association. TENTH. Any action required to be taken at a meeting of the shareholders or directors or any action which may be taken at a meeting of the shareholders or directors may be taken without a meeting if consent in writing, setting forth the action as taken shall be signed by all the shareholders or directors entitled to vote with respect to the matter thereof. Such action shall be effective on the date on which the last signature is placed on the writing, or such earlier date as is set forth therein. ELEVENTH. Meetings of the board of directors or shareholders, regular or special, may be held by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can simultaneously hear each other, and participation in such meeting by such aforementioned means shall constitute presence in person at such meeting. TWELFTH. Any person, such person's heirs, executors, or administrators, may be indemnified or reimbursed by the Association for reasonable expenses actually incurred in connection with any action, suit or proceeding, civil or -3- FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION criminal to which such person or such person's heirs, executors, or administrators shall be made a party by reason of such person being or having been a director, advisory director, officer, employee, or agent of the Association or of any firm, corporation, or organization which such person served in any such capacity at the request of the Association. Provided, however, that no person shall be so indemnified or reimbursed in relation to any matter in such action, suit or proceeding as to which such person shall finally be adjudged to have been guilty of or liable for gross negligence, willful misconduct or criminal acts in the performance of such person's duties to the Association. And, provided further, that no person shall be so indemnified or reimbursed in relation to any matter in such action, suit, or proceeding which has been made the subject of a compromise settlement except with the approval of a court of competent jurisdiction, or the holders of record of a majority of the outstanding shares of the Association, or the board of directors acting by vote of directors not parties to the same or substantially the same action, suit or proceeding, constituting a majority of the whole number of directors. The foregoing right of indemnification or reimbursement shall not be exclusive of other rights to which such persons, their heirs, executors, or administrators, may be entitled as a matter of law. The Association may, upon the affirmative vote of a majority of its board of directors, purchase insurance for the purpose of indemnifying its directors, advisory directors, officers, employees and agents to the extent that such indemnification is allowed in the preceding paragraph. Such insurance shall not provide coverage of liability for any formal order issued by a regulatory authority assessing civil money penalties against an officer, director or employee. Further, such insurance may, but need not be, for the benefit of all directors, advisory directors, officers, employees or agents. Expenses incurred by an officer, director or employee in defending a civil or criminal action, suit or proceeding may be paid by the Association in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such individual or officer to repay such amount if it shall ultimately be determined that such individual is not entitled to be indemnified by the Association. Prior to the advancement of any such expenses, the board of directors shall determine in writing that all of the following conditions are met: (1) the officer, director or employee has a substantial likelihood of prevailing on the merits; (2) in the event the officer, director or employee does not prevail, he or she will have the financial capability to reimburse the Association; and (3) payment of such expenses by the Association will not adversely affect bank safety and soundness. If at any time the board of directors believes, or should reasonably believe, that any of the above conditions are not met, the -4- FIRST TRUST NATIONAL ASSOCIATION ARTICLES OF ASSOCIATION Association shall cease paying such expenses. Further, the Association shall enter into a written agreement with the director, officer or employee specifying the conditions under which such individual shall reimburse the Association. THIRTEENTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of the Association, unless the vote of the holders of a greater amount of stock is required by law and in that case by the vote of the holders of such greater amount. The notice of any shareholders' meeting at which an amendment to the Articles of Association of the Association is to be considered, shall be given as hereinabove set forth. ---- ---- ---- -5- Exhibit 2 OFFICE OF COUNTY RECORDER RAMSEY COUNTY, MINNESOTA I, JOHN C. MCLAUGHLIN, County Recorder of said County and State, do hereby certify that I have compared the foregoing paper photograph with the original record now remaining in this office, and that the same is a correct photographic transcript therefrom and of the whole of said original record as the same appears in Ramsey County Records as Document Number 2426124. (County Recorder Seal) In Witness Whereof, I have hereunto subscribed my name and affixed my official seal of the City of St. Paul, in said County, this 4th day of February, A.D. 1988 JOHN C. MCLAUGHLIN, County Recorder By: Barbara Vikliman Deputy ------------------------- ROS201 COMPTROLLER OF THE CURRENCY TREASURY DEPARTMENT OF THE UNITED STATES Washington, D.C. WHEREAS, satisfactory evidence has been presented to the Comptroller of the Currency that FIRST TRUST COMPANY, INC., located in ST. PAUL State of MINNESOTA has complied with all provisions of the states of the United States required to be complied with before being authorized to commence the business of banking as a National Banking Association. NOW, THEREFORE. Thereby certify that the above named association is authorized to commence the business of banking as a National Banking Association under the title "FIRST TRUST NATIONAL ASSOCIATION" effective DECEMBER 31, 1987 ( SEAL ) In testimony whereof, witness my signature and seal of office this 31st day of December 1987 Charter No. 21467 /s/ Robert R. Klinzing ------------------------------- Robert R. Klinzing Deputy Comptroller of the Currency Midwestern District Exhibit 3 Comptroller of the Currency Administrator of National Banks Midwestern District 2345 Grand Avenue, Suite 700 Kansas City, Missouri 64105 December 31, 1987 Mr. Mark W. Sheffert Chairman of the Board & CEO First Trust National Association First Trust Center 180 East Fifth Street St. Paul, Minnesota 55101 Dear Mr. Sheffert: The Office of the Comptroller of the Currency has received, reviewed, and found no exception to the documents submitted by your bank to complete the conversion process. Your charter certificate is enclosed. You are authorized to commence business as a national trust association on December 31, 1987. This national trust company will not engage in any banking activities other than those within the scope of 12 U.S.C. 92a, and 12 C.F.R. 9, without the prior written approval of the OCC. This letter also hereby constitutes official authorization by the Office to exercise fiduciary powers. A separate fiduciary powers permit will be sent under separate cover by the Trust Activities Division in Washington, D.C. Sincerely, /s/ Thomas C. McAllister - ---------------------------- Thomas C. McAllister Director for Analysis Midwestern District - ------------------------------------------------------------------------------ Comptroller of the Currency Administrator of National Banks - ------------------------------------------------------------------------------ Washington, D.C. 20219 TRUST CERTIFICATE WHEREAS, FIRST TRUST NATIONAL ASSOCIATION, located in St. Paul, State of Minnesota, being a National Banking Association, organized under the statutes of the United States, has made application for authority to act as fiduciary; AND WHEREAS, applicable provisions of the statutes of the United States authorize the grant of such authority; NOW THEREFORE, I hereby certify that the said association was granted the authority to act in all fiduciary capacities permitted by such statutes, effective December 31, 1987. ( SEAL ) IN TESTIMONY WHEREOF, witness my signature and seal of Office this Eighth day of September 1989. /s/ ROBERT L. CLARKE -------------------------------- ROBERT L. CLARKE COMPTROLLER OF THE CURRENCY CHARTER NO. 21467 Exhibit 4 FIRST TRUST NATIONAL ASSOCIATION I, Elizabeth Becker, the Secretary of First Trust National Association, a national banking association organized under the laws of the United States, hereby certify that the attached copy of the Bylaws of First Trust National Association is a full, true and complete copy of the original. I further certify that such Bylaws have not been revoked and remain in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of First Trust National Association to be affixed hereto this 27th day of July, 1993. (Corporate Seal) /s/ Elizabeth Becker ---------------------------- Elizabeth Becker Secretary Sworn to before me this 27th day of July, 1993. /s/ Jeanne M. Erickson - ------------------------------ Notary Public certified/bylaws [logo] FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE I MEETINGS OF SHAREHOLDERS Section 1.1. ANNUAL MEETING. The annual meeting of the shareholders, for the election of directors and the transaction of other business, shall be held at a time and place as the Chairman or President may designate. Notice of such meeting shall be given at least ten days prior to the date thereof, to each shareholder of the Association. If, for any reason, an election of directors is not made on the designated day, the election shall be held on some subsequent day, as soon thereafter as practicable, with prior notice thereof. Section 1.2. SPECIAL MEETINGS. Except as otherwise specially provided by law, special meetings of the shareholders may be called for any purpose, at any time by a majority of the board of directors, or by any shareholder or group of shareholders owning at least ten percent of the outstanding stock. Every such special meeting, unless otherwise provided by law, shall be called upon not less than ten days prior notice stating the purpose of the meeting. Section 1.3. NOMINATIONS FOR DIRECTORS. Nominations for election to the board of directors may be made by the board of directors or by any shareholder. Section 1.4. PROXIES. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing. Proxies shall be valid only for one meeting and any adjournments of such meeting and shall be filed with the records of the meeting. Section 1.5. QUORUM. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association. - 1 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE II Section 2.1. BOARD OF DIRECTORS. The board of directors (hereinafter referred to as the "board"), shall have power to manage and administer the business and affairs of the Association. All authorized corporate powers of the Association shall be vested in and may be exercised by the board. Section 2.2 POWERS. In addition to the foregoing, the board of directors shall have and may exercise all of the powers granted to or conferred upon it by the Articles of Association, the Bylaws and by law. Section 2.3. NUMBER. The board shall consist of a number of members to be fixed and determined from time to time by resolution of the board or the shareholders at any meeting thereof, in accordance with the Articles of Association. Section 2.4 ORGANIZATION MEETING. The newly elected board shall meet for the purpose of organizing the new board and electing and appointing such officers of the Association as may be appropriate. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within thirty days thereafter. If, at the time fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting until a quorum is obtained. Section 2.5 REGULAR MEETINGS. The regular meetings of the board shall be held, without notice, as the Chairman or President may designate and deem suitable. Section 2.6 SPECIAL MEETINGS. Special meetings of the board may be called by the Chairman or the President of the Association, or at the request of two or more directors. Each member of the board shall be given notice stating the time and place of each such meeting. Section 2.7. QUORUM. A majority of the directors shall constitute a quorum at any meeting, except when otherwise provided by law; but fewer may adjourn any meeting. Unless otherwise provided, once a quorum is established, any act by a majority of those constituting the quorum shall be the act of the board. Section 2.8. VACANCIES. When any vacancy occurs among the directors, the remaining members of the board may appoint a director to fill such vacancy at any regular meeting of the board, or at a special meeting called for that purpose. - 2 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE III Section 3.1. ADVISORY BOARD OF DIRECTORS. The board may appoint persons, who need not be directors, to serve as advisory directors on an advisory board of directors established with respect to the business affairs of either this Association alone or the business affairs of a group of affiliated organizations of which this Association is one. Advisory directors, shall have such powers and duties as may be determined by the board, provided, that the board's responsibility for the business and affairs of this Association shall in no respect be delegated or diminished. Section 3.2 AUDIT COMMITTEE. The board shall appoint an Audit Committee which shall consist of at least two Directors which are not active officers or employees of the Association. The Audit Committee shall direct and review audits of the Association's fiduciary activities. The members of the Audit Committee shall be appointed each year and shall continue to act until their successors are named. The Audit Committee shall have power to adopt its own rules and procedures and to do those things which in the judgment of such Committee are necessary or helpful with respect to the exercise of its functions or the satisfaction of its responsibilities. Section 3.3 EXECUTIVE COMMITTEE. The board may appoint an Executive Committee which shall consist of at least three directors and which shall have, and may exercise, all the powers of the board between meetings of the board or otherwise when the board is not meeting. Section 3.4 OTHER COMMITTEES. The board may appoint, from time to time, committees of one or more persons who need not be directors, for such purposes and with such powers as the board may determine. In addition, either the Chairman or the President may appoint, from time to time, committees of one or more officers, employees, agents or other persons, for such purposes and with such powers as either the Chairman or the President deems appropriate and proper. Whether appointed by the board, the Chairman, or the President, any such Committee shall at all times be subject to the direction and control of the board. - 3 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS Section 3.5. MEETINGS, MINUTES AND RULES. An advisory board of directors and/or committee shall meet as necessary in consideration of the purpose of the advisory board of directors or committee, and shall maintain minutes in sufficient detail to indicate actions taken or recommendations made; unless required by the members, discussions, votes or other specific details need not be reported. An advisory board of directors or a committee may, in consideration of its purpose, adopt its own rules for the exercise of any of its functions or authority. ARTICLE IV OFFICERS AND EMPLOYEES Section 4.1 CHAIRMAN OF THE BOARD. The board may appoint one of its members to be Chairman of the board to serve at the pleasure of the board. The Chairman shall supervise the carrying out of the policies adopted or approved by the board; shall have general executive powers, as well as the specific powers conferred by these Bylaws; shall also have and may exercise such powers and duties as from time to time may be conferred upon or assigned by the board. Section 4.2 PRESIDENT. The board may appoint one of its members to be President of the Association. In the absence of the Chairman, the President shall preside at any meeting of the board. The President shall have general executive powers, and shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the Office of President, or imposed by these Bylaws. The President shall also have and may exercise such powers and duties as from time to time may be conferred or assigned by the Board. Section 4.3 VICE PRESIDENT. The board may appoint one or more Vice Presidents who shall have such powers and duties as may be assigned by the board and to perform the duties of the President on those occasions when the President is absent, including presiding at any meeting of the board in the absence of both the Chairman and the President. Section 4.4 SECRETARY. The board shall appoint a Secretary, or other designated officer who shall be Secretary of the board and of the Association, and shall keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these Bylaws to be given; shall be custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records of all transactions of the Association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the Secretary, or imposed by these Bylaws; and shall also perform such other duties as may be assigned from time to time, by the Board. - 4 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS Section 4.5 OTHER OFFICERS. The board may appoint, and may authorize the Chairman or the President to appoint, any officer as from time to time may appear to the board, the Chairman or the President to be required or desirable to transact the business of the Association. Such officers shall exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon or assigned to them by these Bylaws, the board, the Chairman or the President. Section 4.6 TENURE OF OFFICE. The Chairman or the President and all other officers shall hold office for the current year for which the board was elected, unless they shall resign, become disqualified, or be removed. Any vacancy occurring in the Office of Chairman or President shall be filled promptly by the board. Any officer elected by the board or appointed by the Chairman or the President may be removed at any time, with or without cause, by the affirmative vote of a majority of the board or, if such officer was appointed by the Chairman or the President, by the Chairman or the President, respectively. ARTICLE V STOCK Section 5.1. