INDENTURE TRUSTr1
LJ
AVON URBAN RENEWAL AUTHORITY
and
UMB BANK, N.A.
as Trustee
INDENTURE OF TRUST
r
U
Dated as of February 15, 2008
This instrument is entered into by the within described parties in order to secure certain
Avon Urban Renewal Authority, Tax Increment Adjustable Rate Revenue Bonds (Town Center
West Area Urban Renewal Project) Series 2008, issued in the original aggregate principal
amount of $25,000,000, as well as any Additional Bonds, as more fully described herein.
11
® TABLE OF CONTENTS
(This Table of Contents is not a part of this Indenture of Trust and is only for
convenience of reference.)
Page
ARTICLE I DEFINITIONS 4
ARTICLE II THE BONDS
21
Section 2.01
Authorized Amount of Bonds
21
Section 2.02
Issuance of Series 2008 Bonds: Bond Provisions
22
Section 2.03
Interest on Bonds
23
Section 2.04
Execution; Limited Obligation
28
Section 2.05
Authentication
29
Section 2.06
Form of Bonds and Temporary Bonds
29
Section 2.07
Delivery of Bonds
30
Section 2.08
Mutilated, Lost, Stolen or Destroyed Bonds; Purchased Bonds
31
Section 2.09
Transfer and Exchange of Bonds; Persons Treated as Owners
31
Section 2.10
Required Information in Bond Form
32
Section 2.11
Cancellation
33
Section 2.12
Book-Entry-Only System
33
Section 2.13
Payments and Notices to Cede & Co
34
®
Section 2.14
Additional Bonds and Subordinate Debt
34
ARTICLE III RE
VENUES AND FUNDS
36
Section 3.01
Source of Payment of Bonds
36
Section 3.02
Creation of Funds
36
Section 3.03
Revenue Fund
37
Section 3.04
Interest Fund
38
Section 3.05
Flexible Pricing Short-Term Fund
40
Section 3.06
Bond Sinking Fund
40
Section 3.07
Redemption Fund
42
Section 3.08
Bond Reserve Fund
43
Section 3.09
Rebate Fund
45
Section 3.10
Bond Purchase Fund
45
Section 3.11
Expense Fund
45
Section 3.12
Project Fund
46
Section 3.13
Investment of Funds
47
Section 3.14
Non-Presentment of Tendered Bonds
48
Section 3.15
Trust Funds
48
Section 3.16
Drawings under the Credit Facility
49
Section 3.17
Repayment of Moneys from the Funds
49
ARTICLE IV PU
RCHASE OF BONDS; REDEMPTION OF BONDS
50
Section 4.01
Purchase on Demand of Owner While Bonds Bear Interest at a Daily
Rate, or Weekly Rate or Annual Rate
50
®
Section 4.02
Purchase While Bonds Bear Interest at a Flexible Pricing Short-Term
Rate
51
Section 4.03
Purchase on Stated Termination Date or Substitution Date
51
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Section 4.04
Purchase While Bonds Bear Interest at a Flexible Pricing Long-Term
Rate
52
Section 4.05
Purchase on any Adjustment Date
52
Section 4.06
Purchase on Notice of Certain Events
52
Section 4.07
Purchase of Tendered Bonds Delivered to the Trustee; Notices
53
Section 4.08
Remarketing of Tendered Bonds by Remarketing Agent
54
Section 4.09
Delivery of Bonds
54
Section 4.10
No Remarketing After Certain Defaults
55
Section 4.11
Redemption Dates and Prices
55
Section 4.12
Notice of Redemption
61
Section 4.13
No Partial Redemption After Default
61
Section 4.14
Selection of Series 2008 Bonds To Be Redeemed
62
Section 4.15
Limit on Remarketing
62
ARTICLE V MODE CONVERSION
63
Section 5.01
Authority for and Conditions to Conversion to an Annual Mode, a
Flexible Pricing Long-Term Mode or Short Mode
63
Section 5.02
Designation of Substitute Adjustment Date
65
Section 5.03
Authority for and Conditions to Conversion to a Fixed Rate
67
Section 5.04
Effect of Notices
68
ARTICLE VI GENERAL COVENANTS
68
Section 6.01
Payment of Debt Service Requirement
68
Section 6.02
Performance of Covenants; Authority
69
Section 6.03
Instruments of Further Assurance
69
Section 6.04
Recording and Filing
69
Section 6.05
Inspection of Records
69
Section 6.06
List of Bondowners
69
Section 6.07 Complete Urban Renewal Project, Amendment to Urban Renewal Plan;
Compliance With Cooperation Agreement 70
Section 6.08 Books and Accounts; Financial Statements 70
Section 6.09 Eminent Domain Proceedings 70
Section 6.10 Disposition of Property 70
Section 6.11 Protection of Security and Rights of Bondowners, Tax Covenants 71
Section 6.12 Maintenance of Existence 72
Section 6.13 Designation of Trustee as Bond Registrar and Paying Agent Designation
of Any Additional Paying Agents
72
Section 6.14
Credit Facility
72
Section 6.15
Rule 15c2-12 Compliance
73
ARTICLE VII EVENTS OF DEFAULT; REMEDIES
73
Section 7.01
Events of Default
73
Section 7.02
Acceleration
75
Section 7.03
Remedies; Rights of Bondholders
75
Section 7.04
Direction of Proceedings by Bondholders
77
Section 7.05
Application of Moneys
77
Section 7.06
Remedies Vested in Trustee
79
Section 7.07 Rights and Remedies of Bondholders 79
Section 7.08 Termination of Proceedings 80
-ii-
Section 7.09
Waiver of Events of Default
80
Section 7.10
Notice of Default
80
ARTICLE VIII TRUSTEE; REMARKETING AGENT
81
Section 8.01
Acceptance of the Trusts
81
Section 8.02
Compensation and Expenses of Trustee
83
Section 8.03
Notice to Bondholders
83
Section 8.04
Good Faith Reliance
83
Section 8.05
Dealings in Bonds
84
Section 8.06
Intervention by Trustee
84
Section 8.07
Successor Trustee by Merger or Consolidation
84
Section 8.08
Trustee Required; Eligibility
84
Section 8.09
Resignation by the Trustee
85
Section 8.10
Removal of the Trustee
85
Section 8.11
Appointment of Successor Trustee
85
Section 8.12
Judicial Appointment of Successor Trustee
86
Section 8.13
Concerning Any Successor Trustees
86
Section 8.14
Successor Trustee as Trustee of Funds, Paying Agent and Registrar...........
86
Section 8.15
Public Contracts for Services
86
Section 8.16
Remarketing Agent
87
Section 8.17
Qualifications of Remarketing Agent
88
ARTICLE IX SUPPLEMENTAL INDENTURES
89
Section 9.01
Supplemental Indentures Not Requiring Consent of Bondholders
89
®
Section 9.02
Supplemental Indentures Requiring Consent of Bondholders
90
Section 9.03
Consent of the Bank
91
ARTICLE X SATISFACTION OF THE INDENTURE
92
Section 10.01
Defeasance
92
Section 10.02
Liability of Authority Not Discharged
93
Section 10.03
Provision for Payment of a Portion of Bonds
93
Section 10.04
When Refunding Is Not Permitted
94
ARTICLE XI MANNER OF EVIDENCING OWNERSHIP OF BONDS
95
Section 11.01
Proof of Ownership
95
ARTICLE XII
AMENDMENT OF BOND RESOLUTION AND COOPERATION
AGREEMENT
95
Section 12.01
Amendments, Etc. to Bond Resolution and Cooperation Agreement Not
Requiring Consent of Registered Owners of the Bonds
95
Section 12.02
Amendments, Etc. to Bond Resolution and Cooperation Agreement
Requiring Consent of Registered Owners of the Bonds
96
ARTICLE XIII MISCELLANEOUS
97
Section 13.01
Limitation of Rights
97
Section 13.02
Bank Deemed Sole Owner
97
Section 13.03
No Recourse Against Officers or Agents
97
Section 13.04
Pledge of Revenues
97
Section 13.05
Severability
97
Section 13.06
Notices
98
is Section 13.07 Counterparts 99
Section 13.08 Governing Law 99
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E
E
Section 13.09
Section 13.10
Section 13.11
Section 13.12
Section 13.13
Section 13.14
Section 13.15
Section 13.16
Additional Notices to Rating Agencies....
Unclaimed Moneys
Holidays
References to Bank and Substitute Bank.
Rules of Interpretation
Captions
Certificates and Opinions
Exhibits
EXHIBIT A - BOND FORM
99
100
100
100
100
101
101
102
EXHIBIT B - DESCRIPTION OF URBAN RENEWAL PROJECT AREA
EXHIBIT C - DESCRIPTION OF CERTAIN SUBORDINATE DEBT OF THE AUTHORITY
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® INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as of February 15, 2008, and any amendments
hereto made in accordance herewith (this "Indenture"), is made by and between the AVON
URBAN RENEWAL AUTHORITY (the "Authority"), a public body corporate and politic duly
organized and existing as an urban renewal authority under the laws of the State of Colorado,
and UMB Bank, n.a. as trustee, (the "Trustee"), a national banking association duly organized
and existing under the laws of the United States of America having an office in Denver,
Colorado, being authorized to accept and execute trusts of the character herein set out; this
Indenture of Trust and all other amendments, supplements, restatements and other modifications
hereto, entered into in accordance with the provisions hereof, are herein collectively referred to
as the "Indenture."
WITNESSETH:
WHEREAS, the Authority is a public body corporate and politic, and has been duly
created, organized, established and authorized by the Town of Avon, Colorado (the "Town") to
transact business and exercise its powers as an urban renewal authority, all under and pursuant to
the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised
Statutes, as amended (the "Act"); and
WHEREAS, pursuant to Section 31-25-109 of the Act, the Authority has the power and
® authority to issue "bonds" (defined by the Act to mean and include bonds, interim certificates or
receipts, temporary bonds, certificates of indebtedness, debentures or other obligations, including
refunding obligations) to finance the activities or operations permitted and authorized to be
undertaken by the Authority under the Act; and
WHEREAS, an urban renewal plan, known as the "Town Center West Area Urban
Renewal Plan," (the "Urban Renewal Plan"), has been duly and regularly approved by the Town
Council of the Town for an urban renewal project under the Act (the "Urban Renewal Project");
and
WHEREAS, all applicable requirements of the Act and other provisions of law for and
precedent to the adoption and approval by the Town of the Urban Renewal Plan have been duly
complied with; and
WHEREAS, the Authority has determined that it is in the best interests of the Authority
and the citizens and taxpayers of the Town that, for the purpose of paying a portion of the costs
of the Urban Renewal Project, the Authority issue $25,000,000 of its Adjustable Rate Revenue
Bonds (Town Center West Area Urban Renewal Project) Series 2008 (the "Series 2008 Bonds"),
which shall be payable from the Trust Estate (as defined below); and
WHEREAS, in order to provide additional support for the repayment of the Bonds, the
Authority will enter into a Reimbursement Agreement dated as of February 15, 2008, with
DEPFA BANK p1c, acting through its New York Branch (the "Initial Credit Facility Provider"),
pursuant to which the Initial Credit Facility Provider will issue and deliver to the Trustee an
® irrevocable, transferable letter of credit (the "Initial Credit Facility") against which the Trustee
will be entitled to draw, in accordance with the terms thereof, up to an amount sufficient to pay
the aggregate principal amount of certain outstanding Bonds plus an amount up to 46 days'
interest on certain outstanding Bonds, calculated at an assumed rate of 12% per annum, and to
pay the purchase price of Tendered Bonds (as defined herein); and
WHEREAS, this Indenture shall also secure any Additional Bonds (as defined herein) on
a parity with, but not superior to, the Series 2008 Bonds (the Series 2008 Bonds and any
Additional Bonds being collectively referred to herein as the "Bonds"); and
WHEREAS, the Authority is authorized to issue the Bonds without an election; and
WHEREAS, the Town and the Authority have determined that it is in the best interest of
the Town and the Authority to enter into a Cooperation Agreement relating to the repayment by
the Authority to the Town of amounts advanced to the Authority by the Town pursuant to the
Replenishment Resolution and other advances and loans relating to the Project, which
obligations are subordinate to the payment of the Bonds; and
WHEREAS, all things necessary to make the Series 2008 Bonds, when authenticated by
the Trustee and issued as in this Indenture provided, the valid, binding and legal obligations of
the Authority according to their terms, and to constitute this Indenture a valid assignment and
pledge of the amounts pledged to the payment of the principal of and interest on the Series 2008
Bonds have been done and performed, and the execution and delivery of this Indenture, and the
execution, authentication and issuance of the Series 2008 Bonds, subject to the terms of this
® Indenture, have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE OF TRUST WITNESSETH:
GRANTING CLAUSES
That the Authority, in consideration of the premises and the acceptance by the Trustee of
the trusts hereby created and of the purchase and acceptance of the Bonds by the Registered
Owners thereof (as defined herein), and of the sum of one dollar ($1.00), lawful money of the
United States of America, to it duly paid by the Trustee at or before the execution and delivery of
these presents, and for other good and valuable consideration, the receipt of which is hereby
acknowledged, in order to secure the payment of the principal of, premium, if any, and interest
on the Bonds according to their tenor and effect, but only as set forth herein, and the payment of
the purchase price of Tendered Bonds, but only as set forth herein, and the payment of amounts
due under the Credit Agreement (as defined herein), and to secure the performance and
observance by the Authority of all of the covenants and obligations expressed or implied herein
and in the Bonds and in the Credit Agreement, does hereby assign and grant a security interest in
the following to UMB Bank, n.a. serving in its capacity hereunder, as trustee, and its successors
in trust and assigns forever, and to the Bank:
GRANTING CLAUSE FIRST
The Pledged Revenues, as defined herein;
•
2
® GRANTING CLAUSE SECOND
The Cooperation Agreement (as defined herein and to the extent set forth in said
definition and otherwise herein), including all extensions and renewals of the term thereof, if
any, together with certain rights, titles and interests of the Authority in and to the Cooperation
Agreement, including, but not limited to, the present and continuing right to make claim for,
collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits
and any other sums of money payable or receivable under the Cooperation Agreement, to bring
actions and proceedings thereunder or for the enforcement thereof, and to do any and all things
which the Authority under the Cooperation Agreement is or may become entitled to;
GRANTING CLAUSE THIRD
All amounts appropriated to the Authority by the Town pursuant to the Replenishment
Resolution (as defined herein); and
GRANTING CLAUSE FOURTH
All moneys and securities from time to time held by the Trustee under the terms of this
Indenture in the Trust Funds (as defined herein and as set forth in said definition and otherwise
herein) except for moneys deposited with or paid to the Trustee for the redemption of Bonds,
notice of the redemption of which shall have been duly given, which shall be held solely for the
® payments of those Bonds which are being redeemed.
TO HAVE AND TO HOLD all and singular such Trust Estate, whether now owned or
hereafter acquired and conveyed (by supplemental indenture or otherwise), unto the Trustee and
the Bank and their respective successors in said Trust and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts in this Indenture set forth for
the equal and proportionate benefit, security and protection of all present and future Registered
Owners of the Bonds, including the Bank Bonds, and the Reimbursement Obligations (as defined
herein) and all other amounts owed under the Credit Agreement from time to time issued under
and secured by this Indenture, without privilege, priority or distinction as to the lien or otherwise
of any of the Bonds over any of the other Bonds, except as specifically provided herein;
PROVIDED, HOWEVER, that if the Authority, its successors or assigns shall well and
truly pay, or cause to be paid, the principal of, premium, if any, and interest on the Bonds due or
to become due thereon, at the times and in the manner set forth in the Bonds according to the true
intent and meaning thereof, and shall cause the payments to be made on the Bonds as hereinafter
required, or shall provide, as permitted hereby, for the payment thereof in accordance with
Article X hereof, and shall well and truly cause to be kept, performed and observed all of its
covenants and conditions pursuant to the terms of this Indenture, and shall pay or cause to be
paid to the Trustee all sums of money due or to become due to the Trustee in accordance with the
terms and provisions of this Indenture and shall pay to the Bank all sums of money due or to
is become due under the Credit Agreement and the Credit Facility shall have been returned to the
Bank for cancellation, then upon the final payment thereof, this Indenture and the rights thereby
3
® granted shall cease, determine and be void; otherwise this Indenture shall remain in full force and
effect.
THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly
declared, that all Bonds issued and secured hereunder are to be issued, authenticated and
delivered and all said property, rights and interests, including, without limitation, the Trust
Estate, are to be dealt with and disposed of under, upon and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes as in this Indenture expressed, and
the Authority has agreed and covenanted and does hereby agree and covenant with the Trustee
and with the respective Registered Owners of the Bonds and the Bank as follows:
ARTICLE I
DEFINITIONS
As used in this Indenture, the following terms shall have the following meanings:
"Act" means the Colorado Urban Renewal Law, constituting part 1 of article 25 of title
31, Colorado Revised Statutes, as from time to time amended and supplemented.
"Additional Bonds " means any note, bond, interim certificate or receipt, temporary note,
certificate of indebtedness, debenture or other obligation issued by the Authority pursuant to
Section 2.14 hereof and having a claim upon the Trust Estate on a parity with the Series 2008
® Bonds.
"Adjustment Date " means (i) the Closing Date, (ii) any date which is the first day of an
Adjustment Period designated in the manner set forth in Section 5.01 hereof, (iii) any Substitute
Adjustment Date designated in the manner set forth in Section 5.02 hereof and (iv) any proposed
Conversion Date designated in the manner set forth in Section 5.03 hereof.
"Adjustment Period" means, with respect to each Bond, each period commencing on an
Adjustment Date for such Bond to and including the day immediately preceding the immediately
succeeding Adjustment Date for such Bond (or the Maturity thereof), during which period such
Bond shall operate in one type of Mode.
"Alternate Rate " means, on any Rate Determination Date, the rate per annum specified
in the index (the "Index") published by the Indexing Agent and in effect on such Rate
Determination Date. The Index shall be based upon yield evaluations at par of bonds, the
interest on which is excluded from gross income for purposes of federal income taxation, of not
less than five "high grade" component issuers selected by the Indexing Agent which shall
include, without limitation, issuers of general obligation bonds. The specific issuers included
among the component issuers may be changed from time to time by the Indexing Agent in its
discretion. The bonds on which the Index is based shall not include any bonds the interest on
which is subject to a "minimum tax" or similar tax under the Code, unless the Bonds are subject
to such tax. When Bonds are in the Daily Mode, the Weekly Mode, the Monthly Mode or the
® Flexible Pricing Short-Term Mode with an Adjustment Period of 30 days or less, the yield'
evaluation period for the Index shall be 30-day yield evaluations. When Bonds are in the
Flexible Pricing Short-Term Mode with an Adjustment Period of greater than 30 days but less
4
than or equal to 180 days, the yield evaluation period for the Index shall be 180-day yield
evaluations. When Bonds are in the Annual Mode or the Flexible Pricing Long-Term Mode with
an Adjustment Period greater than 180 days, the yield evaluation period for the Index shall be
one-year yield evaluations.
If at any particular time no Indexing Agent publishes an Index satisfying the
requirements of the preceding paragraph, the Alternate Rate for an Adjustment Period shall be
the rate per annum specified in the most recently published Index for a comparable Adjustment
Period.
"Annual Expense Account " means the Annual Expense Account of the Revenue Fund
created in Section 3.02 hereof.
"Annual Mode " means any Adjustment Period during which Rate Determination Date
occurs on the Business Day of each calendar year next preceding the Rate Change Date in such
calendar year in the manner set forth in Section 2.03(e) hereof and during which Bonds bear
interest at the Annual Rate.
"Annual Rate " means, for each Rate Period of twelve months within an Annual Mode
applicable to a Bond, a fixed per annum interest rate borne by such Bond established pursuant to
Section 2.03(e), 5.01 or 5.02(b) hereof equal to the lowest interest rate which, in the judgment of
the Remarketing Agent, would enable such Bond to be remarketed at the principal amount
® thereof, plus accrued interest thereon, if any, on the Rate Change Date for such Rate Period.
`Assessor' means the property tax assessor of the County or any successor to the
functions of the property tax assessor of the County.
"Authority " means (a) the Avon Urban Renewal Authority, an urban renewal authority
duly organized and existing under the Act, and (b) its successors and assigns.
"Authority Bond" means any Bond which is registered in the name of the Authority or
the Town.
"Authority Representative" means the Person at the time designated to act on behalf of
the Authority by written certificate furnished to the Trustee containing the specimen signature of
such Person and signed on behalf of the Authority by its duly authorized agent. Such certificate
may designate an alternate or alternates.
"Authorized Denomination " means, prior to the Conversion Date with respect to a
particular Bond, $100,000 or any integral multiple of $5,000 in excess thereof, and after the
Conversion Date with respect to a particular Bond, $5,000 or any integral multiple thereof.
"Available Moneys " means (i) with respect to any payment date for Bonds not in the
Fixed Mode occurring while the Credit Facility is in full force and effect, (A) moneys drawn
under the Credit Facility or Bond Reserve Credit Enhancement, (B) moneys constituting
proceeds of the Bonds, moneys constituting proceeds from the resale by the Remarketing Agent
of Bonds referred to in subsections (a) and (b) of Section 3.10 hereof, (C) moneys deposited
directly by the Authority with the Trustee, which moneys have been on deposit in the Interest
5
® Fund, Bond Sinking Fund, Redemption Fund or Bond Reserve Fund for at least 123 days during
and prior to which no petition in bankruptcy (or the other commencement of a bankruptcy or
similar proceeding) has been filed by or against the Authority under any applicable bankruptcy,
insolvency, reorganization or similar law now or hereafter in effect, (D) the proceeds of the sale
of any Additional Bonds or refunding obligations if, in the opinion of nationally recognized
counsel experienced in bankruptcy matters in a form acceptable to each Rating Agency then
maintaining a rating on the Bonds, the application of such moneys will not constitute a voidable
preference in the event a petition in bankruptcy (or other commencement of a bankruptcy or
similar proceeding) has been filed by or against the Authority under any applicable bankruptcy,
insolvency, reorganization or similar law now or hereafter in effect, and (E) the proceeds from
the investment of moneys qualifying as Available Moneys under clauses (A), (B), (C) or (D)
above, and (ii) with respect to any payment date occurring while the Credit Facility is not in full
force and effect or with respect to Bonds in the Fixed Mode, any moneys held by the Trustee and
the proceeds from the investment thereof. Notwithstanding the foregoing, when used with
respect to payment of any amounts due in respect of any Bank Bonds or Authority Bonds, the
term "Available Moneys" shall mean any moneys held by the Trustee and the proceeds from the
investment thereof, except for moneys drawn under the Credit Facility.
"Average Annual Debt Service" means for each Fiscal Year, the average annual Debt
Service Requirement for the Bonds from time to time Outstanding.
"Bank" means DEPFA BANK plc, acting through its New York Branch, and any
Substitute Bank.
"Bank Bonds " means Tendered Bonds purchased with moneys drawn under the Credit
Facility pursuant to Section 3.10(c) hereof and registered in the name of the Bank in accordance
with the Credit Agreement.
"Bank Rate " means the interest rate for the Bank Bonds set forth in the Credit
Agreement, but in no event more than the Maximum Interest Rate.
"Bond Counsel" means an attorney or firm of attorneys selected by the Authority and
experienced in the field of municipal bonds whose opinions are generally accepted by purchasers
of municipal bonds.
"Bond Purchase Agreement" means the Bond Purchase Agreement dated February 20,
2008, between the Authority and the Original Purchaser with respect to the Series 2008 Bonds.
"Bond Purchase Fund " means the Bond Purchase Fund created in Section 3.10 hereof.
"Bond Registrar " means, collectively, the Trustee and such other financial institutions, if
any, appointed as Bond Registrar pursuant to Section 6.13 hereof.
"Bond Register " means the registration records of the Authority kept by the Trustee to
evidence the registration and transfer of Bonds.
® "Bond Resolution " means the resolution adopted by the Board of Commissioners of the
Authority on February 12, 2008, authorizing the execution of this Indenture, the issuance, sale
6
and delivery of the Series 2008 Bonds and certain other matters, and any additional or
supplemental resolutions adopted in order to further authorize or validate this Indenture, as from
time to time adopted.
"Bond Reserve Credit Enhancement" means any insurance policy, surety bond, letter of
credit or similar instrument which is issued by any insurance company or financial institution,
the long term senior unsecured debt of which is rated in one of the two highest rating categories
by a Rating Agency, deposited in or credited to the Bond Reserve Fund, in lieu of or in partial
substitution for moneys required to be on deposit therein; provided that the obligation of the
Authority to pay any amounts to any such insurance company or financial institution shall be
Subordinated Indebtedness or Indebtedness on a parity with the Bonds.
"Bond Reserve Fund " means the Bond Reserve Fund created in Section 3.02 hereof.
"Bond Reserve Requirement " means upon initial issuance of the Bonds, an amount equal
to the least of (a) 10% of the stated principal amount of each series of the Bonds, unless original
issue discount or premium on such Bonds exceeds 2%, then 10% of the issue price of the Bonds;
(b) 100% of the maximum annual debt service on the Bonds; or (c) 125% of the average annual
debt service on the Bonds, or the maximum amount of proceeds of a Series of the Bonds which
may be deposited in the Bond Reserve Fund without adversely affecting the exclusion of the
interest on such Series from federal income taxation.
`'Bond Sinking Fund " means the Bond Sinking Fund created in Section 3.02 hereof.
"Bonds " means the Series 2008 Bonds and any Additional Bonds.
"Business Day " means a day which is not (i) a Saturday, Sunday or legal holiday on
which banking institutions in the State, the State of New York, or the state in which the office of
the Bank at which demands for payment are to be presented is located are authorized by law to
close or (ii) a day on which the New York Stock Exchange is closed.
"Closing Date " means February 22, 2008, the date of the initial issuance and delivery of
any of the Bonds.
"Code " means the Internal Revenue Code of 1986, as amended and the regulations, final,
proposed and temporary, promulgated thereunder, all as in effect on the date of delivery of any
of the Series 2008 Bonds.
"Conversion Date " means an Adjustment Date for any Bond on which it begins to bear
interest at a Fixed Rate.
"Cooperation Agreement " means that certain Amended and Restated Cooperation
Agreement dated as of February 15, 2008, between the Town and the Authority, relating to the
repayment by the Authority to the Town of amounts advanced to the Authority by the Town
pursuant to the Replenishment Resolution, and any supplements or amendments thereto in
® accordance herewith.
"County " means Eagle County, Colorado.
7
"Credit Agreement " means the Initial Credit Agreement or in the event of the delivery of
a Substitute Credit Facility, the Substitute Credit Agreement pursuant to which such Substitute
Credit Facility is issued.
"Credit Facility" means the Initial Credit Facility or in the event of the delivery of a
Substitute Credit Facility, such Substitute Credit Facility. All references to "Credit Facility"
shall be of no effect at any time that none of the Bonds are supported by the Initial Credit
Facility or a Substitute Credit Facility and all obligations owing to the Bank or the Substitute
Bank shall have been paid.
"Daily Mode" means any Adjustment Period of one day during which Rate
Determination Dates and Rate Change Dates occur on each Business Day in the manner set forth
in Section 2.03(b) hereof and during which Bonds bear interest at the Daily Rate.
"Daily Rate" means, for each Rate Period within a Daily Mode applicable to a Bond, a
fixed per annum interest rate borne by such Bond established pursuant to 2.03(b), 5.01 or 5.02(b)
hereof equal to the lowest interest rate which, in the judgment of the Remarketing Agent, would
enable such Bond to be remarketed at the principal amount thereof plus accrued interest thereon,
if any, on the Rate Change Date for such Rate Period.
"Debt Service Requirement " means the difference of (i) the sum of (a) principal of
outstanding Bonds payable in such fiscal year, whether by maturity, prepayment or redemption,
(b) interest on such outstanding Bonds payable in such fiscal year, (c) all applicable fees required
to be paid by the Authority in such fiscal year in connection with the outstanding Bonds, and (d)
amounts required to replenish any reserve funds required with respect to such outstanding Bonds
in such fiscal year, minus (ii) amounts available in the Interest Fund as capitalized interest, if
any, on such outstanding Bonds. To the extent the outstanding Bonds, or any portion thereof,
will not bear interest at a rate fixed for at least twelve months, the rate of interest on such
outstanding Bonds shall be assumed to be a rate which will produce an amount equal to the
average per annum rate of interest on such outstanding Bonds during the preceding twelve month
period.
"Default " means any event of default as defined in the Credit Agreement.
"Defaulted Interest " means interest on any Bond which is payable but not duly paid on
the date due.
"Demand Date " means (i) with respect to any Bond during a Daily Mode, the Business
Day on which the Trustee and the Remarketing Agent receive notice prior to 10:30 a.m., Eastern
time, from the Owner thereof demanding to have such Bond (or any portion thereof in an
Authorized Denomination) purchased (or the succeeding Business Day if such notice is received
after 10:30 a.m., Eastern time), all as provided in Section 4.01 hereof, (ii) with respect to any
Bond during a Weekly Mode, the Business Day specified in the notice received by the Trustee
upon which the Owner of such Bond intends to tender such Bond (or any portion thereof in an
Authorized Denomination) for purchase as provided in Section 4.01 hereof, which Business Day
shall be not less than seven calendar days after the date such notice is received, (iii) with respect
to any Bonds during a Monthly Mode, the Rate Change Date specified in the notice received by
8
the Trustee upon which the owner of such Bonds intends to tender such Bonds (or any portion
thereof in an Authorized Denomination) for purchase as provided in section 4.01 hereof, which
notice shall be given not less than five Business Days prior to such Rate Change Date; and (iv)
with respect to any Bond during an Annual Mode, the Rate Change Date which is not less than
fifteen calendar days after the date notice is received from the Owner of such Bond of the
Owner's intent to tender such Bond (or any portion thereof in an Authorized Denomination) for
purchase as provided in Section 4.01 hereof.
"DTC" means The Depository Trust Company, New York, New York, and any successor
corporation.
"Event of Default " has the meaning specified and defined in Section 7.01 hereof.
"Expense Fund" means the Trust Fund by that name established pursuant to Section 3.02
hereof.
"Federal Tax Exemption Certificate" or "Tax Compliance Certificate" means the
certificate concerning compliance with the requirements of the Code in relation to the
Authority's covenants under Section 6.11 hereof, to be delivered at the time of delivery of the
Series 2008 Bonds, and including any supplements or amendments thereto.
"Fiscal Year " means the fiscal year of the Authority, which currently begins on January
1 of each year and ends on December 31 of such year, or any other fiscal year of the Authority in
® the event the fiscal year of the Authority shall be modified.
"Fixed Mode " means the Adjustment Period commencing on the Conversion Date for a
Bond and ending on the Maturity thereof, as established pursuant to Section 5.03 hereof, during
which Bonds bear interest at the Fixed Rate.
"Fixed Rate " means, for the Fixed Mode applicable to a Bond, a fixed per annum interest
rate borne by such Bond established pursuant to Section 2.03(h) hereof equal to the lowest
interest rate which, in the judgment of the Remarketing Agent, would enable such Bond to be
remarketed at the principal amount thereof plus accrued interest thereon, if any, on the
Conversion Date for such Fixed Mode.
"Fixed Rate Interest Account " means the Fixed Rate Interest Account of the Interest
Fund created in Section 3.02 hereof.
"Fixed Rate Principal Account " means the Fixed Rate Principal Account of the Bond
Sinking Fund created in Section 3.02 hereof.
"Fixed Rate Redemption Account " means the Fixed Rate Redemption Account of the
Redemption Fund created in Section 3.02 hereof.
"Flexible Pricing Long-Term Mode" means any Adjustment Period during which the
Rate Determination Date and Rate Change Date for each Rate Period therein (which shall have a
® duration of 365 days or more and less than or equal to the remaining term of the Bonds) shall be
9
® designated by the Remarketing Agent upon the request of the Authority pursuant to Section 5.01
hereof and during which Bonds bear interest at the Flexible Pricing Long-Term Rate.
"Flexible Pricing Long-Term Rate " means, for each Rate Period within a Flexible
Pricing Long-Term Mode applicable to a Bond, a fixed per annum interest rate borne by such
Bond established pursuant to Section 2.03(g), 5.01 or 5.02(b) hereof equal to the lowest interest
rate which, in the judgment of the Remarketing Agent, would enable such Bond to be remarketed
at the principal amount thereof plus accrued interest thereon, if any, on the Rate Change Date for
such Rate Period.
"Flexible Pricing Short-Term Fund" means the Flexible Pricing Short-Term Fund
created in Section 3.02 hereof.
"Flexible Pricing Short-Term Mode" means any Adjustment Period during which the
Rate Determination Date and the Rate Change Date for each Rate Period therein (which shall
have a duration which is not less than seven days or more than 360 days) shall occur on the first
day of such Rate Period which shall be designated by the Remarketing Agent pursuant to Section
2.03(f), 5.01 or 5.02(b) hereof and during which Bonds bear interest at the Flexible Pricing
Short-Term Rate.
"Flexible Pricing Short-Term Rate " means, for each Rate Period within a Flexible
Pricing Short-Term Mode applicable to a Bond, a fixed per annum interest rate borne by such
® Bond established pursuant to Section 2.03(f), 5.01 or 5.02(b) hereof equal to the lowest interest
rate which, in the judgment of the Remarketing Agent, would enable such Bond to be remarketed
at the principal amount thereof on the Rate Change Date for such Rate Period.
"Fund" means any of the funds established pursuant to this Indenture.
"Governmental Obligations" means direct general obligations of (including obligations
issued or held in book-entry form on the books of) the Department of the Treasury of the United
States of America.
"Immediate Notice " means notice by telephone, telex, telecopier or electronic mail, to
such address as the addressee shall have directed in writing, promptly followed by written notice
by first class mail, postage prepaid; provided, however, that if any Person required to give an
Immediate Notice shall not have been provided with the necessary information as to the
electronic mail address, telephone, telex or telecopier number of an addressee, Immediate Notice
shall mean written notice by first class mail, postage prepaid.
"Indenture " means, collectively, this Indenture and any indenture supplemental hereto,
or any restatement, amendment or other modification thereof from time to time entered into in
accordance with the provisions of this Indenture.
"Independent Counsel " means an attorney duly admitted to practice law before the
highest court of any state and who is not a full-time employee or director of the Authority, the
® Town, the Original Purchaser, the Bank, the Remarketing Agent or the Trustee.
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"Indexing Agent " means Standard & Poor's Securities Services, a corporation duly
organized and existing under and by virtue of the laws of the State of New York, and its
successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no
longer publish the indices referred to in the definition of Alternate Rate, then the term "Indexing
Agent" shall be deemed to refer to any other entity publishing similar indices selected by the
Authority and approved by the Bank and the Remarketing Agent (neither of whom shall be under
any liability by reason of such approval).
"Initial Credit Agreement " means the Reimbursement Agreement dated as of February
15, 2008, among the Authority, the Town and the Bank, as it may be supplemented and amended
from time to time.
"Initial Credit Facility " means the irrevocable, transferable letter of credit dated the
Closing Date issued by the Initial Credit Facility Provider pursuant to the Initial Credit
Agreement to the Trustee, as amended from time to time (including without limitation any
amendment to extend the expiration date of such letter of credit).
"Initial Credit Facility Provider " means DEPFA BANK plc, acting through its New
York Branch.
"Interest Fund" means the Interest Fund created in Section 3.02 hereof.
"Interest Payment Date " means (i) for each Bond, each Adjustment Date (including
® without limitation a proposed Conversion Date, but excluding the Closing Date) therefor, (ii) for
any Bond in a Daily Mode, Weekly Mode or Monthly Mode, on the first Business Day of each
month, (iii) for any Bond in an Annual Mode, each June 1 and December 1, (iv) for any Bond in
a Flexible Pricing Long-Term Mode, the first day of the sixth calendar month following the
month in which the applicable Rate Period commences, the first day of each sixth month
thereafter and each Rate Change Date therefor, (v) for any Bond in a Flexible Pricing Short-
Term Mode, each Rate Change Date therefor, (vi) for any Bond in a Fixed Mode, each June 1
and December 1, commencing as provided in Section 5.03 hereof, (vii) for any Bank Bond, the
dates set for payment of interest on Bank Bonds as set forth in the Credit Agreement, and
(viii) for each Bond, the Maturity thereof.
"Interest Rate Agreement" means an interest rate exchange, hedge or similar agreement,
expressly identified in a certificate of the Authority Representative delivered to the Trustee as
having been entered into in connection with the Bonds, which agreement may include, without
limitation, an interest rate swap, a forward or futures contract or an option (e.g. a call, put, cap,
floor or collar).
"Issuance Expenses " means the fees and expenses of issuance and sale of the Bonds
permitted by the Act, including, but not limited to, the following:
(a) Expenses incurred by the Authority in connection with the issuance and
sale of the Bonds and in connection with the preparation and execution of the Indenture, the
• Remarketing Agreement, the Initial Credit Agreement, the Initial Credit Facility and any
amendments or supplements thereto, the fees and expenses of the Trustee in connection with the
® issuance of the Bonds, underwriting discount, credit enhancement fees, and legal, underwriting,
consulting and accounting fees and expenses and printing, photocopying and engraving costs.
(b) Any sums required to reimburse the Authority for advances made by it for
any of the above items.
"Maturity" means June 1, 2032, or with respect to each Bond bearing interest at a Fixed
Rate which has been assigned a specific serial maturity date pursuant to Section 4.11(c)(ii)
hereof, such serial maturity date.
"Maximum Interest Rate " means, with respect to Bonds other than Bank Bonds, the
lesser of 12% per annum or the maximum rate permitted by law, and with respect to Bank
Bonds, means the maximum rate permitted by law.
"Mode " means a Daily Mode, Weekly Mode, the Monthly Mode, the Annual Mode,
Flexible Pricing Short-Term Mode, Flexible Pricing Long-Term Mode or Fixed Mode.
"Monthly Mode" means any Adjustment Period during which the Rate Determination
Date occurs on the Business Day of each calendar month preceding the Rate Change Date in
such calendar month in the manner set forth in Section 2.03(d) hereof and during which the
Bonds bear interest at the Monthly Rate.
"Monthly Rate " means, for each Rate Period within a Monthly Mode applicable to the
® Bonds, a fixed per annum interest rate borne by such Bonds established pursuant to
Section 2.03(d), 5.01 or 5.02(b) hereof equal to the lowest interest rate which, in the judgment of
the Remarketing Agent, would enable such Bonds to be remarketed at the principal amount
thereof plus accrued interest thereon, if any, on the Rate Change Date for such Rate Period.
"Moody's " means Moody's Investors Service, Inc., a corporation organized and existing
under the laws of the State of New York, its successors and assigns and, if such corporation shall
be dissolved or liquidated or shall no longer perform the functions of a securities rating agency,
"Moody's" shall be deemed to refer to any other nationally recognized securities rating agency
designated by the Authority by notice to the Trustee, which rating agency then maintains a rating
with respect to the Series 2008 Bonds.
"No-Call Period" means the period of time during which a Bond in a Flexible Pricing
Long-.Term Mode or a Fixed Mode may not be called for optional redemption as set forth in
Section 4.11(a)(11i) or 4.11(a)(iv) hereof.
"Opinion of Bond Counsel" when used with reference to this Indenture means a written
opinion of Bond Counsel in form and substance acceptable to the Authority and the Trustee,
which opinion may be based on a ruling or rulings of the Internal Revenue Service.
"Original Purchaser " means, with respect to the Series 2008 Bonds, Stifel, Nicolaus &
Company, Incorporated, or its successors, and, with respect to any Additional Bonds, such
® purchaser or purchasers as the Authority may designate.
12
® "Outstanding, " "Bonds outstanding" or "outstanding Bonds " when used with reference
to Bonds means, as of any given date, all Bonds which have been duly authenticated and
delivered under this Indenture, except:
(a) Bonds cancelled by the Trustee pursuant to Section 2.11 hereof,
(b) Bonds for the payment or redemption of which cash or Governmental
Obligations shall have been theretofore deposited with the Trustee (whether upon or prior to the
Maturity or redemption date of any such Bonds) in accordance with Article X hereof,
(c) Bonds deemed to be tendered in accordance with Section 2.08 hereof or
no longer deemed to be outstanding as provided in Section 4.11(b)(iii) hereof; and
(d) Bonds in lieu of which other Bonds have been authenticated under Section
2.08 or 2.09 hereof.
"Participant " means those broker-dealers, banks and other financial institutions reflected
on the books of the Securities Depository.
"Paying Agent" means the Trustee and such other financial institutions, if any, as are
appointed additional Paying Agents pursuant to Section 6.13 hereof.
"Permitted Investments " means any of the following which at the time of investment are
legal investments for the Authority under the laws of the State for moneys proposed to be
invested therein:
(a) Direct obligations of the United States of America;
(b) Obligations, which are unconditionally guaranteed by the United States of
America, of (1) an agency or instrumentality of the United States of America, (ii) Banks for
Cooperatives, (iii) Federal Intermediate Credit Banks, (iv) Federal Home Loan Bank Board, (v)
Tennessee Valley Authority, (vi) Federal National Mortgage Association, (vii) Small Business
Administration, and (viii) any United States of America government-sponsored enterprise;
(c) Obligations, which are not unconditionally guaranteed by the United
States of America, of (i) Federal Home Loan Mortgage Corporation, (ii) Federal Land Banks,
(iii) Federal Intermediate Credit Banks, (iv) Banks for Cooperatives, (v) Federal Home Loan
Banks, (vi) Federal National Mortgage Association, and (vii) Student Loan Marketing
Association;
(d) Pre-refunded securities which are tax-exempt and for which cash or
obligations (constituting Federal Securities or obligations described in (a) or (b) above) in an
amount sufficient to pay the debt service when due has been irrevocably deposited with a fiscal
depository;
(e) Municipal debt obligations which are rated in one of the two highest rating
categories by Moody's and S&P;
13
(f) Demand or time deposits or negotiable certificates of deposit issued by a
bank, trust company or savings and loan association, which maintains a long-term rating of "A3"
or better or a short-term rating of "P-2" or better by Moody's or a long-term rating or "A-" or
better by S&P;
(g) Demand or time deposits or negotiable certificates of deposit issued by
any bank, trust company, or savings and loan association (which maintains a rating of a long-
term rating of "Baa3" or better or a short-term rating of "P-3" or better by Moody's or a long-
term rating of "BBB-" or better by S&P), but only if such deposit is (i) continuously and fully
insured by the Federal Deposit Insurance Corporation, or (ii) issued by an institution which has a
combined capital and surplus or shareholder's equity of at least $50,000,000, does not exceed
10% of such capital and surplus or shareholder's equity, and is continuously and fully secured by
Federal Securities or obligations described herein (which collateral shall have a market value of
at least 105% of the principal amount of the deposit, marked to market at least weekly);
(h) Repurchase agreements with a bank, trust company, or savings and loan
association (which maintains a long-term rating of "A3" or better or a short-term rating of "P-2"
or better by Moody's or a long-term rating or "A-" or better by S&P) or any entity which is
recognized as a primary dealer by the Federal Reserve Bank of New York, but only if the
repurchase agreement is secured by Federal Securities or obligations described in (a) or (b)
above (marked to market weekly) and only if the Trustee shall have received a perfected first
security interest in such securities and the Trustee or its appointed agent shall hold such
securities free and clear of the claims of third parties;
(i) Money market funds (which money market fund may include funds for
which the Bank, its affiliates or subsidiaries or the Trustee, or its affiliates or subsidiaries,
provide investment advisory or other management services) or investment company shares
which fund or company restricts their investments to Federal Securities or obligations described
in (a) or (b) above and to repurchase agreements secured by Federal Securities or obligations
described in (a) or (b) above, and which are approved by the Bank;
0) Corporate debt obligations which are rated in one of the two highest long
term rating categories of Moody's or S&P and which are approved by the Bank;
(k) Commercial paper (having original maturities of not more than 365 days)
rated in the highest rating category by Moody's or S&P which is approved by the Bank;
(1) Any guaranteed investment contract, guaranteed interest contract, annuity
contract, or funding agreement if, at the time the contract or agreement is entered into, the long-
term credit rating, financial obligations rating, claims paying ability rating, or financial strength
rating of the party, or of the guarantor of the party, with whom the Authority enters the contract
or agreement is, at the time of issuance, rated in one of the two highest rating categories by one
or more nationally recognized securities rating agencies that regularly issue such ratings; and
(m) Any other investment vehicle requested by the Authority in writing and
® approved by the Bank; and
14
0 (n) Any Colorado local government investment pool trust fund created
pursuant to Section 24-75-703.
"Person " means an individual, partnership, corporation, trust or unincorporated
organization, or a government or agency, instrumentality, programs account, fund, political
subdivision or corporation thereof.
"Pledged Property Tax Revenues" means, for each Fiscal Year and subject to Section
6.10 hereof, that portion of ad valorem property taxes produced by the levy at the rates fixed
each year by or for the governing bodies of the various taxing jurisdictions within or overlapping
the Urban Renewal Project Area, but excluding:
(i) ad valorem property taxes produced by any mill levy imposed by Confluence
Metropolitan District and Avon Station Metropolitan District pursuant to intergovernmental
agreement between such districts and the Authority; and
(ii) ad valorem property taxes produced by a mill levy of any special district formed after
February 22, 2008 pursuant to Title 32, Article 1, Colorado Revised Statutes, if such exclusion is
authorized and approved by the Authority,
which mill levy is in addition to, and not a replacement for, property taxes levied by
taxing entities in existence as of February 22, 2008, upon that portion of the valuation for
assessment of all taxable property within the Urban Renewal Project Area which is in excess of
the Property Tax Base Amount; provided, however, that such amount shall be reduced by any
lawful collection fee charged by the County.
"Pledged Revenues " or "Revenues " means the Pledged Property Tax Revenues and all
income derived from the investment and reinvestment of the Trust Funds.
"Principal Office " means the principal office of any Person designated as such in a
written notice to the Trustee by such Person.
"Project Fund" means the Project Fund created in Section 3.02 hereof.
"Property Tax Base Amount" means, for the 2008 collection year, $53,235,090, which is
the amount certified by the Assessor as the valuation for assessment of all taxable property
within the Urban Renewal Project Area last certified by the Assessor prior to the adoption of the
Urban Renewal Plan or any modification thereof; and provided, however, that in the event of a
general reassessment of taxable property in the Urban Renewal Project. Area, the valuation for
assessment of taxable property within the Urban Renewal Project Area shall be proportionately
adjusted in accordance with such general reassessment in the manner required by the Act.
"Rate Change Date " means for each Rate Period (i) during any Daily Mode, each
Business Day, (ii) during any Weekly Mode, Thursday or such other day of the week designated
as such by the Remarketing Agent from time to time, in accordance with the provisions of
® Section 2.03(c)(11) hereof, (iii) during the Monthly Mode, the first Business Day of each calendar
month; (iv) during any Annual Mode, any June 1 or December 1, (v) during any Flexible Pricing
Long-Term Mode, the Business Day(s) specified in the notice delivered to the Trustee in
15
® accordance with Section 5.01(b) or 5.02(b) hereof, (vi) during any Flexible Pricing Short-Term
Mode, the Business Day(s) specified in the notice delivered to the Trustee in accordance with
Section 2.03, 5.01(b) or 5.02(b) hereof and (vii) each Adjustment Date.
"Rate Determination Date " means for (i) each Rate Period during any Daily Mode, the
Rate Change Date for such Rate Period, (ii) each Rate Period during any Weekly Mode,
Wednesday or such other day of the week designated as such by the Remarketing Agent from
time to time, in accordance with the provisions of Section 2.03(c)(11) hereof, next preceding the
Rate Change Date for such Rate Period (unless such day is not a Business Day, in which case the
Rate Determination Date shall be the immediately preceding Business Day), (iii) each Rate
Period in a Monthly Mode, a date not later than the sixth Business Day preceding a Rate Change
Date; (iv) each Rate Period during any Annual Mode, a Business Day which shall be not less
than fifteen Business Days nor more than thirty Business Days (as determined by the
Remarketing Agent) before the Rate Change Date for such Rate Period, (v) each Rate Period
during any Flexible Pricing Long-Term Mode, the Business Day(s) specified in the notice
delivered to the Trustee in accordance with Section 5.01(b) or Section 5.02(b) hereof, which
Business Day(s) shall not be less than one calendar day or more than 30 calendar days prior to
the first day of such Rate Period, (vi) each Rate Period during any Flexible Pricing Short-Term
Mode, the Rate Change Date for such Rate Period specified in the notice delivered to the Trustee
in accordance with Section 2.03(f), 5.01(b) or 5.02(b) hereof, (vii) the Rate Period during a Fixed
Mode, the date of the firm underwriting or Bond Purchase Agreement referred to in Section 5.03
hereof, (viii) the Rate Period following a proposed Conversion Date in the event of a failed
® conversion, such proposed Conversion Date and (ix) the Rate Period following a failed Mode
conversion pursuant to Section 5.01(e) hereof, the proposed Adjustment Date for the initial Rate
Periods commencing on the Closing Date, the Rate Determination Dates shall be the Business
Day prior to the Closing Date.
"Rate Period " means, with respect to each Bond, each period commencing on a Rate
Change Date for such Bond to and including the day immediately preceding the immediately
succeeding Rate Change Date for such Bond (or the Maturity or date of redemption thereof)
during which period such Bond shall bear interest at one particular interest rate.
"Rating Agency " means each nationally recognized securities rating agency then
maintaining a rating on the Bonds and initially means S&P and Moody's.
"Rebate Fund" means the fund by that name established pursuant to Section 3.02 hereof.
"Record Date " means (i) with respect to any Bond during a Daily Mode or a Weekly
Mode, the last calendar day of the month (whether or not a Business Day) immediately preceding
each Interest Payment Date for such Bond, except for any Interest Payment Date which is an
Adjustment Date, (ii) with respect to any Bonds during a Monthly Mode, the Business Day
immediately preceding each Interest Payment Date which is an Adjustment Date for such Bonds,
(iv) with respect to any Bond during a Flexible Pricing Short-Term Mode, the Business Day
immediately preceding each Interest Payment Date for such Bond, (v) with respect to any Bond
during a Flexible Pricing Long-Term Mode, the 15th calendar day immediately preceding each
is Interest Payment Date (whether or not a Business Day) for such Bond, (vi) with respect to any
Bond during an Annual Mode, May 15 and November 15 (whether or not a Business Day), and
16
® (vii) with respect to any Bond during a Fixed Mode, May 15 and November 15 (whether or not a
Business Day); provided, however, that if the Conversion Date shall occur on or after May 15
but prior to June 1 or on or after November 15 but prior to December 1, the Record Date shall be
the Conversion Date.
"Redemption Fund" means the Redemption Fund created in Section 3.02 hereof.
"Registered Owner" or "Bondowner " or "Owner " of Bonds or "Bondholder " means the
Person or Persons in whose name or names a Bond shall be registered on the records of the
Authority kept by the Bond Registrar for that purpose in accordance with the provisions of this
Indenture.
"Reimbursement Obligations " has the meaning set forth in the Credit Agreement.
"Remarketing Agent " means the placement or remarketing agent at the time serving as
such under the Remarketing Agreement and designated as the Remarketing Agent for purposes
of this Indenture. The initial Remarketing Agent shall be Stifel, Nicolaus and Company,
Incorporated, as provided in the Remarketing Agreement.
"Remarketing Agreement " means the Remarketing Agreement dated as of February 15,
2008, between the Authority and the Remarketing Agent, as the same may be amended,
supplemented or assigned from time to time, or any similar agreement as may be substituted
® therefor.
"Replenishment Resolution " means the resolution adopted by the Town expressing its
present intent to lend additional moneys to the Authority, if necessary, to maintain the Bond
Reserve Fund at the Bond Reserve Requirement.
"Representation Letter " means the blanket issuer letter of representations from the
Authority to DTC to induce DTC to accept the Bonds as eligible for deposit at DTC.
"Revenue Fund " means the Revenue Fund created in Section 3.02 hereof.
"Securities Depository " means DTC or any successor securities depository appointed
pursuant to Section 2.12 hereof.
"Series " means any series of Bonds designated as such in the proceedings pursuant to
which such Bonds are issued.
"Series 2008 Bonds " means the $25,000,000 aggregate principal amount of the
Authority's Tax Increment Adjustable Rate Revenue Bonds (Town Center West Area Urban
Renewal Project) Series 2008, issued pursuant to this Indenture.
"Short Mode " means a Flexible Pricing Short-Term Mode, a Daily Mode, a Weekly
Mode or a Monthly Mode.
"Short Rate" means a Flexible Pricing Short-Term Rate, a Daily Rate, Weekly Rate, or
the Monthly Rate.
17
"SIFMA Index" means the Securities Industry and Financial Markets Association
Municipal Swap Index, produced by Municipal Market Data, or if such index is not published,
then such other index selected by the Trustee which reflects the yield of tax-exempt seven-day
variable rate demand bonds.
"S&P" means Standard & Poor's Ratings Service, a division of The McGraw-Hill
Companies, a corporation duly organized and existing under and by virtue of the laws of the
State of New York, its successors and assigns, except that if such corporation shall be dissolved
or liquidated or shall no longer perform the functions of a securities rating agency, then the
"S&P" shall be deemed to refer to any other nationally recognized securities rating agency
designated by the Authority by notice to the Trustee, which rating agency then maintains a rating
with respect to the Series 2008 Bonds.
"Special Interest Payment Date " means a special date fixed to pay Defaulted Interest on
the Bonds as further provided in Section 2.03(1) hereof.
"Special Record Date " means a special date fixed to determine the names and addresses
of Registered Owners for purposes of paying Defaulted Interest on a Special Interest Payment
Date, all as further provided in Section 2.03(1) hereof.
"State " means the State of Colorado.
"Stated Termination Date " means the stated date upon which the Credit Facility issued
® pursuant to a Credit Agreement by its term expires, as the same may be extended from time to
time.
"Subordinate Debt" means (a) the Town Subordinate Debt and (b) any other obligation
issued or incurred by the Authority pursuant to Section 2.14 hereof, and payable from the Trust
Estate on a basis which is subordinate to the claim thereon which secures any Outstanding Series
of the Bonds, including the Bank Bonds, and the Reimbursement Obligations and all other
amounts owed under the Credit Agreement.
"Substitute Adjustment Date " means (i) any Business Day during any Adjustment Period
for Bank Bonds or Authority Bonds and (ii) any Business Day after the No-Call Period for any
Bonds in a Flexible Pricing Long-Term Mode set forth in Section 4.11(a)(iii) hereof, in each case
designated by the Authority in accordance with Section 5.02 hereof as the first day of a new
Adjustment Period.
"Substitute Bank" means the commercial bank, trust company or other entity which
issues the Substitute Credit Facility under any Substitute Credit Agreement.
"Substitute Credit Agreement " means any agreement (other than the Initial Credit
Agreement) between the Authority and a Substitute Bank (which agreement shall be reasonably
satisfactory in form and substance to the Authority) as it may from time to time be amended or
supplemented, pursuant to which a Credit Facility shall be in effect.
"Substitute Credit Facility" means any letter of credit, bank bond purchase agreement,
revolving credit agreement, surety bond, insurance policy or other agreement or instrument under
18
® which any Person (other than the Authority) undertakes to make or provide funds to pay the
principal of, premium, if any (if the Credit Facility being replaced secures premium payable
upon an optional redemption of the Bonds), and interest on the Bonds and the purchase price of
Tendered Bonds, delivered or deemed delivered to and received by the Trustee (i) replacing the
then existing Credit Facility, (ii) dated as of a date prior to the Stated Termination Date of the
then existing Credit Facility, (iii) expiring on a date which is at least 15 days after an Interest
Payment Date and at least one year from the date of its issuance (unless the Bonds mature prior
to that time), (iv) issued on substantially identical terms and conditions as the then existing
Credit Facility, except that the Substitute Credit Facility may expire on a date which is later (but
not earlier) than the Stated Termination Date of the then existing Credit Facility, and except that
the stated amount of the Substitute Credit Facility shall equal the sum of (A) the aggregate
principal amount of Bonds at the time outstanding (other than Bonds in the Fixed Mode) (plus, if
the Credit Facility being replaced secures premium payable upon an optional redemption of the
Bonds, the maximum premium so secured), plus not less than (B) an amount equal to (1) 46
days' interest on all outstanding Bonds in a Daily Mode or Weekly Mode, plus (2) 46 days'
interest on all outstanding Bonds in an Annual Mode, Flexible Pricing Short-Term Mode, or a
Flexible Pricing Long-Term Mode; provided, however, that the foregoing amounts shall be
adjusted as necessary to either maintain a rating then existing on the Bonds, or to obtain a rating
on the Bonds by a Rating Agency, (v) accompanied by an Opinion of Bond Counsel to the effect
that the delivery thereof is authorized or permitted by the terms of this Indenture and the Act, and
will not adversely affect the exclusion from gross income of interest on the Bonds for federal
income tax purposes; however, none of the following shall be deemed a Substitute Credit
® Facility: a change in the Credit Agreement pursuant to which the Credit Facility is issued, or an
extension of the Stated Termination Date of the existing Credit Facility.
"Substitution Date " means the day on which a Substitute Credit Facility becomes
effective, which shall be no later than the Business Day prior to the Stated Termination Date of
the Credit Facility which is being replaced.
"Supplemental Public Securities Act" means the Supplemental Public Securities Act,
constituting Title 11, Article 57, Part 2, Colorado Revised Statutes.
"Tender Office " means that office of the Trustee designated in Section 13.06 hereof.
"Tendered Bonds " means Bonds tendered or deemed tendered for purchase pursuant to
Sections 4.01, 4.02, 4.03, 4.04, 4.05, 4.06 and 4.07 hereof.
"Town " means the Town of Avon, Colorado, and its successors and assigns.
"Town Subordinate Debt" means the obligations set forth on Exhibit C to this Indenture
and any other obligation issued or incurred by the Authority pursuant to Section 2.14 hereof
which is payable from the Trust Estate on a basis which is subordinate to the claim thereon
which secures the Bonds and amounts due under the Credit Agreement, and which is payable to
the Town.
•
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® "Trust Estate " means the rights, property and interests pledged and assigned by the
Authority under this Indenture to the Trustee and the Bank pursuant to the Granting Clauses of
this Indenture and the interest of the Trustee in the Credit Facility.
"Trust Funds " means all funds and accounts established under Section 3.02 hereof,
excluding the Rebate Fund, the Bond Purchase Fund and any escrow fund established to defease
any of the Bonds pursuant to Article X hereof.
"Trustee" means UMB Bank, n.a., a national banking association duly organized and
existing under and by virtue of the laws of the United States of America, having an office in
Denver, Colorado, and its successors, and any successor trustee at the time serving as successor
trustee hereunder.
"Urban Renewal Plan " means the "Town Center West Area Urban Renewal Plan" as
amended or supplemented from time to time in accordance with the Act and this Indenture.
"Urban Renewal Project" means undertakings and activities of the Authority in the
Urban Renewal Project Area for the elimination of blight and for the prevention of the
development or spread of slums and blight in accordance with the Urban Renewal Plan and the
Act.
"Urban Renewal Project Area " means the area described in Exhibit B attached hereto.
® "Urban Renewal Project Costs " means the Authority's costs properly attributable to the
Urban Renewal Project or any part thereof, including without limitation:
(a) the costs of labor and materials, of machinery, furnishings and equipment,
and of the restoration of property damaged or destroyed in connection with construction work;
(b) the costs of insurance premiums, indemnity and fidelity bonds, financing
charges, bank fees, taxes, or other municipal or governmental charges lawfully levied or
assessed;
(c) periodic fees of the Remarketing Agent, the Rating Agency and the
Trustee, and obligations due under the Credit Agreement;
(d) the payment of interest on the Bonds, including Bank Bonds;
(e) administrative and general overhead costs;
(f) the costs of reimbursing funds advanced by the Authority in anticipation
of reimbursement from Bond proceeds, including any intrafund or interfund loan;
(g) the costs of surveys, appraisals, plans, designs, specifications, and
estimates;
(h) the costs, fees, and expenses of printers, engineers, architects, financial
consultants, legal advisors, or other agents or employees;
20
® documents; (i) the costs of publishing, reproducing, posting, mailing, or recording
0) the costs of contingencies or reserves;
(k) the costs of preparing or amending any resolution or other instrument
relating to the Bonds or the Urban Renewal Project, including without limitation this Indenture;
(1) the costs of repaying any short-term financing, construction loans, and
other temporary loans, and of the incidental expenses incurred in connection with such loans;
(m) the costs of acquiring any property, rights, easements, licenses, privileges,
agreements, and franchises;
(n) the costs of demolition, removal, and relocation; and
(o) all other lawful costs as determined by the Board of Commissioners of the
Authority.
"Weekly Mode" means any Adjustment Period of seven days during which Rate
Determination Dates occur on the Business Day of each calendar week next preceding the Rate
Change Date in such calendar week in the manner set forth in Section 2.03(c) hereof and during
which Bonds bear interest at the Weekly Rate.
® "Weekly Rate " means, for each Rate Period within a Weekly Mode applicable to a Bond,
a fixed per annum interest rate borne by such Bond established pursuant to Section 2.03(c),
5.01(b) or 5.02(b) hereof equal to the lowest interest rate which, in the judgment of the
Remarketing Agent, would enable such Bond to be remarketed at the principal amount thereof,
plus accrued interest thereon, if any, on the Rate Change Date for such Rate Period.
"Written Request" means with reference to the Authority, a request in writing signed by
the Chairman, Vice-Chairman, the Authority Representative or any other officers designated by
the Authority.
ARTICLE II
THE BONDS
Section 2.01 Authorized Amount of Bonds. No Bonds may be issued under the
provisions of this Indenture except in accordance with this Article II. The total principal amount
of Bonds that may be issued by the Authority and which may be secured in any manner by the
Trust Estate is hereby expressly limited to (a) the $25,000,000 in aggregate principal amount of
the Series 2008 Bonds, (b) any Bonds issued pursuant to Section 2.09 hereof, and (c) any
Additional Bonds issued by the Authority pursuant to Section 2.14 hereof. The Authority may
also issue any Subordinate Debt payable from the Trust Estate on a subordinate basis as set forth
in Section 2.14 hereof.
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Section 11-57-204 of the Supplemental Act provides that a public entity, including the
Authority, may elect in an act of issuance to apply any or all of the provisions of the
Supplemental Act to the Bonds. The Authority hereby elects to apply all of the provisions of the
Supplemental Act to the Bonds. The Bonds are issued under the authority of the Act and the
Supplemental Act and shall so recite on each Bond, a form of which is attached as Exhibit A.
Pursuant to Section 11-57-210, Colorado Revised Statutes, such recital conclusively imparts full
compliance with all the provisions of said sections, and the Bonds issued containing such recital
shall be incontestable for any cause whatsoever after their delivery for value.
Section 2.02 Issuance of Series 2008 Bonds: Bond Provisions. The Series 2008 Bonds
shall be designated "Avon Urban Renewal Authority, Tax Increment Adjustable Rate Revenue
Bonds (Town Center West Area Urban Renewal Project) Series 2008" and shall be in the
aggregate principal amount of $25,000,000. The Bonds shall be issuable as fully registered
bonds, without coupons, in any Authorized Denomination, substantially in the form attached as
Exhibit A hereto. Unless the Authority shall otherwise direct, the 2008 Bonds shall be lettered
and numbered from R-1 and upwards. The Bonds, as initially issued, will be dated the Closing
Date and shall mature, be subject to prior redemption and optional and mandatory tender as
provided in Article IV hereof and further subject to the designation of additional maturity dates
in connection with a Conversion Date.
Each Bond authenticated prior to the first Interest Payment Date thereon shall bear
interest from the Closing Date and thereafter interest shall accrue as set forth in the next
® paragraph, except that if, as shown by the records of the Trustee, interest on such Bond shall be
in default, any Bond issued in exchange for or upon the registration of transfer of such Bond
shall bear interest from (i) the date to which interest has been paid in full on such Bond or, (ii) if
no interest has been paid on such Bond, the Closing Date. Each Bond shall bear interest on
overdue principal and, to the extent permitted by law, on overdue premium, if any, and interest at
the rates borne by such Bond from the date on which such principal, premium or interest became
due and payable. Bank Bonds shall bear interest at the Bank Rate and shall be payable on the
dates as set forth in the Credit Agreement, notwithstanding any other provisions hereof.
Interest on Bonds in a Daily Mode, Weekly Mode or a Monthly Mode shall be payable
on each Interest Payment Date for the period from the later of (i) the preceding Interest Payment
Date occurring during the Rate Period to which interest has been paid or (ii) the Adjustment Date
for such Daily Mode, Weekly Mode, or Monthly Mode, as the case may be, to the earlier of (A)
the day preceding such Interest Payment Date or (B) the Adjustment Date for the Mode which
succeeds such Daily Mode, Weekly Mode, or Monthly Mode, as the case may be. Interest on
Bonds in a Flexible Pricing Short-Term Mode shall be payable on each Interest Payment Date
for the period from the Rate Change Date for such Bonds to, but not including, the next
succeeding Rate Change Date. Interest on Bonds in an Annual Mode shall be payable on each
Interest Payment Date for the period to, but not including, such Interest Payment Date from the
later of (1) the Rate Change Date for such Bonds or (ii) the preceding Interest Payment Date
occurring during the Rate Period to which interest has been paid. Interest on Bonds in a Flexible
Pricing Long-Term Mode shall be payable on each Interest Payment Date for the period to, but
not including, such Interest Payment Date from the later of (i) the Rate Change Date for such
Bonds or (ii) the preceding Interest Payment Date occurring during the Rate Period to which
interest has been paid. Interest on Bonds in a Fixed Mode shall be payable on each Interest
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Payment Date for the period from the Conversion Date to, but not including, the next succeeding
June 1 or December 1 and from each succeeding June 1 or December 1, as the case may be, to,
but not including, the next succeeding June 1 or December 1. Interest on Bank Bonds shall be
payable on the dates and in the amounts as set forth in the Credit Agreement.
The principal of, premium, if any, and interest on the Bonds shall be payable in any coin
or currency of the United States of America which, at the respective dates of payment thereof, is
legal tender for the payment of public and private debts.
The principal of and premium, if any, on any Bonds shall be payable at the Principal
Office of the Trustee, upon presentation and surrender of such Bonds. Any payment of the
purchase price of a Tendered Bond shall be payable at the Tender Office, upon presentation and
surrender of such Tendered Bond, as provided in Section 4.08 hereof.
Unless otherwise required by the Representation Letter, payment of interest on Bonds
bearing interest at a Daily Rate, a Weekly Rate, a Monthly Rate, an Annual Rate, a Flexible
Pricing Long-Term Rate or a Fixed Rate shall be paid by wire transfer or check mailed on the
Interest Payment Date to the Person appearing on the Bond Register as the Registered Owner
thereof as of the close of business of the Trustee on the Record Date at the address of such
Owner as it appears on the Bond Register. Payment of interest on Bonds bearing interest at a
Flexible Pricing Short-Term Rate shall be made to the Person appearing on the Bond Register as
the Registered Owner thereof as of the close of business of the Trustee on the Record Date, upon
presentation and surrender of such Bond at the Principal Office of the Trustee on the applicable
Interest Payment Date. Payment of interest on any Bond shall be made to any Owner of
$1,000,000 or more in aggregate principal amount of Bonds as of the close of business of the
Trustee on the Record Date for a particular Interest Payment Date by wire transfer to such Owner
on such Interest Payment Date upon written notice from such Owner containing the wire transfer
address within the continental United States to which such Owner wishes to have such wire
directed, which written notice is received not later than the Business Day next preceding the
Record Date; provided that such wire transfer shall only be made for Bonds bearing interest at a
Flexible Pricing Short-Term Rate upon presentation and surrender of such Bonds at the Principal
Office of the Trustee on the applicable Interest Payment Date.