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to such person's shares, succeed to all rights of the prior holder of such shares. Each certificate of stock shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. ARTICLE VI CORPORATE SEAL Section 6.1. The Chairman, the President, the Secretary, any Assistant Secretary or other officer designed by the board, the Chairman, or the President, shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form: [SEAL] - 5 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE VII MISCELLANEOUS PROVISIONS Section 7.1 EXECUTION OF INSTRUMENTS. All agreements, checks, drafts, orders, indentures, notes, mortgages, deeds, conveyances, transfers, endorsements, assignments, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, guarantees, proxies and other instruments or documents may be signed, countersigned, executed, acknowledged, endorsed, verified, delivered or accepted on behalf of the Association, whether in a fiduciary capacity or otherwise, by any officer of the Association, or such employee or agent as may be designated from time to time by the board by resolution, or by the Chairman or the President by written instrument, which resolution or instrument shall be certified as in effect by the Secretary or an Assistant Secretary of the Association. The provisions of this section are supplementary to any other provision of the Articles of Association or Bylaws. Section 7.2. RECORDS. The Articles of Association, the Bylaws and the proceedings of all meetings of the shareholders, the board, and standing committees of the board, shall be recorded in appropriate minute books provided for the purpose. The minutes or each meeting shall be signed by the Secretary, or other officer appointed to act as Secretary of the meeting. Section 7.3. TRUST FILES. There shall be maintained in the Association files all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged. Section 7.4. TRUST INVESTMENTS. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and according to law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under law. Section 7.5 NOTICE. Whenever notice is required by the Articles of Association, the Bylaws or law, such notice shall be by mail, postage prepaid, telegram, in person, or by any other means by which such notice can reasonably be expected to be received, using the address of the person to receive such notice, or such other personal data, as may appear on the records of the Association. Prior notice shall be proper if given not more than 30 days nor less than 10 days prior to the event for which notice is given. - 6 - FIRST TRUST NATIONAL ASSOCIATION BYLAWS ARTICLE VIII INDEMNIFICATION Section 8.1. The association shall indemnify to the full extent permitted by, and in the manner permissible under, the Articles of Association and the laws of the United States of America, as applicable and as amended from time to time, any person made, or threatened to be made, a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was a director, advisory director, officer or employee of the Association, or any predecessor of the Association, or served any other enterprise as a director or officer at the request of the Association or any predecessor of the Association. Section 8.2 The board in its discretion may, on behalf of the Association, indemnify any person, other than a director, advisory director, officer or employee, made a party to any action, suit or proceeding by reason of the fact that such person is or was an agent of the Association or any predecessor of the Association serving in such capacity at the request of the Association or any predecessor of the Association. ARTICLE IX BYLAWS: INTERPRETATION AND AMENDMENT Section 9.1. These Bylaws shall be interpreted in accordance with and subject to appropriate provisions of law, and may be amended, altered or repealed, at any regular or special meeting of the board. Section 9.2. A copy of the Bylaws, with all amendments, shall at all times be kept in a convenient place at the main office of the Association, and shall be open for inspection to all shareholders during Association hours. --- --- --- - 7 - Exhibit 6 CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: August 27, 1996 FIRST TRUST NATIONAL ASSOCIATION /s/ James A. Ehrenberg -------------------------------- James A. Ehrenberg Senior Vice President Exhibit 7 Board of Governors of the Federal Reserve System OMB Number: 7100-0036 Federal Deposit Insurance Corporation OMB Number: 3064-0052 Office of the Comptroller of the Currency OMB Number: 1557-0081 Expires March 31, 1999 Federal Financial Institutions Examination Council - -------------------------------------------------------------------------------- /1/ [LOGO] Please refer to page 1, Table of Contents, for the required disclosure of estimated burden. - -------------------------------------------------------------------------------- CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC OFFICES ONLY AND TOTAL ASSETS OF LESS THAN $100 MILLION - FFIEC 034 (960630) Report at the close of business June 30, 1996 ----------- (RCRI 9999) This report is required by law: 12 U.S.C. Section 324 (State member banks); 12 U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161 (National banks). This report form is to be filed by banks with domestic offices only. Banks with branches and consolidated subsidiaries in U.S. territories and possessions, Edge or Agreement subsidiaries, foreign branches, consolidated foreign subsidiaries, or International Banking Facilities must file FFIEC 031. - -------------------------------------------------------------------------------- NOTE: The Reports of Condition and Income must be signed by an authorized officer and the Report of Condition must be attested to by not less than two directors (trustees) for State nonmember banks and three directors for State member and National banks. I, MERITA D. SCHOLLMEIER, ASSISTANT SECRETARY --------------------------------------------------- Name and Title of Officer Authorized to Sign Report of the named bank do hereby declare that these Reports of Condition and Income (including the supporting schedules) have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief. /s/ Merita D. Schollmeier - ----------------------------------------------- Signature of Officer Authorized to Sign Report 7/11/96 - ----------------------------------------------- Date of Signature - ----------------------------------------------- The Reports of Condition and Income are to be prepared in accordance with Federal regulatory authority instructions. NOTE: These instructions may in some cases differ from generally accepted accounting principles. We, the undersigned directors (trustees), attest to the correctness of this Report of Condition (including the supporting schedules) 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 appropriate Federal regulatory authority and is true and correct. /s/ - ----------------------------------------------- Director (Trustee) /s/ - ----------------------------------------------- Director (Trustee) /s/ - ----------------------------------------------- Director (Trustee) - -------------------------------------------------------------------------------- For Banks Submitting Hard Copy Report Forms: STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal Reserve District Bank. STATE NONMEMBER BANKS: Return the original only in the SPECIAL RETURN ADDRESS ENVELOPE PROVIDED. If express mail is used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. NATIONAL BANKS: Return the original only in the SPECIAL RETURN ADDRESS ENVELOPE PROVIDED. If express mail is used in lieu of the special return address envelope, return the original only to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114. - -------------------------------------------------------------------------------- FDIC Certificate Number /9/0/3/1/9/ ----------- (RCRI 9050) CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC OFFICES ONLY AND TOTAL ASSETS LESS THAN $100 MILLION - -------------------------------------------------------------------------------- TABLE OF CONTENTS SIGNATURE PAGE COVER REPORT OF INCOME Schedule RI - Income Statement.................................... RI-1, 2, 3 Schedule RI-A - Changes in Equity Capital......................... RI-3 Schedule RI-B - Charge-offs and Recoveries and Changes in Allowance for Loan and Lease Losses.................. RI-4, 5 Schedule RI-C - Applicable Income Taxes by Taxing Authority....... RI-5 Schedule RI-E - Explanations...................................... RI-5,6 REPORT OF CONDITION Schedule RC - Balance Sheet....................................... RC-1,2 Schedule RC-B - Securities........................................ RC-3,4 Schedule RC-C - Loans and Lease Financing Receivables: Part I. Loans and Leases ....................................... RC-5,6 Part II. Loans to Small Businesses and Small Farms (included in the forms for June 30, only).............................. RC-6a, 6b Schedule RC-E - Deposit Liabilities .............................. RC-7,8 Schedule RC-F - Other Assets ..................................... RC-9 Schedule RC-G - Other Liabilities................................. RC-9 Schedule RC-K - Quarterly Averages................................ RC-10 Schedule RC-L - Off-Balance Sheet Items........................... RC-11,12 Schedule RC-M - Memoranda......................................... RC-13,14 Schedule RC-N - Past Due and Nonaccrual Loans, Leases, and Other Assets.................................................... RC-15 Schedule RC-O - Other Data for Deposit Insurance Assessments..................................................... RC-16,17 Schedule RC-R - Regulatory Capital ............................... RC-18,19 Optional Narrative Statement Concerning the Amounts Reported in the Reports of Condition and Income................. RC-20 Special Report (TO BE COMPLETED BY ALL BANKS) Schedule RC-J - Repricing Opportunities (sent only to and to be completed only by savings banks) DISCLOSURE OF ESTIMATED BURDEN The estimated average burden associated with this information collection is 32.2 hours per respondent and is estimated to vary from 15 to 230 hours per response, depending on individual circumstances. burden estimates include the time for reviewing instructions, gathering and maintaining data in the required form, and completing the information collection, but exclude the time for compiling and maintaining business records in the normal course of a respondent's activities. Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, D.C. 20503, and to one of the following: SECRETARY Board of Governors of the Federal Reserve System Washington, D.C. 20851 LEGISLATIVE AND REGULATORY ANALYSIS DIVISION Office of the Comptroller of the Currency Washington, D.C. 20219 ASSISTANT EXECUTIVE SECRETARY Federal Deposit Insurance Corporation Washington, D.C. 20429 For information or assistance, national and state nonmember banks should contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington, D.C. 20429, toll free on (800) 688-FDIC(3342), Monday through Friday between 8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their Federal Reserve District Bank. CONSOLIDATED REPORT OF INCOME FOR THE PERIOD JANUARY 1, 1996 - JUNE 30, 1996 ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE BASIS IN THOUSANDS OF DOLLARS. SCHEDULE RI - INCOME STATEMENT
I180 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------ 1. Interest Income: a. Interest and fee income on loans (1,2): RIAD (1) Total loans (to be completed only by those banks with less than ---- $25 million in total assets)____________________________________________ 4010. . 0 1.a.1 The following four items are to be completed only by those banks with $25 million or more in total assets (1,2) (2) Real estate loans________________________________________________________ 4246. . N/A 1.a.2 (3) Installment loans________________________________________________________ 4247. . N/A 1.a.3 (4) Credit cards and related plans___________________________________________ 4248. . N/A 1.a.4 (5) Commercial (time and demand) and all other loans_________________________ 4249. . N/A 1.a.5 b. Income from lease financing receivables______________________________________ 4065. . 0 1.b c. Interest income on balances due from depository institutions (3)_____________ 4115. . 77 1.c d. Interest and dividend income on securities: (1) Securities issued by states and political subdivisions in the U.S.: (a) Taxable securities__________________________________________________ 4506. . 0 1.d.1a (b) Tax-exempt securities_______________________________________________ 4507. . 11 1.d.1b (2) U.S. Government and other debt securities_______________________________ 3660. . 0 1.d.2 (3) Equity securities (including investments in mutual funds)_______________ 3659. . 23 1.d.3 e. Interest income from trading assets__________________________________________ 4069. . 0 1.e f. Interest income on federal funds sold (4) and securities purchased under agreements to resell_________________________________________________________ 4020. . 24 1.f g. Total interest income (sum of items 1.a through 1.f)_________________________ 4107. . 135 1.g
_________________ (1) See instructions for loan classifications used in this schedule. (2) The $25 million asset size test is generally based on the total assets reported on the June 30, 1995 Report of Condition. (3) Includes interest income on time certificates of deposit not held for trading. (4) Report interest income on "term federal funds sold" in Schedule R1, Item 1.a, "Interest and fee income on loans." 4 Schedule RI - Continued
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 2. Interest expense: a. Interest on deposits: (1) Transaction accounts (NOW accounts, ATS accounts, and RIAD Year-to-date telephone and preauthorized transfer accounts) ______________4508. . 0 . . . . . . . . 2.a.1 (2) Nontransaction accounts: (a) Money market deposit accounts (MMDAs) ___________________4509. . 0 . . . . . . . . 2.a.2 (b) Other savings deposits __________________________________4511. . 0 . . . . . . . . 2.a.2b (c) Time certificates of deposit of $ 100,000 or more _______4174. . 0 . . . . . . . . 2.a.2c (d) All other time deposits (1) _____________________________4512. . 0 . . . . . . . . 2.a.2d b. Expense of federal funds purchased (2) and securities sold under agreements to repurchase __________________________________4180. . 219 . . . . . . . . 2.b c. Interest on demand notes issued to the U.S. Treasury, trading liabilities, and on other borrowed money ________________________4185. . 0 . . . . . . . . 2.c d. Interest on mortgage indebtedness and obligations under capitalized leases ______________________________________________4072. . 0 . . . . . . . . 2.d e. Interest on subordinated notes and debentrues ___________________4200. . 0 . . . . . . . . 2.e f. Total interest expense (sum of items 2.a through 2.e) ___________4073. . 219 . . . . . . . . 2.f 3. Net interest income (item 1.g minus 2.f) ___________________________4074. . . . . . . . . . . . ( 84) 3. 4. Provisions a. Provision for loan and lease losses _____________________________4230. . . . . . . . . . . . 0 4.a b. Provision for allocated transfer risk ___________________________4243. . . . . . . . . . . . 0 4.b 5. Noninterest income: a. Service charges on deposit accounts _____________________________4080. . 0 . . . . . . . . 5.a b. Other noninterest income: (1) Other fee income ____________________________________________5407. . 51,150 . . . . . . . . 5.b.1 (2) All other noninterest income * ______________________________5408. . 14,960 . . . . . . . . 5.b.2 c. Total noninterest income (sum of items 5.a and 5.b) _____________4079. . . . . . . . . . . . 66,110 5.c 6. a. Realized gains (losses) on held-to-maturity securities __________3521. . . . . . . . . . . . 0 6.a b. Realized gains (losses) on available-for-sale securities ________3196. . . . . . . . . . . . 0 6.b 7. Noninterest expense: a. Salaries and employee benefits __________________________________4135. . 24,074 . . . . . . . . 7.a b. Expenses of premises and fixed assets (net of rental income) (excluding salaries and employee benefits and mortgage interest) _______________________________________________________4217. . 3,830 . . . . . . . . 7.b c. Other noninterest expense * _____________________________________4092. . 16,555 . . . . . . . . 7.c d. Total noninterest expense (sum of items 7.a through 7.c) ________4093. . . . . . . . . . . . 44,459 7.d 8. Income (loss) before income taxes and extraordinary items and other adjustments (item 3 plus or minus items 4.a, 4.b, 5.c, 6.a, 6.b, and 7.d) _________________________________________________4301. . . . . . . . . . . . 21,567 8. 9. Applicable income taxes (on item 8)_________________________________4302. . . . . . . . . . . . 8,024 9. 10. Income (loss) before extraordinary items and other ajustments (item 8 minus 9) ___________________________________________________4300. . . . . . . . . . . . 13,543 10. 11. Extraordinary items and other adjustments: a. Extraordinary items and other adjustments, gross of income taxes * _________________________________________________________4310. . 0 . . . . . . . . 11.a b. Applicable income taxes (on item 11.a) * ________________________4315. . 0 . . . . . . . . 11.b c. Extraordinary items and other adjustments, net of income taxes (item 11.a minus 11.b) _____________________________4320. . . . . . . . . . . . 0 11.c 12. Net income (loss) (sum of items 10 and 11.c)________________________4340. . . . . . . . . . . . 13,543 12.