Section 2.03 Interest on Bonds. (a) General. The Bonds shall bear interest from and
including the Closing Date until payment of the principal or redemption price thereof shall have
been made or provided for in accordance with the provisions hereof, whether at Maturity, upon
redemption, acceleration or otherwise. Interest accrued on the Bonds during each Rate Period
shall be paid in arrears on each Interest Payment Date. Interest on the Bonds shall be computed
(i) during any Short Mode upon the basis of a 365-day or a 366-day year, as applicable, for the
number of days actually elapsed and (ii) during any Annual Mode or Flexible Pricing Long-Term
Mode or during a Fixed Mode, upon the basis of a 360-day year consisting of twelve 30-day
months. The Bonds shall initially bear interest at a Weekly Rate. The Bonds shall continue to
bear interest at a Weekly Rate until and unless any portion thereof is converted to a different
Mode as provided in Section 5.01, 5.02 or 5.03 hereof. At no time shall the Bonds bear interest
at a rate higher than the Maximum Interest Rate.
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0 (b) Daily Mode.
(i) For each Rate Period during any Daily Mode, Bonds in such Mode
shall bear interest beginning on the Rate Change Date at the Daily Rate determined on the Rate
Determination Date in the following manner for each such Rate Period. No later than 10:30
a.m., Eastern time, on the Rate Determination Date for each such Rate Period, the Remarketing
Agent will determine, and is required to give telephonic notice (confirmed by telecopy) to the
Trustee of, the Daily Rate. Except on an Adjustment Date, in the event that the Daily Rate is not
determined by the Remarketing Agent, the rate of interest borne by the Bonds bearing interest at
a Daily Rate for the immediately preceding Business Day will be the Daily Rate for such Bond
for the day as of which such determination is not made.
(ii) If at any time the Remarketing Agent shall determine that, in its
judgment, the scheduled Rate Determination Dates or Rate Change Dates during a Daily Mode
have become inappropriate (taking into account general market practice with respect to periodic
adjustment of rates on instruments comparable to the Bonds bearing interest at the Daily Rate,
whether based upon the time of compilation or reporting of any interest rate or financial index or
indicator or otherwise), the Remarketing Agent may, after consultation with the Authority,
designate new scheduled Rate Determination Dates and/or Rate Change Dates, to remain in
effect until another re-determination of scheduled Rate Determination Dates or Rate Change
Dates in accordance with this paragraph. The Remarketing Agent shall give written notice of
any change in scheduled Rate Determination Dates and/or Rate Change Dates during a Daily
® Mode to the Trustee, the Bank and the Authority, and such change shall become effective on the
first scheduled Rate Determination Date or Rate Change Date, as the case may be, so designated
occurring not less than 14 days following the giving of such notice. Promptly upon receipt of
such notice, the Trustee shall notify or cause the Remarketing Agent to notify each affected
Bondholder of such change in writing.
(c) Weekly Mode.
(1) For each Rate Period during any Weekly Mode, Bonds in such
Mode shall bear interest beginning on the Rate Change Date at the Weekly Rate determined on
the Rate Determination Date in the following manner for each such Rate Period. No later than
11:00 a.m., Eastern time, on the Rate Determination Date for each such Rate Period, the
Remarketing Agent will determine, and is required to give telephonic notice (confirmed by
telecopy) to the Trustee, of the Weekly Rate. Except on an Adjustment Date, in the event that
the Weekly Rate is not determined by the Remarketing Agent on a Rate Determination Date, the
rate of interest borne by the Bonds bearing interest at a Weekly Rate for the immediately
preceding Rate Period shall remain in effect; provided that if such rate is not determined by the
Remarketing Agent for two consecutive weeks, the interest rate to be borne by such Bonds shall
be equal to the SIFMA Index most recently published prior to the Rate Determination Date.
(ii) If at any time the Remarketing Agent shall determine that, in its
judgment, the scheduled Rate Determination Dates or Rate Change Dates during a Weekly Mode
have become inappropriate (taking into account general market practice with respect to periodic
adjustment of rates on instruments comparable to the Bonds bearing interest at the Weekly Rate,
whether based upon the time of compilation or reporting of any interest rate or financial index or
24
indicator or otherwise), the Remarketing Agent may, after consultation with the Authority,
designate new scheduled Rate Determination Dates and/or Rate Change Dates, to remain in
effect until another re-determination of scheduled Rate Determination Dates or Rate Change
Dates in accordance with this paragraph. The Remarketing Agent shall give written notice of
any change in scheduled Rate Determination Dates and/or Rate Change Dates during a Weekly
Mode to the Trustee, the Bank and the Authority, and such change shall become effective on the
first scheduled Rate Determination Date or Rate Change Date, as the case may be, so designated
occurring not less than 14 days following the giving of such notice. Promptly upon receipt of
such notice, the Trustee shall notify or cause the Remarketing Agent to notify each affected
Bondholder of such change in writing.
(d) Monthly Mode.
(1) For each Rate Period during a Monthly Mode, Bonds shall bear
interest beginning on the Rate Change Date at the Monthly Rate determined on the Rate
Determination Date in the following manner for each such Rate Period. No later than 11:00
a.m., Eastern time, on the Rate Determination Date for each such Rate Period, the Remarketing
Agent will determine and is required to give notice by telecopy to the Trustee of the Monthly
Rate. Except on an Adjustment Date, in the event that the Monthly Rate is not determined by the
Remarketing Agent on a Rate Determination Date, the rate of interest borne by Bonds for the
immediately preceding Rate Period shall remain in effect.
(ii) If at any time the Remarketing Agent shall determine that, in its
judgment, the scheduled Rate Determination Dates or Rate Change Dates during a Monthly
Mode have become inappropriate (taking into account general market practice with respect to
periodic adjustment of rates on instruments comparable to the Bonds bearing interest at the
Monthly Rate, whether based upon the time of compilation or reporting of any interest rate or
financial index or indicator or otherwise), the Remarketing Agent may, after consultation with
the Authority, designate new scheduled Rate Determination Dates and/or Rate Change Dates, to
remain in effect until another re-determination of scheduled Rate Determination Dates or Rate
Change Dates in accordance with this paragraph. The Remarketing Agent shall give written
notice of any change in scheduled Rate Determination Dates and/or Rate Change Dates during a
Monthly Mode to the Authority, the Trustee, the Bank, and such change shall become effective
on the first scheduled Rate Determination Date or Rate Change Date, as the case may be, so
designated occurring not less than 14 days following the giving of such notice. Promptly upon
receipt of such notice, the Trustee shall notify or cause the Remarketing Agent to notify each
affected Bondholder of such change in writing.
(e) Annual Mode.
(i) For each Rate Period during any Annual Mode, Bonds in such
Mode shall bear interest beginning on the Rate Change Date at the Annual Rate determined on
the Rate Determination Date in the following manner for each such Rate Period. No later than
11:00 a.m., Eastern time, on the Rate Determination Date for each such Rate Period, the
Remarketing Agent will determine, and is required to give telephonic notice (confirmed by
telecopy) to the Trustee, of the Annual Rate. Except on an Adjustment Date, in the event that the
Annual Rate is not determined by the Remarketing Agent on a Rate Determination Date, the rate
25
® of interest borne by the Bonds bearing interest at an Annual Rate for the immediately preceding
Rate Period shall remain in effect.
(ii) If at any time the Remarketing Agent shall determine that, in its
judgment, the scheduled Rate Determination Dates or Rate Change Dates during an Annual
Mode have become inappropriate (taking into account general market practice with respect to
periodic adjustment of rates on instruments comparable to the Bonds bearing interest at the
Annual Rate, whether based upon the time of compilation or reporting of any interest rate or
financial index or indicator or otherwise), the Remarketing Agent may, after consultation with
the Authority, designate new scheduled Rate Determination Dates and/or Rate Change Dates, to
remain in effect until another re-determination of scheduled Rate Determination Dates or Rate
Change Dates in accordance with this paragraph. The Remarketing Agent shall give written
notice of any change in scheduled Rate Determination Dates and/or Rate Change Dates during an
Annual Mode to the Trustee, the Bank and the Authority, and such change shall become
effective on the first scheduled Rate Determination Date or Rate Change Date, as the case may
be, so designated occurring not less than 30 days following the giving of such notice. Promptly
upon receipt of such notice, the Trustee shall notify or cause the Remarketing Agent to notify
each affected Bondholder of such change in writing.
(f) Flexible Pricing Short-Term Mode.
(i) For each Rate Period during any Flexible Pricing Short-Term
® Mode, each Bond which will bear interest at a Flexible Pricing Short-Term Rate for such Rate
Period shall bear interest beginning on the Rate Change Date at the Flexible Pricing Short-Term
Rate determined on the Rate Determination Date in the following manner for each such Rate
Period. No later than 11:00 a.m., Eastern time, on the Rate Determination Date for a Bond
bearing interest at the Flexible Pricing Short-Term Rate, the Remarketing Agent will determine,
and is required to give telephonic notice (confirmed by telecopy) to the Trustee of (A) the
duration of the Rate Period for such Bond by specifying the succeeding Rate Change Date
(which shall also be the succeeding Rate Determination Date) for such Bond, which Rate Change
Date shall be no later than the Business Day prior to the Stated Termination Date if a Credit
Facility is required to be in place and (B) the Flexible Pricing Short-Term Rate applicable to
such Bond bearing interest at the Flexible Pricing Short-Term Rate during such Rate Period. The
last day of such Rate Period must be a Business Day and the day next succeeding such Business
Day must also be a Business Day. Except on an Adjustment Date, in the event that the Flexible
Pricing Short-Term Rate for any Bond is not determined by the Remarketing Agent on any Rate
Determination Date, such Bond shall bear interest at the same rate of interest borne by such
Bond for the immediately preceding Rate Period for a Rate Period of the shortest possible
duration.
(ii) The Remarketing Agent shall determine the duration of Rate
Periods during a Flexible Pricing Short-Term Mode as will, in the judgment of the Remarketing
Agent, result in the lowest aggregate cost being payable by the Authority with respect to the
Bonds bearing interest at Flexible Pricing Short-Term Rates, taking into account interest and any
other determinable fees and expenses. The Remarketing Agent may establish different Rate
® Periods on the same Rate Change Date for Bonds in the Flexible Pricing Short-Term Mode in
order to achieve an average duration of Rate Periods that, in the judgment of the Remarketing
26
® Agent, is most likely to achieve the lowest total aggregate cost being payable by the Authority
with respect to such Bonds bearing interest at a Flexible Pricing Short-Term Rate, taking into
account interest and any other determinable fees and expenses. The Remarketing Agent's
determination shall be based upon the market for and the relative yields of the Bonds and other
securities that bear interest at a variable rate or at fixed rates that, in the judgment of the
Remarketing Agent, are otherwise comparable to the Bonds, or any fact or circumstance relating
to the Bonds or affecting the market for the Bonds or affecting such other comparable securities
in a manner that, in the judgment of the Remarketing Agent, will affect the market for the Bonds.
The Remarketing Agent, in its discretion, may consider such information and resources as it
deems appropriate in making the determinations required by this paragraph, but the Remarketing
Agent's determination shall be based solely upon the Remarketing Agent's judgment, and the
Remarketing Agent's determination shall be conclusive and binding upon all parties. Except on
an Adjustment Date, in the event that the Rate Period for any Bond in a Flexible Pricing Short-
Term Mode is not determined by the Remarketing Agent as provided in this paragraph, the Rate
Period for such Bond shall be a Rate Period of the shortest possible duration.
(g) Flexible Pricing Long-Term Mode.
(1) For each Rate Period during any Flexible Pricing Long-Term
Mode each Bond which will bear interest at a Flexible Pricing Long-Term Rate for such Rate
Period shall bear interest beginning on the Rate Change Date at the Flexible Pricing Long-Term
Rate determined on the Rate Determination Date in the following manner for such Rate Period.
No later than 11:00 a.m., Eastern time, on the Rate Determination Date for each Rate Period
during a Flexible Pricing Long-Term Mode applicable to a particular Bond, the Remarketing
Agent will determine a fixed per annum interest rate to be borne by such Bond for such Rate
Period and is required to give telephonic notice (confirmed by telecopy) to the Trustee of the
Flexible Pricing Long-Term Rate. In the event that the Flexible Pricing Long-Term Rate for any
Bond is not determined by the Remarketing Agent for the initial Rate Period, the rate of interest
borne by such Bonds shall be determined pursuant to Section 5.01(e) hereof. Except on an
Adjustment Date, if the Remarketing Agent shall fail to determine a Flexible Pricing Long-Term
Rate on a Rate Determination Date for a Rate Period within a Flexible Pricing Long-Term Mode,
the Flexible Pricing Long-Term Rate for the preceding Rate Period shall remain in effect for
such Rate Period.
(ii) The Remarketing Agent upon the request of the Authority will
determine the duration of Rate Periods during a Flexible Pricing Long-Term Mode as will, in the
judgment of the Remarketing Agent, result in the lowest aggregate cost being payable by the
Authority with respect to the Bonds bearing interest at Flexible Pricing Long-Term Rates, taking
into account interest and any other determinable fees and expenses. The Remarketing Agent
may establish different Rate Periods on the same Rate Change Date for Bonds in a Flexible
Pricing Long-Term Mode in order to achieve an average duration of Rate Periods that, in the
judgment of the Remarketing Agent, is most likely to achieve the lowest total aggregate cost
being payable by the Authority with respect to such Bonds, taking into account interest and any
other determinable fees and expenses. The Remarketing Agent's determination will be based
upon the market for and the relative yields of the Bonds and other securities that bear interest at a
variable rate or at fixed rates that, in the judgment of the Remarketing Agent, are otherwise
comparable to the Bonds, or any fact or circumstance relating to the Bonds or affecting the
27
® market for the Bonds or affecting such other comparable securities in a manner that, in the
judgment of the Remarketing Agent, will affect the market for the Bonds. The Remarketing
Agent's determination will be conclusive and binding upon all parties. Except on an Adjustment
Date, in the event that the Rate Period for any Bond in a Flexible Pricing Long-Term Mode is
not determined by the Remarketing Agent as provided in this paragraph, the Rate Period for such
Bond will be a 365-day Rate Period.
(h) Fixed Rate. From and after the Conversion Date for a Bond, such Bond
shall bear interest at the Fixed Rate with respect thereto established as provided in Section 5.03
hereof.
(i) Defaulted Interest. Defaulted Interest with respect to any Bond shall cease
to be payable to the Owner of such Bond on the relevant Record Date and shall be payable to the
Owner in whose name such Bond is registered at the close of business of the Trustee on the
Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Authority shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Bond and the date of the proposed payment (which date
shall be such as will enable the Trustee to comply with the next sentence hereof), and at the same
time the Authority 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 Bondholders entitled to such
is Defaulted Interest as provided in this subsection. Following receipt of such funds, the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not
more than 15 nor less than 10 days prior to the date of the proposed payment and not less than
ten days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Authority of such Special Record Date and, in the name and at the expense
of the Authority, shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first class postage prepaid, to each Owner of a Bond
at the address of such Owner as it appears on the Bond Register not less than ten days prior to
such Special Record Date. Such Defaulted Interest shall be paid to the Owners in whose names
the Bonds on which such Defaulted Interest is to be paid are registered on such Special Record
Date.
0) Information for Bondholders. The Trustee agrees to provide to any
Bondholder, upon the written request of such Bondholder, information regarding the Adjustment
Periods, Rate Periods, Interest Payment Dates, optional redemption provisions and interest rate
or rates applicable to such Bondholder's Bonds. The Trustee may impose a reasonable fee,
including recovery of its costs for this service.
(k) Notices. The Remarketing Agent agrees to provide to the Authority, the
Trustee and the Bank notice of all determinations made by the Remarketing Agent pursuant to
this Indenture including, but not limited to, interest rate determinations and duration of Rate
Periods, on a timely basis.
® Section 2.04 Execution; Limited Obligation. (a) The Series 2008 Bonds shall be
executed on behalf of the Authority with the manual or facsimile signature of its Chairman or
28
® Vice Chairman and shall have impressed or imprinted thereon the official seal of the Authority
and be attested with the manual or facsimile signature of the Executive Director/Secretary of the
Authority. All authorized facsimile signatures shall have the same force and effect as if
manually signed.
(b) The Series 2008 Bonds are and shall be special obligations of the
Authority and each Series is equally secured by an irrevocable pledge of, and payable as to
principal and interest and the purchase price of Tendered Bonds from, the portions of the Trust
Estate provided herein, without priority for number, date of sale, date of execution or
authentication or date of delivery, except as provided herein. Principal of and interest on the
Series 2008 Bonds and the purchase price of Tendered Bonds shall not constitute an
indebtedness of the Town, the State or any political subdivision thereof, and neither the Town,
the State nor any political subdivision thereof shall be liable thereon, nor in any event shall the
principal of or interest on the Series 2008 Bonds be payable out of any funds or properties other
than the Trust Estate. Further, the Series 2008 Bonds shall not constitute a debt or an
indebtedness within the meaning of any constitutional, charter or statutory debt limitation or
provision applicable to the Town. Neither the members of the Authority nor any Persons
executing the Series 2008 Bonds shall be liable personally on the Series 2008 Bonds.
Section 2.05 Authentication. No Bond shall be valid or obligatory for any purpose or
entitled to any security or benefit under this Indenture unless and until a certificate of
authentication on such Bond substantially in the form set forth in Exhibit A hereto shall have
® been duly executed by the Trustee, and such executed certificate of the Trustee upon any such
Bond shall be conclusive evidence that such Bond has been authenticated and delivered under
this Indenture. The Trustee shall insert the authentication date on each Bond authenticated
hereunder. The certificate of authentication of the Trustee on any Bond shall be deemed to have
been executed by it if signed by an authorized agent of the Trustee, but it shall not be necessary
that the same officer or employee sign the certificate of authentication on all of the Bonds issued
hereunder.
Section 2.06 Form of Bonds and Temporary Bonds. The Bonds shall be substantially
in the form set forth in Exhibit A hereto with such appropriate variations, omissions and
insertions as are permitted or required by this Indenture or deemed necessary by the Trustee and
the Authority; provided, however, that the Bonds may be modified in such manner as is
approved by the Authority for the purpose of reflecting the substitution of a Substitute Credit
Facility or the elimination of a Credit Facility in accordance with the terms hereof. Following
the Conversion Date for any Bond, the form of such Bond may be appropriately revised to reflect
the conversion of the interest rate on such Bond to the Fixed Rate, to delete the provisions of the
form of Bond set forth in Exhibit A hereto which are then of no further force and effect, to
include a description of the Fixed Mode, the terms upon which such Bond may or is required to
be redeemed and any additional security therefor and to make any other changes therein which
are necessary or appropriate in the circumstances.
Bonds may be initially issued in temporary form exchangeable for definitive Bonds of the
same Maturity when ready for delivery. The temporary Bonds shall be in the form of registered
® Bonds without coupons in Authorized Denominations, substantially in the form of Exhibit A
hereto, with such appropriate omissions, insertions and variations as may be required with
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respect to such temporary Bonds and may contain such reference to any of the provisions of this
Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and
be authenticated by the Trustee upon the same conditions and in substantially the same manner
as the definitive Bonds. If the Authority issues temporary Bonds it will execute and furnish
definitive Bonds without delay and thereupon the temporary Bonds may be surrendered for
cancellation in exchange therefor at the Principal Office of the Trustee, and the Trustee shall
authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal
amount of definitive Bonds of the same Maturity and tenor of Authorized Denominations. Until
so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as
definitive Bonds authenticated and delivered hereunder.
Section 2.07 Delivery of Bonds. Upon the execution and delivery of this Indenture, the
Authority shall execute and deliver to the Trustee and the Trustee shall authenticate the Series
2008 Bonds to be issued and deliver such Series 2008 Bonds to the Original Purchaser as may be
directed by the Authority as hereinafter in this Section provided.
Prior to the delivery by the Trustee of any of the Series 2008 Bonds, there shall be filed
with or delivered to the Trustee:
(a) a copy, duly certified by the Executive Director/Secretary of the
Authority, of the resolutions adopted and approved by the Authority authorizing the execution
and delivery of the Initial Credit Agreement, the Bond Purchase Agreement, the Remarketing
Agreement, this Indenture, and the issuance and sale of the Series 2008 Bonds;
(b) the original executed Initial Credit Facility and an original executed
counterpart of this Indenture, the Bond Purchase Agreement, the Remarketing Agreement and
the Initial Credit Agreement;
(c) a request and authorization to the Trustee on behalf of the Authority and
signed by the Authority Representative to authenticate and deliver the Series 2008 Bonds to the
Original Purchaser upon payment to the Trustee, but for the account of the Authority, of the
proceeds from the sale of the Series 2008 Bonds;
(d) a certificate signed by an officer of the Remarketing Agent certifying that
the Weekly Rate has been determined by the Remarketing Agent in accordance with
Section 2.03 hereof and setting forth the initial Weekly Rate; and
(e) such other closing documents and opinions of counsel as the Trustee or the
Authority may reasonably require.
The proceeds of the Series 2008 Bonds to the date of their delivery less an amount of
$150,000 retained by the Original Purchaser representing the underwriter's discount, shall be,
and the Trustee hereby acknowledges and confirms that such proceeds were, deposited with the
Trustee in the funds and accounts established under this Indenture and/or used as follows:
is (1) to the Expense Fund, the sum of $110,000;
(2) to the Bond Reserve Fund, the sum of $2,149,753.94;
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(3) to the Interest Fund, the sum of $2,660,517.22 of capitalized
0 interest; and
(4) to the Project Fund, the balance of the proceeds.
Section 2.08 Mutilated, Lost, Stolen or Destroyed Bonds; Purchased Bonds. In the
event any temporary or definitive Bond is mutilated, lost, stolen or destroyed, the Authority may
execute and the Trustee may authenticate a new Bond of like form, tenor, date, Maturity and
Authorized Denomination as that mutilated, lost, stolen or destroyed and bearing a number not
contemporaneously outstanding; provided that, in the case of any mutilated Bond, such mutilated
Bond shall first be surrendered to the Authority, and in the case of any lost, stolen or destroyed
Bond, there shall be first furnished to the Authority and the Trustee evidence of such loss, theft
or destruction satisfactory to the Authority and the Trustee, together with indemnity satisfactory
to them. In the event any such Bond shall have matured or been called for redemption, instead of
issuing a duplicate Bond the Authority may pay the same without surrender thereof. The
Authority and the Trustee may charge the Owner of such Bond with their reasonable fees and
expenses in this connection.
In the event that sufficient moneys are on deposit in the Bond Purchase Fund to pay the
applicable purchase price of any Tendered Bond as provided herein, such Tendered Bond shall
be deemed to have been purchased whether or not delivered by the Owner thereof on the date
such Tendered Bond is to be purchased. In the event any such purchased Tendered Bond is not
so delivered, the Authority shall execute and the Trustee shall authenticate and deliver a
replacement Bond of like date, Maturity, tenor and Authorized Denomination and in the same
aggregate principal amount as the Tendered Bond and bearing a number not contemporaneously
outstanding. In the event any such purchased Tendered Bond is so delivered, the Trustee shall
register such Tendered Bond as provided in Section 4.09(b) hereof.
All duplicate Bonds issued and authenticated pursuant to this Section shall constitute
original contractual obligations of the Authority (whether or not, in the case of the first paragraph
of this Section, lost, stolen or destroyed Bonds are at any time found by anyone) and shall be
entitled to equal and proportionate rights and benefits hereunder as all other outstanding Bonds
issued hereunder.
All Bonds shall be owned upon the express condition that the foregoing provisions, to the
extent permitted by law, are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost, stolen or purchased Bonds, and shall preclude any and all other rights or
remedies.
Section 2.09 Transfer and Exchange of Bonds; Persons Treated as Owners. (a) Subject
to the limitations contained in subsection (c) of this Section, upon surrender for registration of
transfer of any Bond at the Principal Office of the Trustee, duly endorsed by, or accompanied by
a written instrument or instruments of transfer in form satisfactory to the Trustee and duly
executed by the Bondholder or such Bondholder's attorney duly authorized in writing, the
Authority shall execute and the Trustee shall authenticate and deliver in the name of the
0 transferee or transferees a new Bond or Bonds of like date and tenor in Authorized
Denominations of the same Maturity for the aggregate principal amount which the Registered
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Owner is entitled to receive bearing numbers not contemporaneously outstanding. Subject to the
limitations contained in subsection (c) of this Section, Bonds may be exchanged at such times at
such Principal Office of the Trustee upon surrender thereof together with an assignment duly
executed by the Registered Owner thereof or such Owner's attorney in such form and with
guarantee of signature as shall be satisfactory to the Trustee for an equal aggregate principal
amount of Bonds of like date, Maturity and tenor as the Bonds surrendered for exchange in any
other Authorized Denomination bearing numbers not contemporaneously outstanding. The
execution by the Authority of any Bond of any Authorized Denomination shall constitute full
and due authorization of such denomination and the Trustee shall thereby be authorized to
authenticate and deliver such registered Bond.
(b) No service charge shall be imposed upon the Owner for any exchange or
transfer of Bonds. The Authority and the Trustee may, however, require payment by the Person
requesting an exchange or transfer of Bonds of a sum sufficient to cover any tax, fee or other
governmental charge that may be imposed in relation thereto, except in the case of the issuance
of a Bond or Bonds for the unredeemed portion of a Bond surrendered for redemption in part.
(c) Subsequent to the Conversion Date for any Bond, the Trustee shall not be
required to transfer or exchange such Bond during the period commencing on the Record Date
next preceding any Interest Payment Date of such Bond and ending on such Interest Payment
Date, or to transfer or exchange such Bond after the mailing of notice calling such Bond for
redemption has been made as herein provided or during the period of 15 days next preceding the
giving of notice of redemption of Bonds of the same Maturity and interest rate which were
converted on the same date. Prior to the Conversion Date applicable to any Bonds, the Trustee
shall not be required to exchange or register the transfer of such Bond after the mailing of notice
calling such Bond for redemption has been made as herein provided, except that the Authority
and the Trustee shall be required to issue or register the transfer of Tendered Bonds after such
date of mailing of notice of redemption.
(d) Bonds delivered upon any registration of transfer or exchange as provided
herein or as provided in Section 2.08 hereof shall be valid special obligations of the Authority,
evidencing the same debt as the Bonds surrendered, shall be secured by this Indenture and shall
be entitled to all of the security and benefits hereof to the same extent as the Bond surrendered.
(e) The Authority, the Trustee, the Bank, and the Remarketing Agent, may
treat the Registered Owner of any Bond as the absolute Owner thereof for all purposes, whether
or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. All
payments of or on account of the principal of and premium, if any, and interest on any such Bond
as herein provided shall be made only to or upon the written order of the Registered Owner
thereof or such Owner's legal representative, but such registration may be changed as herein
provided. All such payments shall be valid and effectual to satisfy and discharge the liability
upon such Bond to the extent of the sum or sums so paid.
Section 2.10 Required Information in Bond Form. (a) On each date on which the
Trustee authenticates and delivers a Bond, it shall complete the information required to be
® inserted by the Bond form and shall keep a record of such information, identifying each such
Bond by CUSIP number or in any other manner as deemed appropriate by the Trustee.
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(b) On each date on which the Trustee authenticates and delivers Bonds
bearing interest at a Fixed Rate from and after the Conversion Date applicable to such Bonds, the
Trustee shall issue Bonds with such information as required pursuant to Section 5.03 hereof.
Section 2.11 Cancellation. Any Bond surrendered for the purpose of payment, or
retirement or for exchange or transfer or for replacement shall be cancelled upon surrender
thereof to the Trustee. If the Authority shall acquire any of the Bonds, the Authority shall
deliver such Bonds to the Trustee for cancellation and the Trustee shall cancel the same.
Certification of Bonds cancelled by the Trustee shall be made to the Authority. Cancelled Bonds
may be destroyed by the Trustee unless instructions to the contrary are received from the
Authority. Upon the date of final Maturity or redemption of all Bonds, the Trustee shall destroy
any inventory of unissued certificates.
Section 2.12 Book-Entry-Only System. The Bonds shall be initially issued in the form
of a separate single fully registered Bond. Upon initial issuance, the Ownership of such Bond
shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC, and
except as provided in this Section, all of the outstanding Bonds shall be registered in the Bond
Register in the name of Cede & Co., as nominee of DTC.
With respect to Bonds registered in the Bond Register in the name of the Securities
Depository, or its nominee, the Authority and the Trustee shall have no responsibility or
obligation to any Participant or to any person on behalf of whom such a Participant holds an
interest in the Bonds. Without limiting the immediately preceding sentence, the Authority and
the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the
records of the Securities Depository, its nominee or any Participant with respect to any
Ownership interest in the Bonds, (ii) the delivery to any Participant or any other Person, other
than a Bondholder, as shown in the Bond Register, of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any Participant or any other Person,
other than a Bondholder, as shown in the Bond Register, of any amount with respect to principal
of, premium, if any, or interest on, the Bonds. Notwithstanding any other provision of this
Indenture to the contrary, the Authority and the Trustee shall be entitled to treat and consider the
Person in whose name each Bond is registered in the Bond Register as the absolute Owner of
such Bond for the purpose of payment of principal, premium, if any, and interest with respect to
such Bond, for the purpose of giving notices of redemption and other matters with respect to
such Bond, for the purpose of registering transfers with respect to such Bond, and for all other
purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the
Bonds only to or upon the order of the respective Bondholders, as shown in the Bond Register as
provided in this Indenture and all such payments shall be valid and effective to fully satisfy and
discharge the Authority's obligations with respect to payment of principal of, premium, if any,
and interest on the Bonds to the extent of the sum or sums so paid. No Person other than a
Bondholder, as shown in the Bond Register, shall receive a Bond certificate evidencing the
obligation of the Authority to make payments of principal, premium, if any, and interest pursuant
to this Indenture.
The Bondholders have no right to a depository for the Bonds. The Authority may remove
® the Securities Depository for any reason at any time. In such event, the Authority shall (i)
appoint a successor Securities Depository, qualified to act as such under Section 17(a) of the
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® Securities Exchange Act of 1934, as amended, notify the Securities Depository and Participants
of the appointment of such successor Securities Depository and transfer one or more separate
Bond certificates to such successor Securities Depository or (ii) notify the Securities Depository
of the availability through the Securities Depository of Bond certificates and transfer one or more
separate Bond certificates to Participants having Bonds credited to their Securities Depository
accounts. Upon the request of the Bank, if the Bank is the beneficial Owner of Bank Bonds, the
Authority and the Trustee shall deliver Bond certificates, registered in the name of the Bank or
the Bank's designee, to the Bank to hold as Bank Bonds. In such event, the Bonds shall no
longer be restricted to being registered in the Bond Register in the name of the Securities
Depository or its nominee, but may be registered in the name of any successor Securities
Depository, or its nominee, or in whatever name or names Participants receiving Bonds shall
designate, or as provided in the preceding sentence in accordance with the provisions of this
Indenture.
The Authority, the Remarketing Agent and the Trustee may execute the Representation
Letter in connection with the issuance of the Bonds. Such Representation Letter is for the
purpose of effectuating the Book-Entry-Only System only and shall not be deemed to amend,
supersede or supplement the terms of this Indenture which are intended to be complete without
reference to the Representation Letter. In the event of any conflict between the terms of the
Representation Letter and the terms of this Indenture, the terms of this Indenture shall control.
The Securities Depository may exercise the rights of a Bondholder hereunder only in accordance
with the terms hereof applicable to the exercise of such rights.
Section 2.13 Payments and Notices to Cede & Co. Notwithstanding any other
provision of this Indenture to the contrary, so long as any Bonds are registered in the name of
Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and
interest on the Bonds and all notices with respect to the Bonds shall be made and given,
respectively, in the manner provided in the Representation Letter.