- --------------- (1) Includes interest expense on open-account time deposits of $ 100,000 or more. (2) Report the expense of "term federal funds purchased" in Schedule RI, item 2.c, "Interest on demand notes issued to the U.S. Treasure, trading liabilities and other borrowed money." * Describe on Schedule RI-E - Explanations. 5 Schedule RI - Continued
I181 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ MEMORANDA RIAD 1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired ---- Year-to-date after August 7, 1986, that is not deductible for federal income tax purposes ____________4513. . 0 M.1 2. Income from the sale and servicing of mutual funds and annuities (included in Schedule RI, item 8) ____________________________________________________________________8431. . 0 M.2 3. Estimated income on tax-exempt loans and leases to states and political subdivisions in the U.S. (reportable in Schedule RC-C, part I, items 7 and 9) included in Schedule RI, items 1.a and 1.b, above (excludes income on tax-exempt securities) ________4313. . 0 M.3 4. Number of full-time equivalent employees on payroll at end of current period (round to NUMBER nearest whole number) ___________________________________________________________________4150. . 1,097 M.4 5. Cash dividends declared during the calendar year to date (to be reported only with March, June, and September Reports of Income) ___________________________________________4475. . 4,000 M.5 6. To be completed by banks with $25 million or more in total assets and with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans. (2) Interest and fee income on agricultural loans (1) (included in item 1.a above) __________4251. . 0 M.6 7. If the reporting bank has restated its balance sheet as a result of applying push down MM DD YY accounting this calendar year, report the date of the bank's acquisition ________________9106. . N/A M.7
- ----------------- (1) See instructions for loan classifications used in this schedule. (2) The $25 million asset size test and the five percent of total loans test are generally base on the total assets reported on the June 30, 1995 Report of Condition. Schedule RI-A - Changes in Equity Capital Schedule RI-A is to be reported with the December Report of Income. Indicate decreases and losses in parentheses.
I183 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Total equity capital originally reported in the December 31, 1995, Reports of RAID ---- Condition and Income _____________________________________________________________3215. . N/A 1. 2. Equity capital adjustments from amended Report of Income, net * __________________3216. . N/A 2. 3. Amended balance end of previous calendar year (sum of items 1 and 2) _____________3217. . N/A 3. 4. Net income (loss) (must equal Schedule RI, item 12) ______________________________4340. . N/A 4. 5. Sale, conversion, acquisition, or retirement of capital stock, net _______________4346. . N/A 5. 6. Changes incident to business combinations, net ___________________________________4356. . N/A 6. 7. LESS: Cash dividends declared on preferred stock _________________________________4470. . N/A 7. 8. LESS: Cash dividends declared on common stock ____________________________________4460. . N/A 8. 9. Cumulative effect of changes in accounting principles from prior years * (see instructions for this schedule) __________________________________________________4411. . N/A 9. 10. Corrections of material accounting errors from prior years *(see instructions for this schedule) ___________________________________________________________________4412. . N/A 10. 11. Change in net unrealized holding gains (losses) on available-for-sale securities__8433. . N/A 11. 12. Other transactions with parent holding company * (not included in item 5, 7, or 8 above) _________________________________________________________________________4415. . N/A 12. 13. Total equity capital end of current period (sum of items through 12) (must equal Schedule RC, item 28.a) __________________________________________________________3210. . N/A 13.
- --------------------- * Describe on Schedule RI-E -Explanations. 6 Schedule RI-B - Charge-Offs and Recoveries and Changes in Allowance for Loan and Lease Losses Part I. Charge-offs and Recoveries on Loans and Leases (1)
I186 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ -----------------------Calendar year-to-date------------------------ Column A Column B Charge-offs Recoveries ----------------------- ---------------------- RIAD RIAD ---- ---- 1. Real estate loans ____________________________________________4256. . 0 4257. . 0 1. 2. Installment loans ____________________________________________4258. . 0 4259. . 0 2. 3. Credit cards and related plans _______________________________4262. . 0 4263. . 0 3. 4. Commercial (time and demand) and all other loans______________4264. . 0 4265. . 0 4. 5. Lease financing receivables __________________________________4266. . 0 4267. . 0 5. 6. Total (sum of items 1 through 5) _____________________________4635. . 0 4605. . 0 6. Memoranda Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 1. To be completed by banks with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans. RIAD RIAD Agricultural loans included in part I,, items 1 ---- ---- through 4, above ____________________________________________4268. . 0 4269. . 0 M.1 2. Not applicable. 3. Not applicable. 4. Loans to finance commercial real estate, construction and land development activities (not secured by real RIAD RIAD estate) included in Schedule RI-B, part I, ---- ---- items 2 through 4, above ____________________________________5443. . 0 5444. . 0 M.4 5. Real estate loans (sum of Memorandum items 5.a through 5.e must equal Schedule RIAD RIAD Ri-B, part I, item 1, above): ---- ---- a. Construction and land development _______________________5445. . 0 5446. . 0 M.5.a b. Secured by farmland _____________________________________5447. . 0 5448. . 0 M.5.b c. Secured by 1-4 family residential properties: (1) Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit ______________________________5449. . 0 5450. . 0 M.5.c1 (2) All other loans secured by 1-4 family residential properties _____________________________5451. . 0 5452. . 0 M.5.c2 d. Secured by multifamily (5 or more) residential properties ______________________________________________5453. . 0 5454. . 0 M.5.d e. Secured by nonfarm nonresidential properties ____________5455. . 0 5456. . 0 M.5.e
- -------------- (1) See instructions for loan classifications used in this schedule. 7 Schedule RI - B - Continued Part II. Changes in Allowance for Loan and Lease Losses Part II is to be reported with the December Report of Income.
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ RIAD ---- 1. Balance originally reported in the December 31, 1995, Reports of Condition and Income___3124. . 0 1. 2. Recoveries (must equal part I, item 6, column B above)__________________________________4605. . N/A 2. 3. LESS: Charge-offs (must equal part I, item 6, column A above)__________________________4635. . N/A 3. 4. Provision for loan and lease losses (must equal Schedule RI, item 4.a)__________________4230. . 0 4. 5. Adjustments * (see instructions for this schedule)______________________________________4815. . 0 5. 6. Balance end of current period (sum of items 1 through 5) (must equal Schedule RC, item 4.b)_______________________________________________________________________________3123. . 0 6.
__________ * Describe on Schedule RI-E - Explanations. Schedule RI-C - Applicable Income Taxes by Taxing Authority
I189 < - Schedule RI-C is to be reported with the December Report of Income. Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ RIAD ---- 1. Federal_________________________________________________________________________________4780. . N/A 1. 2. State and local_________________________________________________________________________4790. . N/A 2. 3. Total (sum of items 1 and 2) (must equal sum of Schedule RI, items 9 and 11.b)__________4770. . N/A 3. RIAD ---- 4. Deferred portion of item 3___________________________4772. . N/A . . . . . . . . . . 4.
Schedule RI-E - Explanations Schedule RI-E is to be completed each quarter on a calendar year-to-date basis. Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and other adjustments in Schedule RI, and all significant items of other noninterest income and other noninterest expense in Schedule RI. (See instructions for details.)
I195 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 1. All other noninterest income (from Schedule RI, item 5.b.(2)) Report amounts that exceed 10% of Schedule RI, item 5.b.(2): RIAD Year-to-date ---- a. Net gains on other real estate owned________________________________________________5415. . N/A 1.a b. Net gains on sales of loans_________________________________________________________5416. . N/A 1.b c. Net gains on sales of premises and fixed assets_____________________________________5417. . N/A 1.c Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, item 5.b.(2): TEXT RIAD ---- ---- d. 4461: Expense Reimbursement fr Affiliates__________________________________________4461. . 13,602 1.d e. 4462: _____________________________________________________________________________4462. . N/A 1.e f. 4463: _____________________________________________________________________________4463. . N/A 1.f 2. Other noninterest expense (from Schedule RI, item 7.c): a. Amortization expense of intangible assets___________________________________________4531. . 255 2.a Report amounts that exceed 10% of Schedule RI, item 7.c: b. Net losses on other real estate owned_______________________________________________5418. . N/A 2.b c. Net losses on sales of loans________________________________________________________5419. . N/A 2.c d. Net losses on sales of premises and fixed assets____________________________________5420. . N/A 2.d Itemize and describe the three largest other amounts that exceed 10% of Schedule RI, item 7.c: TEXT RIAD ---- ---- e. 4464: Data Processing Expense - Non Affiliate______________________________________4464. . 2,286 2.e f. 4467: Consulting Services Expense__________________________________________________4467. . 3,000 2.f g. 4468: _____________________________________________________________________________4468. . N/A 2.g
8 Schedule RI-E - continued
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ 3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary items and other adjustments): TEXT RIAD RIAD Year-to-date ---- ---- ---- a. (1) 4469: ________________________________________________ . . . . . . . . . 4469. . 0 3.a.1 (2) Applicable income tax effect__________________________4486 . . 0 . . . . . . . 3.a.2 b. (1) 4487: ________________________________________________ . . . . . . . . . 4487. . 0 3.b.1 (2) Applicable income tax effect__________________________4488 . . 0 . . . . . . . 3.b.2 c. (1) 4489: ________________________________________________ . . . . . . . . . 4489. . 0 3.c.1 (2) Applicable income tax effect__________________________4491 . . 0 . . . . . . . 3.c.2 4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2) (itemize and describe all adjustments): TEXT ---- a. 4492: ______________________________________________________________________________________4492. . N/A 4.a b. 4493: ______________________________________________________________________________________4493. . N/A 4.b 5. Cumulative effect of changes in accounting principles from prior years (from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles): TEXT ---- a. 4494: ______________________________________________________________________________________4494. . N/A 5.a b. 4495: ______________________________________________________________________________________4495. . N/A 5.b 6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10) (itemize and describe all corrections): TEXT ---- a. 4496: ______________________________________________________________________________________4496. . N/A 6.a b. 4497: ______________________________________________________________________________________4497. . N/A 6.b 7. Other transactions with parent holding company (from Schedule RI-A, item 12) (itemize and describe all such transactions): TEXT ---- a. 4498: ______________________________________________________________________________________4998. . N/A 7.a b. 4499: ______________________________________________________________________________________4499. . N/A 7.b 8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, item 5) (itemize and describe all adjustments): TEXT ---- a. 4521: ______________________________________________________________________________________4521. . N/A 8.a b. 4522: ______________________________________________________________________________________4522. . N/A 8.b I198 I199 < -
Other explanations (the space below is provided for bank to briefly describe, at its option, any other significant items affecting the Report of Income): No comment: X (RIAD 4769) Other explanations (please type or print clearly): (TEXT 4769) 9 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for June 30, 1996 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter. Schedule RC - Balance Sheet
C100 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS 1. Cash and balances due from depository institutions: RCON ---- a. Noninterest-bearing balances and currency and coin (1,2)__________________________0081. . 49,771 1.a b. Interest-bearing balances (3)_____________________________________________________0071. . 10,370 1.b 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A)________________________1754. . 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)______________________1773. . 1,061 2.b 3. Federal funds sold and securities purchased under agreements to resell: a. Federal funds sold (4)____________________________________________________________0276. . 0 3.a b. Securities purchased under agreements to resell (5)_______________________________0277. . 882 3.b 4. Loans and lease financing receivables: RCON a. Loans and leases, net of unearned income ---- (from Schedule RC-C)_______________________________2122 . . 0 . . . . . . . . . . . 4.a b. LESS: Allowance for loan and lease losses_________3123 . . 0 . . . . . . . . . . . 4.b c. LESS: Allocated transfer risk reserve_____________3128 . . 0 . . . . . . . . . . . 4.c d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c)_______________________________2125. . 0 4.d 5. Trading assets________________________________________________________________________3545. . 0 5. 6. Premises and fixed assets (including capitalized leases)______________________________2145. . 6,076 6. 7. Other real estate owned (from Schedule RC-M) 2150. . 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)________________________________________________________________________2130. . 0 8. 9. Customers' liability to this bank on acceptances outstanding__________________________2155. . 0 9. 10. Intangible assets (from Schedule RC-M)________________________________________________2143. . 1,020 10. 11. Other assets (from Schedule RC-F)_____________________________________________________2160. . 22,322 11. 12. a. Total assets (sum of items 1 through 11)__________________________________________2170. . 91,502 12.a b. Losses deferred pursuant to 12 U.S.C. 1823(j)_____________________________________0306. . 0 12.b c. Total assets and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 12.a and 12.b_____________________________________________________________________0307. . 91,502 12.c
- ------------- (1) Includes cash items in process of collection and unposted debits. (2) The amount reported in this item must be greater than or equal to the sum of Schedule RC-M, items 3.a and 3.b. (3) Includes time certificates of deposit not held for trading. (4) Report "term federal funds sold" in Schedule RC, item 4.a, "Loans and leases, net of unearned income", and in Schedule RC-C, part I. (5) Report securities purchased under agreements to resell that involve the receipt of immediately available funds and mature in one business day or roll over under a continuing contract in Schedule RC, item 3.a, "Federal funds sold." 10 Schedule RC - Continued
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES 13. Deposits RCON a. In domestic offices (sum of totals of ---- columns A and C from Schedule RC-E) ________________________________________________________2200. . 0 13.a RCON ---- (1) Noninterest-bearing (1) ________________________________________6631. . 0 . . . . . . . . . 13.a.1 (2) Interest-bearing _________________________________________________6636. . 0 . . . . . . . . 13.a.2 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs _______________________________ (1) Noninterest-bearing _____________________________________________________________________ (2) Interest-bearing ________________________________________________________________________ 14. Federal funds purchased and securities sold under agreements to repurchase: a. Federal funds purchased (2) _______________________________________________________________0278. . 0 14.a b. Securities sold under agreements to repurchase (3)_________________________________________0279. . 0 14.b 15. a. Demand notes issued to the U.S. Treasury ___________________________________________________2840. . 0 15.a b. Trading liabilities ________________________________________________________________________3548. . 0 15.b 16. Other borrowed money: a. With a remaining maturity of one year or less _____________________________________________2332. . 0 16.a b. With a remaining maturity of more than one year ___________________________________________2333. . 0 16.b 17. Mortgage indebtedness and obligations under capitalized leases ________________________________2910. . 0 17. 18. Bank's liability on acceptances executed and outstanding ______________________________________2920. . 0 18. 19. Subordinated notes and debentures _____________________________________________________________3200. . 0 19. 20. Other liabilities (from Schedule RC-G)_________________________________________________________2930. . 37,173 20. 21. Total liabilities (sum of items 13 through 20) ________________________________________________2948. . 37,173 21. 22. Limited-life preferred stock and related surplus ______________________________________________3282. . 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus _________________________________________________3838. . 0 23. 24. Common stock __________________________________________________________________________________3230. . 1,000 24. 25. Surplus (exclude all surplus related to preferred stock) ______________________________________3839. . 24,000 25. 26. a. Undivided profits and capital reserves _____________________________________________________3632. . 29,322 26.a b. Net unrealized holding gains (losses) on available-for-sale securities ____________________8434. . 7 26.b 27. Cumulative foreign currency translation adjustments ___________________________________________ 28. a. Total equity capital (sum of items 23 through 27) __________________________________________3210. . 54,329 28.a b. Losses deferred pursuant to 12 U.S.C. 1823 (j) ____________________________________________0306. . 0 28.b c. Total equity capital and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 28.a and 28.b) ______________________________________________________________3559. . 54,329 28.c 29. Total liabilities, limited-life preferred stock, equity capital, and losses deferred pursuant to 12 U.S.C. 1823(j) (sum of items 21, 22, and 28.c) ________________________2257. . 91,502 29. Memorandum To be reported only with the March Report of Condition 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by the independent external auditors as of any date during 1995 _________________________________________________6724. . N/A M.1
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Director's examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ------- 1) Includes total demand deposits and noninterest-bearing time and savings deposits. 2) Report "term federal funds purchased" in Schedule RC, item 16, "other borrowed money." 3) Report securities sold under agreements to repurchase that involve the receipt of immediately available funds and mature in one business day or roll over under a continuing contract in Schedule RC, item 14.a, "Federal funds purchased." 11 Schedule RC-B - Securities Exclude assets held for trading
C110 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ Held-to-maturity Available-for-sale (Column A) (Column B) (Column C) (Column D) Amortized Costs Fair Value Amortized Cost Fair Value (1) ------------------- -------------- -------------- -------------------- RCON RCON RCON RCON ---- ---- ---- ---- 1. U.S. Treasury securities ______________________________________0211.. 0 0213.. 0 1286.. 0 1287.. 0 1. 2. U.S. Government agency and corporation obligations (exclude mortgage-backed securities): a. Issued by U.S. Government agencies (2) _________________________________1289.. 0 1290.. 0 1291.. 0 1293.. 0 2.a b. Issued by U.S. Government - sponsored agencies (3)________________________1294.. 0 1295.. 0 1297.. 0 1298.. 0 2.b 3. Securities issued by states and political subdivisions in the U.S.: a. General obligations __________________________1676.. 0 1677.. 0 1678.. 300 1679.. 311 3.a b. Revenue obligations __________________________1681.. 0 1686.. 0 1690.. 0 1691.. 0 3.b c. Industrial development and similar obligations __________________________________1694.. 0 1695.. 0 1696.. 0 1697.. 0 3.c 4. Mortgage-backed securities (MBS): a. Pass-through securities: (1) Guaranteed by GMMA ______________________1698.. 0 1699.. 0 1701.. 0 1702.. 0 4a1 (2) Issued by FMMA and FHLMC _________________1703.. 0 1705.. 0 1706.. 0 1707.. 0 4a2 (3) Other pass_through securities ____________1709.. 0 1710.. 0 1711.. 0 1713.. 0 4a3 b. Other mortgage-backed securities (Include CMOs, REMICs, and Stripped MBS): (1) Issued or guaranteed by FMMA, FHLMC, or GMMA __________________________1714.. 0 1715.. 0 1716.. 0 1717.. 0 4b1 (2) Collateralized by MBS issued or guaranteed by FMMA, FHLMC, or GMMA __________________________1718.. 0 1719.. 0 1731.. 0 1732.. 0 4b2 (3) All other mortgage-backed securities ______________________________1733.. 0 1734.. 0 1735.. 0 1736.. 0 4b3 5. Other debt securities ____________________________1774.. 0 1775.. 0 1776.. 0 1777.. 0 5. 6. Equity securities: a. Investments in mutual funds __________________ .. .. 1747.. 0 1748.. 0 6.a b. Other equity securities with readily determinable fair values_____________ .. .. 1749.. 0 1751.. 0 6.b c. All other equity securities(1) (includes Federal Reserve stock)______________ .. .. 1752.. 750 1753.. 750 6.c 7. Total (sum of items 1 through 6) (total of column A must equal Schedule RC item 2.a)(total of column D must equal Schedule RC, item 2.b)_______________1754.. 0 1771.. 0 1772..1,050 1773.. 1,061 7.
- --------- (1) Includes equity securities without readily determinable fair values at historical cost in item 6.c, column D. (2) Includes Small Business Administration "Guaranteed Loan Pool Certificates," U.S. Maritime Administration obligations, and Export-Import Bank participation certificates. (3) Includes obligations (other than mortgage-backed securities) issued by the Farm Credit System, the Federal Home Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Financing Corporation, Resolution Funding Corporation, the Student Loan Marketing Association, and the Tennessee Valley Authority. Schedule RC-B - Continued
Memoranda C112 < - Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------------------------------------ RCON ---- 1. Pledged securities(1) _______________________________________________________________________________0416.. 0 M.1 2. Maturity and repricing data for debt securities (1,2,3) excluding those in nonaccrual status): a. Fixed rate debt securities with a remaining maturity of: (1) Three months or less ________________________________________________________________________0343.. 0 M.2.a1 (2) Over three months through 12 months _________________________________________________________0344.. 204 M.2.a2 (3) Over one year through five years ____________________________________________________________0345.. 107 M.2.a3 (4) Over five years _____________________________________________________________________________0346.. 0 M.2.a4 (5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through 2.a.(4)) ____________________________________________________________________________0347.. 311 M.2.a5 b. Floating rate debt securities with a repricing frequency of: (1) Quarterly or more frequently _______________________________________________________________4544.. 0 M.2.b1 (2) Annually or more frequently, but less frequently than quarterly _____________________________4545.. 0 M.2.b2 (3) Every five years or more frequently, but less frequently than annually ______________________4551.. 0 M.2.b3 (4) Less frequently than every five years _______________________________________________________4552.. 0 M.2.b4 (5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4))_____________________________________________________________________________4553.. 0 M.2.b5 c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total debt securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus nonaccrual debt securities included in Schedule RC-W, item 6, column C)_________________0393.. 311 M.2.c 3. Not applicable. 4. Held-to-maturity debt securities restructured and in compliance with modified terms (included in Schedule RC-B, items 3 through 5, column A, above) _____________________________________5365.. 0 M.4 5. Not applicable. 6. Floating rate debt securities with a remaining maturity of one year or less (1,3) (included in Memorandum items 2.b.(1) through 2.b.(4) above) _______________________________________5519.. 0 M.6 7. Amortized cost of held-to-maturity securities sold or transferred to available-for- sale or trading securities during the calendar year-to-date (report the amortized cost at date of sale or transfer) ____________________________________________________________________1778.. 0 M.7 8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale accounts in Schedule RC-B, item 4.b): a. Amortized cost __________________________________________________________________________________8780.. 0 M.8.a b. Fair value ______________________________________________________________________________________8781.. 0 M.8.b 9. Structured notes (included in the held-to maturity and available-for-sale accounts in Schedule RC-B, items 2, 3, and 5): a. Amortized cost __________________________________________________________________________________8782.. 0 M.9.a b. Fair value _____________________________________________________________________________________8783.. 0 M.9.b
- ------ 1) Includes held-to-maturity securities at amortized cost and available-for- sale securities at fair value. 2) Exclude equity securities, e.g., investments in mutual funds, Federal Reserve stock, common stock, and preferred stock. 3) Memorandum items 2 and 6 are not applicable to savings banks that must complete supplemental Schedule RC-J. 13 Schedule RC-C - Loans and Lease Financing Receivables Part I. Loans and Leases Do not deduct the allowance for loan and lease losses from amounts reported in this schedule. Report total loans and leases, net of unearned income. Exclude assets held for trading.
C115 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- RCON 1. Loans secured by real estate: ---- a. Construction and land development_____________________________________________________1415. . 0 1.a b. Secured by farmland (including farm residential and other improvements)_______________1420. . 0 1.b c. Secured by 1-4 family residential properties: (1) Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit____________________________________________________1797. . 0 1.c.1 (2) All other loans secured by 1-4 family residential properties: (a) Secured by first liens________________________________________________________5367. . 0 1.c.2a (b) Secured by junior liens_______________________________________________________5368. . 0 1.c.2b d. Secured by multifamily (5 or more) residential properties_____________________________1460. . 0 1.d e. Secured by nonfarm nonresidential properties__________________________________________1480. . 0 1.e 2. Loans to depository institutions_________________________________________________________1489. . 0 2. 3. Loans to finance agricultural production and other loans to farmers______________________1590. . 0 3. 4. Commercial and industrial loans__________________________________________________________1766. . 0 4. 5. Acceptances of other banks_______________________________________________________________1755. . 0 5. 6. Loans to individuals for household, family, and other personal expenditures (i.e., consumer loans) (includes purchased paper): a. Credit cards and related plans (includes check credit and other revolving credit plans)________________________________________________________________________________2008. . 0 6.a b. Other (includes single payment, installment, and all student loans)___________________2011. . 0 6.b 7. Obligations (other than securities and leases) of states and political subdivisions in the U.S. (includes nonrated industrial development obligations)_______________________2107. . 0 7. 8. All other loans (exclude consumer loans)_________________________________________________2080. . 0 8. 9. Lease financing receivables (net of unearned income)_____________________________________2165. . 0 9. 10. LESS: Any unearned income on loans reflected in items 1-8 above__________________________2123. . 0 10. 11. Total loans and leases, net of unearned income (sum of items 1 through 9 minus item 10) (must equal Schedule RC, item 4.a)___________________________________________________2122. . 0 11.