Section 2.14 Additional Bonds and Subordinate Debt. So long as no Default or Event
of Default has occurred and is at the time continuing under this Indenture, Additional Bonds may
be issued, authenticated and delivered for the purpose of providing the Authority with funds for
any lawful purpose of the Authority. The Additional Bonds of each such Series shall be
authenticated by the Trustee and, upon payment to the Trustee of the proceeds of said sale of
such Additional Bonds, such Additional Bonds shall be delivered by the Trustee to or upon the
order of the original purchaser thereof, but only upon there being filed with the Trustee, Bank,
such original purchaser, the Original Purchaser and the Authority:
(a) original, executed counterparts of an indenture supplemental to this
Indenture and a resolution supplementing or amending the Bond Resolution in order to cause the
issuance of the Additional Bonds;
(b) a Credit Facility issued by the Bank supporting the payment of the
Additional Bonds and the purchase price of the Additional Bonds in an amount equal to the
principal of the Additional Bonds plus such number of days of interest on the Additional Bonds
® as may be required by each Rating Agency rating the Additional Bonds; provided that no Credit
Facility is required if all of the then Outstanding Bonds and the Additional Bonds bear interest at
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a Fixed Rate; provided, further, that the Initial Credit Facility Provider's consent shall be
required in order to issue Additional Bonds bearing a Fixed Rate of interest if the Initial Credit
Facility is outstanding at such time;
(c) an Opinion of Bond Counsel to the effect that the issuance of the
Additional Bonds and the execution thereof have been duly authorized, all conditions precedent
to the delivery thereof have been fulfilled, and that the exclusion from gross income for federal
income tax purposes of the interest on the Bonds will not be adversely affected by the issuance
of the proposed Additional Bonds;
(d) a certificate of the Authority Representative to the effect that the proceeds
of the proposed Additional Bonds will be used for a permissible undertaking under this
Indenture, the Urban Renewal Plan and the Act;
(e) a certificate of the Authority Representative addressed to the Bank, the
Trustee and the Original Purchaser establishing to the reasonable satisfaction of the Bank, the
Trustee and the Original Purchaser that the Pledged Revenues for (i) the most recent Fiscal Year
preceding the date of the issuance of such Additional Bonds for which audited financial
statements are available, or (ii) any period of 12 consecutive calendar months out of the 18
calendar months next preceding the date of the issuance of such Additional Bonds were at least
125% of the Average Annual Debt Service of the combination of (1) the Bonds then Outstanding
and (2) the Additional Bonds proposed to be issued; provided, however, that any Bonds to be
refunded with the proceeds of any such Additional Bonds shall be excluded for purposes of such
calculation;
(f) a copy, duly certified by the Town Clerk of the Town, of a resolution
adopted by the Town Council of the Town evidencing the agreement of the Town to the issuance
of such Additional Bonds and further evidencing the intent of the Town to subordinate its claims
for payment from the Authority to the payment of the Debt Service Requirement on the
Additional Bonds being issued;
(g) a written order to the Trustee by the Authority to authenticate and deliver
the Additional Bonds to the original purchaser therein identified upon payment to the Trustee of
a specified sum plus accrued interest; and
(h) written evidence from each Rating Agency, if any, then providing a rating
for the outstanding Bonds, that such rating or ratings will not be reduced or withdrawn as a
result of the issuance of the proposed Additional Bonds.
At such time as any Additional Bonds shall be issued, the Authority shall deposit or cause
to be deposited in the Bond Reserve Fund an amount sufficient to make the amount on deposit in
the Bond Reserve Fund equal to the Bond Reserve Requirement.
Each Series of Additional Bonds issued pursuant to this Section 2.14 shall be equally and
ratably secured under this Indenture with the Bonds and all other Series of Additional Bonds, if
any, theretofore issued pursuant to this Section 2.14, without preference, priority or distinction of
any such Bonds over any other thereof.
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® Notwithstanding anything contained in this Indenture to the contrary, the Authority may
issue or incur Subordinate Debt from time to time as determined by the Authority without the
consent of or notice to the Registered Owners of the Bonds at the time Outstanding or any other
Person. Subordinate Debt shall have no claim for payment upon the Trust Estate except for
payments to be made pursuant to Section 3.03(b)(vii) hereof. Payment of such Subordinate Debt
shall be subordinate to payment of the Bonds, including the Bank Bonds, the Reimbursement
Obligations and all other amounts owed under the Credit Agreement.
The Authority shall comply with all requirements in the Credit Agreement with respect to
the issuance of any Additional Bonds.
ARTICLE III
REVENUES AND FUNDS
Section 3.01 Source of Payment of Bonds. The Bonds and all payments to be made by
the Authority thereon and into the various Funds established under this Indenture are not general
obligations of the Authority, but are special obligations payable solely from (i) the Trust Estate,
and (ii) income from the investment of any of the Funds. Except as otherwise provided in
Sections 3.04, 3.06, 3.07, 3.10 and 4.07 hereof and while a Credit Facility is in full force and
effect, the principal of and interest on the Bonds not in a Fixed Mode and the purchase price of
Tendered Bonds shall be payable from the proceeds of draws under the Credit Facility and, with
is respect to the purchase of Tendered Bonds in a Flexible Pricing Short-Term Mode, the interest or
other gain realized as a result of any investments or reinvestments of moneys in the Flexible
Pricing Short-Term Fund prior to the use of funds from any other source.
Section 3.02 Creation of Funds. (a) There is hereby created by the Authority and
ordered established with the Trustee the following Funds:
(i) the "Revenue Fund" and the "Annual Expense Account" thereof,
thereof,
thereof,
(ii) the "Interest Fund" and the "Fixed Rate Interest Account" thereof,
(iii) the "Flexible Pricing Short-Term Fund";
(iv) the "Bond Sinking Fund" and the "Fixed Rate Principal Account"
(v) the "Redemption Fund" and the "Fixed Rate Redemption Account"
(vi) the "Bond Reserve Fund";
(vii) the "Rebate Fund";
(viii) the "Bond Purchase Fund";
(ix) the "Expense Fund"; and
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® (x) the "Project Fund".
Moneys and investments in each of the Funds shall be used only and exclusively as provided
herein. The "Rebate Fund" and the "Bond Purchase Fund" shall not constitute a Trust Fund for
purposes of this Indenture. All Funds created under this Section shall be in the custody of the
Trustee, but in the name of the Authority, and the Authority hereby authorizes and directs the
Trustee to apply moneys and investments in the Funds as set forth herein, which authorization
and direction the Trustee hereby accepts.
Section 3.03 Revenue Fund. (a) Except as provided in Section 7.05 hereof, all moneys
received under the Credit Facility and all Pledged Revenues and other deposits thereto from the
Authority, as and when received by the Trustee, shall be deposited into the Revenue Fund and
shall be held therein until disbursed as herein provided. The Authority shall transfer the Pledged
Property Tax Revenues to the Trustee when, as, and if received. Except as otherwise provided in
Sections 3.10 and 7.02 hereof, any amount paid to the Trustee for deposit in the Revenue Fund
under the Credit Facility shall be segregated from all other moneys in the Revenue Fund and
shall be transferred to the Interest Fund, the Flexible Pricing Short-Term Fund, the Bond Sinking
Fund or the Bond Reserve Fund, as required by the provisions hereof. Amounts shall be
transferred from the Revenue Fund as provided in this Article III.
(b) Amounts deposited in the Revenue Fund (excluding proceeds of draws
under the Credit Facility) shall be applied by the Trustee to the following purposes in the
® following order of priority:
(i) First, there shall be transferred to the Annual Expense
Account of the Revenue Fund, the periodic fees estimated by the Authority in a Written Request
from the Authority Representative to the Trustee to be coming due during the Fiscal Year: under
the Credit Agreement; of the Remarketing Agent; of the Rating Agency; and of the Trustee.
Upon receipt of a Written Request from the Authority Representative, the Trustee shall pay such
periodic fees at the times and in the amounts as they become due.
(ii) Second, there shall be transferred to the Interest Fund an
amount which, together with any other moneys already on deposit therein (excluding proceeds of
draws under the Credit Facility) and available to make interest payments, is equal to the amount
required by Section 3.04(b) hereof to pay the interest due on each Interest Payment Date during
the Fiscal Year. For Bonds bearing interest at the Short Rate, the interest rate on such Bonds
shall be assumed to be equal to the 10 year average of the SIFMA Index plus 1%. For Bank
Bonds, the interest rate on such Bonds shall be assumed to be equal to the Bank Rate plus I%.
(iii) Third, there shall be transferred to the Bond Sinking Fund
an amount equal to the amount required by Section 3.06(b) hereof,
(iv) Fourth, there shall be transferred to the Bank all amounts
due and owing under the Credit Agreement to the extent not paid pursuant to clauses (i), (ii) or
(iii) of this Section, and Sections 3.04 and 3.06 hereof.
(v) Fifth, there shall be transferred to the Bond Reserve Fund
enough moneys so that the amount on deposit in the Bond Reserve Fund shall equal the Bond
Reserve Requirement.
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• (vi) Sixth, there shall be transferred to the Rebate Fund an
amount equal to the amount required by Section 3.09 hereof.
(vii) Seventh, so long as no Event of Default has occurred and is
continuing under this Indenture, on the next to the last Business Day of December of each Fiscal
Year, the Trustee shall apply moneys, at the request and upon written direction of the Authority,
to the payment of the principal of and interest on Subordinate Debt then due and owing.
(viii) Eighth, on and after the last Business Day of December, all
remaining moneys in the Revenue Fund, which are not credited to the Annual Expense Account,
the Interest Fund, the Bond Sinking Fund, the Bond Reserve Fund, or the Rebate Fund, shall be
transferred by the Trustee to the Authority for any legal use in accordance with the Act. If at any
time during a Fiscal Year the Authority determines that it has deposited sufficient moneys from
the Pledged Property Tax Revenue to provide for the expenditures listed above, the Authority
shall no longer be required to transfer such Pledged Property Tax Revenue to the Trustee until
the following Fiscal Year; provided that if thereafter during the current Fiscal Year there is a
need to make further expenditures described above, the Authority shall resume transferring
Pledged Property Tax Revenue to the Trustee for deposit to the Revenue Fund. Any transfers
made pursuant to this section are subject to the prior written consent of the Bank, which consent
shall not be unreasonably withheld.
Section 3.04 Interest Fund. (a) There shall be deposited into the Interest Fund as and
when received (i) all moneys transferred to the Interest Fund from the Bond Reserve Fund
pursuant to Section 3.08 hereof and all moneys transferred to the Interest Fund from the
Redemption Fund pursuant to Section 3.07 hereof, (ii) all other moneys required to be deposited
therein pursuant to this Indenture, (iii) all moneys transferred to the Interest Fund pursuant to
Section 7.02 hereof, and (iii) all other moneys received by the Trustee (other than pursuant to the
Credit Facility) when accompanied by directions that such moneys are to be paid into the Interest
Fund. There shall also be retained in the Interest Fund interest and other income received on
investments of Interest Fund moneys to the extent provided in Section 3.13 hereof. Unless
otherwise specified in this Indenture, all such moneys shall be transferred to the Interest Fund
and the Fixed Rate Interest Account pro rata, based upon the amount of outstanding Bonds
(A) bearing interest at a Short Rate, an Annual Rate, and a Flexible Pricing Long-Term Rate and
(B) bearing interest at a Fixed Rate. Any amount paid to the Trustee for deposit in the Interest
Fund pursuant to Section 7.02 under the Credit Facility shall be segregated from all other
moneys in the Interest Fund.
(b) On or before each Interest Payment Date (or the first Business Day
thereafter if such day is not a Business Day) for a Bond bearing interest at a Short Rate, an
Annual Rate, the Bank Rate, or a Flexible Pricing Long-Term Rate, the Trustee shall deposit in
the Interest Fund from the Revenue Fund and from the Flexible Pricing Short-Term Fund (in the
amounts specified in Section 3.05 hereof) moneys, in an amount which, together with any other
moneys already on deposit therein (excluding proceeds of draws under the Credit Facility) and
available to make such payment (other than in the Fixed Rate Interest Account), is not less than
the interest coming due on such Bond on such Interest Payment Date. Any amount derived from
® the Credit Facility to be deposited in the Interest Fund shall be segregated from all other moneys
in the Interest Fund. Subject to the provisions of Section 3.16 hereof, funds for the payment of
38
® interest on the Bonds bearing interest at a Short Rate, an Annual Rate, the Bank Rate, or a
Flexible Pricing Long-Term Rate (other than interest constituting a portion of the purchase price
of Tendered Bonds) shall be made from the following sources in the order of priority indicated:
(1) Moneys received by the Trustee under the Credit Facility with
respect to interest on the Bonds and transferred from the Revenue Fund and from the Flexible
Pricing Short-Term Fund to the Interest Fund, provided that such moneys shall not be used to
pay Bank Bonds; and
(ii) Any other moneys furnished to the Trustee and available for such
purpose.
After the Bank has honored a drawing under the Credit Facility for the payment of interest on the
Bonds, the Trustee shall, on the date required by the Credit Agreement, transfer from the Interest
Fund to the Bank an amount necessary to reimburse the Bank for such drawing under the Credit
Facility to pay the interest on the Bonds and, to the extent such amount is not paid when due
under the Credit Agreement, interest thereon at the rate required under the Credit Agreement.
(c) After the Conversion Date applicable to a Bond, on or before the 20th day
of each May and November, commencing with the first of such months following the month in
which the Conversion Date applicable to such Bonds occurs, the Trustee shall deposit in the
Fixed Rate Interest Account from moneys in the Revenue Fund (other than from moneys drawn
under the Credit Facility) an amount which will be not less than the amount of interest to become
due on such Bond on such Interest Payment Date; provided, however, that if the Conversion
Date for such Bond occurs between May 20 and May 31 or between November 20 and
November 30, the deposit in the Fixed Rate Interest Account from moneys in the Revenue Fund
(which shall be other than from moneys drawn under the Credit Facility) shall be made on the
Conversion Date in an amount which will not be less than the amount of interest to become due
on such Bond on the next succeeding June 1 or December 1. No deposit pursuant to this
paragraph need be made to the extent that there is a sufficient amount already on deposit in the
Fixed Rate Interest Account to pay interest on Bonds bearing interest at a Fixed Rate on each
such Interest Payment Date. If the 20th day of any such month is not a Business Day, the deposit
herein required shall be made on the next succeeding Business Day. Moneys received under the
Credit Facility shall not be deposited in the Fixed Rate Interest Account.
(d) Except as provided in this paragraph, in Section 8.02 hereof and in the Tax
Compliance Certificate, moneys in the Interest Fund shall be used solely to pay interest on the
Bonds when due or to reimburse the Bank for a drawing under the Credit Facility to pay interest
on the Bonds. Payment of interest on Bonds bearing interest at a Short Rate, an Annual Rate, or
a Flexible Pricing Long-Term Rate shall be made from moneys on deposit in the Interest Fund
other than in the Fixed Rate Interest Account. Payment of interest on Bonds bearing interest at
Fixed Rate shall be made from moneys on deposit in the Fixed Rate Interest Account. No
interest shall be paid on Authority Bonds unless and until the interest on all other Bonds and
amounts due to the Bank for drawings under the Credit Facility to pay interest on the Bonds shall
be paid and all other obligations owing to the Bank under the Credit Agreement shall be paid.
39
® Section 3.05 Flexible Pricing Short-Term Fund. The Trustee shall maintain, so long as
any of the Bonds are outstanding, bear interest at a Short Rate, an Annual Rate or a Flexible
Pricing Long-Term Rate and a Credit Facility is required to be in full force and effect, a separate
account to be known as the "Flexible Pricing Short-Term Fund." The amounts drawn under the
Initial Credit Facility pursuant to Section 3.16(b) hereof and any moneys similarly drawn under a
Substitute Credit Facility shall be deposited in the Revenue Fund and then immediately
transferred by the Trustee to the Flexible Pricing Short-Term Fund. Except to the extent required
to be transferred to other Funds pursuant to this Section, there shall be retained in the Flexible
Pricing Short-Term Fund interest on amounts held in the Flexible Pricing Short-Term Fund to
the extent provided in Section 3.13 hereof. No moneys other than amounts drawn under the
Initial Credit Facility and any moneys similarly drawn under a Substitute Credit Facility and the
interest income thereon shall be deposited in the Flexible Pricing Short-Term Fund. On or
before each Interest Payment Date for a Bond bearing interest at a Flexible Pricing Short-Term
Rate, the Trustee shall transfer from the Flexible Pricing Short-Term Fund to the Interest Fund
an amount which is equal to the interest due on such Bond. On the date (unless such date is an
Interest Payment Date) any Bonds are required to be purchased pursuant to Section 4.02 or 4.07
hereof, the Trustee shall transfer all amounts in the Flexible Pricing Short-Term Fund to the
Bond Purchase Fund. When any such Bonds required to be purchased have been remarketed,
proceeds of the remarketing shall be deposited first to the Flexible Pricing Short-Term Fund to
restore the balance in the Fund to the amount that was on deposit prior to the transfer of the Bond
Purchase Fund and then shall be used to pay any amounts to the Bank. Amounts on deposit in
the Flexible Pricing Short-Term Fund shall be irrevocably held in trust for the benefit of (i) the
® Owners of the Bonds and, (ii) so long as the Credit Facility is in effect and. the Bank has not
defaulted under its obligations with respect to the Credit Facility, the Bank. Notwithstanding the
deposit of such moneys under this Indenture and the subsequent reimbursement to the Bank, the
Authority shall have no right, title or interest in such moneys.
Section 3.06 Bond Sinking Fund. (a) There shall be deposited into the Bond Sinking
Fund, as and when received (i) all moneys transferred to the Bond Sinking Fund from the Bond
Reserve Fund pursuant to Section 3.08 hereof and all moneys transferred to the Bond Sinking
Fund from the Redemption Fund pursuant to Section 3.07 hereof, (ii) all other moneys required
to be deposited therein pursuant to this Indenture and (iii) all other moneys (other than pursuant
to the Credit Facility) received by the Trustee when accompanied by directions that such moneys
are to be paid into the Bond Sinking Fund. There shall also be retained in the Bond Sinking
Fund interest and other income received on investments of Bond Sinking Fund moneys to the
extent provided in Section 3.13 hereof. Unless otherwise specified in this Indenture, all such
moneys shall be transferred to the Bond Sinking Fund and the Fixed Rate Principal Account pro
rata, based upon the amount of outstanding Bonds (A) bearing interest at a Short Rate, an Annual
Rate and a Flexible Pricing Long-Term Rate and (B) bearing interest at a Fixed Rate.
(b) On or before November 20, 2008, and on or before each November 20
thereafter to and including November 20, 2031, and May 20, 2032 after making the deposit
required by Section 3.03 hereof, the Trustee shall deposit in the Bond Sinking Fund from the
Revenue Fund moneys in an amount which, together with any other moneys already on deposit
® in the Bond Sinking Fund (excluding proceeds of draws under the Credit Facility) and available
to make such payment (other than in the Fixed Rate Principal Account), is not less than such
principal becoming due on the Bonds bearing interest at a Short Rate, an Annual Rate or a
40
Flexible Pricing Long-Term Rate on the next December 1 or the final maturity on June 1, 2032.
Any amount derived from the Credit Facility to be deposited in the Bond Sinking Fund shall be
segregated from all other moneys in the Bond Sinking Fund. Subject to the provisions of
Section 3.16 hereof, funds for the payment of principal of the Bonds bearing interest at a Short
Rate, an Annual Rate or a Flexible Pricing Long-Term Rate (other than principal constituting a
portion of the purchase price of Tendered Bonds) shall be made from the following sources in
the order of priority indicated:
(i) Moneys received by the Trustee under the Credit Facility with
respect to principal of the Bonds and transferred from the Revenue Fund to the Bond Sinking
Fund; and
(ii) Any other moneys furnished to the Trustee and available for such
purpose.
After the Bank has honored a drawing under the Credit Facility for the payment of principal on
the Bonds, the Trustee shall on the date required by the Credit Agreement transfer from the Bond
Sinking Fund to the Bank an amount necessary to reimburse the Bank for such drawing under the
Credit Facility to pay the principal of the Bonds.
(c) After the Conversion Date applicable to a Bond, on or before the 20th day
of each May and November, beginning with the first of such months following the month in
which such Conversion Date applicable to such Bond occurs, after making the deposits required
by Section 3.03 hereof, the Trustee shall deposit in the Fixed Rate Principal Account from
moneys in the Revenue Fund (other than from moneys drawn under the Credit Facility) an
amount which, together with an equal amount to be deposited on the 20th day of each such
month, if any, occurring before the next succeeding December 1, will not be less than the amount
of principal of such Bond to be redeemed pursuant to Section 4.11(c)(i) or paid on the next
succeeding December 1; provided, however, that if the Conversion Date for such Bond occurs
between May 20 and May 30, the deposit in the Fixed Rate Principal Account from moneys in
the Revenue Fund (which shall be other than from moneys drawn under the Credit Facility) shall
be made on the Conversion Date in an amount which will not be less than the amount of
principal to become due on such Bond on the next succeeding December 1. No deposit pursuant
to this paragraph need be made if and to the extent that there is a sufficient amount already on
deposit in the Fixed Rate Principal Account to pay principal on Bonds bearing interest at a Fixed
Rate on the next Maturity or mandatory sinking fund redemption date. If the 2Dth day of any
month is not a Business Day, the deposit herein required to be made shall be made on or before
the next succeeding Business Day. Moneys received under the Credit Facility shall not be
deposited in the Fixed Rate Principal Account.
(d) Except as provided in this paragraph, in Section 7.05 or 8.02 hereof and in
the Tax Compliance Certificate, moneys in the Bond Sinking Fund shall be used solely for the
payment of principal of the Bonds as the same shall become due and payable at Maturity and in
accordance with the mandatory sinking fund redemption schedule or to reimburse the Bank for
drawings under the Credit Facility to pay principal on the Bonds. Payment of principal of Bonds
bearing interest at a Short Rate, an Annual Rate, or a Flexible Pricing Long-Term Rate shall be
made from moneys on deposit in the Bond Sinking Fund other than in the Fixed Rate Principal
41
® Account. Payment of principal of Bonds bearing interest at a Fixed Rate shall be made from
moneys on deposit in the Fixed Rate Principal Account. No principal of Authority Bonds shall
be paid unless and until the principal due on such date for all other Bonds or for amounts due to
the Bank for drawings under the Credit Facility to pay principal on the Bonds shall be paid and
all other obligations due under the Credit Agreement shall be paid.
(e) In lieu of mandatory sinking fund redemption, the Trustee shall, at the
direction of the Authority, use its best efforts to make purchases in the open market of an equal
principal amount of Bonds bearing interest at a Short Rate, an Annual Rate or a Flexible Pricing
Long-Term Rate of the Maturity to be redeemed at prices not exceeding the principal amount of
the Bonds being purchased plus accrued interest, with such interest portion of the purchase price
to be paid from the Interest Fund (other than the Fixed Rate Interest Account) and the principal
portion of such purchase price to be paid from the Bond Sinking Fund (other than the Fixed Rate
Principal Account). The amount of Bonds bearing interest at a Short Rate, an Annual Rate or a
Flexible Pricing Long-Term Rate to be redeemed on any date pursuant to the mandatory sinking
fund redemption schedule provided in Section 4.11(c)(i) hereof shall be reduced by the principal
amount of Bonds bearing interest at a Short Rate, an Annual Rate or a Flexible Pricing Long-
Term Rate, as the case may be, which are acquired by the Authority and delivered to the Trustee
for cancellation.
(f) In lieu of mandatory sinking fund redemption pursuant to the redemption
schedule provided in Section 4.11(c)(i) hereof, the Trustee may, at the request of the Authority,
purchase in the open market an equal principal amount of Bonds bearing interest at a Fixed Rate
of the Maturity and interest rate to be redeemed at prices not exceeding the principal amount of
the Bonds being purchased plus accrued interest, with such interest portion of the purchase price
to be paid from the Fixed Rate Interest Account and the principal portion of such purchase price
to be paid from the Fixed Rate Principal Account. The amount of Bonds bearing interest at a
Fixed Rate to be redeemed on any date pursuant to the mandatory sinking fund redemption
schedule provided in Section 4.11(c)(i) hereof shall be reduced by the principal amount of Bonds
bearing interest at a Fixed Rate of such Maturity and interest rate which are acquired by the
Authority and delivered to the Trustee for cancellation.
Section 3.07 Redemption Fund. (a) In the event of (i) moneys (other than pursuant to
the Credit Facility) received by the Trustee when accompanied by directions that such moneys
are to be paid into the Redemption Fund, (ii) a transfer of moneys from the Bond Reserve Fund
to the Redemption Fund pursuant to Section 3.08 hereof, (iii) moneys received pursuant to
Section 6.10 hereof, or (iv) a deposit with the Trustee of moneys received under the Credit
Facility for redeeming Bonds, except as otherwise provided in Section 3.06 of this Indenture,
such moneys shall be deposited in the Redemption Fund or, in the case of any such prepayment,
receipt or deposit related to Bonds which bear interest at a Fixed Rate, in the Fixed Rate
Redemption Account. Moneys received under the Credit Facility shall not be deposited in the
Fixed Rate Redemption Account.
(b) Any amount derived from the Credit Facility to be deposited in the
Redemption Fund shall be segregated from all other moneys in the Redemption Fund. On or
prior to the Conversion Date with respect to a Bond, payments of the redemption price of such
Bond shall be paid, to the extent available from amounts deposited in the Redemption Fund
42
® (other than the Fixed Rate Redemption Account). The redemption price of Bonds which bear
interest at a Fixed Rate shall be paid from amounts on deposit in the Fixed Rate Redemption
Account.
(c) Moneys on deposit in the Redemption Fund shall be used first to make up
any deficiencies existing in the Interest Fund and the Bond Sinking Fund (in the order listed) and
second for the purchase or redemption of Bonds in accordance with the provisions of Article IV
hereof, or to reimburse the Bank for drawings under the Credit Facility to pay the redemption
price of the Bonds.
(d) Funds for the payment of the redemption price of the Bonds bearing
interest at a Short Rate, an Annual Rate, or a Flexible Pricing Long-Term Rate in accordance
with Article IV hereof shall be made from the following sources in the order of priority
indicated:
(i) Moneys received by the Trustee under the Credit Facility for
redemption of the Bonds and transferred from the Revenue Fund to the Redemption Fund; and
(ii) Any other moneys furnished to the Trustee and available for such
purposes.
On or as soon as possible after each date on which the Bank has honored a drawing under the
Credit Facility, after the redemption price of the Bonds has been paid with such drawing, the
Trustee shall transfer from the Redemption Fund to the Bank an amount necessary to reimburse
the Bank for such drawing under the Credit Facility to pay the redemption price of the Bonds.
Section 3.08 Bond Reserve Fund. On the Closing Date, there shall be deposited in the
Bond Reserve Fund an amount equal to the Bond Reserve Requirement for the Bonds then
Outstanding. There shall be deposited into the Bond Reserve Fund (1) all moneys to be
transferred to the Bond Reserve Fund from other Funds pursuant to Section 3.13 hereof, (ii) all
other moneys required to be deposited therein pursuant to this Indenture and (iii) all other
moneys received by the Trustee (other than pursuant to the Credit Facility) when accompanied
by directions that such moneys are to be paid into the Bond Reserve Fund. On or before May 15
and November 15 of each year, the Trustee shall determine the value of the amount on deposit in
the Bond Reserve Fund as of the first Business Day in May or November, as appropriate, such
value to be determined in accordance with the provisions of Section 3.13 hereof. The Authority
may at any time satisfy its obligations to fund the Bond Reserve Fund by depositing a Bond
Reserve Credit Enhancement into the Bond Reserve Fund and may at any time substitute (i) cash
or Permitted Investments for a Bond Reserve Credit Enhancement or (ii) a Bond Reserve Credit
Enhancement for cash or Permitted Investments, so long as the amount on deposit in the Bond
Reserve Fund after such substitution is not less than the Bond Reserve Requirement for the
Bonds then outstanding. In calculating the amount in the Bond Reserve Fund, any Bond Reserve
Credit Enhancement shall be valued at the amount available to be paid thereunder.
Moneys in the Bond Reserve Fund shall be used by the Trustee solely for the payment of
40 the principal of, premium, if any, and interest on the Bonds bearing interest at a Short Rate, an
Annual Rate, or a Flexible Pricing Long-Term Rate or the Bank Rate or to reimburse the Bank
43
for draws under the Credit Facility in the event moneys in the Interest Fund, Bond Sinking Fund
or Redemption Fund are insufficient to make such payments when due or in the event moneys in
the Fixed Rate Interest Account, Fixed Rate Principal Account or Fixed Rate Redemption
Account are insufficient to make such payments when due with respect to Bonds bearing interest
at a Fixed Rate, in either case whether on an Interest Payment Date, mandatory sinking fund
redemption date, Maturity or otherwise; provided that such moneys may also be deposited in the
Rebate Fund if necessary to enable the Authority to comply with Section 6.11 hereof. At
Maturity of the Bonds any moneys in the Bond Reserve Fund may be transferred to the Interest
Fund, the Fixed Rate Interest Account, the Bond Sinking Fund and the Fixed Rate Principal
Account to pay the principal of and interest on the Bonds or to reimburse the Bank for drawings
under the Credit Facility with respect thereto, or may be deposited in the Rebate Fund if
necessary to enable the Authority to comply with Section 6.11 hereof. Upon the occurrence of
an Event of Default hereunder and the acceleration of the Bonds, any moneys in the Bond
Reserve Fund, after any transfer to the Rebate Fund so as to enable the Authority to comply with
Section 6.11 hereof, shall be transferred by the Trustee to the Interest Fund and the Fixed Rate
Interest Account, as applicable, and with respect to any moneys in excess of the amount required
to be transferred to the Interest Fund and the Fixed Rate Interest Account, to the Bond Sinking
Fund and the Fixed Rate Principal Account, as applicable, and applied in accordance with
Sections 3.04 and 3.06 hereof. In the event of the redemption. of the Bonds in whole or upon
making provision for the payment of the Bonds in whole, any moneys in the Bond Reserve Fund
shall, at the direction of the Authority, be transferred (i) to the Rebate Fund so as to enable the
Authority to comply with Section 6.11 hereof, (ii) to the Redemption Fund and the Fixed Rate
Redemption Account to pay the redemption price of the Bonds or to reimburse the Bank for
drawings under the Credit Facility to pay the redemption price of the Bonds, or (iii) to an escrow
fund established in connection with the provision for payment of the Bonds pursuant to Article X
hereof. Unless otherwise specified in this Indenture, all such moneys shall be transferred to the
Interest Fund and the Fixed Rate Interest Account, to the Bond Sinking Fund and the Fixed Rate
Principal Account or to the Redemption Fund and Fixed Rate Redemption Account, as the case
may be, pro rata, based upon the amount of outstanding Bonds (A) bearing interest at a Short
Rate, an Annual Rate, and a Flexible Pricing Long-Term Rate and (B) bearing interest at a Fixed
Rate.
If, at any time, the Bond Reserve Fund is not funded at the Bond Reserve Requirement by
December 2 of each year, the Trustee shall notify the Town Manager of any deficiency and,
pursuant to the Replenishment Resolution, the Town Council has agreed to consider but is not
obligated to, replenish the Bond Reserve Fund immediately thereafter. Prior to any request to
the Town to replenish the Bond Reserve Fund, Revenues of the Authority shall be deposited into
the Bond Reserve Fund to the extent available and as provided in Section 3.03(b) hereof. While
the Town Council has agreed to consider funding the Bond Reserve Fund so that it will be
funded at the Bond Reserve Requirement, the Town Council's decision not to so fund the Bond
Reserve Fund shall not constitute an Event of Default hereunder. In addition, any Town
replenishment of the Bond Reserve Fund shall constitute a loan from the Town to the Authority,
to be repaid in accordance with the Cooperation Agreement. The Trustee shall provide notice to
the Bank and the Remarketing Agent if the balance of the Reserve Fund does not equal or exceed
the Bond Reserve Requirement as of December 2 of each year and as of the succeeding January
31.
44
® Section 3.09 Rebate Fund. There shall be deposited into the Rebate Fund amounts
transferred from the Revenue Fund and the Bond Reserve Fund as required to comply with
Section 148(f) of the Code. In addition, notwithstanding any other provision of this Indenture,
upon the Written Request of the Authority, any investment income or other gain on moneys in
any of the Funds may be transferred to the Rebate Fund to enable the Authority to satisfy the
requirements of Section 148(f) of the Code. Moneys in the Rebate Fund shall be paid to the
United States in the amounts and at the times required by the Code. Any excess moneys
contained in the Rebate Fund shall, at the written direction of the Authority, be transferred to the
Interest Fund and the Bond Sinking Fund. Upon payment of all amounts due to the United States
pursuant to Section 148 of the Code, any moneys remaining in the Rebate Fund shall be paid by
the Trustee to the Authority.
Section 3.10 Bond Purchase Fund. The Bond Purchase Fund shall be maintained so
long as any Bonds are outstanding which have not been converted to a Fixed Rate. There shall
be deposited into the Bond Purchase Fund from time to time the following:
(a) the moneys received upon the remarketing of Tendered Bonds to any
Person pursuant to the Remarketing Agreement (other than Tendered Bonds sold to the
Authority);
(b) the moneys received from the underwriter or purchaser (other than the
Authority) of Tendered Bonds upon the conversion of the interest rate thereon to a Fixed Rate;
(c) moneys received by the Trustee as proceeds of a drawing made pursuant
to the Credit Facility to be applied to pay the purchase price of Tendered Bonds and transferred
from the Revenue Fund to the Bond Purchase Fund; and
(d) moneys received by the Trustee from the Authority to the extent that
moneys obtained pursuant to (a), (b) or (c) above are insufficient on any date to pay the purchase
price of Tendered Bonds.
Any amounts received by the Trustee for deposit in the Bond Purchase Fund which do
not constitute Available Moneys when paid shall not be commingled with any other moneys held
by the Trustee until such time as they constitute Available Moneys. Any amount derived from
the Credit Facility to be deposited in the Bond Purchase Fund shall be segregated from all other
moneys in the Bond Purchase Fund. Moneys in the Bond Purchase Fund shall be held in trust
exclusively for the payment of the purchase price of Tendered Bonds; provided, however under
no circumstances shall proceeds of a drawing made pursuant to the Credit Facility be used to
purchase Authority Bonds and provided further that any excess moneys contained in the Bond
Purchase Fund shall be paid by the Trustee to the Bank to the extent any amounts are owed to the
Bank under the Credit Agreement. Moneys on deposit in the Bond Purchase Fund shall not be
invested. Amounts held to pay the purchase price for more than six years shall be applied in the
same manner as provided under Section 13.10 hereof with respect to unclaimed payments of
principal and interest.
Section 3.11 Expense Fund. Moneys on deposit in the Expense Fund shall be disbursed
by the Trustee, at the direction of the Authority, to pay all Issuance Expenses. When the
45
® Authority certifies to the Trustee that all Issuance Expenses have been paid, the Trustee shall
transfer the balance in the Expense Fund to the Project Fund to pay the Urban Renewal Project
Costs.
Section 3.12 Project Fund. There shall be deposited to the Project Fund the proceeds of
the Series 2008 Bonds specified in Section 2.07 hereof. The Authority may thereafter deposit
amounts in the Project Fund at such times and in such amounts as it may elect. At the direction
of the Authority, the Trustee may establish accounts within the Project Fund as necessary to
facilitate the administration thereof.
Amounts on deposit in the Project Fund shall be disbursed by the Trustee to pay
the Urban Renewal Project Costs upon receipt of a requisition signed by the Authority
Representative (i) stating with respect to each disbursement to be made: (1) the requisition
number, (2) the name and address of the Person to whom payment is due, (3) the amount to be
disbursed and (4) that each obligation mentioned therein has been properly incurred, constitutes
an Urban Renewal Project Cost and is a proper charge against the Project Fund and has not been
the basis of any previous disbursement; (ii) specifying in reasonable detail the nature of the
obligation; and (iii) accompanied by a bill or statement of account for such obligation; provided,
however, that no bill or statement of account shall be required for the requisition of any amount
for payment of the day to day operating costs incurred in the administration of the Authority. In
the event the Project Fund does not contain sufficient funds to pay the amount requested in any
requisition, no payment shall be made from the Project Fund.
® Upon completion of the Urban Renewal Project, there shall be delivered to the
Trustee a certificate signed by the Authority Representative stating that except for amounts
retained by the Trustee for any amount of the Urban Renewal Project Costs not then due and
payable, (i) the Urban Renewal Project has been completed in accordance with the plans and
specifications therefor, and all labor, services, materials and supplies used in connection with the
Urban Renewal Project have been paid and the Urban Renewal Project conforms with all
applicable zoning, planning and building regulations and is suitable and sufficient for efficient
operation, and (ii) all other facilities necessary in connection with the Urban Renewal Project
have been acquired, constructed and installed in accordance with the plans and specifications
therefor and all costs and expenses incurred in connection therewith have been paid.
Notwithstanding the foregoing, such certificate shall be and shall state that it is
given without prejudice to any right of the Authority against third parties which exist at the date
of such certificate or which may subsequently come into being. Upon receipt of such certificate
the Trustee shall retain in the Project Fund an amount necessary for the payment of the Urban
Renewal Project Costs not then due and payable (as set forth in such certificate). All other
amounts (including moneys earned pursuant to the provisions of Section 3.13 of this Indenture)
remaining in the Project Fund after completion of the Project and after payment of the Urban
Renewal Project Costs then due and payable, shall be transferred to (i) the Bond Reserve Fund to
such extent as shall not cause the amount in the Bond Reserve Fund to exceed the Bond Reserve
Requirement and (ii) the Bond Sinking Fund to the extent of any remaining balance of such
moneys to be applied against the next principal payment or payments coming due on the Series
® 2008 Bonds.
46
Notwithstanding any other provision of this Indenture other than Sections 3.13
and 10.01 hereof, moneys in the Project Fund shall not be used for any purpose other than as
hereinabove specified in this Section.
Section 3.13 Investment of Funds. (a) Subject to the limitations provided in this
Section, upon the oral direction of the Authority Representative (confirmed in writing), moneys
on deposit in the Funds shall be invested in Permitted Investments (i) with respect to the
Revenue Fund, Interest Fund, Bond Sinking Fund, Redemption Fund, Project Fund and Expense
Fund, maturing in the amounts and at the times necessary to provide funds to make the payments
to which such moneys are applicable as determined by the Trustee, and (ii) with respect to the
Rebate Fund, maturing in the amounts and at the times necessary to provide funds to make
payments to the United States of America from the Rebate Fund at the times estimated by the
Authority. Moneys on deposit in the Bond Reserve Fund, upon the oral direction of the
Authority Representative (confirmed in writing), shall be invested in (i) Permitted Investments
which mature in not more than twelve (12) months from the date of purchase, or (ii) obligations
of the type described in subparagraphs (h), (1) and (n) of the definition of "Permitted
Investments" which permit draws of amounts invested without penalty at any time for purposes
of complying with the provisions of this Section, or (iii) any other Permitted Investment
approved in writing by the Bank. Moneys on deposit in the Flexible Pricing Short-Term Fund,
amounts in the Bond Purchase Fund, and all drawings on the Credit Facility shall be held
uninvested. The Trustee shall sell and reduce to cash a sufficient portion of such investments
whenever the cash balance in a Fund or the Rebate Fund is insufficient for the purposes thereof.
® The Trustee, when authorized by the Authority, may trade with itself in the purchase and sale of
securities for such investment; provided, however, that in no case shall any investment be
otherwise than in accordance with the investment limitations contained herein and in the Tax
Compliance Certificate. The Trustee shall not be liable or responsible for any loss resulting from
any such investments. In computing for any purpose hereunder the amount in any Fund on any
date, the value of any investments shall be calculated as follows:
(i) the Trustee, using a recognized pricing service, will determine the
market value. If no price is available, the Trustee shall be authorized to price any investment by
contacting any dealer designated as a "primary dealer" by the Federal Reserve Bank of New
York and relying upon any price quoted by such "primary dealer" as if it were quoted by a
recognized pricing service or the Trustee may price such investment in accordance with the
methodology utilized by the Trustee for such purpose in the ordinary course of its business.
(ii) as to certificates of deposit and bankers acceptances: the face
amount thereof, plus accrued interest; and
(iii) as to any investment not specified above: the value thereof
established by prior agreement between the Authority and the Trustee and, if a Credit Facility is
in effect, the Bank.
(b) Any moneys in any Fund may be commingled with any moneys in any
other Fund for investment purposes; provided that (i) moneys derived from the Credit Facility
® shall not be commingled with any other moneys, (ii) moneys in the Bond Purchase Fund which
are Available Moneys shall not be commingled with moneys which are not Available Moneys
47
® and (iii) moneys in the Rebate Fund shall not be commingled with any other moneys. Any
investments shall be held by or under the control of the Trustee and shall be deemed at all times
a part of the Fund or the Rebate Fund from which the investment was made. Any loss resulting
from such investments shall be charged to such Fund or the Rebate Fund. Any interest or other
gain from any Fund or the Rebate Fund from any investment or reinvestment thereof shall be
allocated and transferred as follows:
(1) Except as provided in (ii), (iii) and (iv) of this subsection (b), any
interest or other gain as a result of any investments or reinvestments of moneys in any Fund shall
be retained in the respective Fund unless a deficiency exists in the Bond Reserve Fund, in which
case such interest or other gain shall be paid into the Bond Reserve Fund forthwith.
(ii) Any interest or other gain realized as a result of any investments or
reinvestments of moneys in the Flexible Pricing Short-Term Fund shall be credited to the
Flexible Pricing Short-Term Fund.
(iii) Any interest or other gain realized as a result of any investments or
reinvestments of moneys in the Bond Reserve Fund shall be credited to the Bond Reserve Fund
if the amount therein is less than the Bond Reserve Requirement with respect to the Bonds then
outstanding. If the amount in the Bond Reserve Fund at that time is equal to or greater than the
Bond Reserve Requirement with respect to the Bonds then outstanding, such interest or other
gain realized shall be paid into the Interest Fund at least semiannually.
(iv) Any interest or other gain realized as a result of any investments or
reinvestments of moneys in the Rebate Fund shall be credited to the Rebate Fund.
(c) The Trustee shall furnish the Authority with monthly reports of all moneys
invested and all Permitted Investments held by the Trustee pursuant to this Indenture, which
reports shall be in a form satisfactory to the Authority. In the event that the Authority fails to
direct the Trustee as to investments as required herein, the Trustee shall invest any such funds in
obligations of the type described in subparagraph (i) of the definition of "Permitted
Investments."
Section 3.14 Non-Presentment of Tendered Bonds. If Available Moneys sufficient to
pay the purchase price of Tendered Bonds are held in the Bond Purchase Fund and such
Tendered Bonds are not presented for purchase, the Trustee shall segregate and hold such
Available Moneys in trust without liability for interest thereon, for the benefit of, and subject to a
security interest in favor of, the Owners of such Tendered Bonds who shall, except as provided
in the last paragraph of Section 3.10 hereof, thereafter be restricted exclusively to such Available
Moneys for the satisfaction of any claim of whatever nature on their part under this Indenture or
on, or with respect to, said Tendered Bonds.
Section 3.15 Trust Funds. All moneys received by the Trustee under any provision
hereof shall be held by the Trustee in trust for the benefit of the Owners of the Bonds and the
Bank, and such moneys (other than moneys held in the Bond Purchase Fund and in the Rebate
® Fund) shall, while so held, constitute part of the Trust Estate and be subject to the lien hereof,
48
and shall not be subject to the lien or attachment of any creditor of the Authority (other than the
Bank to the extent provided herein).
Section 3.16 Drawings under the Credit Facility.
(a) During the term of the Credit Facility, the Trustee shall draw moneys
under the Credit Facility in accordance with the terms thereof and in the time and manner
required by Article IV hereof (i) to pay when due (whether on an Interest Payment Date or by
reason of Maturity, redemption, acceleration or otherwise) the principal of and interest on the
Bonds, other than interest on Bonds in the Flexible Pricing Short-Term Mode, and (ii) to the
extent moneys described in subsections (a) and (b) of Section 3.10 hereof are not available
therefore and on deposit with the Trustee at the time of such draw, to pay when due the purchase
price of Tendered Bonds (other than the interest portion of the purchase price of Tendered Bonds
in the Flexible Pricing Short-Term Mode). Notwithstanding any provision to the contrary which
may be contained in this Indenture, (i) in computing the amount to be drawn under the Credit
Facility on account of the payment of the principal of or interest on the Bonds and the purchase
price of Tendered Bonds, the Trustee shall exclude any such amounts in respect of any Bonds
bearing interest at a Fixed Rate or which are Bank Bonds or Authority Bonds on the date such
payment is due, and (ii) amounts drawn by the Trustee under the Credit Facility shall not be
applied to the payment of the principal of or interest on any Bonds or the purchase price of
Tendered Bonds which bear interest at a Fixed Rate or are Bank Bonds or Authority Bonds on
the date such payment is due.
(b) During the term of the Credit Facility, on the Business Day prior to the
first Business Day of each month on which any Bond (other than a Bank Bond or an Authority
Bond) bears interest at a Flexible Pricing Short-Term Rate, the Trustee shall draw moneys under
the Credit Facility in the amount of the interest which has accrued and not been paid on such
Bond bearing interest at a Flexible Pricing Short-Term Rate from the first Business Day of the
immediately preceding month or, if such Bond was not in the Flexible Pricing Short-Term Mode
on such date, from the Rate Change Date which was the first day of the Rate Period for such
Bond bearing interest at such Flexible Pricing Short-Term Rate. In addition, the Trustee shall
draw moneys under the Credit Facility on (A) the Business Day prior to each Interest Payment
Date (if other than the first Business Day of a month) for each Bond (other than a Bank Bond or
Authority Bond) in the Flexible Pricing Short-Term Mode and (B) the Business Day prior to any
other date when interest on Bonds in a Flexible Pricing Short-Term Mode is due (whether by
reason of redemption, tender, acceleration or otherwise) in the amount of interest accrued on
such Bond bearing interest at a Flexible Pricing Short-Term Rate from the first Business Day of
such month, or if such Bond was not in the Flexible Pricing Short-Term Mode on such date,
from the Rate Change Date which was the first day of the Rate Period for such Bond bearing
interest at such Flexible Pricing Short-Term Rate. There shall be credited against the amounts
required to be drawn under the Credit Facility pursuant to this subsection all investment income
and other gain earned on amounts contained in the Flexible Pricing Short-Term Fund and then
available to pay interest on the Bonds in the Flexible Pricing Short-Term Mode.
Section 3.17 Repayment of Moneys from the Funds. Any amounts remaining in the
® Funds after payment, or provision of payment in accordance with Section 10.01 hereof, in full of
the Bonds, the fees and expenses of the Trustee and all other amounts required to be paid
49
® hereunder shall be paid immediately to the Bank to the extent of any indebtedness of the
Authority to the Bank under the Credit Agreement and shall be applied by the Bank in
accordance with the provisions of the Credit Agreement, and after payment of all such
indebtedness, to the Authority. Any amounts remaining in the Rebate Fund after payment in full
of the Bonds and after payment in full of all amounts due to the United States of America under
Section 148(f) of the Code shall be paid to the Authority; provided, however, that if the amounts
referred to in the first sentence of this Section are not sufficient to pay the full indebtedness of
the Authority to the Bank under the Credit Agreement, any amounts remaining in the Rebate
Fund after payment of the amounts referred to above (other than payments to the Authority) shall
be promptly paid by the Trustee to the Bank for the account of the Authority and shall be applied
by the Bank in accordance with the provisions of the Credit Agreement.
ARTICLE IV
PURCHASE OF BONDS; REDEMPTION OF BONDS
Section 4.01 Purchase on Demand of Owner While Bonds Bear Interest at a Dail_ Rate,
or Weekly Rate, Monthly Rate or Annual Rate. (a) While a Bond (other than an Authority Bond
or a Bank Bond) bears interest at a Daily Rate, such Bond (or portion thereof in an Authorized
Denomination) shall be purchased on a Demand Date therefor upon the demand of the Owner
thereof, at a purchase price equal to 100% of the principal amount thereof plus, if such purchase
date is not an Interest Payment Date, accrued interest, if any, to such Demand Date, upon
irrevocable telephonic or written notice (which telephonic notice shall be confirmed in writing
and which written notice may be given by telecopy) to both the Trustee and the Remarketing
Agent, which notice must be received not later than 10:30 a.m., Eastern time, in order to be
effective on that date. Any notice received after 10:30 a.m., Eastern time, shall be deemed given
on the next succeeding Business Day. The Business Day on which any notice is deemed given
will be the Demand Date for the applicable Tendered Bond. Such notice must specify the
principal amount and number of such Bond, the name and the address of such Owner and the
taxpayer identification number, if any, of such Owner. The Trustee shall give Immediate Notice
to the Authority and the Bank as to the contents of any such notices received by it.
(b) While a Bond (other than an Authority Bond or a Bank Bond) bears
interest at a Weekly Rate or a Monthly Rate, such Bond (or portion thereof in an Authorized
Denomination) shall be purchased on a Demand Date therefor upon the demand of the Owner
thereof, at a purchase price equal to 100% of the principal amount thereof plus, if such purchase
date is not an Interest Payment Date, accrued interest, if any, to such Demand Date, upon
irrevocable written notice (which may be given by telecopy) to the Trustee, which notice must be
received by the Trustee not later than 4:00 p.m., Eastern time, in order to be effective on that
day. Any notice received after 4:00 p.m., Eastern time, shall be deemed given on the next
succeeding Business Day. Such notice must specify (i) the principal amount and number of such
Bond, the name and the address of such Owner and the taxpayer identification number, if any, of
such Owner and (ii) the Demand Date on which such Bond is to be purchased. The Trustee shall
give Immediate Notice to the Remarketing Agent, the Authority and the Bank as to the contents
of any such notices received by it.
•
50
® (c) While a Bond (other than an Authority Bond or a Bank Bond) bears
interest at a Annual Rate, such Bond (or portion thereof in an Authorized Denomination) shall be
purchased on a Demand Date therefor upon the demand of the Owner thereof, at a purchase price
equal to 100% of the principal amount thereof, upon irrevocable written notice (which may be
given by telecopy) to the Trustee, which notice must be received by the Trustee not less than
fifteen calendar days prior to the Demand Date. Such notice must specify (i) the principal
amount and number of such Bond, the name and the address of such Owner and the taxpayer
identification number, if any, of such Owner and (ii) the Demand Date on which such Bond is to
be purchased. The Trustee shall give Immediate Notice to the Remarketing Agent, the Authority
and the Bank as to the contents of any such notices received by it.
(d) The determination of the Trustee as to whether a notice of tender has been
properly delivered pursuant to the foregoing shall be conclusive and binding upon the Owner of
such Bond. Any notice received by the Trustee pursuant to this Section from any Person
reasonably believed by the Trustee to be the Owner of a Bond may be conclusively relied upon
by the Trustee as a true, irrevocable notice of demand with respect to such Bond.
Section 4.02 Purchase While Bonds Bear Interest at a Flexible Pricing Short-Term
Rate. While any Bond (other than an Authority Bond or a Bank Bond) bears interest at a
Flexible Pricing Short-Term Rate, such Bond shall be purchased pursuant to this Section on each
Rate Change Date for such Bond, other than the Rate Change Date which is the first day of a
Flexible Pricing Short-Term Mode applicable to such Bond, and on the Adjustment Date
immediately following the last day of the Flexible Pricing Short-Term Mode at a purchase price
equal to 100% of the principal amount thereof. The Owner of such Bond may not elect to retain
its Bond.
Section 4.03 Purchase on Stated Termination Date or Substitution Date.
(a) If by the 20th day preceding any Stated Termination Date of the Credit Facility,
the Trustee has not received a commitment to issue a Substitute Credit Facility or an extension of
the existing Credit Facility in accordance with the terms of Section 6.14 hereof, all Bonds (other
than Authority Bonds, Bank Bonds and Bonds bearing interest at the Fixed Rate) shall be
purchased not less than five (5) days prior to the Stated Termination Date of the Credit Facility
pursuant to this Section. Not later than 15 days prior to the purchase date, the Trustee shall give
Immediate Notice to the owners of the Bonds stating (i) the date the Bonds are required to be
purchased, and (ii) that the owners of the Bonds may not elect to retain their Bonds.
(b) All Bonds (other than Authority Bonds, Bank Bonds and Bonds bearing interest at
the Fixed Rate) shall be purchased on the Substitution Date. Not later than the 15th day
preceding a Substitution Date, the Trustee shall give Immediate Notice to the owners of the
Bonds stating (1) the Substitution Date, (ii) that the Bonds are required to be purchased on the
Business Day prior to the Substitution Date, and (iii) that the owners of the Bonds may not elect
to retain their Bonds.
(c) A purchase of Bonds pursuant to this Section shall be at a purchase price equal to
® 100% of the principal amount of each such Bond purchased plus, if such purchase date is not an
Interest Payment Date, accrued interest to the purchase date. The owner of such Bond may not
51
elect to retain its Bond. If the Bonds are required to be tendered pursuant to this Section, the
Trustee shall not take any action in order to terminate such Credit Facility until after it has
received the funds sufficient to pay the purchase price of the Tendered Bonds.
Section 4.04 Purchase While Bonds Bear Interest at a Flexible Pricing Long-Term
Rate. While any Bond (other than an Authority Bond or a Bank Bond) bears interest at
a Flexible Pricing Long-Term Rate, such Bond shall be purchased pursuant to this Section on
each Rate Change Date within a Flexible Pricing Long-Term Mode for such Bond, other than the
Rate Change Date which is the first day of a Flexible Pricing Long-Term Mode applicable to
such Bond, and on the Adjustment Date immediately following the last day of such Flexible
Pricing Long-Term Mode, at a purchase price equal to 100% of the principal amount thereof.
The Owner of such Bond may not elect to retain its Bond.
Not later than the 15th day next preceding such Rate Change Date for each Rate Period,
the Trustee shall give notice by mail to the Owners of the Bonds which bear interest at a Flexible
Pricing Long-Term Rate stating (i) the last day of the Rate Period then ending and (ii) that the
Bonds are required to be purchased on such Rate Change Date. The foregoing notwithstanding,
the failure of the Trustee to give such notice or cause such notice to be given will not affect the
requirement of such Owners to tender their Bonds for purchase.
Section 4.05 Purchase on any Adjustment Date. On each Adjustment Date, excluding
the Closing Date, with respect to a Bond (other than a Bank Bond or an Authority Bond),
including, without limitation, a proposed Conversion Date or a Substitute Adjustment Date,
excluding the Closing Date, such Bond shall be purchased pursuant to this Section at a purchase
price equal to 100% of the principal amount thereof, except that a Bond which is to be purchased
on an Adjustment Date which immediately follows the last day of a Flexible Pricing Short-Term
Mode shall be purchased pursuant to Section 4.02 hereof and a Bond which is to be purchased on
an Adjustment Date which immediately follows the scheduled final day of a Flexible Pricing
Long-Term Mode shall be purchased pursuant to Section 4.04 hereof. The Owner of such Bond
may not elect to retain its Bond.
Not later than the 15th day next preceding the Adjustment Date for any Bond bearing
interest at a Daily Rate, a Weekly Rate, or a Monthly Rate, the Trustee shall give Immediate
Notice to the Owner of such Bond stating (i) the last day of the Adjustment Period then ending
and (ii) that such Bond is required to be purchased on the Adjustment Date.
Section 4.06 Purchase on Notice of Certain Events. During the period a Credit Facility
is required by this Indenture, the Bonds (other than Authority Bonds, Bank Bonds and Bonds
bearing interest at a Fixed Rate) are subject to mandatory tender by the Owners thereof to the
Trustee when the Trustee gives Immediate Notice to the Owners of such Bonds of (i) the
occurrence and continuation of an event constituting an Event of Default under Section 7.01
hereof, or (ii) receipt by the Trustee of notice from the Bank that (a) the Bank will not reinstate
the interest component of the Credit Facility following a drawing thereunder in respect of the
payment of interest or (b) an event of default under the Credit Agreement has occurred and is
continuing and directing the Trustee to give Immediate Notice of a mandatory tender. Upon the
giving of such notice, such Bonds shall be purchased on a date which date is a Business Day not
more than four (4) Business Days after the date such notice is received by the Trustee and in no
52
® event later than two (2) days prior to the last day on which funds will be available under the
Credit Facility at a purchase price equal to 100% of the principal amount thereof plus, if such
purchase date is not an Interest Payment Date, accrued interest to the purchase date. In such
case, the Owner of any such Bond required to be purchased may not elect to retain its Bond and
by the acceptance of such Bond shall be deemed to have agreed to sell such Bond to the Trustee
on the date specified pursuant to this Section. The Trustee shall give such Immediate Notice
upon the occurrence and continuation of an Event of Default hereunder and receipt by the
Trustee of a written notice from the Bank requesting that such Immediate Notice be given.
Section 4.07 Purchase of Tendered Bonds Delivered to the Trustee; Notices. (a)
Tendered Bonds shall be purchased from the Owners thereof at a purchase price equal to 100%
of the principal amount thereof, plus, if such purchase date is not an Interest Payment Date,
accrued interest thereon, but solely from the following sources in order of priority indicated,
neither the Authority, the Trustee nor the Remarketing Agent having an obligation to use funds
from any other source:
(i) Proceeds of the sale of such Tendered Bonds pursuant to Section
4.08 hereof other than sales to the Authority;
(ii) Moneys received from the underwriter or purchaser (other than the
Authority) of Tendered Bonds upon the conversion of the interest rate thereon to a Fixed Rate;
(iii) Proceeds of a drawing received pursuant to the Credit Facility, to
the extent a Credit Facility is available and, with respect to the purchase of Tendered Bonds in a
Flexible Pncmg Short-Term Mode, interest or other gain realized as a result of any investments
or reinvestments of moneys in the Flexible Pricing Short-Term Fund; and
(iv) Moneys furnished by the Authority to the Trustee for the purchase
of Tendered Bonds, which moneys shall be segregated by the Trustee in a separate account in the
Bond Purchase Fund apart from, and not commingled with, other moneys held by the Trustee in
the Bond Purchase Fund.
(b) The Trustee shall pay the purchase price specified above of each Tendered
Bond from the sources specified above to the Registered Owner thereof by 4:30 p.m., Eastern
time, on the purchase date, provided that such Registered Owner has delivered such Tendered
Bond (with any necessary endorsements) to the Tender Office of the Trustee no later than 4:00
p.m., Eastern time, on such date; and provided further that failure of the Authority to pay the
purchase price of a Tendered Bond on the purchase date shall not constitute a default hereunder
in the event (1) the failure is the result of a failure of the Remarketing Agent or the Bank to
deliver proceeds in accordance with the terms of the Remarketing Agreement or the Credit
Facility, respectively, and (ii) such funds are deposited with the Trustee not later than 11:30 a.m.,
Eastern time, on the next succeeding Business Day after which such Tendered Bonds were
required to be purchased, in which case the Trustee shall not be required to pay the purchase
price of such Tendered Bond until noon, Eastern time on such next succeeding Business Day.
Section 4.08 Remarketing of Tendered Bonds by Remarketing Agent. Upon the
delivery or deemed delivery of Tendered Bonds by any Owners thereof in accordance with the
53
provisions hereof (including the delivery or deemed delivery of Authority Bonds), the
Remarketing Agent shall offer for sale and use its best efforts to remarket such Tendered Bonds
pursuant to the Remarketing Agreement, any such remarketing to be made on the date on which
such Tendered Bonds are to be purchased, at a price equal to 100% of the principal amount
thereof plus accrued interest, if any.
If Bonds are delivered or deemed delivered for purchase under Section 4.01(a) hereof, the
Remarketing Agent shall give telephonic notice to the Trustee, the Authority and the Bank no
later than 10:45 a.m., Eastern time, on the date on which such Bonds are to be so delivered or
deemed delivered, of the aggregate principal amount of such Bonds to be purchased on such date
which it has reasonable grounds to expect will not be remarketed on such date.
In addition, with respect to Bonds delivered or deemed delivered for purchase under
Section 4.01(b), 4.02, 4.03, 4.04, 4.05, 4.06 and 4.07 hereof, the Remarketing Agent shall give
telephonic notice to the Trustee, the Authority and the Bank no later than 4:30 p.m., Eastern
time, on the Business Day next preceding the date on which such Bonds are to be so delivered or
deemed delivered, of the aggregate principal amount of such Bonds to be purchased on such date
which it has reasonable grounds to expect will not be remarketed on such date.
The Remarketing Agent shall deliver the proceeds of the remarketing of any of the
Tendered Bonds to the Trustee no later than 12:45 p.m., Eastern time.
The Remarketing Agent shall remarket any Bank Bonds prior to remarketing of any
Tendered Bonds or Authority Bonds and shall remarket Bank Bonds and any Authority Bonds to
the extent and subject to the conditions set forth herein and in the Remarketing Agreement.
Upon the remarketing of Bank Bonds or Authority Bonds, the Remarketing Agent shall
immediately provide telephonic notice, promptly confirmed by telecopy or electronic mail, of
such remarketing to the Trustee, the Authority and the Bank, and thereupon the Authority or the
Trustee, whichever has possession of or beneficial interest in such Bonds, shall, subject to
Section 4.09(a)(ii) hereof, immediately deliver or provide for transfer of beneficial interest in
such Bonds to the Trustee for delivery to the purchasers thereof.
In addition to all other requirements to be met before the remarketing of Bank Bonds, if
the Bank Bonds have been purchased as a result of the purchase of Bonds pursuant to Section
4.03 or Section 4.06 hereof, the Remarketing Agent shall not remarket any such Bank Bonds
unless it shall have received an Opinion of Bond Counsel to the effect that the remarketing of the
Bank Bonds will not adversely affect any exclusion of interest on the Bonds from gross income
for federal income tax purposes under Section 103(a) of the Code to which the interest on the
Bonds would otherwise be entitled.
Section 4.09 Delivery of Bonds.
(a) (1) Subject to Section 4.11 hereof, Bonds remarketed by the
Remarketing Agent pursuant to Section 4.08 hereof shall be delivered by the Trustee as directed
by the Remarketing Agent by 3:30 p.m., Eastern time, on the date of purchase against payment
therefor.
54
® (ii) The Trustee shall take all such actions as shall be necessary to
remove Bank Bonds from the Book-Entry-Only System described in Section 2.12 hereof and to
register such Bank Bonds in the name of the Bank. Bank Bonds shall be held by the Trustee on
behalf, and for the benefit, of the Bank. At such time as all Bank Bonds have been remarketed
such that no Bank Bonds remain Outstanding and the Trustee has received written notice from
the Bank that the Credit Facility has been reinstated to its Commitment amount (as such term is
defined in the Credit Agreement), the Trustee shall take all such actions as shall be necessary to
return the Bonds to the Book-Entry-Only System described in Section 2.12 hereof. Once Bank
Bonds have been remarketed and the Trustee has received written notice from the Bank that the
Credit Facility has been fully reinstated, such Bank Bonds shall no longer be considered Bank
Bonds under this Indenture.
(b) Tendered Bonds delivered as provided in this Section shall be registered in
the manner directed by the purchaser thereof.
(c) The Trustee shall take such actions as are necessary to draw or obtain
funds under the Credit Facility in accordance with Section 3.16 hereof. If surplus moneys from
the Bank remain after the payment in full of all Tendered Bonds, the Trustee shall provide
Immediate Notice to the Bank of the amount of funds made available by the Bank on such date
which are not required for the payment of Tendered Bonds and shall immediately return such
excess funds to the Bank.
Section 4.10 No Remarketing After Certain Defaults. Anything in this Indenture to the
contrary notwithstanding (i) if during the period a Credit Facility is required pursuant to the
terms hereof, there is no Credit Facility in effect, there shall be no remarketing of Tendered
Bonds, (ii) if there shall have occurred and be continuing an Event of Default described in
Section 7.01 hereof of which an officer in the Principal Office of the Remarketing Agent or an
officer in the Principal Office of the Trustee has actual knowledge, there shall be no remarketing
of Tendered Bonds pursuant to Section 4.09 hereof and (iii) from and after the purchase of
Bonds pursuant to Section 4.07 hereof, there shall be no remarketing of Tendered Bonds without
the prior written consent of the Bank.
Section 4.11 Redemption Dates and Prices. The Series 2008 Bonds shall be subject to
redemption prior to Maturity in the amounts, at the times and in the manner provided in this
Section.
(a) Optional Redemption.
(1) Any Series 2008 Bond in a Daily Mode or a Weekly Mode shall be
subject to redemption prior to Maturity at the option of the Authority, with the prior written
consent of the Bank, to the extent that moneys are on deposit in the Redemption Fund (excluding
amounts on deposit in the Fixed Rate Redemption Account), in whole or in part (and if in part in
an Authorized Denomination) on any Business Day during such Daily Mode or Weekly Mode,
as applicable, at a redemption price equal to 100% of the principal amount thereof plus accrued
interest, if any, to the redemption date, without premium.
•
55
® (ii) Any Series 2008 Bond in a Monthly Mode shall be subject to
redemption prior to Maturity upon direction of the Authority, with prior written consent of the
Bank, to the extent that moneys are on deposit in the Redemption Fund (excluding amounts on
deposit in the Fixed Rate Redemption Account), in whole or in part (and if in part, in an
Authorized Denomination) on any Rate Change Date during such Monthly Mode, at a
redemption price equal to 100% of the principal amount thereof plus accrued interest, if any, to
the redemption date, without premium.
(iii) Any Series 2008 Bond in a Flexible Pricing Long-Term Mode
shall be subject to redemption prior to Maturity during each Rate Period therein at the option of
the Authority upon direction of the Authority from moneys on deposit in the Redemption Fund
(excluding amounts on deposit in the Fixed Rate Redemption Account), in whole on any
Business Day or in part (and if in part in an Authorized Denomination) on any Interest Payment
Date applicable to such Series 2008 Bonds after the No-Call Period described below, at the
following redemption prices (expressed as percentages of the principal amount of Series 2008
Bonds called for redemption) plus accrued interest to the date fixed for redemption:
Length of Rate Period
No-Call Period
Redemption
Price
greater than 12
10 years
101% declining.5%
years
from the
per 6 months to 100%
Rate Change Date
in year 10
less than or equal to 12
until 2 years
100%
years and greater than
prior to end
6 years
of Rate Period
less than or equal to 6
length of
Not subject to optional
years
Rate Period
redemption
The Authority may deliver to the Trustee an alternative redemption schedule to the schedule
shown above if the Authority delivers to the Authority and the Trustee an Opinion of Bond
Counsel to the effect that the alternative schedule of redemption. will not adversely affect the
validity and enforceability of the Series 2008 Bonds in accordance with their terms and will not
have an adverse effect on any exclusion of interest on the Series 2008 Bonds from gross income
for federal income tax purposes under Section 103(a) of the Code to which the interest on the
Series 2008 Bonds would otherwise be entitled. After the first Rate Change Date succeeding the
delivery of such alternative schedule and Opinion of Bond Counsel, Series 2008 Bonds in a
Flexible Pricing Long-Term Mode shall be subject to redemption pursuant to the terms of such
alternative schedule.
(iv) Any Series 2008 Bond bearing interest at a Fixed Rate shall be
subject to redemption prior to Maturity at the option of the Authority upon direction of the
Authority out of moneys deposited in the Fixed Rate Redemption Account in whole or in part on
any Business Day (and if in part in an Authorized Denomination) after the No-Call Period
described below, at the following redemption prices (expressed as percentages of the principal
56
® amount of the Series 2008 Bond called for redemption) plus accrued interest to the date fixed for
redemption:
Term to Maturity No-Call Period Redemption Price
greater than 12 years 10 years 101% declining.5%
from the per 6 months to 100%
Conversion Date in year 10
less than or equal to 12 until 2 years 100%
years and greater than prior to
6 years Maturity
less than or equal to 6 term to Not subject to optional
years Maturity redemption
The Authority may deliver to the Trustee an alternative redemption schedule to the schedule
shown above if the Authority delivers to the Trustee an Opinion of Bond Counsel to the effect
that the alternative schedule of redemption will not adversely affect the validity and
enforceability of the Series 2008 Bonds in accordance with their terms and will not have an
adverse effect on any exclusion of interest on the Series 2008 Bonds from gross income for
federal income tax purposes under Section 103(a) of the Code to which the interest on the Series
2008 Bonds would otherwise be entitled. Series 2008 Bonds which commence bearing interest
at a Fixed Rate on or after the delivery of such alternative schedule and Opinion of Bond
Counsel shall be subject to redemption in accordance with the provisions of such alternative
schedule.
(v) Any Series 2008 Bond bearing interest at a Flexible Pricing Short-
Term Rate or an Annual Rate shall be subject to optional redemption prior to Maturity at the
option of the Authority upon direction of the Authority from moneys on deposit in the
Redemption Fund (excluding amounts on deposit in the Fixed Rate Redemption Account), in
whole or in part (and if in part in an Authorized Denomination) on any Rate Change Date
therefor, at a redemption price equal to 100% of the principal amount thereof.