14 Schedule RC-C - Continued Part I. Continued Memoranda
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Loans (1) and leases restructured and in compliance with modified terms (included in Schedule RC-C, part I, above, and not reported as past due or nonaccrual in Schedule RCON RC-W, Memorandum item 1):________________________________________________________________---- a. Real estate loans_____________________________________________________________________1617. . 0 M.1.a b. All other loans and all lease financing receivables (exclude loans to individuals for household, family, and other personal expenditures)_______________________________8691. . 0 M.1.b 2. Maturity and repricing data for loans and leases (2) (excluding those in nonaccrual status): a. Fixed rate loans and leases with a remaining maturity of: (1) Three months or less______________________________________________________________0348. . 0 M.2.a1 (2) Over three months through 12 months_______________________________________________0349. . 0 M.2.a2 (3) Over one year through five years__________________________________________________0356. . 0 M.2.a3 (4) Over five years___________________________________________________________________0357. . 0 M.2.a4 (5) Total fixed rate loans and leases (sum of Memorandum items 2.a.(1) through 2.a.(4))__________________________________________________________________________0358. . 0 M.2.a5 b. Floating rate loans with a repricing frequency of: (1) Quarterly or more frequently______________________________________________________4554. . 0 M.2.b1 (2) Annually or more frequently, but less frequently than quarterly___________________4555. . 0 M.2.b2 (3) Every five years or more frequently, but less frequently than annually____________4561. . 0 M.2.b3 (4) Less frequently than every five years_____________________________________________4564. . 0 M.2.b4 (5) Total floating rate loans (sum of Memorandum items 2.b.(1) through 2.b.(4))_______4567. . 0 M.2.b5 c. Total loans and leases (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal the sum of total loans and leases, net, from Schedule RC-C, part I, Item 11, plus unearned income from Schedule RC-C, Part I, item 10, minus total nonaccrual loans and leases from Schedule RC-N, sum of items 1 through 5, column C)______________1479. . 0 M.2.c d. Floating rate loans with a remaining maturity of one year or less (included in memorandum items 2.b.(1) through 2.b.(4) above)_______________________________________A246. . 0 M.2.d 3. Reserved 4. Loans to finance commercial real estate, construction, and land development activities (not secured by real estate) included in Schedule RC-C, part I, items 4 and 8, page RC-5 (3)_________________________________________________________________________________2746. . 0 M.4 5. Loans and leases held for sale (included in Schedule RC-C, part I, above)________________5369. . 0 M.5 6. Adjustable rate closed-end loans secured by first liens on 1-4 family residential properties (included in Schedule RC-C, part I, Item 1.c.(2)(a), page RC-5)_______________5370. . 0 M.6
- ---------- (1) See instructions for loan classifications used in Memorandum Item 1. (2) Memorandum item 2 is not applicable to savings banks that must complete supplemental Schedule RC-J. (3) Exclude loans secured by real estate that are included in Schedule RC-C, part I, items 1.a through 1.e. 14a Schedule RC-C - Continued Part II. Loans to Small Businesses and Small Farms Schedule RC-C, Part II is to be reported only with the June Report of Condition. Report the number and amount currently outstanding as of June 30 of business loans with "original amounts" of $1,000,000 or less and farm loans with "original amounts" of $500,000 or less. The following guidelines should be used to determine the "original amount" of a loan: (1) For loans drawn down under lines of credit or loan commitments, the "original amount" of the loan is the size of the line of credit or loan commitment when the line of credit or loan commitment was most recently approved, extended, or renewed prior to the report date. However, if the amount currently outstanding as of the report date exceeds this size, the "original amount" is the amount currently outstanding on the report date. (2) For loan participations and syndications, the "original amount" of the loan participation or syndication is the entire amount of the credit originated by the lead lender. (3) For all other loans, the "original amount" is the total amount of the loan at origination or the amount currently outstanding as of the report date, whichever is larger.
C118 < - Loans to Small Businesses 1. Indicate in the appropriate box at the right whether all or substantially all of the dollar volume of your bank's "Loans secured by nonfarm nonresidential properties" reported in Schedule RC-C, part I, item 1.e, and all or substantially all of the dollar volume of your bank's "Commercial and industrial loans" reported in Schedule RC-C, part I, item 4, have original amounts of $100,000 or less (if your bank has no loans outstanding in both RCON YES NO of these two loan categories, place an "X" in the box marked "NO" and go to item 5; ---- --- -- otherwise, see instructions for further information.)_______________________________________6999. . X 1. If YES, complete items 2.a and 2.b below, skip items 3 and 4, and go to item 5. If NO and your bank has loans outstanding in either loan category, skip items 2.a and 2.b, complete items 3 and 4 below, and go to item 5. 2. Report the total number of loans currently outstanding for each of the following Schedule RC-C, part I, loan Number of Loans categories: ---------------------------- a. "Loans secured by nonfarm nonresidential properties" RCON reported in Schedule RC-C, part I, ---- item 1.e______________________________________________5562. . N/A 2.a b. "Commercial and industrial loans" reported in Schedule RC-C, part I, item 4__________________________________5563. . N/A 2.b
Dollar Amounts in Thousands - -------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------- (Column A) (Column B) Number of Loans Amount Currently Outstanding --------------------------- --------------------------------- 3. Number and amount currently outstanding of "Loans secured by nonfarm nonresidential properties" reported in Schedule RC-C, part I, item 1.e (sum of items 3.a though 3.c must RCON RCON be less than or equal to Schedule RC-C, part I, item 1.e): ---- ---- a. With original amounts of $100,000 or less____________________________________________________5564. . N/A 5565. . N/A 3.a b. With original amounts of more than $100,000 through $250,000___________________________________________________5566. . N/A 5567. . N/A 3.b c. With original amounts of more than $250,000 through $1,000,000_________________________________________________5568. . N/A 5569. . N/A 3.c 4. Number and amount currently outstanding of "Commercial and industrial loans" reported in Schedule RC-C, part I, item 4 (sum of items 4.a though 4.c must be less than or equal to RCON RCON Schedule RC-C, part I, item 4): ---- ---- a. With original amounts of $100,000 or less__________________5570. . N/A 5571. . N/A 4.a b. With original amounts of more than $100,000 through $250,000___________________________________________________5572. . N/A 5573. . N/A 4.b c. With original amounts of more than $250,000 through $1,000,000_________________________________________________5574. . N/A 5575. . N/A 4.c
14b Schedule RC-C - Continued Part II. Continued Agricultural Loans to Small Farms 5. Indicate in the appropriate box at the right whether all or substantially all of the dollar volume of your bank's "Loans secured by farmland (including farm residential and other improvements)" reported in Schedule RC-C, part I, item 1.b, and all or substantially all of the dollar volume of your bank's "Loans to finance agricultural production and other loans to farmers" reported in Schedule RC-C, part 1, item 3, have original amounts of $100,000 or less (if your bank has no loans outstanding in both of RCON YES NO these two loan categories, place an "X" in the box marked "NO" and do not complete items 7 ---- --- -- and 8; otherwise, see instructions for further information.)________________________________6860. . X 5. If YES, complete Items 6.a and 6.b below and do not complete items 7 and 8. if NO and your bank has loans outstanding in either loan category, skip items 6.a and 6.b and complete items 7 and 8 below. 6. Report the total number of loans currently outstanding for each of the following Schedule RC-C, part I, loan Number of Loans categories: ---------------------- a. "Loans secured by farmland (including farm residential RCON and other improvements)" reported in Schedule RC-C, ---- part I, item 1.b________________________________________5576. . N/A 6.a b. "Loans to finance agricultural production and other loans to farmers" reported in Schedule RC-C, part I, item 3__________________________________________________5577. . N/A 6.b
Dollar Amounts in Thousands - ---------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------- (Column A) (Column B) Number of Loans Amount Currently Outstanding ----------------------- ---------------------------- Number and amount currently outstanding of "Loans secured by farmland (including farm residential and other improvements)" reported in Schedule RC-C, part I, item 1.b (sum of items 7.a through 7.c must be less than or equal to Schedule RC-C, part I, item 1.b): RCON RCON a. With original amounts of $ 100,000 ---- ---- or less____________________________________________________5578. . N/A 5579. . N/A 7.a b. With original amounts of more than $ 100,000 through $ 250,000__________________________________________________5580. . N/A 5581. . N/A 7.b c. With original amounts of more than $ 250,000 through $ 500,000__________________________________________________5582. . N/A 5583. . N/A 7.c Number and amount currently outstanding of "Loans to finance agricultural production and other loans to farmers" reported in Schedule RC-C, part I, item 3 (sum of items 8.a through 8.c must be less than or equal to Schedule RC-C, part I, item 3): RCON RCON a. With original amounts of $ 100,000 ---- ---- or less____________________________________________________5584. . N/A 5585. . N/A 8.a b. With original amounts of more than $ 100,000 through $ 250,000__________________________________________________5586. . N/A 5587. . N/A 8.b c. With original amounts of more than $ 250,000 through $ 500,000__________________________________________________5588. . N/A 5589. . N/A 8.c
15
Schedule RC-E - Deposit Liabilities C125 < - Dollar Amount in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- ---------------Transaction Accounts-------------- --Nontransaction Accounts---- (Column A) (Column B) (Column C) Total transaction Memo: Total demand accounts (including total deposits (included in Total Nontransaction demand deposits) column A) accounts (including MMDAs) - ------------------------------------------ ------------------------- ---------------------- ---------------------------- RCON RCON RCON Deposits of: ---- ---- ---- 1. Individuals, partnerships and corporations__2201. . 0 2240. . 0 2346. . 0 1. 2. U.S. Government_____________________________2202. . 0 2280. . 0 2520. . 0 2. 3. States and political subdivisions in the U.S.____________________________________2203. . 0 2290. . 0 2530. . 0 3. 4. Commercial banks in the U.S. (including U.S. branches and agencies of foreign banks)_____2206. . 0 2310. . 0 2550. . 0 4. 5. Other depository institutions in the U.S.___2207. . 0 2312. . 0 2349. . 0 5. 6. Certified and official checks_______________2330. . 0 2330. . 0 . . . . . . . . . . . . 6. 7. Banks in foreign countries, foreign governments, and foreign official institutions________________________________2184. . 0 2185. . 0 2186. . 0 7. 8. Total (sum of items 1 through 7) (sum of columns A and C must equal Schedule RC, item 13.a)__________________________________2215. . 0 2210. . 0 2385. . 0 8.
Dollar Amount in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- Memoranda RCON ---- 1. Selected components of total deposits (i.e., sum of item 8, columns A and C): a. Total individual Retirement Accounts (IRAs) and Keogh Plan Accounts_________________6835. . 0 M.1.a b. Total brokered deposits_____________________________________________________________2365. . 0 M.1.b c. Fully insured brokered deposits (included in Memorandum item 1.b above): (1) Issued in denominations of less than $ 100,000__________________________________2343. . 0 M.1.c1 (2) Issued either in denominations of $ 100,000 or in denominations greater than $ 100,000 and participated out by the broker in shares of $ 100,000 or less_____2344. . 0 M.1.c2 d. Maturity data for brokered deposits: (1) Brokered deposits issued in denominations of less than $ 100,000 with a remaining maturity of one year or less (included in Memorandum item 1.c.(1) above)__________________________________________________________________A243. . 0 M.1.d1 (2) Brokered deposits issued in denominations of $ 100,000 or more with a remaining maturity of one year or less (included in Memorandum item 1.b above)______________________________________________________________________A244. . 0 M.1.d2 e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S. reported in item 3 above which are secured or collateralized as required under state law)__________________________________________________________________________5590. . 0 M.1.e 2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d must equal item 8, column C, above): a. Saving deposits: (1) Money Market deposit accounts (MMDAs)___________________________________________6810. . 0 M.2.a1 (2) Other savings deposits (excludes MMDAs)_________________________________________0352. . 0 M.2.a2 b. Total time deposits of less than $ 100,000__________________________________________6648. . 0 M.2.b c. Time certificates of deposit of $ 100,000 or more___________________________________6645. . 0 M.2.c d. Open-account time deposits of $ 100,000 or more_____________________________________6646. . 0 M.2.d 3. All NOW accounts (included in column A above)__________________________________________2398. . 0 M.3 4. Not applicable
16 Schedule RC-E - Continued
Dollar Amount in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- Memoranda (Continued) 5. Maturity and repricing data for time deposits of less than $ 100,000 (sum of Memorandum items 5.a(1) through 5.b(3) must equal Memorandum item 2.b above): (1) RCON a. Fixed rate time deposits of less than $ 100,000 with a remaining maturity of: ---- (1) Three months or less_________________________________________________________________A225. . 0 M.5.a1 (2) Over three months through 12 months__________________________________________________A226. . 0 M.5.a2 (3) Over one year________________________________________________________________________A227. . 0 M.5.a3 b. Floating rate time deposits of less than $ 100,000 with a repricing frequency of: (1) Quarterly or more frequently_________________________________________________________A228. . 0 M.5.b1 (2) Annually or more frequently, but less frequently than quarterly______________________A229. . 0 M.5.b2 (3) Less frequently than annually________________________________________________________A230. . 0 M.5.b3 c. Floating rate time deposits of less than $ 100,000 with a remaining maturity of one year or less (included in Memorandum items 5.b.(1) through 5.b.(3) above)____________A231. . 0 M.5.c 6. Maturity and repricing data for time deposits of $ 100,000 or more (i.e., time certificates of deposit of $ 100,000 or more and open-account time deposits of $ 100,000 or more) (sum of Memorandum items 6.a.(1) through 6.b.(4) must equal the sum of Memorandum items 2.c and 2.d above): (1) a. Fixed rate time deposits of $ 100,000 or more with a remaining maturity of: (1) Three months of less_________________________________________________________________A232. . 0 M.6.a1 (2) Over three months through 12 months__________________________________________________A233. . 0 M.6.a2 (3) Over one year through five years_____________________________________________________A234. . 0 M.6.a3 (4) Over five years______________________________________________________________________A235. . 0 M.6.a4 b. Floating rate time deposits of $ 100,000 or more with a repricing frequency of: (1) Quarterly or more frequently_________________________________________________________A236. . 0 M.6.b1 (2) Annually or more frequently, but less frequently than quarterly______________________A237. . 0 M.6.b2 (3) Every five years or more frequently, but less frequently than annually_______________A238. . 0 M.6.b3 (4) Less frequently than every five years________________________________________________A239. . 0 M.6.b4 c. Floating rate time deposits of $ 100,000 or more with a remaining maturity of one year or less (included in Memorandum items 6.b.(1) through 6.b.(4) above)____________A240. . 0 M.6.c
- ---------- (1) Memorandum items 5 and 6 are not applicable to savings banks that must complete supplemental Schedule RC-J. 17 Schedule RC-F - Other Assets
c130 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- 1. Income earned, not collected on loans (1)__________________________ 2164. . . . 0 1. 2. Net deferred tax assets (2)________________________________________ 2148. . . . 2,136 2. 3. Excess residential mortgage servicing fees receivable______________ 5371. . . . 0 3. 4. Other (itemize and describe amounts greater than $25,000 that exceed 25% OF this item____________________________________________ 2168. . . . 20,186 4. TEXT RCON ---- ---- a. 3549: Personal Trust Fees Receivable___________ 3549. . 7,982 . . . . . 4.a b. 3550:__________________________________________ 3550. . N/A . . . . . 4.b c. 3551:__________________________________________ 3551. . N/A . . . . . 4.c 5. Total (sum of items 1 through 4) (must equal Schedule RC, Item 11) 2160. . . . 22,322 5. Memorandum Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- 1. Deferred tax assets disallowed for regulatory capital purposes_____ 5610. . . . 0 M.1
Schedule RC-G - Other Liabilities
c135 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- 1. a. Interest accrued and unpaid on deposits (3)_____________________ 3645. . . . 0 1.a b. Other expenses accrued and unpaid (includes accrued income taxes payable)__________________________________________________ 3646. . . . 11,202 1.b 2. Net deferred tax liabilities (2)___________________________________ 3049. . . . 0 2. 3. Minority interest in consolidated subsidiaries_____________________ 3000. . . . 0 3. 4. Other (itemize and describe amounts greater than $25,000 that exceed 25% of this item)___________________________________________ 2938. . . . 25,971 4. TEXT RCON ---- ---- a. 3552: Escheatable Funds_________________________ 3552. . 21,532 . . . . . 4.a b. 3553: __________________________________________ 3553. . N/A . . . . . 4.b c. 3554: __________________________________________ 3554. . N/A . . . . . 4.c 5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) 2930. . . . 37,173 5.
- ---------- 1) Report income earned, not collected on securities (and on other assets) in item 4 of Schedule RC-F. 2) See discussion of deferred income taxes in Glossary entry on "income taxes." 3) For saving banks, includes "dividends" accrued and unpaid on deposits. 18 Schedule RC-K - Quarterly Averages (1)
c155 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- ASSETS 1. Interest-bearing balances due from depository institutions_________ 3381. . . . 8,372 1. 2. a. U.S. Treasury securities, U.S. Government agency and corporation obligations, and other debt securities (4) (excluding securities issued by states and political subdivisions in the U.S.)________ 3649. . . . 0 2.a b. Equity securities (5)(includes investments in mutual funds and Federal Reserve stock)__________________________________________ 3648. . . . 750 2.b 3. Securities issued by states and political subdivisions in the U.S. (4)____________________________________________________ 3383. . . . 300 3. 4. Federal funds sold and securities purchased under agreements to resell_____________________________________________________________ 3365. . . . 879 4. 5. Loans (2,3): a. Total loans, net of unearned income (to be completed by those banks with less than $25 million in assets)_____________________ 3360. . . . 0 5.a The following four items are to be completed only by those banks with $25 million or more in total assets. b. Real estate loans_______________________________________________ 3286. . . . 0 5.b c. Installment loans_______________________________________________ 3287. . . . 0 5.c d. Credit cards and related plans__________________________________ 3288. . . . 0 5.d e. Commercial (time and demand) and all other loans________________ 3289. . . . 0 5.e 6. Lease financing receivables (net of unearned income)_______________ 3484. . . . 0 6. 7. Total assets(6)____________________________________________________ 3368. . . . 80,488 7. LIABILITIES 8. Interest-bearing transaction accounts (NOW accounts, ATS accounts, and telephone and preauthorized transfer accounts) (exclude demand deposits)___________________________________________________ 3485. . . . 0 8. 9. Nontransaction accounts: a. Money market deposit accounts (MMDAs)___________________________ 3486. . . . 0 9.a b. Other savings deposits__________________________________________ 3487. . . . 0 9.b c. Time certificates of deposit of $100,000 or more________________ 3345. . . . 0 9.c d. All other time deposits (include all time deposits of less than $100,000 and open-account time deposits of $100,000 or more)____ 3469. . . . 0 9.d 10. Federal funds purchased and securities sold under agreements to repurchase_________________________________________________________ 3353. . . . 0 10. Memorandum Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- 1. To be completed by banks with $25 million or more in total assets and with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans. (3) RCON ---- Agricultural loans included in items 5.b through 5.e above_________ 3379. . . . 0 M.1
- ---------- (1) For all items, banks have the option of reporting either (1) an average of daily figures for the quarter or (2) an average of weekly figures (i.e., the Wednesday of each week of the quarter). In addition, averages of four month-end figures (the last day of the preceding quarter and of each month of the currently-reported quarter) are allowed for items 2, 3, 5.a through 5.e, 6, 7, and Memorandum item 1. (2) See instructions for loan classifications used in this schedule. (3) The $25 million asset size test and the five percent of total loans test are generally based on the total assets and total loans reported on the June 30, 1995 Report of Condition. (4) Quarterly averages for all debt securities should be based on amortized cost. (5) Quarterly averages for all equity securities should be based on historical cost. (6) The quarterly average for total assets should reflect all debt securities (not held for trading) at amortized cost, equity securities with readily determinable fair values at the lower of cost or fair value, and equity securities without readily determinable fair values at historical cost. 19 Schedule RC-L - Off-Balance Sheet Items Please read carefully the instructions for the preparation of Schedule RC-L. Some of the amounts reported in Schedule RC-L are regarded as volume indicators and not necessarily as measures of risk.
c160 < - Dollar Amount in Thousands - -------------------------------------------------------------------------------------------------------- RCON ---- 1. Unused commitments: a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home equity lines_____________________________ 3814. . . . 0 1.a b. Credit card lines_______________________________________________ 3815. . . . 0 1.b c. Commercial real estate, construction, and land development: (1) Commitments to fund loans secured by real estate____________ 3816. . . . 0 1.c.1 (2) Commitments to fund loans not secured by real estate________ 6550. . . . 0 1.c.2 d. Securities underwriting_________________________________________ 3817. . . . 0 1.d e. Other unused commitments________________________________________ 3818. . . . 0 1.e 2. Financial standby letters of credit (1)____________________________ 3819. . . . 0 2. RCON a. Amount of financial standby letters of credit ---- conveyed to others_______________________________ 3820. . 0 . . . . . 2.a 3. Performance standby letters of credit (1)__________________________ 3821. . . . 0 3. RCON a. Amount of performance standby letters of credit ---- conveyed to others_______________________________ 3821. . 0 . . . . . 3.a 4. Commercial and similar letters of credit (1)_______________________ 3411. . . . 0 4. 5. Not applicable_____________________________________________________ 6. Participations in acceptances (as described in the instructions) acquired by the reporting (nonaccepting) bank______________________ 3429. . . . 0 6. 7. Securities borrowed________________________________________________ 3432. . . . 0 7. 8. Securities lent (including customers' securities lent where the customer is indemnified against loss by the reporting bank)________ 3433. . . . 0 8. 9. Loans transferred (i.e., sold or swapped) with recourse that have been treated as sold for Call Report purposes: a. FNMA and FHLMC residential mortgage loan pools: (1) Outstanding principal balance of mortgages as of the report date_________________________________________________ 3650. . . . 0 9.a.1 (2) Amount of recourse exposure on these mortgages as of the report date_________________________________________________ 3651. . . . 0 9.a.2 b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools: (1) Outstanding principal balance of mortgages transferred as of the report date_____________________________________________ 3652. . . . 0 9.b.1 (2) Amount of recourse exposure on these mortgages as of the report date_________________________________________________ 3653. . . . 0 9.b.2 c. Farmer Mac agricultural mortgage loan pools: (1) Outstanding principal balance of mortgages transferred as of the report date_____________________________________________ 3654. . . . 0 9.c.1 (2) Amount of recourse exposure on these mortgages as of the report date_________________________________________________ 3655. . . . 0 9.c.2 d. Small business obligations transferred with recourse under section 208 of the Riegle Community Development and Regulatory Improvement Act of 1994: (1) Outstanding principal balance of small business obligations transferred as of the report date___________________________ A249. . . . 0 9.d.1 (2) Amount of retained recourse on these obligations as of the report date_________________________________________________ A250. . . . 0 9.d.2 10. When-issued securities: a. Gross commitments to purchase___________________________________ 3434. . . . 0 10.a b. Gross commitments to sell_______________________________________ 3435. . . . 0 10.b 11. Spot foreign exchange contracts____________________________________ 8765. . . . 0 11. 12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and describe each component of this item over 25% of Schedule RC, item 28.a "total equity capital")______________ 3430. . . . 0 12. TEXT RCON ---- ---- a. 3555:__________________________________________ 3555. . N/A . . . . . 12.a b. 3556:__________________________________________ 3556. . 0 . . . . . 12.b c. 3557:__________________________________________ 3557. . N/A . . . . . 12.c d. 3558:__________________________________________ 3558. . N/A . . . . . 12.d