(vi) Any redemption of less than all of the Series 2008 Bonds
outstanding shall be made first from Bank Bonds.
(b) General Provisions Regarding Optional Redemption Including Credits
Against Bond Sinking Fund Deposits.
(i) No redemption of less than all of the Series 2008 Bonds
outstanding shall be made pursuant to subsection (a) of this Section unless (i) if such redemption
is of Series 2008 Bonds bearing interest at a Short Rate, an Annual Rate, or a Flexible Pricing
Long-Term Rate, the aggregate principal amount of Series 2008 Bonds to be redeemed is equal
to $100,000 or integral multiples thereof or (ii) if such redemption is with respect to Series 2008
0 Bonds bearing interest at a Fixed Rate, the aggregate principal amount of Series 2008 Bonds to
be redeemed is equal to $100,000 or $5,000 multiples in excess thereof. Any redemption of less
57
® than all of the Series 2008 Bonds outstanding shall be made in such a manner that all Series 2008
Bonds outstanding after such redemption are in Authorized Denominations. In the event that
less than all of the Series 2008 Bonds are redeemed, any Bank Bonds outstanding shall be
redeemed first.
(ii) Series 2008 Bonds may be called for redemption by the Trustee
pursuant to subsection (a) of this Section upon receipt by the Trustee at least 45 days prior to the
redemption date of a Written Request of the Authority requesting such redemption unless waived
by the Bank. Each such Written Request of the Authority shall specify the principal amount of
the Series 2008 Bonds so to be called for redemption, the applicable redemption price or prices
and the provision or provisions of this Section pursuant to which such Series 2008 Bonds are to
be called for redemption.
(iii) In lieu of redeeming Series 2008 Bonds pursuant to subsections (a)
or (c) of this Section, the Trustee may, at the request of the Authority, use such funds available
hereunder for redemption of Series 2008 Bonds to purchase Series 2008 Bonds in the open
market at a price not exceeding the redemption price then applicable hereunder. Any Series
2008 Bond so purchased in lieu of redemption shall be delivered to the Trustee for cancellation
and shall be cancelled, all as provided in Section 2.11 hereof. It is understood that (i) in the case
of any optional redemption or purchase and cancellation of Series 2008 Bonds bearing interest at
a Fixed Rate with serial Maturities, the Authority shall receive credit against its required Bond
Sinking Fund deposits with respect to such Series 2008 Bonds of such Maturity and (ii) in the
® case of any optional or extraordinary redemption of any Series 2008 Bonds in any Mode with a
term Maturity, the Authority shall receive credit against its required Bond Sinking Fund deposits
in such order as the Authority shall designate prior to the redemption or purchase and
cancellation or, if no such election is made prior to such redemption or purchase and
cancellation, in the inverse order thereof, provided, however, that following such reduction each
such mandatory Bond Sinking Fund redemption payment is made in integral multiples of an
Authorized Denomination.
(iv) Notwithstanding the provisions of this Section, if the Trustee does
not have on deposit funds sufficient to pay the redemption price of the Series 2008 Bonds to be
called for redemption, any notice of redemption with respect to redemptions pursuant to this
Section 4.11 may contain a statement that the redemption is conditioned upon the receipt by the
Trustee of funds on or before the date fixed for redemption sufficient to pay the redemption price
of the Series 2008 Bonds so called for redemption, and that if such funds are not available, such
redemption shall be canceled by written notice to the owners of the Series 2008 Bonds called for
redemption in the same manner as the original redemption notice was mailed.
(c) Bond Sinking Fund Deposits - Mandatory Redemption.
(i) The Series 2008 Bonds are subject to mandatory sinking fund
redemption at a redemption price equal to 100% of the principal amount thereof plus accrued
interest to the redemption date. As and for a sinking fund for the redemption of the Series 2008
Bonds, there shall be redeemed (after any credits provided for in this Indenture) from amounts on
deposit in the Bond Sinking Fund on the following dates the following principal amounts of
Series 2008 Bonds:
58
®
Maturity Date
Principal Amount
December 1, 2011
$ 355,000
December 1, 2012
690,000
December 1, 2013
725,000
December 1, 2014
755,000
December 1, 2015
790,000
December 1, 2016
825,000
December 1, 2017
860,000
December 1, 2018
900,000
December 1, 2019
940,000
December 1, 2020
985,000
December 1, 2021
1,030,000
December 1, 2022
1,075,000
December 1, 2023
1,120,000
December 1, 2024
1,170,000
December 1, 2025
1,225,000
December 1, 2026
1,280,000
December 1, 2027
1,335,000
December 1, 2028
1,395,000
December 1, 2029
1,460,000
December 1, 2030
1,525,000
December 1, 2031
1,595,000
June 1, 2032*
2,965,000
* Maturity
(ii) Prior to each conversion of any of the Series 2008 Bonds to a
Fixed Rate pursuant to Section 5.03 hereof, the Remarketing Agent shall deliver to the Trustee
and the Authority a certificate which includes (i) a schedule specifying the principal amount of
converted Series 2008 Bonds, if any, which will mature on the first December 1 occurring after
such Conversion Date and on each December 1 thereafter to and including December 1, 2031
and the final maturity on June 1, 2032 and the interest rate payable on the converted Series 2008
Bonds of each such Maturity and (ii) a schedule specifying the principal amount of converted
Series 2008 Bonds maturing December 1, 2031 and the final maturity of June 1, 2032, if any, to
be called for mandatory sinking fund redemption on each such December 1 and June 1, 2032. In
determining the principal maturities, mandatory sinking fund redemption payments and interest
rates for converted Series 2008 Bonds, the Remarketing Agent shall use the following
guidelines:
(1) The Remarketing Agent shall determine the December 1 or
June 1 which shall be designated the "Final Serial Maturity Date" for such converted Series 2008
Bonds. The Final Serial Maturity Date and each preceding December 1 or June 1 shall be
designated as "Serial Maturity Dates." Converted Series 2008 Bonds shall mature on each Serial
• Maturity Date in an amount equal to the pro rata portion of the Bond Sinking Fund payment
scheduled to be made on such Serial Maturity Date which is allocated to the converted Series
2008 Bonds in the manner provided in subsection (2) below. The remaining converted Series
59
2008 Bonds, if any, shall mature on June 1, 2032. The pro rata portion of each Bond Sinking
Fund payment scheduled to be made after the Final Serial Maturity Date, if any, which is
allocated to the converted Series 2008 Bonds in the manner provided in subsection (2) below
shall be applied to make Bond Sinking Fund payments with respect to and to pay the principal of
the converted Series 2008 Bonds maturing June 1, 2032.
(2) The Remarketing Agent shall determine the portion of each
regularly scheduled Bond Sinking Fund payment to be allocated to the converted Series 2008
Bonds by prorating based on the outstanding principal amount of Series 2008 Bonds, between
the Series 2008 Bonds to be converted and those which have not been and are not being
converted, that portion of each such payment which has not previously been allocated to
previously converted Series 2008 Bonds. In making such pro-ration, the Remarketing Agent
shall, to the extent necessary, alternately round down and up to the nearest $100,000 the amount
allocable to the Series 2008 Bonds which have not been and are not being converted.
(3) The Remarketing Agent shall set the interest rate on each
converted Series 2008 Bond of a particular Maturity at the lowest interest rate that will enable
such Series 2008 Bond upon conversion to be remarketed at par (plus any accrued interest)
taking into account the Maturity of such Series 2008 Bond and Bond Sinking Fund payments to
be made with respect to converted Series 2008 Bonds of such maturity.
The foregoing notwithstanding, the Authority may provide another method for providing
® for payment of principal of the Series 2008 Bonds after the Conversion Date if there is delivered
to the Trustee and the Remarketing Agent by the Authority an Opinion of Bond Counsel to the
effect that utilization of such other method will not adversely affect the validity or enforceability
in accordance with their terms of any Series 2008 Bonds and will not have an adverse effect on
any exclusion of interest on the Series 2008 Bonds from gross income for federal income tax
purposes under Section 103(a) of the Code to which the interest on the Series 2008 Bonds would
otherwise be entitled.
(iii) Payment or redemption of the Series 2008 Bonds through the Bond
Sinking Fund shall be without premium. The Series 2008 Bonds shall be redeemed by the
Trustee pursuant to the provisions of this subsection without any notice from or direction by the
Authority or the consent of the Bank.
(d) Authority Bonds. Authority Bonds shall not be subject to redemption. At
any time the Authority may surrender any Authority Bonds to the Trustee, which shall promptly
cancel such Bonds.
(e) Bank Bonds. The Authority shall redeem Bank Bonds at the time or times
required by the Credit Agreement at a redemption price of 100% of the principal amount of the
Bank Bonds to be redeemed plus accrued interest, if any, at the rate specified in the Credit
Agreement, to the redemption date. The Bank Bonds shall be redeemed by the Trustee pursuant
to the provisions of this subsection without any notice from or direction by the Authority.
® Section 4.12 Notice of Redemption. (a) Except as hereinafter provided, a copy of the
notice of any redemption identifying the Series 2008 Bonds to be redeemed shall be given by
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Immediate Notice with respect to Series 2008 Bonds bearing interest at a Short Rate not less than
30 nor more than 60 days prior to the date fixed for redemption and shall be given by first class
mail, postage prepaid with respect to Series 2008 Bonds bearing interest at an Annual Rate, a
Flexible Pricing Long-Term Rate or a Fixed Rate not less than 30 or more than 60 days prior to
the date fixed for redemption, to the Registered Owners of Series 2008 Bonds to be redeemed at
their addresses as shown on the Bond Register. Such notice shall specify the redemption date,
the redemption price, the place and manner of payment and that from the redemption date
interest will cease to accrue on the Series 2008 Bonds which are the subject of such notice and
shall include such other information as the Trustee shall deem appropriate or necessary at the
time. The redemption of any Bonds may be contingent or subject to such conditions as may be
specified in the notice. Except for mandatory sinking fund redemptions, prior to the date that the
redemption notice is first given as aforesaid, (i) funds shall be placed with the Trustee to pay
such Series 2008 Bonds, any premium thereon, and accrued interest thereon to the redemption
date if the Series 2008 Bonds to be redeemed bear interest at a Fixed Rate or if no Credit Facility
is required to be in effect or (ii) with respect to Series 2008 Bonds bearing interest at a Short
Rate, an Annual Rate, or a Flexible Pricing Long-Term Rate while a Credit Facility is required to
be in effect, the Bank shall have consented thereto. Prior to the time at which all Series 2008
Bonds bear interest at Fixed Rates, Immediate Notice of any such redemption shall also be given
to the Bank and the Remarketing Agent promptly following the giving of notice to the
Bondholders as aforesaid.
(b) Failure to give notice in the manner prescribed hereunder with respect to
® any Series 2008 Bond, or any defect in such notice, shall not affect the validity of the
proceedings for redemption for any Series 2008 Bond with respect to which notice was properly
given. Upon the happening of the above conditions and if sufficient Available Moneys are on
deposit with the Trustee on the applicable redemption date to redeem the Series 2008 Bonds to
be redeemed and to pay interest due thereon and premium, if any, the Series 2008 Bonds thus
called shall not after the applicable redemption date bear interest, be protected by this Indenture
or be deemed to be outstanding under the provisions of this Indenture.
(c) Notwithstanding the provisions of this Section, any notice of redemption
shall either (a) contain a statement that the redemption is conditioned upon the receipt by the
Trustee on or before the redemption date of Available Moneys sufficient to pay the redemption
price of the Bonds so called for redemption, and that if such Available Moneys are not available,
such redemption shall be canceled by written notice to the Owners of the Bonds called for
redemption in the same manner as the original redemption notice was mailed, or (b) be given
only if Available Moneys sufficient to pay the redemption price of the Bonds so called for
redemption are on deposit with the Trustee in the Redemption Fund.
Section 4.13 No Partial Redemption After Default. Anything in this Indenture to the
contrary notwithstanding, if there shall have occurred and is continuing an Event of Default
hereunder of which an officer of the Trustee has actual knowledge, there shall be no redemption
of less than all of the Series 2008 Bonds (other than Authority Bonds or Bank Bonds) at the time
outstanding (other than pursuant to Section 4.11(c))hereof.
® Section 4.14 Selection of Series 2008 Bonds To Be Redeemed. If less than all the
Series 2008 Bonds shall be called for redemption under any provision of this Indenture
61
® permitting such partial redemption, the particular Series 2008 Bonds or portions thereof to be
redeemed shall be selected by the Authority, in the principal amount designated to the Trustee by
the Authority, which designation shall include the Mode and Maturity of the particular Series
2008 Bonds to be redeemed, or otherwise as required by this Indenture; provided, however, that
subject to the last sentence of this Section, (i) in the case of mandatory sinking fund redemption
the Trustee shall determine the Series 2008 Bonds to be redeemed by lot in such manner as the
Trustee may determine among the Series 2008 Bonds subject to such redemption, (ii) in the case
of the redemption of less than all Series 2008 Bonds which bear interest in the same Mode at the
same rate for the same Rate Periods and which in the case of Series 2008 Bonds bearing interest
at a Fixed Rate were converted on the same date, such redemption shall be by lot in such manner
as the Trustee may determine among such Series 2008 Bonds and (iii) subject to other applicable
provisions of this Indenture, the portion of any Series 2008 Bond to be redeemed shall be in a
principal amount equal to an Authorized Denomination. In selecting Series 2008 Bonds for
redemption, the Trustee shall treat each Series 2008 Bond as representing that number of Series
2008 Bonds which is obtained by dividing the principal amount of such Series 2008 Bond by the
minimum Authorized Denomination. If it is determined that one or more, but not all, of the
integral multiples of the Authorized Denomination of principal amount represented by any Series
2008 Bond is to be called for redemption, then, upon notice of intention to redeem such integral
multiple of an Authorized Denomination, the Owner of such Series 2008 Bond shall forthwith
surrender such Series 2008 Bond to the Trustee for (A) payment to such Owner of the
redemption price of the integral multiple of the Authorized Denomination of principal amount
called for redemption and (B) delivery to such Owner of a new Series 2008 Bond or Series 2008
® Bonds in the aggregate principal amount of the unredeemed balance of the principal amount of
such Series 2008 Bond. New Series 2008 Bonds representing the unredeemed balance of the
principal amount of such Series 2008 Bond shall be issued to the Registered Owner thereof
without charge therefor.
Section 4.15 Limit on Remarketing. Any Bond purchased pursuant to Section 4.01,
4.02, 4.03, 4.04, 4.05, 4.06 or 4.07 of this Indenture from the date notice is given of redemption
of such Bond pursuant to Section 4.12 hereof through the date for such redemption or from the
date of notice of mandatory purchase of such Bond pursuant to Section 4.02, 4.03, 4.04, 4.05,
4.06 or 4.07 hereof through the date for such mandatory purchase shall not be remarketed except
to a buyer who has been notified at the time of such purchase of the requirement to deliver such
Bond for redemption or purchase to the Trustee on the redemption or purchase date. Tendered
Bonds shall not be remarketed to the Authority. The Trustee shall not be required to monitor the
actions of the Remarketing Agent to ensure that it will not remarket any Bonds to the Authority
and, for the purposes of Section 4.07(a)(i) hereof, the Trustee may, in the absence of actual
notice to the contrary, assume that no funds furnished to the Trustee by the Remarketing Agent
constitute proceeds of the remarketing of any Bonds to the Authority.
ARTICLE V
MODE CONVERSION
Section 5.01 Authority for and Conditions to Conversion to an Annual Mode a Flexible
® P' ing_Long-Term Mode or Short Mode. (a) It is not necessary that all of the Bonds operate in
the same Mode at the same time. The Authority may designate a different Mode with respect to
62
® any Bond upon compliance with this Section. The Authority may select such subsequent Mode
and, within a Flexible Pricing Long-Term Mode or a Flexible Pricing Short-Term Mode, the
Remarketing Agent may designate such Rate Periods from time to time, upon the written request
of the Authority in the case of the Flexible Pricing Long-Term Mode, as will, in its judgment,
result in the lowest aggregate cost being payable by the Authority with respect to the Bonds
bearing interest at a Flexible Pricing Short-Term Rate or a Flexible Pricing Long-Term Rate, as
the case may be, taking into account interest and any other determinable fees and expenses and
taking into account any Interest Rate Agreement relating to such Bonds. The Authority may
establish different Modes and, within a Flexible Pricing Long-Term Mode or a Flexible Pricing
Short-Term Mode, the Remarketing Agent may from time to time, upon the request of the
Authority in the case of the Flexible Pricing Long-Term Mode, establish different Rate Periods,
for Bonds on the same Adjustment Date in order to achieve an average duration of Rate Periods
that, in the judgment of the Remarketing Agent, is most likely to achieve the lowest total
aggregate cost being payable by the Authority with respect to the Bonds, taking into account
interest and any other determinable fees and expenses and taking into account any Interest Rate
Agreement relating to such Bonds. The Remarketing Agent's determination shall be based upon
the market for and the relative yields of the Bonds and other securities that bear interest at a
variable rate or at fixed rates that, in the judgment of the Remarketing Agent, are otherwise
comparable to the Bonds, or any fact or circumstance relating to the Bonds or affecting the
market for the Bonds or affecting such other comparable securities in a manner that, in the
judgment of the Remarketing Agent, will affect the market for the Bonds. The Remarketing
Agent, in its discretion, may consider such information and resources as it deems appropriate in
® making the determinations required by this Section, but the Remarketing Agent's determination
shall be based solely upon the Remarketing Agent's judgment, and the Remarketing Agent's
determination shall be conclusive and binding upon all parties. The foregoing notwithstanding,
the Authority may select any Mode and, within a Flexible Pricing Long-Term Mode or a Flexible
Pricing Short-Term Mode, the Remarketing Agent may designate any Rate Period which does
not meet the foregoing standards if the conditions of subsection (g)(ii) of this Section are
satisfied. The Authority shall select such a principal amount of Bonds for conversion from one
Mode to another as will allow Bonds after conversion to be sold in the minimum Authorized
Denominations applicable to such Mode.
(b) The Authority shall evidence each designation of a subsequent Mode and
Adjustment Date for Bonds pursuant to subsection (a) hereof by giving written notice to the
Trustee, the Remarketing Agent, the Bank and each Rating Agency then maintaining a rating on
the Bonds, which written notice shall be received by each such party not less than 20 days prior
to the Adjustment Date with respect to the new Adjustment Period, specifying (i) the Mode in
which such Bonds shall operate during such Adjustment Period and the commencement date of
such Adjustment Period and (ii) if such Mode is to be a Flexible Pricing Long-Term Mode, the
duration of such Adjustment Period for each Bond affected thereby, the Rate Determination Date
or Dates and the Rate Change Date or Dates therefor and the applicable optional redemption
provisions determined in accordance with Section 4.11 hereof, provided, however, that (A) if
such Adjustment Period is a Flexible Pricing Long-Term Mode or a Flexible Pricing Short-Term
Mode, the first day following each Rate Period therein shall be a Business Day and (B) not later
® than the 20th day prior to the Adjustment Date with respect to the new Adjustment Period, the
Trustee shall have received written evidence from each Rating Agency then maintaining a rating
on the Bonds that the rating on the Bonds will not be reduced or withdrawn due to the conversion
63
• of the Bonds to the Flexible Pricing Long-Term Mode or the Flexible Pricing Short-Term Mode.
In addition, notwithstanding any other provisions of this Indenture to the contrary, no change in
Modes shall be effective unless the Credit Facility provides the number of days of interest
coverage after the Adjustment Date as may be required by any Rating Agency then maintaining a
rating on the Bonds to continue its rating, unless all of the Bonds shall bear interest at a Fixed
Rate after the change in Modes, in which case no Credit Facility is required. While the Credit
Facility is in effect, a change to an Annual Mode or a Flexible Pricing Long-Term Mode shall
not be permitted unless a Substitute Credit Facility satisfying the requirements of the
immediately preceding sentence is delivered concurrently with such change. There shall be no
change from a Mode to a different Mode unless the Authority provides the Trustee prior to the
Adjustment Date with an Opinion of Bond Counsel that (i) such change will not have an adverse
effect on the exclusion of interest on the Bonds from gross income for federal income tax
purposes and (ii) the remarketing of the Bonds complies with Rule 15c2-12 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
(c) No later than 11:00 a.m., Eastern time, on an Adjustment Date which is
the first day of a Flexible Pricing Short-Term Mode, the Remarketing Agent shall give
telephonic notice (confirmed by telecopy) to the Authority, the Bank and the Trustee of (i) the
initial Rate Period and initial Flexible Pricing Short-Term Rate to be borne by each Bond
designated to operate in a Flexible Pricing Short-Term Mode and (ii) the Rate Change Date
which immediately succeeds such initial Rate Period. No later than 10:30 a.m., Eastern time, on
an Adjustment Date which is the first day of a Daily Mode, the Remarketing Agent shall give
telephonic notice (confirmed by telecopy) to the Authority and the Trustee of the initial Daily
Rate to be borne by the Bonds designated to operate in a Daily Mode. No later than 11:00 a.m.,
Eastern time, on the Rate Determination Date preceding an Adjustment Date which is the first
day of a Weekly Mode, the Remarketing Agent shall give telephonic notice (confirmed by
telecopy) to the Authority and the Trustee of the initial Weekly Rate to be borne by the Bonds
designated to operate in a Weekly Mode. No later than 11:00 a.m., Eastern time, on the Rate
Determination Date preceding an Adjustment Date which is the first day of a Monthly Mode, the
Remarketing Agent shall give telephonic notice (confirmed by telecopy) to the Authority and the
Trustee of the initial Monthly Rate to be borne by the Bonds designated to operate in a Monthly
Mode. No later than 11:00 a.m., Eastern time, on the Rate Determination Date preceding an
Adjustment Date which is the first day of a Flexible Pricing Long-Term Mode, the Remarketing
Agent shall give telephonic notice (confirmed by telecopy) to the Trustee, the Bank and the
Authority of the initial Flexible Pricing Long-Term Rate to be borne by each Bond designated to
operate in a Flexible Pricing Long-Term Mode.
(d) If the Authority shall designate a new Flexible Pricing Long-Term Mode
for any Bond, the Authority shall cause to be delivered to the Trustee, the Bank, and the
Remarketing Agent concurrently with the notice described in subsection (b) of this Section an
Opinion of Bond Counsel to the effect that such designation (i) is authorized or permitted by this
Indenture, (ii) will not have an adverse effect on any exclusion of interest on the Bonds from
gross income for federal income tax purposes under Section 103(a) of the Code to which the
interest on the Bonds would otherwise be entitled, and (iii) will not have an adverse effect on the
® validity or enforceability of any Bond. If an Opinion of Bond Counsel is required to be delivered
together with the notice, the conversion contemplated by such Opinion and notice shall not
become effective unless prior to noon, Eastern time, on the applicable Adjustment Date the
64
Trustee shall have received an Opinion of Bond Counsel, dated the Adjustment Date, reaffirming
the conclusions of the Opinion accompanying the notice delivered as above required.
(e) In the event (i) the Remarketing Agent does not determine the interest rate
applicable to the initial Rate Period during a new Mode with respect to any Bond as provided in
subsection (a) of this Section, or (ii) an opinion required by subsection (d) of this Section is not
delivered or reaffirmed on the applicable Adjustment Date, the immediately succeeding Mode
with respect to the Bonds in the Mode then ending shall be (A) a Daily Mode if the preceding
Mode was a Short Mode, with a Daily Rate established by the Remarketing Agent or if the
Remarketing Agent fails to set such Rate, such Daily Rate shall be the Alternate Rate for the
Mode in effect, or (B) a Flexible Pricing Long-Term Mode with an Adjustment Period of 365
days if the preceding Mode was a Flexible Pricing Long-Term Mode, with a Flexible Pricing
Long-Term Rate established by the Remarketing Agent, or if the Remarketing Agent fails to set
such rate, such Flexible Pricing Long-Term Rate shall be the Alternate Rate for the Mode in
effect. If any such rate shall exceed the Maximum Interest Rate, the Bonds shall bear interest at
the Maximum Interest Rate.
(f) Upon receipt of notice from the Authority as provided in subsection (b) of
this Section, the Trustee, at least 15 days prior to each succeeding Adjustment Date, shall give
the Immediate Notice described in Section 4.06 hereof to each Owner of Bonds thereby affected
bearing interest at a Daily Rate, a Weekly Rate, a Monthly Rate, or an Annual Rate of the
mandatory tender for purchase of the affected Bonds on the Adjustment Date.
(g) Any designation pursuant to subsection (a) of this Section of a subsequent
Adjustment Period shall be accompanied by (i) a written statement from the Remarketing Agent,
addressed to the Authority and the Trustee, to the effect that the Remarketing Agent has
determined that such change satisfies the standards provided in subsection (a) of this Section or
(ii) an approval in writing of such change by a duly authorized officer of the Authority and an
Opinion of Bond Counsel to the effect that such approval is not required for the continued
validity and enforceability of the Bonds in accordance with their terms.
Section 5.02 Designation of Substitute Adjustment Date. (a) The Authority may
designate a Substitute Adjustment Date (i) for any Bank Bonds, with the consent of the Bank, or
Authority Bonds on any Business Day and (ii) for any Bonds in a Flexible Pricing Long-Term
Mode, on any Business Day after the No-Call Period for such Bonds set forth in
Section 4.11(a)(iii) hereof. The Substitute Adjustment Date shall be the next succeeding
Adjustment Date for such Bonds for all purposes of this Indenture; provided that no date shall be
a Substitute Adjustment Date unless the Bonds to which such Substitute Adjustment Date
pertains are successfully remarketed by the Remarketing Agent on such date.
(b) The Authority shall evidence each such designation of a Substitute
Adjustment Date by giving written notice to the Remarketing Agent, the Bank and the Trustee,
which written notice shall be received by the Remarketing Agent and the Trustee not less than
one day prior to each such Substitute Adjustment Date for Bank Bonds and Authority Bonds and
not less than 20 days prior to each Substitution Date for Bonds in a Flexible Pricing Long-Term
® Mode, specifying (i) the Mode in which such Bonds shall operate commencing with such
Substitute Adjustment Date and (ii) if such Adjustment Period is to be a Flexible Pricing Long-
65
® Term Mode, the duration of the immediately succeeding Adjustment Period for each Bond
affected thereby, the Rate Periods therein, the Rate Change Dates and Rate Determination Dates
therefor and the applicable optional redemption provisions determined in accordance with
Section 4.11(a)(iii) hereof, provided, however, that clauses (A) and (B) of Section 5.01(b) hereof
shall apply to the designation by the Authority of a Substitute Adjustment Date and the selection
of the Rate Change Date or Dates applicable thereto. In addition, if the succeeding Adjustment
Period is to be a Flexible Pricing Long-Term Mode, the Remarketing Agent shall give telephonic
notice (confirmed by telecopy) to the Trustee no later than 11:00 a.m., Eastern time on the
Business Day immediately preceding the Substitute Adjustment Date, specifying the interest rate
which will be effective commencing on such Substitute Adjustment Date. If the succeeding
Adjustment Period is to be a Flexible Pricing Short-Term Mode, the Remarketing Agent shall
give telephonic notice (confirmed by telecopy) to the Trustee no later than 11:00 a.m., Eastern
time, on the Adjustment Date which is the first day of a Flexible Pricing Short-Term Mode, of (i)
the duration of the initial Rate Periods during such Flexible Pricing Short-Term Mode and the
initial Flexible Pricing Short-Term Rates to be borne by the Bonds designated to operate in a
Flexible Pricing Short-Term Mode during such Rate Periods and (ii) the Rate Change Dates upon
which such Rate Periods shall terminate. If the succeeding Adjustment Period is to be a Weekly
Mode, the Remarketing Agent shall give telephonic notice (confirmed by telecopy) to the
Authority and the Trustee no later than 11:00 a.m., Eastern time on the Business Day
immediately preceding the Substitute Adjustment Date, specifying the interest rate which will be
effective commencing on such Substitute Adjustment Date. If the succeeding Adjustment Period
is to be a Daily Mode, the Remarketing Agent shall give telephonic notice (confirmed by
• telecopy) to the Trustee no later than 10:30 a.m., Eastern time on the Substitute Adjustment Date
which is the first day of a Daily.Mode, of the initial Daily Rate to be borne by the Bonds
designated to operate in a Daily Mode during such Rate Period. If the succeeding Adjustment
Period is to be a Fixed Mode, the Authority shall satisfy the requirements of Section 5.03 hereof.
(c) If the Authority shall designate a Substitute Adjustment Date for any
Bonds, it shall cause to be delivered to the Trustee, the Remarketing Agent and the Bank
concurrently with the notice described in subsection (b) of this Section, and no such designation
of a Substitute Adjustment Date shall take effect without, an Opinion of Bond Counsel to the
effect that the designation of such Substitute Adjustment Date (i) is authorized or permitted by
this Indenture, (ii) will not have an adverse effect on any exclusion of interest on the Bonds from
gross income for federal income tax purposes under Section 103(a) of the Code to which the
interest on the Bonds would otherwise be entitled, and (iii) will not have an adverse effect on the
validity or enforceability of any Bond. The Substitute Adjustment Date shall not be effective
unless prior to 11:00 a.m., Eastern time, on the Substitute Adjustment Date, the Trustee shall
have received an Opinion of Bond Counsel, dated such Adjustment Date, reaffirming the
conclusions of the Opinion accompanying the notice delivered as above required.
(d) Any designation by the Authority pursuant to subsection (a) of this
Section of a Substitute Adjustment Date shall be accompanied by (i) a written statement from the
Remarketing Agent, addressed to the Authority and the Trustee, to the effect that the
Remarketing Agent has determined that such change satisfies the standards provided in
® Section 5.01(a) hereof or (ii) an approval in writing of such change by a duly authorized officer
of the Authority and an Opinion of Bond Counsel to the effect that such approval is not required
for the continued validity and enforceability of the Bonds in accordance with their terms.
66
® Section 5.03 Authority for and Conditions to Conversion to a Fixed Rate. (a) On any
Rate Change Date during a Flexible Pricing Short-Term Mode, an Annual Mode or a Flexible
Pricing Long-Term Mode or on any Business Day during a Daily Mode or a Weekly Mode, the
interest rate to be borne by all or any portion of the Bonds in such Mode shall be converted to a
Fixed Rate, and such Bonds so converted shall thereafter bear interest at such Fixed Rate until
payment of the principal or redemption price thereof shall have been made or provided for in
accordance with the provisions hereof, whether at Maturity, upon redemption or otherwise, upon
receipt by the Trustee of: (i) a direction from the Authority specifying a Conversion Date and the
principal amount of Bonds to be converted; (ii) an approval in writing of the conversion of the
interest rate on such Bonds to a Fixed Rate as herein provided by the Authority Representative;
(iii) the certificate of the Remarketing Agent described in Section 4.11(c)(ii); (iv) a firm
underwriting or Bond Purchase Agreement from a recognized firm of bond underwriters or
recognized institutional investors to underwrite or purchase all Bonds which are to be converted
on such Conversion Date at a price of 100% of the principal amount thereof, and (v) an Opinion
of Bond Counsel addressed to the Authority and the Trustee to the effect that such conversion
(A) is authorized or permitted by this Indenture, (B) will not have an adverse effect on any
exclusion of interest on the Bonds from gross income for federal income tax purposes under
Section 103(a) of the Code to which the interest on the Bonds would otherwise be entitled, and
(C) will not have an adverse effect on the validity or enforceability of any Bond, all of which
direction, certificates, contract and Opinion shall be received not less than 20 days prior to the
Conversion Date. The conversion of the interest rate borne by Bonds pursuant to this Section
shall not become effective unless prior to 11:00 a.m., Eastern time, on the applicable Conversion
Date the Trustee shall have received an Opinion of Bond Counsel, dated the Conversion Date,
reaffirming the conclusions of the opinion accompanying the written direction of the Authority
delivered as above required.
(b) At least 15 days prior to the Conversion Date, the Trustee shall give or
cause the Remarketing Agent to give written notice of such election by the Authority to the
Owners of all Bonds to be converted bearing interest at a Daily Rate or a Weekly Rate or an
Annual Rate, which notice shall state (i) the Conversion Date and (ii) that such Bonds shall be
subject to mandatory purchase on such Conversion Date. The Trustee shall give written notice
by first class mail to the Remarketing Agent and the Bank of the foregoing information.
(c) The Authority, at the direction of the Trustee, shall deliver replacement
Bonds bearing the Fixed Rate for converted Bonds surrendered or deemed surrendered by the
Owner thereof. Any such replacement Bonds shall be executed and authenticated as provided in
Section 2.09 hereof; provided, however, that unless the form of the Bonds is revised pursuant to
Section 2.06 hereof, the Trustee shall affix a legend on the face of each Bond authenticated on or
after the Conversion Date therefor in substantially the following form:
This Bond bears interest at the Fixed Rate, as defined in this Bond, of
% per annum from and after This Bond is not supported by
a Credit Facility. This Bond matures
(d) From the date notice of the proposed establishment of a Fixed Rate with
• respect to any Bond is received by the Trustee as provided in subsection (a) of this Section
through the Conversion Date therefor, such Bond shall not be remarketed by the Remarketing
67
® Agent except to a buyer who is notified in writing of the mandatory purchase of such Bond on
such Conversion Date.
(e) No Credit Facility is required with respect to Bonds bearing interest at a
Fixed Rate, so the amount of the Credit Facility, if any, may be reduced on or after the
Conversion Date with respect to such Bonds as provided in the Credit Agreement. The
determination of the Fixed Rate for any Bonds shall be conclusive and binding upon the Owners
of such Bonds, the Authority and the Trustee; provided, however, that the Bank's consent shall
be required for the conversion of Bonds to a Fixed Rate if the Initial Credit Facility is
outstanding at such time.
(f) After the Conversion Date for any Bonds, interest on such Bonds shall be
payable semiannually on each June 1 and December 1 until all of such Bonds shall have been
paid or payment shall have been duly provided for. The interest payable on the June 1 or
December 1, as the case may be, next following the Conversion Date for such Bonds shall be for
the period, which may be less than six months, commencing on such Conversion Date until such
June 1 or December 1.
(g) If the conversion of the interest rate on any Bond does not occur for any
reason, including in the event that any condition precedent to the conversion shall not occur,
such Bond shall bear interest from and after the proposed Conversion Date in the same Mode as
the Mode applicable to such Bond prior to the proposed Conversion Date and at the interest rate
® as calculated in the manner set forth in Section 2.03 hereof and, in the case of a Flexible Pricing
Long-Term Mode, for a Rate Period of 365 days.
Section 5.04 Effect of Notices. Any notice mailed as provided herein shall be
conclusively presumed to have been given, whether or not the Owner of Bonds receives the
notice.
ARTICLE VI
GENERAL COVENANTS
Section 6.01 Payment of Debt Service Requirement. The Authority covenants that it
shall promptly pay the Debt Service Requirement on every Bond issued under this Indenture at
the place, on the dates and in the manner provided herein and in said Bonds according to the true
intent and meaning thereof. The principal of, premium, if any, and interest on the Bonds and the
purchase price of Tendered Bonds shall not constitute an indebtedness of Town, the State or any
political subdivision thereof, and neither the Town, the State nor any political subdivision thereof
shall be liable thereon.
Section 6.02 Performance of Covenants-, Authority. The Authority shall faithfully
perform at all times any and all covenants, undertakings, stipulations and provisions set forth in
this Indenture, in any and every Bond executed, authenticated and delivered hereunder and in all
of its proceedings pertaining hereto. The Authority is duly authorized under the Constitution and
® laws of the State, including particularly and without limitation the Act, to issue the Bonds
authorized hereby and to execute this Indenture, the Cooperation Agreement, the Credit
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® Agreement, the Remarketing Agreement and the Bond Purchase Agreement, and to pledge the
receipts and amounts hereby pledged in the manner and to the extent set forth herein. All action
taken by the Authority in connection with the issuance of the Bonds and the execution and
delivery of this Indenture, the Cooperation Agreement, the Credit Agreement, the Remarketing
Agreement and the Bond Purchase Agreement has been duly and effectively taken, and the
Bonds in the hands of the Registered Owners thereof are and shall be valid and enforceable
obligations of the Authority according to the terms thereof and of this Indenture.
Section 6.03 Instruments of Further Assurance. The Authority shall do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and delivered, such
indentures supplemental hereto and such further acts, instruments and transfers as the Trustee,
the Bank, or the Original Purchaser may reasonably require for the better assuring, transferring,
conveying, pledging, assigning and confirming unto the Trustee and the Bank all and singular the
amounts pledged hereby to the payment of the Debt Service Requirement on the Bonds. The
Authority, except as specifically provided herein, shall not encumber or otherwise dispose of all
or any part of the Trust Estate.
Section 6.04 Recording and Filing. The Trustee, on behalf of the Authority, will cause
all financing statements related to this Indenture, and such other documents as may be necessary,
in the opinion of counsel acceptable to the Trustee and the Authority, to be kept and filed in such
manner and in such places as may be required by law in order to preserve and protect fully the
security of the Owners of the Bonds and the Bank and the rights of the Trustee and the Bank
hereunder; provided that (a) the Trustee may rely upon bond counsel for the preparation (in form
® and substance) and the filing of all initial financing statements, if any, relating to the Trust
Estate, and all supplements thereto, and (b) on a date not more than 60 days prior to the
termination of any such financing statement, the Trustee shall request that the Authority file all
continuation statements necessary to continue the effectiveness of all financing statements that
shall have been filed with respect to the Trust Estate; if the Trustee does not receive written
confirmation that all such continuation statements have been duly filed before the date that is 30
days prior to the termination of any such financing statement, the Trustee shall file such
continuation statements at the expense of the Authority.
Section 6.05 Inspection of Records. All books and records in the possession of the
Authority relating to the Urban Renewal Project, the Urban Renewal Plan, the Pledged
Revenues, the Cooperation Agreement and the Trust Estate shall at all reasonable times be open
to inspection by such accountants or other agents as the Trustee, the Bank or the Original
Purchaser may from time to time designate.
Section 6.06 List of Bondowners. The Trustee shall keep the registration records of the
Authority as Bond Registrar, together with the principal amounts and numbers of such Bonds.
At reasonable times and under reasonable regulations established by the Trustee (including with
respect to the imposition of a reasonable fee), the registration records may be inspected and
copied by the Authority, the Bank or the Registered Owners (or a designated representative
thereof) of 15% or more in principal amount of Bonds then Outstanding, such Ownership and the
authority of such designated representative to be evidenced to the satisfaction of the Trustee.
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® Section 6.07 Complete Urban Renewal Project Amendment to Urban Renewal Plan,
Compliance With Cooperation Agreement. The Authority covenants and agrees that the
Authority shall diligently and in a sound and economical manner carry out and continue to
completion, with all practicable dispatch, the Urban Renewal Project in accordance with its duty
so to do under and in accordance with the Act, the Urban Renewal Plan and the Cooperation
Agreement. The Urban Renewal Plan may be amended, but the Authority shall not request that
an amendment be made unless the Authority shall have received an opinion of counsel to the
Authority and reasonably acceptable to the Trustee, the Bank and the Original Purchaser to the
effect that such amendment would not result in a failure of the Urban Renewal Plan, as so
amended, to comply with the requirements of this Indenture or adversely and materially affect
the security for the Bonds or the obligations to the Bank hereunder.
The Authority covenants and agrees that the Authority shall comply with the Act and the
terms and provisions of the Cooperation Agreement from time to time in effect, and shall
promptly notify the Trustee and the Bank whenever the Authority shall have reason to believe
that any material provision of the Cooperation Agreement shall have been violated by the
Authority or any other party thereto.
Section 6.08 Books and Accounts, Financial Statements. The Authority covenants and
agrees that it shall at all times keep, or cause to be kept, proper and current books and accounts
(separate from all other records and accounts) in which complete and accurate entries shall be
made of all transactions relating to the Urban Renewal Project, Pledged Revenues, Trust Funds
® and other funds and accounts relating to the Urban Renewal Project, and shall prepare within 180
days after the close of each Fiscal Year a complete financial statement or statements for such
year in reasonable detail covering the Urban Renewal Project, Pledged Revenues, Trust Funds
and other funds or accounts, certified by a certified public accountant or firm of certified public
accountants selected by the Authority, and shall furnish a copy of such statement or statements to
the Trustee, the Original Purchaser, and the Bank and to any Registered Owner upon written
request therefor.
Section 6.09 Eminent Domain Proceedings. The Authority covenants and agrees that if
all or any part of the Urban Renewal Project should be taken from it, by eminent domain
proceedings or other proceedings authorized by law, for any public or other use under which the
property will be exempt from ad valorem property taxes, the net proceeds realized by the
Authority therefrom shall be deposited in the Revenue Fund.
Section 6.10 Disposition of Property. The Authority covenants and agrees that it shall
not dispose of more than 15% of the land area in the Urban Renewal Project Area (except
property not currently on the tax rolls or which is shown in the Urban Renewal Plan as planned
for public use, including without limitation property to be used for public streets, public off-
street parking, water, sewage or drainage facilities, parks, easements or rights of way for public
utilities or other similar uses) to public bodies or other Persons or entities whose property is
exempt from ad valorem property taxes, unless the Authority shall receive written consent of the
Bank so long as the Credit Facility is in effect, or, if the Credit Facility is not in effect, an
opinion of Independent Counsel to the effect that such disposition would not substantially impair
® the security for the Bonds or the obligations to the Bank hereunder or under the Credit
Agreement or the rights of the Registered Owners of the Bonds or the Bank.
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® Section 6.11 Protection of Security and Rights of Bondowners, Tax Covenants. The
Authority covenants and agrees to preserve and protect the security of the Bonds and the
obligations to the Bank hereunder or under the Credit Agreement and the rights of the Registered
Owners and the Bank and to defend their rights under all claims and demands of all Persons.
Without limiting the generality of the foregoing, the Authority covenants and agrees to contest or
cause to be contested by court action or otherwise (a) any claim made in any action or
proceeding to which the Authority is a party that the Act is unconstitutional or that the Pledged
Revenues or Trust Funds pledged hereunder cannot be paid to or by the Authority for the debt
service on the Bonds or payment of amounts due under the Credit Agreement, or any other
action affecting the validity of the Bonds or the obligations of the Bank hereunder or under the
Credit Agreement or diluting the security therefor, and (b) any assertion by the United States of
America or any department or agency thereof or any other Person that the interest received by
the Bondowners is includible in gross income for federal income tax purposes. The Authority
covenants and agrees to knowingly take no action which would result in (i) the Pledged
Revenues being withheld from the Trustee, or (ii) the interest received by the Registered Owners
on the Bonds becoming includible in gross income for federal income tax purposes.
The Authority covenants for the benefit of the Registered Owners of the Bonds that it
will not take any action or omit to take any action with respect to the Bonds, the proceeds
thereof, any other funds of the Authority or any facilities financed or refinanced by the Bonds if
such action or omission (i) would cause the interest on the Bonds to lose its exclusion from gross
income for federal income tax purposes under Section 103 of the Code, (ii) would cause interest
® on the Bonds to lose its exclusion from alternative minimum taxable income as defined in
Section 55(b)(2) of the Code except to the extent such interest is required to be included in the
adjusted net book income and adjusted current earnings adjustments applicable to corporations
under Section 56 of the Code in calculating corporate alternative minimum taxable income, or
(iii) would subject the Authority to any penalties under Section 148 of the Code. The foregoing
covenant shall remain in full force and effect notwithstanding the payment in full or defeasance
of the Bonds until the date on which all obligations of the Authority in fulfilling the above
covenant under the Code and the law of the State have been met.
In addition, the Authority hereby covenants that its direction of investments pursuant to
Article III hereof shall be in compliance with the procedures established by the Federal Tax
Exemption Certificate to the extent required to comply with its covenants contained in the
foregoing provisions of this Section and, to the extent required to comply with its covenants
contained in the foregoing provisions of this Section, the investment earnings on any moneys
held by the Trustee or the Authority under this Indenture, or other Pledged Revenues, or other
legally available moneys of the Authority, shall be deposited from time to time in the Rebate
Fund for timely payment of all amounts due and owing to the United States Treasury. The
Authority shall provide to the Trustee at least annually from the date of delivery of the Bonds a
certificate of the Authority Representative to the effect that (i) all requirements of this Indenture
with respect to the Rebate Fund have been met on a continuing basis, (ii) the proper amounts
have been and are on deposit in the Rebate Fund, and (iii) timely payment of all amounts due and
owing to the United States Treasury have been made. If the certifications required by either (ii)
® or (iii) above cannot be made, the certificate shall so state and shall be accompanied either by
Pledged Revenues or other legally available moneys of the Authority, together with a direction to
the Trustee to either deposit such moneys to the Rebate Fund or to pay such moneys over to the
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United States Treasury, as appropriate, or by directions to the Trustee to transfer investment
income available in any fund held by the Trustee under this Indenture to the Rebate Fund or to
the United States Treasury, as appropriate.
The covenants set forth in this Section 6.11 concerning federal tax matters shall apply
only to those Bonds which are issued with the intention and expectation that interest payable
thereon shall be excludible from gross income for federal income tax purposes.
Section 6.12 Maintenance of Existence. The Authority covenants and agrees to take no
action to terminate its existence as a public body corporate and politic so long as any Bonds
remain Outstanding.
Section 6.13 Designation of Trustee as Bond Registrar and Paying Agent Desi ation
of Any Additional Paying Agents. The Trustee is hereby designated and agrees to act as Bond
Registrar and Paying Agent for and in respect to the Bonds. The Authority hereby covenants and
agrees to cause the necessary arrangements to be made through the Trustee and to be thereafter
continued for the designation of any additional Paying Agents as may from time to time be
designated hereunder and for the making available of funds hereunder for the payment of such of
the Bonds as shall be presented when due.
Section 6.14 Credit Facility. (a) The Authority covenants and agrees that at all times
prior to the date when all outstanding Bonds shall bear interest at a Fixed Rate the Authority will
® maintain a Credit Facility in full force and effect.
(b) The Credit Facility shall be reduced in whole or in part, as provided in the
Credit Agreement, upon the receipt by the Bank of a Written Request from the Authority
Representative requesting that a specified amount of the Credit Facility be reduced. The
Authority shall not request a reduction in the Credit Facility to an amount less than the principal
amount of the Bonds outstanding which bear interest at other than a Fixed Rate plus interest
thereon in an amount equal to not less than (i) the number of days interest on all outstanding
Bonds as may be required by each Rating Agency then maintaining a rating on the Bonds to
continue its rating, in each case computed at the Maximum Interest Rate unless the Authority has
deposited a Substitute Credit Facility with the Trustee in accordance with the terms of this
Section.
(c) Prior to the date on which all outstanding Bonds bear interest at a Fixed
Rate, a Substitute Credit Facility may become effective on any Business Day, which shall be a
Substitution Date. The Authority shall give written notice to the Trustee and the Bank that it
intends to deliver a Substitute Credit Facility (which notice shall include the name of the
Substitute Bank) at least 25 days prior to a proposed Substitution Date. The Authority
Representative shall cause a draft of any Substitute Credit Facility in substantially final form and
a commitment letter with respect thereto, together with written evidence from each Rating
Agency rating the Bonds prior to the Substitution Date of the rating on the Bonds after the
Substitution Date, to be delivered to the Trustee, with a copy to the Authority, not less than
15 days prior to the proposed Substitution Date. On each Substitution Date the Authority and the
® Trustee shall also receive (1) an opinion of counsel for the Substitute Bank regarding the
enforceability of the Substitute Credit Facility in substantially the form delivered to the Trustee
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upon execution and delivery of the Credit Facility then in effect, and (ii) an Opinion of Bond
Counsel to the effect that the substitution of the Credit Facility then in effect will not adversely
affect the validity of the Bonds or any exclusion of interest on the Bonds from gross income for
federal income tax purposes under Section 103(a) of the Code to which the interest on the Bonds
would otherwise be entitled. Any amounts due and owing the existing Bank under a Credit
Agreement shall be shall be paid prior to any Substitution Date.
(d) On any Substitution Date on which a Substitute Credit Facility becomes
effective in accordance with the provisions of this Section, the Trustee and the Authority upon
the Written Request of the Authority Representative shall consent to the cancellation of the
Credit Facility then in effect, and the Trustee shall return such cancelled Credit Facility to the
Bank; provided, however, that the Trustee shall not surrender the existing Credit Facility until all
draws under such existing Credit Facility have been honored.
(e) Immediate Notice shall be given by the Trustee to the Bank or Substitute
Bank, the Authority and each Rating Agency then maintaining a rating on the Bonds if no
satisfactory Substitute Credit Facility shall be furnished to the Trustee in accordance with this
Section on or prior to the Stated Termination Date of the then current Credit Facility.
(f) Upon the Stated Expiration Date of the Credit Facility and payment of all
amounts due under or cancellation of the Credit Facility pursuant to its terms, the Trustee shall
immediately return the Credit Facility to the Bank or Substitute Bank in accordance with the
terms thereof.
Section 6.15 Rule 15c2-12 Compliance. The Authority covenants and agrees to enter
into a written agreement or contract constituting an undertaking to provide ongoing disclosure as
required by Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. § 240.15c2-12) on or
before the Conversion Date, for the benefit of the Owners of the 2008 Bonds bearing interest at a
Fixed Rate, an Annual Rate or a Flexible Pricing Long Term Rate with an interest rate period in
excess of 270 days.
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 7.01 Events of Default. Each of the following events is hereby declared an
"Event of Default" under this Indenture:
(a) payment of any installment of interest payable on any of the Bonds (other
than Authority Bonds) shall not be made when the same shall become due and payable; or
(b) payment of the principal of or the premium, if any, payable on any of the
Bonds (other than Authority Bonds) shall not be made when the same shall become due and
payable, either at Maturity, by proceedings for redemption, upon acceleration, through failure to
make any payment to any Fund hereunder or otherwise; or
0 (c) payment of any amount due in respect of the purchase price of Tendered
Bonds shall not be made when the same shall become due and payable; or
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® (d) the Authority shall for any reason be rendered incapable of fulfilling its
obligations hereunder; or
(e) an order or decree shall be entered appointing a receiver, receivers,
custodian or custodians for any of the revenues of the Authority, or approving a petition filed
against the Authority seeking reorganization of the Authority under the federal bankruptcy laws
or any other similar law or statute of the United States of America or any state thereof, or if any
such order or decree, having been entered without the consent or acquiescence of the Authority,
shall not be vacated or discharged or stayed on appeal within 60 days after the entry thereof, or
(f) any proceeding shall be instituted, with the consent or acquiescence of the
Authority, or any plan shall be entered into by the Authority, for the purpose of effecting a
composition between the Authority and its creditors or for the purpose of adjusting the claims of
such creditors pursuant to any federal or State statute now or hereafter enacted, if the claims of
such creditors are under any circumstances payable from any part or all of the Trust Estate,
including the Revenues; or
(g) the Authority (i) files a petition in bankruptcy or under Title 11 of the
United States Code, as amended, (ii) makes an assignment for the benefit of its creditors, (iii)
consents to the appointment of a receiver, custodian or trustee for itself or for the whole or any
part of the Trust Estate, including the Revenues or (iv) is generally not paying its debts as such
debts become due; or
(h) under the provisions of any other law for the relief or aid of debtors, any
court of competent jurisdiction shall assume custody or control of the Authority or of the whole
or any substantial part of its property, and such custody or control shall not be terminated within
30 days from the date of assumption of such custody or control; or
(i) the Bank gives notice that an "Event of Default" as set forth in Section 6.1
of the Credit Agreement shall have occurred and directing the acceleration of the Bonds; or
0) the Authority shall default in the due and punctual performance of any
other of the covenants, conditions, agreements and provisions contained in the Bonds, the
Cooperation Agreement or in this Indenture to be performed on the part of the Authority, and
such default shall continue for 30 days after written notice specifying such default and requiring
the same to be remedied shall have been given to the Authority by the Trustee; provided that the
Trustee may give such notice in its discretion and shall give such notice at the written request of
the Bank, or the Owners of not less than 10% in aggregate principal amount of the Bonds then
outstanding hereunder with the consent of the Bank; provided that if such default cannot with
due diligence and dispatch be wholly cured within 30 days but can be wholly cured, the failure of
the Authority to remedy such default within such 30-day period shall not constitute a default
hereunder if the Authority shall immediately upon receipt of such notice commence with due
diligence and dispatch the curing of such default and, having so commenced the curing of such
default, shall thereafter prosecute and complete the same with due diligence and dispatch.
If on the date payment of principal of or interest on the Bonds is due, or if on the date on
which payment of the purchase price of Tendered Bonds is to be made, sufficient moneys are not
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available to make such payment, the Trustee shall give telephonic notice of such insufficiency to
the Authority and the Bank.
Section 7.02 Acceleration. (i) Upon the occurrence of an Event of Default specified in
subsection (d), (e), (f), (g), (h), (i) or 0) of Section 7.01 hereof (of which the Trustee shall be
deemed to have notice pursuant to the provisions of Section 8.01(g) hereof) the Trustee shall
upon the request of the Bank, without any action on the part of the Bondholders, or (ii) upon the
occurrence of an Event of Default specified in subsection (d), (e), (f), (g), (h), (i) or 0) of Section
7.01 hereof (of which the Trustee shall be deemed to have notice pursuant to the provisions of
Section 8.01(g) hereof) and the written request of the Owners of not less than 25% in aggregate
principal amount of the Bonds then outstanding hereunder (exclusive of Authority Bonds and
upon being indemnified to its satisfaction as provided in Section 8.01(k) hereof), the Trustee
shall, with the prior written consent of the Bank, or (iii) upon the occurrence and continuance of
an Event of Default specified in subsection (a), (b) or (c) of Section 7.01 hereof, the Trustee
shall, with the prior written consent of the Bank, by notice in writing delivered to the Authority
not later than the next Business Day succeeding such request, request and consent or Event of
Default, as the case may be, declare the entire principal amount of the Bonds then outstanding
hereunder and the interest accrued thereon immediately due and payable, and the entire principal
and interest shall thereupon become and be immediately due and payable, subject, however, to
the provisions of Section 7.09 hereof with respect to waivers of Events of Default. The Trustee
shall give notice thereof by first class mail, postage prepaid, to all Owners of outstanding Bonds;
provided, however, that the giving of such notice shall not be considered a precondition to the
Trustee declaring the entire principal amount of the Bonds then outstanding and the interest
accrued thereon immediately due and payable. The Bonds shall cease to accrue interest on the
date of declaration of acceleration whether or not they are paid on such date.
Immediately following a declaration of an acceleration pursuant to this Section, the
Trustee shall draw upon the Credit Facility in accordance with its terms in an amount which
equals the total amount of principal of and interest on the Bonds coming due and payable;
provided that no such draw shall be made to pay any Bank Bond, Authority Bond or Bonds
bearing interest at a Fixed Rate. All amounts derived by the Trustee with respect to the Credit
Facility shall be deposited in the Revenue Fund upon receipt thereof by the Trustee, shall be
transferred by the Trustee to the Interest Fund to the extent required to pay the interest. on the
Series 2008 Bonds or the Bond Sinking Fund to the extent required to pay the principal of the
Series 2008 Bonds, shall not be commingled with any other moneys and shall be applied as
provided in Section 7.05 hereof.
Section 7.03 Remedies; Rights of Bondholders. Upon the occurrence and continuance
of any Event of Default hereunder and the receipt of written consent of the Bank, the Trustee
may, without any action on the part of the Bondholders, or upon the occurrence and continuance
of any Event of Default hereunder and the receipt of written consent of the Bank and the written
request of the Owners of not less than 25% in aggregate principal amount of the Bonds then
outstanding hereunder (exclusive of Authority Bonds and upon being indemnified to its
satisfaction as provided in Section 8.01(k) hereof) the Trustee shall:
0 (a) by mandamus, or other suit, action or proceeding at law or in equity,
enforce all rights of the Owners under, and require the Authority, the Bank to carry out any
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agreements with or for the benefit of the Owners of Bonds and to perform its or their duties
under the Act, the Credit Facility, the Credit Agreement and this Indenture;
(b) bring suit upon the Bonds;
(c) by action or suit in equity enjoin any acts or things which may be unlawful
or in violation of the rights of the Owners of Bonds, but any such judgment against the Authority
shall be enforceable only against the Trust Estate and no recovery of any judgment by the
Trustee shall in any manner or to any extent affect the lien of this Indenture or any rights, powers
or remedies of the Trustee or the Bank hereunder, or any lien, rights, powers or remedies of the
Owners of the Bonds or the Bank, but such lien, rights, powers and remedies of the Trustee or
the Bank and of the Bondholders shall continue unimpaired as before; provided, however, that
the Trustee shall have the right to decline to comply with any such request or direction if the
Trustee shall be advised by counsel (who may be its own counsel) that the action so requested
may not lawfully be taken or the Trustee in good faith shall determine that such action would be
unjustly prejudicial to the Owners of Bonds not parties to such request.
Upon the occurrence and continuance of any Event of Default hereunder and upon the
request of the Bank, the Trustee shall give Immediate Notice of the mandatory tender of the
Bonds pursuant to Section 4.06 hereof.
Upon the filing of a bill in equity or other commencement of judicial proceedings to
® enforce the rights of the Trustee and of the Bondholders, the Trustee shall be entitled as a matter
of right to the appointment of a receiver or receivers of the Trust Estate, and of the rents,
revenues, income, product and profits thereof, pending such proceedings, but, notwithstanding
the appointment of any receiver, trustee or other custodian, the Trustee shall be entitled to the
possession and control of any cash, securities or other instruments at the time held by, or payable
or deliverable under the provisions of this Indenture to, the Trustee.
No remedy by the terms of this Indenture conferred upon or reserved to the Trustee (or to
the Owners of Bonds or the Bank) is intended to be exclusive of any other remedy, but each and
every such remedy shall be cumulative and shall be in addition to any other remedy given to the
Trustee or the Bank or to the Owners of Bonds now or hereafter existing at law or in equity or by
statute; provided, however, that any conditions set forth herein to the taking of any remedy to
enforce the provisions of this Indenture or the Bonds shall also be conditions to seeking any
remedies under any of the foregoing pursuant to this Section.
No delay or omission of the Trustee or the Bank or any Owner of Bonds to exercise any
right or power accruing upon any default or Event of Default hereunder shall impair any such
right or power or shall be construed to be a waiver of any such default or Event of Default, or
acquiescence therein; and every such right and power given by this Article to the Trustee and the
Bank and the Owners of Bonds, respectively, may be exercised from time to time and as often as
may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the Trustee or by the
owners of Bonds, shall extend to or shall affect any subsequent default or Event of Default or
shall impair any rights or remedies consequent thereon.
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® Section 7.04 Direction of Proceedings by Bondholders. The Owners of not less than a
majority in aggregate principal amount of Bonds then outstanding shall have the right, at any
time, by an instrument or instruments in writing executed and delivered to the Trustee and the
Bank, to direct the method and place of conducting all proceedings to be taken in connection
with the enforcement of the terms and conditions of this Indenture, including the appointment of
a receiver or any other proceedings hereunder; provided, that such direction shall not be
otherwise than in accordance with the provisions of law and of this Indenture; and provided,
further, that, if the Bank has not failed to honor a properly presented and conforming drawing
under the Credit Facility, no such direction shall be followed by the Trustee without the prior
written consent of the Bank.
Section 7.05 Application of Moneys. Subject to the provisions of the Tax Compliance
Certificate, all moneys received by the Trustee or any receiver pursuant to any right given or
action taken under the provisions of this Article shall (after payment of the costs and expenses of
the proceedings resulting in the collection of such moneys and the expenses, liabilities and
advances incurred or made by the Authority or the Trustee, it being understood that such
payment shall not be made from the proceeds of any draw under the Credit Facility or any
moneys already held for the benefit of the Bondholders) be deposited in the Bond Sinking Fund
and all moneys so deposited during the continuance of an Event of Default (other than moneys
for the payment of Bonds which have previously matured or otherwise become payable prior to
such Event of Default or for the payment of interest due prior to such Event of Default), together
with all moneys in the Funds maintained by the Trustee under Articles III and IV hereof other
• than the Bond Purchase Fund, shall be applied as follows:
(a) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable, all such moneys shall be applied:
FIRST: To the payment of amounts, if any, payable to the United States
Treasury pursuant to the Tax Compliance Certificate;
SECOND: To the payment to the Persons entitled thereto of all installments of
interest then due on the outstanding Bonds (other than Authority Bonds), or to reimburse
the Bank for payments of any interest drawing, with interest on overdue installments, if
lawful, at the rate per annum borne by the Bonds, in the order of the maturity of the
installments of such interest, and, if the amount available shall not be sufficient to pay in
full any particular installment of interest, then to the payment ratably, according to the
amounts due on such installment, to the Persons entitled thereto without any
discrimination or privilege;
THIRD: To the payment to the Persons entitled thereto of the unpaid
principal of any of the outstanding Bonds which shall have become due (other than
Authority Bonds or Bonds called for redemption and for the payment of which moneys
are held pursuant to the provisions of this Indenture), or to reimburse the Bank for
payments of any principal drawing, with interest on such Bonds at their rate from the
respective dates upon which they became due, in the order of their due dates, and, if the
amount available shall not be sufficient to pay in full Bonds due on any particular date,
together with such interest, then to the payment ratably, according to the amount of
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principal and interest due on such date, to the Persons entitled thereto without any
discrimination or privilege;
FOURTH: To the payment of all amounts owed to the Bank pursuant to the
Credit Agreement; and
FIFTH: To the payment to the Persons entitled thereto of unpaid principal
and interest due and owing on any Bonds, the payment of principal and interest of which
has been extended in the manner described in Section 7.01 hereof.
(b) If the principal of all the Bonds shall have become due or shall have been
declared due and payable, all such moneys shall be applied:
FIRST: To the payment of amounts, if any, payable to the United States
Treasury pursuant to the Tax Compliance Certificate;
SECOND: To the payment of the principal and interest then due and unpaid
upon the Bonds (other than Authority Bonds), or to reimburse the Bank for such
payments, with interest on overdue interest and principal, as aforesaid, without preference
or priority of principal over interest or of interest over principal or of any installment of
interest over any other installment of interest, or of any Bond over any other Bond,
ratably, according to the amounts due respectively for principal and interest, to the
Persons entitled thereto without any discrimination or privilege and thereafter to the
payment of the principal and interest then due and owing on any Bonds, the payment of
principal and interest of which has been extended in the manner described in Section 7.01
hereof, and
THIRD: To the payment of all amounts owed to the Bank pursuant to the
Credit Agreement.
(c) If the principal of all the Bonds shall have been declared due and payable,
and if such declaration shall thereafter have been rescinded and annulled under the provisions of
this Article, then, subject to the provisions of paragraph (b) of this Section which shall be
applicable in the event that the principal of all the Bonds shall later become due or be declared
due and payable, the moneys shall be applied in accordance with the provisions of paragraph (a)
of this Section.
Whenever moneys are to be applied pursuant to the provisions of this Section, such
moneys shall be applied at such times, and from time to time, as the Trustee shall determine,
having due regard for the amount of such moneys available for application and the likelihood of
additional moneys becoming available for such application in the future. Whenever the Trustee
shall apply such moneys, it shall fix the date (which shall be an Interest Payment Date unless it
shall deem another date more suitable) upon which such application is to commence and upon
such date interest on the amounts of principal and interest to be paid on such date shall cease to
accrue (except as otherwise provided in Section 7.02 hereof). The Trustee shall give such notice
® as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any
such date and of the Special Record Date in accordance with Section 2.03(1) hereof. The Trustee
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shall not be required to make payment to the Owner of any unpaid Bond until such Bond shall be
presented to the Trustee for appropriate endorsement or for cancellation if fully paid.
Notwithstanding anything in this Section to the contrary, amounts deposited in the Bond
Sinking Fund which are derived from the Credit Facility shall only be applied to the payment of
the principal of and interest on the Bonds (other than Bonds bearing interest at a Fixed Rate).
Section 7.06 Remedies Vested in Trustee. All rights of action including the right to file
proof of claims under this Indenture or under any of the Bonds may be enforced by the Trustee
without the possession of any of the Bonds or the production thereof in any trial or other
proceedings relating thereto and any such suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any
Owners of the Bonds and the Bank, and any recovery of judgment shall be for the equal benefit
of the Owners of the then outstanding Bonds or, if applicable, the Bank, subject to the provisions
of this Indenture.
Section 7.07 Rights and Remedies of Bondholders. No Owner of any Bond shall have
any right to institute any suit, action or proceeding in equity or at law for the enforcement of this
Indenture or for the execution of any trust hereof or for the appointment of a receiver or any
other remedy hereunder, unless a default shall have become an Event of Default and the Owners
of not less than 25% in aggregate principal amount of Bonds then outstanding shall have made
written request to the Trustee and shall have offered the Trustee reasonable opportunity either to
proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceeding
in its own name, and unless also such Bondholders have offered to the Trustee indemnity as
provided in Section 8.01(k) hereof, and unless the Trustee shall thereafter fail or refuse to
exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own
name and unless the Bank has given its prior written consent thereto; and such notification,
request, offer of indemnity and consent are hereby declared in every case at the option of the
Trustee to be conditions precedent to the execution of the powers and trusts of this Indenture and
to any action or cause of action for the enforcement of this Indenture, or for the appointment of a
receiver or for any other remedy hereunder, it being understood and intended that no one or more
Owners of the Bonds shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien of this Indenture by any action or to enforce any right hereunder except in the
manner herein provided, and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the equal benefit of the Owners of all Bonds
outstanding. Nothing in this Indenture contained shall, however, (i) affect or impair the right of
any Owner to enforce the payment of the principal of and interest on any Bond at and after the
Maturity thereof or (ii) affect or impair the obligation of the Authority to pay the principal of and
interest on each of the Bonds issued hereunder to the respective Owners thereof at the time and
place, from the source and in the manner in said Bonds expressed.
Section 7.08 Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver, or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every case the Authority, the Bank and the
Trustee shall, subject to any determination in such proceeding, be restored to their former
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positions and rights hereunder with respect to the Trust Estate, and all rights, remedies and
powers of the Trustee shall continue as if no such proceedings had been taken.
Section 7.09 Waiver of Events of Default. The Trustee may, with the prior written
consent of the Bank, and shall, at the written direction of the Bank, but in either event, only after
the Bank has rescinded notice of termination of the Credit Facility, and without any action on the
part of the Bondholders, waive any Event of Default hereunder and its consequences and rescind
any declaration of acceleration of principal. In the event the Bank has failed to honor a properly
presented and conforming drawing under the Credit Facility, the Trustee shall waive any Event
of Default hereunder and its consequences and rescind any declaration of acceleration of
principal (without a requirement of Authority approval) upon being indemnified to its
satisfaction and upon the written request of the Owners of (i) at least a majority in aggregate
principal amount of all the Bonds outstanding in respect of which default in the payment of
principal and/or interest exists, or (ii) at least a majority in aggregate principal amount of all the
Bonds outstanding in the case of any other Event of Default; provided, however that there shall
not be waived without the consent of the Bondholders affected thereby (A) any Event of Default
in the payment of the principal of any outstanding Bonds when due whether by mandatory
redemption through the Bond Sinking Fund, at the dates of Maturity specified therein or
otherwise, (B) any default in the payment when due of the interest on any such Bonds or (C) any
Event of Default in the requirement referred to in Section 6.14 hereof to maintain a Credit
Facility and provided further that there is a full reinstatement of amounts available to be drawn
under the Credit Facility following any draw thereunder in connection with such Event of
Default.