- ---------- 1) Do not report letters of credit as "contra" items in "Other assets" (Schedule RC-F) and "other liabilities" (Schedule RC-G). 20 Schedule RC-L - Continued Dollar Amounts in Thousands - -------------------------------------------------------------------------------- 13. All other off-balance sheet assets (exclude off-balance sheet derivatives) (itemize and describe each component of this item over 25% of Schedule RC, Item 28.a "Total equity capital")_____________________5591. . 0 13. TEXT RCOW ---- ---- a. 5592:_____________________5592 . . N/A . . . . . . 13.a b. 5593:_____________________5593 . . N/A . . . . . . 13.b c. 5594:_____________________5594 . . N/A . . . . . . 13.c d. 5595:_____________________5595 . . N/A . . . . . . 13.d
C161 < - Dollar Amounts in Thousands - -------------------------------------------------------------------------------------------------------------------------------- (Column A) (Column B) (Column C) (Column D) Equity Commodity Off-Balance Sheet Derivatives Position Interest Rate Foreign Exchange Derivative And Other Indicators Contracts Contracts Contracts Contracts - -------------------------------------------- ------------------ ------------------ ------------------ ------------------- 14. Gross amounts (e.g., notional amounts)(for each column, sum of items 14.a through 14.e must equal sum of items 15, 16a., and 16.b): RCON RCON RCON RCON ---- ---- ---- ---- a. Futures contracts___________________8693. . 0 8694. . 0 8695. . 0 8696. . 0 14.a b. Forward contracts___________________8697. . 0 8698. . 0 8699. . 0 8700. . 0 14.b c. Exchange-traded option contracts: (1) Written options_________________8701. . 0 8702. . 0 8703. . 0 8704. . 0 14.c1 (2) Purchased options_______________8705. . 0 8706. . 0 8707. . 0 8708. . 0 14.c2 d. Over-the-counter option contracts: (1) Written options_________________8709. . 0 8710. . 0 8711. . 0 8712. . 0 14.d1 (2) Purchased options_______________8713. . 0 8714. . 0 8715. . 0 8716. . 0 14.d2 e. Swaps_______________________________3450. . 0 3826. . 0 8719. . 0 8720. . 0 14.e 15. Total gross notional amount of derivative contracts held for trading_________________________________A126. . 0 A127. . 0 8723. . 0 8724. . 0 15. 16. Total gross notional amount of derivative contracts held for purposes other than trading: a. Contracts marked to market__________8725. . 0 8726. . 0 8727. . 0 8728. . 0 16.a b. Contracts not marked to market______8729. . 0 8730. . 0 8731. . 0 8732. . 0 16.b
Memoranda
Dollar Amounts in Thousands - ------------------------------------------------------------------------------------------------------ 1. Not applicable. 2. Not applicable. 3. Unused commitments with an original maturity exceeding one year that are reported in Schedule RC-L, items 1.a through 1.e, above (report only the RCON unused portions of commitments that are fee paid or otherwise legally ---- binding)_____________________________________________________________________3833. . 0 M.3
- ------------- 21 Schedule RC-M - Memoranda
C165 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Extensions of credit by the reporting bank to its executive officers, directors, principal shareholders, and their related interests as of the report date: a. Aggregate amount of all extensions of credit to all executive officers, directors, RCON ---- principal shareholders and their related interests_________________________________________6164. . 0 1.a b. Number of executive officers, directors, and principal shareholders to whom the amount of all extensions of credit by the reporting bank (including extensions of credit to related interests) equals or exceeds the RCON Number lesser of $ 500,000 or 5 percent of total capital as ---- ------ defined for this purpose in agency regulations_________6165. . 0 . . . . . 1.b 2. Not applicable 3. a. Noninterest-bearing balances due from commercial banks in the U.S. (included in RCON Schedule RC, item 1.a) (exclude balances due from Federal Reserve Banks and cash ---- items in process of collection)____________________________________________________________0050. . 49,374 3.a b. Currency and coin (included in Schedule RC, item 1.a)______________________________________0080. . 0 3.b 4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for RCON others (include both retained servicing and purchased servicing): ---- a. Mortgages serviced under a GNMA contract___________________________________________________5500. . 0 4.a b. Mortgages serviced under a FHLMC contract: (1) Serviced with recourse to servicer_____________________________________________________5501. . 0 4.b.1 (2) Serviced without recourse to servicer:_________________________________________________5502. . 0 4.b.2 c. Mortgages serviced under a FNMA contract: (1) Serviced under a regular option contract_______________________________________________5503. . 0 4.c.1 (2) Serviced under a special option contract_______________________________________________5504. . 0 4.c.2 d. Mortgages serviced under other servicing contracts_________________________________________5505. . 0 4.d 5. Not applicable. RCON 6. Intangible assets: ---- a. Mortgage servicing rights__________________________________________________________________3164. . 0 6.a b. Other identifiable intangible assets: (1) Purchased credit card relationships____________________________________________________5506. . 0 6.b.1 (2) All other identifiable intangible assets_______________________________________________5507. . 1,020 6.b.2 c. Goodwill___________________________________________________________________________________3163. . 0 6.c d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10)_____________________2143. . 1,020 6.d e. Amount of intangible assets (inluded in item 6.b.(2) above)that have been grandfathered or are otherwise qualifying for regulatory capital purposes__________________6442. . 0 6.e RCON 7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to ---- redeem the debt________________________________________________________________________________3295. . 0 7. RCON 8. a. Other real estate owned: ---- (1) Direct and indirect investments in real estate ventures________________________________5372. . 0 8.a.1 (2) All other real estate owned: (a) Construction and land development__________________________________________________5508. . 0 8.a.2a (b) Farmland___________________________________________________________________________5509. . 0 8.a.2b (c) 1-4 family residential properties__________________________________________________5510. . 0 8.a.2c (d) Multifamily (5 or more) residential properties_____________________________________5511. . 0 8.a.2d (e) Nonfarm nonresidential properties__________________________________________________5512. . 0 8.a.2e (3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7)______________2150. . 0 8.a.3 b. Investments in unconsolidated subsidiaries and associated companies: (1) Direct and Indirect investments in real estate ventures________________________________5374. . 0 8.b.1 (2) All other investments in unconsolidated subsidiaries and associated companies__________5375. . 0 8.b.2 (3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)______________2130. . 0 8.b.3 c. Total assets of unconsolidated subsidiaries and associated companies_______________________5376. . 0 8.c
22 Schedule RC-M - Continued
Dollar Amounts in Thousands - --------------------------------------------------------------------------------------------------------------------------------- RCON 9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC, ---- item 23, "Perpetual preferred stock and related surplus"_______________________________________3778. . 0 9. 10. Mutual fund and annuity sales during the quarter (include proprietary, private label, RCON and third party products): ---- a. Money market funds_________________________________________________________________________6441. . 0 10.a b. Equity securities funds____________________________________________________________________8427. . 0 10.b c. Debt securities funds______________________________________________________________________8428. . 0 10.c d. Other mutual funds_________________________________________________________________________8429. . 0 10.d e. Annuities__________________________________________________________________________________8430. . 0 10.e f. Sales of propietary mutual funds and annuities (included in items 10.a through 10.e above)________________________________________________________________________________8784. . 0 10.f Memorandum Dollar Amounts in Thousands - --------------------------------------------------------------------------------------------------------------------------------- 1. Interbank holdings of capital instruments (to be completed for the December report RCON only): ---- a. Reciprocal holdings of banking organizations' capital instruments__________________________3836. . N/A M.1.a b. Nonreciprocal holdings of banking organizations' capital instruments_______________________3837. . N/A M.1.b
23 Schedule RC-N - Past Due and Nonaccrual Loans (1), Leases, and Other Assets The FFIEC regards the information reported in all of Memorandum item 1, in items 1 through 7, column A, and in Memorandum items 2 through 4, column A, as confidential.
C170 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- -------(Column A)------- -------(Column B)------- -------(Column C)------- Past due 30 through 89 Past due 90 days or more Nonaccrual days and still accruing and still accruing ------------------------ ------------------------ ------------------------ RCON RCON RCON ---- ---- ---- 1. Real estate loans_________________________1210. . 0 1211. . 0 1212. . 0 1. 2. Installment loans_________________________1214. . 0 1215. . 0 1216. . 0 2. 3. Credit cards and related plans____________1218. . 0 1219. . 0 1220. . 0 3. 4. Commercial (time and demand) and all other loans_______________________________1222. . 0 1223. . 0 1224. . 0 4. 5. Lease financing receivables_______________1226. . 0 1227. . 0 1228. . 0 5. 6. Debt securities and other assets (exclude other real estate owned and other repossessed assets)_______________________3505. . 0 3506. . 0 3507. . 0 6. - ----------------------------------------------------------------------------------------------------------------------------------- Amounts reported in items 1 through 5 above include guaranteed and unguaranteed portions of past due and nonaccrual loans and leases. Report in item 7 below certain guaranteed loans and leases that have already been included in the amounts reported in items 1 through 5. 7. Loans and leases reported in items 1 through 5 above which are wholly or RCON RCON RCON partially guaranteed by the U.S. ---- ---- ---- Government_______________________________5612. . 0 5613. . 0 5614. . 0 7. a. Guaranteed portion of loans and leases included in item 7 above______________5615. . 0 5616. . 0 5617. . 0 7.a Memoranda C173 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Restructured loans and leases included in Schedule RC-N, items 1 through 5, above RCON RCON RCON (and not reported in Schedule RC-C, ---- ---- ---- Memorandum item 1)_______________________1658. . 0 1659. . 0 1661. . 0 M.1 2. To be completed by banks with loans to finance agricultural production and other loans to farmers (Schedule RC-C, part I, item 3) exceeding five percent of total loans: RCON RCON RCON Agricultural loans included in Schedule ---- ---- ---- RC-N, items 1 through 4, above___________1230. . 0 1231. . 0 1232. . 0 M.2 3. Loans to finance commercial real estate, construction, and land development activities (not secured by real estate) RCON RCON RCON included in Schedule RC-N, items 2 ---- ---- ---- through 4, above_________________________5421. . 0 5422. . 0 5423. . 0 M.3 4. Real estate loans (sum of Memorandum items 4.a through 4.e must equal RCON RCON RCON Schedule RC-N, item 1, above): ---- ---- ---- a. Construction and land development_____5424. . 0 5425. . 0 5426. . 0 M.4a b. Secured by farmland___________________5427. . 0 5428. . 0 5429. . 0 M.4b c. Secured by 1-4 family residential properties: (1) Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit___________________5430. . 0 5431. . 0 5432. . 0 M.4c1 (2) All other loans secured by 1-4 family residential properties_____5433. . 0 5434. . 0 5435. . 0 M.4c2 d. Secured by multifamily (5 or more) residential properties________________5436. . 0 5437. . 0 5438. . 0 M.4d e. Secured by nonfarm nonresidential properties____________________________5439. . 0 5440. . 0 5441. . 0 M.4e
- ---------- (1) See instructions for loan classification used in this schedule. 24 Schedule RC-O - Other Data for Deposit Insurance Assessments
C175 < - Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- RCON 1. Unposted debits (see instructions): ---- a. Actual amount of all unposted debits__________________________________________________0030. . N/A 1.a OR b. Separate amount of unposted debits: (1) Actual amount of unposted debits to demand deposits_______________________________0031. . 0 1.b.1 (2) Actual amount of unposted debits to time and savings deposits (1)_________________0032. . 0 1.b.2 2. Unposted credits (see instructions): a. Actual amount of all unposted credits_________________________________________________3510. . N/A 2.a OR b. Separate amount of unposted credits: (1) Actual amount of unposted credits to demand deposits______________________________3512. . 0 2.b.1 (2) Actual amount of unposted credits to time and savings deposits (1)________________3514. . 0 2.b.2 3. Uninvested trust funds (cash) held in bank's own trust department (not included in total deposits)__________________________________________________________________________3520. . 0 3. 4. Deposits of consolidated subsidiaries (not included in total deposits): a. Demand deposits of consolidated subsidiaries__________________________________________2211. . 0 4.a b. Time and savings deposits (1) of consolidated subsidiaries____________________________2351. . 0 4.b c. Interest accrued and unpaid on deposits of consolidated subsidiaries__________________5514. . 0 4.c 5. Not applicable. Item 6 is not applicable to state nonmember banks that have not been authorized by the Federal Reserve to act as pass-through correspondents. 6. Reserve balance actually passed through to the Federal Reserve by the reporting bank on behalf of its respondent depository institutions that are also reflected as deposit liabilities of the reporting bank: RCON a. Amount reflected in demand deposits (included in Schedule RC-E, item 4 or 5, ---- column B)_____________________________________________________________________________2314. . 0 6.a b. Amount reflected in time and savings deposits (1) (included in Schedule RC-E, item 4 or 5, column A or C, but not column B)_________________________________________2315. . 0 6.b 7. Unamortized premiums and discounts on time and savings deposits:(1) a. Unamortized premiums__________________________________________________________________5516. . 0 7.a b. Unamortized discounts_________________________________________________________________5517. . 0 7.b 8. To be completed by banks with "Oakar deposits." Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s))____________________________________________________________________________5518. . N/A 8. 9. Deposits in lifeline accounts____________________________________________________________ . . . . . . . . . . 9. 10. Benefit-responsive "Depository Institution Investment Contracts" (included in total deposits)________________________________________________________________________________8432. . 0 10.
- ---------- (1) For FDIC insurance assessment purposes, "time and savings deposits" consists of nontransaction accounts and all transaction accounts other than demand deposits. 25 Schedule RC-O - Continued
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 11. Adjustments to demand deposits reported in Schedule RC-E for certain reciprocal demand balances: a. Amount by which demand deposits would be reduced if reciprocal demand balances RCON between the reporting bank and savings associations were reported on a net basis ---- rather than a gross basis in Schedule RC-E____________________________________________8785 0 11.a b. Amount by which demand deposits would be increased if reciprocal demand balances between the reporting bank and U.S. branches and agencies of foreign banks were reported on a gross basis rather than a net basis in Schedule RC-E____________________A181 0 11.b c. Amount by which demand deposits would be reduced if cash items in process of collection were included in the calculation of net reciprocal demand balances between the reporting bank and the domestic offices of U.S. banks and savings associations in Schedule RC-E_________________________________________________________A182 0 11.c Memoranda (To be completed each quarter except as noted) Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------------------- 1. Total deposits of the bank (sum of Memorandum items 1.a.(1) and 1.b.(1) must equal Schedule RC, item 13.a): RCON a. Deposit accounts of $100,000 or less: ---- (1) Amount of deposit accounts of $100,000 or less_____________________________________2702. . 0 M.1.a1 RCON Number (2) Number of deposit accounts of $100,000 or less ---- ------ (to be completed for the June report only)____________3779. . 0 . . . . . . . . M.1.a2 b. Deposit accounts of more than $100,000: (1) Amount of deposit accounts of more than $100,000___________________________________2710. . 0 M.1.b1 RCON Number (2) Number of deposit accounts of more than ---- ------ $100,000______________________________________________2722. . 0 . . . . . . . . M.1.b2 2. Estimated amount of uninsured deposits of the bank: a. An estimate of your bank's uninsured deposits can be determined by multiplying the number of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2) above by $100,000 and subtracting the result from the amount of deposit accounts of more than $100,000 reported in Memorandum item 1.b.(1) above. Indicate in the appropriate box at right whether your bank has a method or procedure RCON YES NO for determining a better estimate of uninsured deposits than the estimate ---- --- -- described above_______________________________________________________________________6861. . X M.2.a b. If the box marked YES has been checked, report the estimate of uninsured deposits determined by using your bank's method or procedure___________________________________5597. . N/A M.2.b - ----------------------------------------------------------------------------------------------------------------------------------- C177 < -
Person to whom questions about the Reports of Condition and Income should be directed: (612) 973-3306 Diane F. Hamernik, Accountant - ------------------------------------------------------------------------------- Name and Title (TEXT 8901) Area code/phone number/extension (TEXT 8902) 26 Schedule RC-R - Regulatory Capital This schedule must be completed by all banks as follows: Banks that reported total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1995, must complete items 2 through 9 and Memoranda items 1 and 2. Banks with assets of less than $1 billion must complete items 1 through 3 below or Schedule RC-R in its entirety, depending on their response to item 1 below. 1. Test for determining the extent to which Schedule RC-R must be completed. To be completed only by banks with total assets of less than $1 billion. Indicate in the appropriate box at the C180 < - right whether the bank has total capital RCON YES NO greater than or equal to eight percent of ---- --- -- adjusted total assets___________________________ 6056 X 1. For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for loan and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see instructions). If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked NO has been checked, the bank must complete the remainder of this schedule. A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than eight percent or that the bank is not in compliance with the risk-based capital guidelines.
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------- -------------------------------------------------- NOTE: All banks are required to complete (Column A) (Column B) items 2 and 3 below. See optional worksheet Subordinated Debt (1) and for items 3.a through 3.f. Intermediate Term Other Limited-Life Preferred Stock Capital Instruments 2. Subordinated debt (1) and other limited-life capital ------------------------- ---------------------- instruments (original weighted average maturity of at least five years) with a remaining maturity of: RCON RCON ---- ---- a. One year or less______________________________________3780. . 0 3786. . 0 2.a b. Over one year through two years_______________________3781. . 0 3787. . 0 2.b c. Over two years through three years____________________3782. . 0 3788. . 0 2.c d. Over three years through four years___________________3783. . 0 3789. . 0 2.d e. Over four years through five years____________________3784. . 0 3790. . 0 2.e f. Over five years_______________________________________3785. . 0 3791. . 0 2.f 3. Amounts used in calculating regulatory capital ratios (report amounts determined by the bank for its own internal regulatory capital analyses): a. Tier 1 capital_______________________________________________________________________8274. . 53,302 3.a b. Tier 2 capital_______________________________________________________________________8275. . 0 3.b c. Total risk-based capital_____________________________________________________________3792. . 53,302 3.c d. Excess allowance for loan and lease losses___________________________________________A222. . 0 3.d e. Risk-weighted assets_________________________________________________________________A223. . 48,961 3.e f. Average total assets_________________________________________________________________A224. . 79,461 3.f
Items 4-9 and Memoranda items 1 and 2 are to be completed by banks that answered NO to item 1 above and by banks with total assets of $1 billion or more.
------------------------------------------------------- (Column A) (Column B) Assets Recorded on the Credit Equivalent Amount Balance Sheet off-Balance Sheet items (2) ---------------------- --------------------------- 4. Assets and credit equivalent amounts of off-balance sheet items assigned to the Zero percent risk category: a. Assets recorded on the balance sheet: (1) Securities issued by, other claims on, and claims unconditionally guaranteed by, the U.S. RCON RCON Government and its agencies and other OECD ---- ---- central governments_______________________________3794. . N/A . . . . . . . . 4.a.1 (2) All other_________________________________________3795. . 750 . . . . . . . . 4.a.2 b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . . 3796. . N/A 4.b
- --------- (1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7. (2) Do not report in column B the risk-weighted amount of assets reported in column A. 27 Schedule RC-R - Continued
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------- 5. Assets and credit equivalent amounts of off-balance (Column A) (Column B) sheet items assigned to the 20 percent risk Assets Recorded on the Credit Equivalent Amount category: Balance Sheet off-Balance Sheet Items (1) ---------------------- --------------------------- a. Assets recorded on the balance sheet: (1) Claims conditionally guaranteed by the U.S. RCON RCON Government and its agencies and other OECD ---- ---- central governments_______________________________3798. . N/A . . . . . . . . 5.a.1 (2) Claims collateralized by securities issued by the U.S. Government and its agencies and other OECD central governments; by securities issued by U.S. Government-sponsored agencies; and by cash on deposit___________________________________3799. . N/A . . . . . . . . 5.a.2 (3) All other_________________________________________3800. . 50,953 . . . . . . . . 5.a.3 b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . 3801. . N/A 5.b 6. Assets and credit amount of off-balance sheet items assigned to the 50 percent risk category: a. Assets recorded on the balance sheet__________________3802. . 3 . . . . . . . . 6.a b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . 3803. . N/A 6.b 7. Assets and credit equivalent amounts of off-balance sheet items assigned to the 100 percent risk category: a. Assets recorded on the balance sheet__________________3804. . 39,789 . . . . . . . . 7.a b. Credit equivalent amount of off-balance sheet items___ . . . . . . . . . 3805. . N/A 7.b 8. On-balance sheet asset values excluded from the calculation of the risk-based capital ratio(2)___________3806. . 7 . . . . . . . . 8. 9. Total assets recorded on the balance sheet (sum of items 4.a, 5.a, 6.a, 7.a, and 8, column A) (must equal Schedule RC, item 12.c plus items 4.b and 4.c)___________3807. . 91,502 . . . . . . . . 9.
Memoranda
Dollar Amounts in Thousands - ----------------------------------------------------------------------------------------------------------------------- RCON 1. Current credit exposure across all off-balance sheet derivative contracts ---- covered by the risk-based capital standards_________________________________________8764. . N/A M.1
------------------------ With a remaining maturity of ------------------------- (Column A) (Column B) (Column C) Over one year One year or less through five years Over five years -------------------- ---------------------- ----------------------- 2. Notional principal amounts of off-balance sheet derivative contracts: (3) RCON RCON RCON ---- ---- ---- a. Interest rate contracts 3809. . N/A 8766. . N/A 8767 N/A M.2a b. Foreign exchange contracts 3812. . N/A 8769. . N/A 8770 N/A M.2b c. Gold contracts 8771. . N/A 8772. . N/A 8773 N/A M.2c d. Other precious metals contracts 8774. . N/A 8775. . N/A 8776 N/A M.2d e. other commodity contracts 8777. . N/A 8778. . N/A 8779 N/A M.2e f. Equity derivative contracts A000. . N/A A001. . N/A A002 N/A M.2f
- --------- (1) Do not report in column B the risk-weighted amount of assets reported in column A. (2) Include the difference between the fair value and the amortized cost of available-for-sale securities in item 8 and report the amortized cost of these securities in items 4 through 7 above. Item 8 also includes on-balance sheet asset values (or portions thereof) of off-balance sheet interest rate, foreign exchange rate, and commodity contracts and those contracts (e.g. future contracts) not subject to risk-based capital. Exclude from item 8 margin accounts and accrued receivables as well as any portion of the allowance for loan and lease losses in excess of the amount that may be included in Tier 2 capital. (3) Exclude foreign exchange contracts with an original maturity of 14 days or less and all futures contracts. 28 Optional Narrative Statement Concerning the Amounts Reported in the Reports of Condition and Income at close of business on June 30, 1996
FIRST TRUST NATIONAL ASSOCIATION ST. PAUL MN - -------------------------------------------------------------- ------------------------ ------------------------------- Legal Title of Bank City State The management of the reporting bank may, if it wishes, submit the truncated statement will appear as the bank's statement a brief narrative statement on the amounts reported in the both on agency computerized records and in computer-file re- Reports of Condition and Income. This optional statement will leases to the public. be made available to the public, along with the publicly available data in the Reports of Condition and Income, in re- All information furnished by the bank in the narrative state- sponse to any request for individual bank report data, How- ment must be accurate and not misleading. Appropriate efforts ever, the information reported in column A and in all of Memo- shall be taken by the submitting bank to ensure the statement's randum item 1 of Schedule RC-N is regarded as confidential and accuracy. The statement must be signed, in the space provided will not be released to the public. BANKS CHOOSING TO SUBMIT below, by a senior officer of the bank who thereby attests to THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT DOES its accuracy. NOT CONTAIN THE NAMES OR OTHER IDENTIFICATION OF INDIVIDUAL BANK CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CON- If, subsequent to the original submission, material changes are FIDENTIAL ITEMS IN SCHEDULE RC-N, OR ANY OTHER INFORMATION submitted for the data reported in the Reports of Condition and THAT THEY ARE NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD Income, the existing narrative statement will be deleted from COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing not the files, and from disclosure; the bank, at its option, may to make a statement may check the "No comment" box below and replace it with a statement, under signature, appropriate to should make no entries of any kind in the space provided for the amended data. the narrative statement; i.e., DO NOT enter in this space such phrases as "No statement," "Not applicable," "N/A," "No The optional narrative statement will appear in agency records comment," and "None." and in release to the public exactly as submitted (or amended as described in the preceding paragraph) by the management of the bank (except for the truncation of statements exceeding The optional statement must be entered on this sheet. The the 750-character limit described above). THE STATEMENT WILL statement should not exceed 100 words. Further, regardless NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY of the number of words, the statement must not exceed 750 AGENCIES FOR ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT characters, including punctuation, indentation, and standard SHALL NOT SIGNIFY THAT ANY FEDERAL SUPERVISORY AGENCY HAS VERI- spacing between words and sentences. If any submission should FIED OR CONFIRMED THE ACCURACY OF THE INFORMATION CONTAINED exceed 750 characters, as defined, it will be truncated at 750 THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY PUBLIC characters with no notice to the submitting bank and RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE REPORTING BANK. - ----------------------------------------------------------------------------------------------------------------------------------- C171 C172 < -
No comment: X (RCON 6979) BANK MANAGEMENT STATEMENT (please type or print clearly) (TEXT 6980): -------------------------------------- ----------------- Signature of Executive Officer of Bank Date of Signature 29 THIS PAGE TO BE COMPLETED BY ALL BANKS - ------------------------------------------------------------------------------- OMB No. for OCC: 1557-0081 OMB No. for FDIC: 3064-0052 OMB No. for Federal Reserve: 7100-0036 Expiration Date: 03/31/99 SPECIAL REPORT (Dollar Amounts in Thousands) CLOSE OF BUSINESS DATE: FDIC Certificate Number: June 30, 1996 90319 C700 < - - ------------------------------------------------------------------------------- LOANS TO EXECUTIVE OFFICERS (complete as of each Call Report Date) - ------------------------------------------------------------------------------- The following information is required by Public Laws 90-44 and 102-242, but does not constitute a part of the Report of Condition. With each Report of Condition, these Laws require all banks to furnish a report of all loans or other extensions of credit to their executive officers made since the date of the previous Report of Condition. Data regarding individual loans or other extensions of credit are not required. If no such loans or other extensions of credit were made during the period, insert "none" against subitem (a). (Exclude the first $15,000 of indebtedness of each executive officer under bank credit card plan.) See sections 215.2 and 215.3 of Title 12 of the Code of Federal Regulations (Federal Reserve Board Regulation O) for the definitions of "Executive officer" and "extension of credit," respectively. Exclude loans and other extensions of credit to directors and principal shareholders who are not executive officers. - -------------------------------------------------------------------------------
RCON ---- a. Number of loans made to executive officers since the previous Call Report date__________3561. . NONE a b. Total dollar amount of above loans (in thousands of dollars)________________________3562. . 0 b c. Range of interest charged on above loans (example: 9-3/4% = 9.75)________________7701/7702. . 0.00% to 0.00% c
- ----------------------------------------------------------------------------------------------------------- SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT: DATE (Month, Day, Year): /s/ [ , Asst. Secretary] 7-12-96 - ----------------------------------------------------------------------------------------------------------- NAME AND TITLE OF PERSON TO WHOM INQUIRES MAY BE DIRECTED: (TEXT 8903) AREA CODE/PHONE NUMBER/EXTENSION (TEXT 8904) (612) 973-3306 Diane F. Hamernik, Accountant - -----------------------------------------------------------------------------------------------------------
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