In case of any such waiver or rescission or in case any proceeding taken by the Trustee
on account of any such default shall have been discontinued or abandoned or determined
adversely, then and in every such case the Authority, the Bank, the Trustee and the Bondholders
shall, subject to any determination in such proceeding, be restored to their former positions and
rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or
other default, or impair any right consequent thereon.
Section 7.10 Notice of Default. In the event of any default hereunder, the Trustee will
promptly give written notice thereof to the Trustee, the Remarketing Agent, the Authority and
the Bank, setting forth the nature of such default. The foregoing notwithstanding, the giving of
such notice shall not be considered a precondition to the Trustee declaring the entire principal
amount of the Bonds then outstanding and the interest accrued thereon immediately due and
payable.
ARTICLE VIII
TRUSTEE; REMARKETING AGENT
Section 8.01 Acceptance of the Trusts. The Authority appoints UMB Bank, n.a. as
Trustee. The Trustee hereby accepts and agrees to execute the trusts imposed upon it by this
Indenture, but only upon the terms and conditions set forth herein, to all of which the Authority
agrees and the respective Owners of the Bonds agree by their acceptance of delivery of any of
the Bonds. The Trustee, prior to the occurrence of an Event of Default hereunder and after the
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curing of all events of default hereunder which may have occurred, agrees to undertake to
perform 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. If an Event
of Default hereunder has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture and shall use the same degree of care as a prudent
person would exercise in the circumstances in the conduct of such person's own affairs. The
Trustee agrees to perform such trusts upon and subject to the following express terms and
conditions:
(a) The Trustee may execute any of the trusts or powers hereof and perform
any of its duties by or through attorneys, agents or receivers and shall not be responsible for the
misconduct or negligence of any such attorneys, agents or receivers appointed in the exercise of
the care of an ordinarily prudent person, and shall be entitled to advice of counsel concerning all
matters of trusts hereof and duties hereunder, and may in all cases pay such reasonable
compensation to any attorney, agent, receiver or employee retained or employed by it in
connection herewith. The Trustee may act upon the opinion or advice of an attorney, surveyor,
engineer or accountant selected by it in the exercise of reasonable care or, if selected or retained
by the Authority, approved by the Trustee in the exercise of such care. The Trustee shall not be
responsible for any loss or damage resulting from any action or nonaction based on its good faith
reliance upon such opinion or advice.
(b) The Trustee shall not be responsible for any recital herein, or in the Bonds
(except with respect to the certificate of the Trustee endorsed on the Bonds), or for the
investment of moneys as herein permitted (except that no investment shall be made except in
compliance with Section 3.13 hereof) and provided that the Trustee shall not be responsible for
any investment losses made in accordance with Section 3.13 except for losses resulting from the
Trustee's own negligence or willful misconduct, or for the recording or re-recording, filing or re-
filing of this Indenture, or any supplement or amendment thereto, or the filing of financing
statements, or for the validity of the execution by the Authority of this Indenture, or of any
supplemental indentures or instruments of further assurance, or for the sufficiency of the security
for the Bonds issued hereunder or intended to be secured hereby, or for the value or title of the
property herein conveyed or otherwise as to the maintenance of the security hereof.
(c) The Trustee shall not be accountable for the use or application by the
Authority of any of the Bonds or the proceeds thereof or for the use or application of any money
paid over by the Trustee in accordance with the provisions of this Indenture.
(d) The Trustee shall be protected in acting upon any notice, order,
requisition, request, consent, certificate, order, opinion (including an opinion of Independent
Counsel), affidavit, letter, telegram or other paper or document in good faith deemed by it to be
genuine and correct and to have been signed or sent by the proper person or persons. Any action
taken by the Trustee pursuant to this Indenture upon the request or authority or consent of any
person who at the time of making such request or giving such authority or consent is the Owner
of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon
Bonds issued in exchange therefor or in place thereof.
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® (e) As to the existence or non-existence of any fact or as to the sufficiency or
validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a
certificate signed by an Authorized Representative of the Authority as sufficient evidence of the
facts therein contained and prior to the occurrence of a default of which the Trustee has been
notified as provided in subsection (g) of this Section, or of which by said subsection it is deemed
to have notice, may accept a similar certificate to the effect that any particular dealing,
transaction or action is necessary or expedient, but may at its discretion secure such further
evidence deemed necessary or advisable, but shall in no case be bound to secure the same. The
Trustee may accept a certificate of the Authorized Representative of the Authority under its seal
to the effect that a resolution in the form therein set forth has been adopted by the Authority as
conclusive evidence that such resolution has been duly adopted and is in full force and effect.
(f) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and the Trustee shall not be answerable for other than
its negligence or willful default.
(g) The Trustee shall not be required to take notice or be deemed to have
notice of any default hereunder, other than an Event of Default under subsection (a), (b) or (c) of
Section 7.01 hereof unless the Trustee shall be specifically notified in writing of such default by
the Authority, by the Remarketing Agent, by the Bank or by the Owners of at least 25% in
aggregate principal amount of all Bonds then outstanding, and all notices or other instruments
required by this Indenture to be delivered to the Trustee must, in order to be effective, be
delivered at the Principal Office of the Trustee, and in the absence of such notice so delivered the
Trustee may conclusively assume there is no default except as aforesaid.
(h) At any and all reasonable times, the Trustee, and its duly authorized
agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to
inspect any and all of the property pledged hereunder, including all books, papers and records of
the Authority pertaining to the property pledged hereunder and the Bonds, and to take such
memoranda from and in regard thereto as may be desired.
(i) The Trustee shall not be required to give any bond or surety in respect of
the execution of the said trusts and powers or otherwise in respect of the premises.
0) Notwithstanding anything elsewhere in this Indenture contained, the
Trustee shall have the right, but shall not be required, to demand in respect of the authentication
of any Bonds, the withdrawal of any cash, the release of any property or any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions, appraisals or other
information, or corporate action or evidence thereof, in addition to that by the terms hereof
required, as a condition of such action by the Trustee deemed reasonably necessary for the
purpose of establishing the right of the Authority to the authentication of any Bonds, the
withdrawal of any cash, the release of any property or the taking of any other action by the
Trustee except that such a demand shall not be a condition precedent to the Trustee's draw on the
Credit Facility when required.
(k) Before taking any action under this Indenture other than payment of the
principal of and interest on the Bonds, the redemption or purchase of Bonds in accordance with
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the provisions hereof, an acceleration when required pursuant to Section 7.02 hereof and other
than making drawings under the Credit Facility, the Trustee may require that a satisfactory
indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to
protect it against all liability, except liability which is adjudicated to have resulted from its
negligence or willful default in connection with any action so taken.
(1) All moneys received by the Trustee shall, until used or applied or invested
as provided in this Indenture, be held in trust for the purposes for which they were received but
need not be segregated from other funds except to the extent required by law or by this
Indenture. The Trustee shall not be under any liability for interest on any moneys received
hereunder except such as may be agreed upon.
(m) Notwithstanding any other provision of this Indenture to the contrary, any
provision relating to the conduct of, intended to provide authority to act, right to payment of fees
and expenses, protection, immunity and indemnification to the Trustee, shall be interpreted to
include any action of the Trustee, whether it is deemed to be in its capacity as Trustee, Bond
Registrar or Paying Agent.
Section 8.02 Compensation and Expenses of Trustee. The Trustee shall be entitled to
payment and/or reimbursement for reasonable fees and for its services rendered hereunder and
all advances, counsel fees and other expenses reasonably and necessarily made or incurred by it
in connection with such services. Upon an Event of Default hereunder, but only upon such an
Event of Default, the Trustee shall have a right of payment prior to payment on account of
principal of, or premium, if any, or interest on any Bond for the foregoing advances, fees, costs
and expenses incurred; provided, however, that in no event shall the Trustee have any such prior
right of payment or claim therefor against (i) any moneys received under the Credit Facility, (ii)
moneys or obligations deposited with or paid to the Trustee for the redemption or payment of
Bonds which are deemed to have been paid in accordance with Article X hereof, (iii) the
proceeds of remarketing of the Bonds and any other moneys held in the Bond Purchase Fund or
(iv) amounts on deposit in the Rebate Fund.
Section 8.03 Notice to Bondholders. If a default occurs of which the Trustee is by
subsection (g) of Section 8.01 hereof required to take notice or if notice of default is given as in
said subsection (g) provided, then the Trustee shall give written notice thereof by first class mail,
postage prepaid to the Bank and to the Registered Owners of all then outstanding Bonds.
Section 8.04 Good Faith Reliance. The Trustee shall be protected and shall incur no
liability in acting or proceeding in good faith upon any resolution, notice, telegram, telex or
facsimile transmission, request, consent, waiver, certificate, statement, affidavit, voucher, bond,
requisition or other paper or document which it shall in good faith believe to be genuine and to
have been passed or signed by the proper board, body or person or to have been prepared and
furnished pursuant to any of the provisions of this Indenture, or upon the written opinion of any
attorney, engineer, accountant or other expert believed by the Trustee to be qualified in relation
to the subject matter, and the Trustee shall be under no duty to make any investigation or inquiry
as to any statements contained or matters referred to in any such instrument, but may accept and
® rely upon the same as conclusive evidence of the truth and accuracy of such statements. The
Trustee shall not be bound to recognize any person as an Owner of Bonds or to take any action at
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• such person's request unless satisfactory evidence of the Ownership of such Bond shall be
furnished to the Trustee.
Section 8.05 Dealings in Bonds. The Trustee and its affiliates may in good faith buy,
sell, own, hold and deal in any of the Bonds issued hereunder, and may join in any action which
any Owner may be entitled to take with like effect as if it did not act in any capacity hereunder.
The Trustee, either as principal or agent, may also engage in or be interested in any financial or
other transaction with the Authority as freely as if it did not act in any capacity hereunder.
Section 8.06 Intervention by Trustee. In any judicial proceeding to which the Authority
is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the
interests of Owners of the Bonds, the Trustee may intervene on behalf of Bondholders and,
subject to the provisions of Section 8.01(1) hereof, shall do so if requested in writing by the
Owners of at least 25% in aggregate principal amount of all Bonds then outstanding. The rights
and obligations of the Trustee under this Section are subject to the approval of a court of
competent jurisdiction.
Section 8.07 Successor Trustee by Merger or Consolidation. Any corporation or
association into which the Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole
or substantially as a whole, or any corporation or association resulting from any such conversion,
sale, merger, consolidation or transfer to which it is a party, provided such corporation or
® association is otherwise eligible under Section 8.08 hereof, shall be and become successor
Trustee hereunder, vested with all of the title to the whole property or trust estate and all the
trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor
under this Indenture without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto other than taking such action as required
under the Credit Facility to transfer the Credit Facility to the successor Trustee, anything herein
to the contrary notwithstanding.
Section 8.08 Trustee Required, Eli gibility. There shall at all times be a Trustee
hereunder which shall (i) be a commercial bank or trust company within the State organized
under the laws of the United States of America or the State, authorized to exercise corporate trust
powers, subject to supervision or examination by federal or state authorities and having its
Principal Office in the State and (ii) have a reported combined capital and surplus of not less
than $50,000,000. 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 provided in Section 8.09
hereof. No resignation or removal of the Trustee and no appointment of a successor Trustee
shall become effective until the successor Trustee has accepted its appointment under Section
8.13 hereof
Section 8.09 Resignation by the Trustee. The Trustee and any successor Trustee may at
any time resign from the trusts created by this Indenture by executing an instrument in writing
resigning such trusts and specifying the date when such resignation shall take effect, and filing
the same with the Authority, the Remarketing Agent and the Bank not less then 45 days before
the date specified in such instrument when such resignation shall take effect, and by giving
notice of such resignation by first class mail, postage prepaid, not less than 20 days prior to such
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® resignation date, to each Registered Owner of Bonds then outstanding, as shown by the Bond
Register.
Section 8.10 Removal of the Trustee. The Trustee may be removed at any time by an
instrument or concurrent instruments in writing delivered to the Trustee, the Authority, the Bank,
and the Remarketing Agent, and signed by the Owners of not less than a majority in aggregate
principal amount of Bonds then outstanding or the Bank. So long as no Event of Default has
occurred and is continuing under this Indenture, the Trustee may be removed or replaced at any
time by an instrument in writing signed by the Authority with the written consent of the Bank,
and delivered to the Trustee. The foregoing notwithstanding, the Trustee may not be removed by
the Authority (with the written consent of the Bank) unless written notice of the delivery of such
instrument or instruments signed by the Authority is mailed to the Bank and Owners of all Bonds
outstanding under this Indenture, which notice indicates the Trustee will be removed and
replaced by the successor trustee, who has been approved by the Bank, named in such notice,
such removal and replacement to become effective on the 90th day next succeeding the date of
such notice, unless the Owners of not less than 10% in aggregate principal amount of such Bonds
then outstanding under this Indenture shall object in writing to such removal and replacement.
Such notice shall be mailed by first class mail postage prepaid to the Owners of all such Bonds
then outstanding at the address of such Owners then shown on the Bond Register.
Section 8.11 Appointment of Successor Trustee. In case the Trustee hereunder shall
resign or be removed, or be dissolved, or shall be in the process of dissolution or liquidation, or
® otherwise becomes incapable of acting hereunder, or in case it shall be taken under the control of
any public officer or officers, or of a receiver appointed by a court, then a vacancy shall
forthwith and as a result thereof exist in the office of Trustee and a successor shall be appointed,
with the approval of the Bank, by the Authority so long as no Event of Default has occurred and
is continuing under this Indenture, by filing with the Bank and the Remarketing Agent an
instrument or concurrent instruments in writing signed by Authority Representative. After any
appointment by the Authority as provided herein, the Authority shall cause notice of such
appointment to be given to the Bank, the Remarketing Agent and each Rating Agency and to be
given by first class mail, postage prepaid, to all Owners of Bonds.
In the event that the Authority is in default under this Indenture or fails to appoint
a successor Trustee as provided above, a successor Trustee shall be appointed, with the approval
of the Bank, by the Owners of a majority in aggregate principal amount of Bonds then
outstanding by filing with the Authority, the Bank and the Remarketing Agent an instrument or
concurrent instruments in writing signed by such Owners' or by their attorneys in fact duly
authorized. After any appointment by the Owners as provided herein, the successor Trustee shall
cause notice of such appointment to be given to the Bank, the Remarketing Agent and each
Rating Agency and to be given by first class mail, postage prepaid, to all Owners of Bonds.
Section 8.12 Judicial Appointment of Successor Trustee. In case at any time the
Trustee shall resign and no appointment of a successor Trustee shall be made pursuant to the
foregoing provisions of this Article prior to the date specified in the notice of resignation as the
date when such resignation is to take effect, the resigning Trustee may forthwith apply to a court
® of competent jurisdiction for the appointment of a successor Trustee. All costs, fees and
expenses related to such application to any court shall be paid by the Authority. If no
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® appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this
Article within six calendar months after a vacancy shall have occurred in the office of Trustee,
any Owner of Bonds may apply to any court of competent jurisdiction to appoint a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor Trustee.
Section 8.13 Concerning Any Successor Trustees. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an
instrument in writing accepting such appointment hereunder, and thereupon such successor,
without any further act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessor; but such predecessor
shall, nevertheless, on the written request of the Authority or of its successor, execute and deliver
an instrument transferring to such successor Trustee all the estates, properties, rights, powers and
trusts of such predecessor hereunder and on the written request of the Bank, execute and deliver
an instrument transferring to such successor Trustee all estates, properties, rights, powers and
trusts of such predecessor hereunder; and every predecessor Trustee shall transfer the Credit
Facility and shall deliver all securities and moneys held by it as Trustee hereunder to its
successor and shall transfer the Bank Bonds, or if the Bonds are in the Book-Entry-Only System
beneficial interest therein, held hereunder to its successor. Should any instrument in writing
from the Authority be required by any successor Trustee for more fully and certainly vesting in
such successor the estate, rights, powers and duties hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, on request, be executed,
® acknowledged and delivered by the Authority. The resignation of any Trustee and the
instrument or instruments removing any Trustee and appointing a successor hereunder, together
with all other instruments provided for in this Article shall be filed and/or recorded by the
successor Trustee in each recording office, if any, where this Indenture shall have been filed
and/or recorded.
Section 8.14 Successor Trustee as Trustee of Funds Paying Agent and Registrar. In the
event of a change in the office of Trustee, the predecessor Trustee which has resigned or been
removed shall cease to be Trustee of the Funds and any other funds provided hereunder and shall
cease to be the registrar and paying agent for principal of, premium, if any, and interest on the
Bonds, and the successor Trustee shall become such Trustee, registrar and paying agent.
Section 8.15 Public Contracts for Services. The Trustee qualifies as a "contractor"
pursuant to §8-17.5-101(2), C.R.S. and the Trustee hereby certifies that, as of the date hereof, the
Trustee does not knowingly employ or contract with an illegal alien, and the Trustee has
participated or attempted to participate in the "Basic Pilot Program" (as defined in §8-17.5-
101(1), C.R.S. and also known as "E-Verify") in order to confirm the employment eligibility of
all employees who are newly hired for employment in the United States. In compliance with §8-
17.5-102(2), C.R.S., it is hereby agreed:
(a) The Trustee shall not knowingly employ or contract with an illegal alien to
perform work described in this Agreement (the "Banking Services") or enter into a contract with
a subcontractor that fails to certify to the Trustee that the subcontractor shall not knowingly
employ or contract with an illegal alien to perform the Banking Services.
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® (b) The Trustee has confirmed or attempted to confirm the employment
eligibility of all employees who are newly hired for employment in the United States through
participation in the Basic Pilot Program or shall apply to participate in the Basic Pilot Program
every three months until the Trustee is accepted or until termination of this Agreement,
whichever is earlier.
(c) The Trustee shall not use Basic Pilot Program procedures to undertake
pre-employment screening of job applicants while performing the Banking Services.
(d) If the Trustee obtains actual knowledge that a subcontractor performing
Banking Services knowingly employs or contracts with an illegal alien, the Trustee shall be
required to: (i) notify the subcontractor and the Authority within three days that the Trustee has
actual knowledge that the subcontractor is employing or contracting with an illegal alien; and (ii)
terminate the subcontract with the subcontractor if within three days of receiving the notice
required pursuant to subparagraph (i) the subcontractor does not stop employing or contracting
with the illegal alien; except that the Trustee shall not terminate the contract with the
subcontractor if during such three days the subcontractor provides information to establish that
the subcontractor has not knowingly employed or contracted with an illegal alien.
The Trustee shall comply with any reasonable request by the Department of Labor
and Employment made in the course of an investigation that such department is undertaking
pursuant to §8-17.5-102(5) C.R.S.
® Section 8.16 Remarketing Agent. The Authority appoints Stifel, Nicolaus & Company,
Incorporated, to act as the Remarketing Agent. The Remarketing Agent shall designate its
Principal Office to the Trustee and the Authority, and shall signify its acceptance of the duties
and obligations imposed upon it hereunder by a written instrument of acceptance delivered to the
Authority and the Trustee under which the Remarketing Agent will agree, particularly:
(a) to hold all moneys delivered to it for the purchase of Bonds for the
account of and for the benefit of the Person which shall have so delivered such moneys until the
Bonds purchased with such moneys shall have been delivered to or for the account of such
Person; and
(b) to keep such books and records as shall be consistent with prudent
industry practice and to make such books and records available for inspection by the Authority
and the Trustee at all reasonable times.
The Authority shall cooperate with the Trustee to cause the necessary arrangements to be
made and to be thereafter continued whereby funds from the sources specified herein will be
made available for the purchase of Bonds presented at the Principal Office of the Trustee and
whereby Bonds executed by the Authority and authenticated by the Trustee shall be made
available to the Remarketing Agent to the extent necessary for delivery pursuant to Section 4.10
hereof.
® The Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Indenture by giving at least 30 days' notice to the Authority, the Bank
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® and the Trustee. The Remarketing Agent may be removed at any time upon three days' notice,
at the direction of the Trustee with the written consent of the Authority and the Bank, by an
instrument signed by the Authority and the Bank and filed with the Remarketing Agent and the
Trustee. In the event of the resignation or removal of the Remarketing Agent, the Remarketing
Agent shall pay over, assign and deliver any moneys and Bonds held by it in such capacity to its
successor or, if there be no successor, to the Trustee. So long as no Event of Default has
occurred and is continuing under this Indenture, the Authority shall, subject to the written
approval of the Bank, appoint any successor Remarketing Agent.
In the event that the Authority shall fail to appoint a Remarketing Agent hereunder, or in
the event that the Remarketing Agent shall resign or be removed, or be dissolved, or if the
property or affairs of the Remarketing Agent shall be taken under the control of any state or
federal court or administrative body because of bankruptcy or insolvency, or for any other
reason, and the Authority shall not have appointed its successor as Remarketing Agent, the
Trustee shall be deemed to be the Remarketing Agent for all purposes of this Indenture until the
appointment by the Authority of the successor Remarketing Agent with the consent of the Bank;
provided, however, that the Trustee, in its capacity as Remarketing Agent, shall not be required
to remarket Bonds, or to determine the interest rate on the Bonds except in the manner provided
in Article II hereof.
The Remarketing Agent for its own account or as broker or agent for others may deal in
Bonds and may do anything any other Bondholder may do to the same extent as if the
® Remarketing Agent were not serving as such.
The Remarketing Agent will not be entitled to any compensation from the Trustee or
have any claim or rights with respect to any property, rights or interests constituting a part of the
Trust Estate or otherwise held under this Indenture, but must make separate arrangements with
the Authority for compensation.
Section 8.17 Qualifications of Remarketing Agent. The Remarketing Agent shall have
a capitalization of at least $5,000,000 or have a line of credit with a commercial bank or clearing
organization in the amount of at least $5,000,000 and shall be authorized by law to perform all
the duties contemplated by this Indenture to be performed by the Remarketing Agent and shall
have knowledge and experience in the remarking of securities such as the Bonds and a
remarketing portfolio (at the time of such appointment) of at least $100,000,000.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Not Requiring Consent of Bondholders. Subject
to the limitation set forth in Section 9.02 hereof with respect to this Section, the Authority and
the Trustee may, without the consent of, or notice to, any of the Bondholders but with written
consent of the Bank, enter into an indenture or indentures supplemental to this Indenture for any
one or more of the following purposes:
40 (a) to cure any ambiguity or formal defect or omission in this Indenture;
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® (b) to grant to or confer upon the Trustee for the benefit of the Bondholders or
the Bank any additional rights, remedies, powers or authority that may lawfully be granted to or
conferred upon the Bondholders, the Bank or the Trustee, or any of them;
(c) to assign and pledge under or subject to this Indenture additional revenues,
properties or collateral;
(d) to evidence the appointment of a separate Trustee or the succession of a
new Trustee hereunder;
(e) to permit the qualification of this Indenture under the Trust Indenture Act
of 1939, as then amended, or any similar federal statute hereafter in effect or to permit the
qualification of the Bonds for sale under the securities laws of any state of the United States;
(f) to permit continued compliance with the Tax Compliance Certificate;
(g) to provide for certificated Bonds;
(h) to provide for the refunding or advance refunding of any Bonds, including
the right to establish and administer an escrow fund and to take related action in connection
therewith;
(i) to implement a conversion of the interest rate on all or any portion of the
Bonds to a Fixed Rate, a Flexible Pricing Long-Term Rate, an Annual Rate or a Short Rate, all
as provided in Articles II and V hereof, including but not limited to modifying, amending or
supplementing the form of Bond to reflect, among other things, a change in the designated title
of the Bonds, the fixing of an annual rate of interest, the termination of the rights of any Owner
of Bonds to tender such Bonds for purchase and the fact that the purchase price of, or the
principal of or interest on, the Bonds is no longer payable out of moneys drawn under the Credit
Facility;
0) to evidence or give effect to or facilitate the delivery and administration
under this Indenture of a Substitute Credit Agreement and/or a Substitute Credit Facility,
including but not limited to such provisions as are necessary to permit the issuer of such a
Substitute Credit Agreement to provide credit support relating to payment of principal of and
interest on the Bonds and a separate issuer of another Substitute Credit Agreement to provide
liquidity support relating to payment of the purchase price of Bonds delivered or deemed
delivered hereunder for purchase;
(k) to secure or maintain ratings from any Rating Agency in the highest short-
term or commercial paper debt rating category and the highest long-term debt rating categories
of such Rating Agency which are available for the Bonds, whether or not a Credit Facility
secures the Bonds, which changes will not restrict, limit or reduce the obligation of the Authority
to pay the principal of and premium, if any, and interest on the Bonds as provided in this
Indenture or otherwise adversely affect the Owners of the Bonds under this Indenture;
0
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(1) to effect a change in the optional redemption schedule for Bonds in a
Fixed Mode or a Flexible Pricing Long-Term Mode pursuant to Section 4.11(a)(iii) or Section
4.11(a)(iv) hereof,
(m) to appoint a successor Securities Depository; and
(n) to make any change that, in the judgment of the Trustee and upon opinion
of counsel, does not materially adversely affect the rights of any Bondholders; provided that no
change shall be materially adverse if it is made in connection with a purchase described in
Sections 4.02, 4.03, 4.04, 4.05 4.06, or 4.07 hereof and such change is not effective until the
Tendered Bonds are purchased or deemed purchased pursuant to Section 4.08 hereof.
Section 9.02 Supplemental Indentures Requiring Consent of Bondholders. (a) . In
addition to supplemental indentures covered by Section 9.01 hereof and subject to the terms and
provisions contained in this Section, and not otherwise: (1) the Bank (or if the Credit Facility is
not in effect and no obligations remain unpaid under the Credit Agreement or if the Bank has
failed to honor a properly presented and conforming drawing under the Credit Facility, the
Owners of not less than a majority in aggregate principal amount of the Bonds which are
outstanding hereunder at the time of the execution of such indenture or supplemental indenture),
or (ii) in case only outstanding Bonds bearing interest at a Short Rate, an Annual Rate, or a
Flexible Pricing Long-Term Rate are affected thereby, the Bank (or if the Credit Facility is not in
effect and no obligations remain unpaid under the Credit Agreement or if the Bank has failed to
honor a properly presented and conforming drawing under the Credit Facility, the Owners of not
less than a majority in aggregate principal amount of the Bonds bearing interest at a Short Rate,
an Annual Rate, or a Flexible Pricing Long-Term Rate which are outstanding at the time of such
execution), or (iii) in case only outstanding Bonds bearing interest at a Fixed Rate are affected
thereby, the Bank, (or if the Credit Facility is not in effect and no obligations remain unpaid
under the Credit Agreement or if the Bank has failed to honor a properly presented and
conforming drawing under the Credit Facility, the Owners of not less than a majority in
aggregate principal amount of the Bonds bearing interest at a Fixed Rate which are outstanding
at the time of such execution), with the consent of the Bank, shall have the right, from time to
time, anything contained in this Indenture to the contrary notwithstanding, to consent to and
approve the execution by the Authority and the Trustee of such other indenture or indentures
supplemental hereto as shall be deemed necessary and desirable by the Authority for the purpose
of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any supplemental indenture; provided, however, that
nothing in this Section contained or in Section 9.01 hereof shall permit, or be construed as
permitting, a supplemental indenture to effect: (i) an extension of the Maturity or reduction in
the principal amount of, or reduction in the rate or extension of the time of paying interest on, or
reduction of any premium payable on the redemption of, any Bonds, without the consent of the
Owners of such Bonds; (ii) a reduction in the amount or extension of the time of any payment
required to be made to or from the Interest Fund or the Bond Sinking Fund; (iii) the creation of
any lien prior to or on a parity with the lien of this Indenture on the Trust Estate or the
deprivation of any Bondholders of the lien created by this Indenture on such Trust Estate,
4D without the consent of the Owners of all the Bonds at the time outstanding; (iv) a reduction in the
aforesaid aggregate principal amount of Bonds the Owners of which are required to consent to
any such supplemental indenture, without the consent of the Owners of all the Bonds at the time
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® outstanding which would be affected by the action to be taken; (v) a modification of the rights,
duties or immunities of the Trustee, without the written consent of the Trustee; or (vi) a change
in the purchase price of a Tendered Bond.
(b) If at any time the Authority shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of this Section, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of
such supplemental indenture to be mailed by first class mail, postage prepaid to the Registered
Owners of the Bonds at their addresses as the same shall appear on the Bond Register. Such
notice shall briefly set forth the nature of the proposed supplemental indenture and shall state
that copies thereof are on file at the Principal Office of the Trustee for inspection by all
Bondholders. The Trustee shall not, however, be subject to any liability to any Bondholder by
reason of its failure to mail such notice, and any such failure shall not affect the validity of such
supplemental indenture when consented to and approved as provided in this Section. If the Bank
and the Owners of the requisite principal amount of Bonds which are outstanding hereunder at
the time of the execution of any such supplemental indenture shall have consented to and
approved the execution thereof as herein provided, no Owner of any Bond shall have any right to
object to any of the terms and provisions contained therein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or
the Authority from executing the same or from taking any action pursuant to the provisions
thereof. Upon the execution of any such supplemental indenture as in this Section permitted and
provided, this Indenture shall be and be deemed to be modified and amended in accordance
® therewith.
Section 9.03 Consent of the Bank. Subject to the provisions set forth in Section 13.12
hereof, so long as the Bank has not failed to honor a properly presented and conforming drawing
under the Credit Facility, a supplemental indenture under this Article IX shall not become
effective unless and until the Bank shall have consented in writing to the execution and delivery
of such supplemental indenture. In this regard, the Trustee shall cause notice of the proposed
execution and delivery of any such supplemental indenture to which the Bank has not already
consented, together with a copy of the proposed supplemental indenture and a written consent
form to be signed by the Bank, to be mailed by first class mail, postage prepaid to the Bank at
least 30 days prior to the proposed date of execution and delivery of any such supplemental
indenture.
ARTICLE X
SATISFACTION OF THE INDENTURE
Section 10.01 Defeasance. If the Authority shall pay or provide for the payment of the
entire indebtedness on all Bonds outstanding in any one or more of the following ways:
(a) by paying or causing to be paid the principal of (including premium, if
any) and interest on all Bonds outstanding, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before Maturity, moneys in
40 an amount sufficient to pay or redeem (when redeemable) all Bonds outstanding (including the
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® payment of premium, if any, and interest payable on such Bonds to the Maturity or redemption
date thereof), provided that such moneys, if invested, shall be invested in United States
Governmental Obligations which are not repayable or callable prior to the date the moneys
therefrom are anticipated to be required in an amount, without consideration of any income or
increment to accrue thereon, sufficient to pay or redeem (when redeemable) and discharge the
indebtedness on all Bonds outstanding at or before their respective Maturity dates, it being
understood that the investment income on such United States Governmental Obligations may be
used for any other purpose under the Act;
(c) by delivering to the Trustee, for cancellation by it, all Bonds outstanding;
or
(d) by irrevocably depositing with the Trustee, in trust, Governmental
Obligations (which have been purchased with Available Moneys) which are not repayable or
callable prior to the date the moneys therefrom are anticipated to be required in such amount
(based upon a verification report delivered by a nationally recognized independent certified
public accountant or firm of nationally recognized independent certified public accountants) as
will, together with the income or revenue to accrue thereon, without consideration of any
reinvestment thereof, and with any uninvested cash, be fully sufficient to pay or redeem (when
redeemable) and discharge the indebtedness on all Bonds at or before their respective Maturity
dates;
® and if the Authority shall pay or cause to be paid all other sums payable hereunder and under the
Credit Agreement by the Authority, and the Credit Facility has been returned to the Initial Credit
Facility Provider, then and in that case this Indenture and the estate and rights granted hereunder
shall cease, determine and become null and void, and thereupon the Trustee shall, upon Written
Request of the Authority, and upon receipt by the Trustee of a certificate of the Authority
Representative and an opinion of Independent Counsel, each stating that in the opinion of the
signers all conditions precedent to the satisfaction and discharge of this Indenture have been
complied with, forthwith execute proper instruments acknowledging satisfaction of and
discharging this Indenture and the lien hereof. No such discharge shall take place unless the
Trustee has received a written notice from the Rating Agency that such discharge will not result
in a reduction or withdrawal of the current rating assigned to the Bonds. In such event, the
Trustee shall assign, transfer and turn over the Trust Estate, including, without limitation, any
surplus in the Bond Sinking Fund and any balance remaining in any other fund created under this
Indenture (other than said United States Governmental Obligations or other moneys deposited in
trust as above provided) as provided in Section 3.16 hereof provided that the Credit Facility shall
be surrendered to the Bank for cancellation. The satisfaction and discharge of this Indenture
shall be without prejudice to the rights of the Trustee to charge and be reimbursed by the
Authority for any fees and expenditures which it may thereafter incur in connection herewith.
The Authority may at any time surrender to the Trustee for cancellation by it any Bonds
previously authenticated and delivered, which the Authority may have acquired in any manner
whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid
and retired.
•
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® Section 10.02 Liability of Authority Not Discharged. Upon the deposit with the Trustee,
in trust, at or before Maturity, of moneys or United States Governmental Obligations in the
necessary amount to pay or redeem all outstanding Bonds (whether upon or prior to Maturity or
the redemption date of such Bonds) and compliance with the other payment requirements of
Section 10.01 hereof, provided that if such Bonds are to be redeemed prior to the Maturity
thereof, notice of such redemption shall have been given as in Article IV hereof provided, or
provisions satisfactory to the Trustee shall have been made for the giving of such notice, and
subject to the provisions of Section 10.04 hereof, this Indenture may be discharged in accordance
with the provisions hereof but the liability of the Authority in respect of such Bonds shall
continue provided that the Owners thereof shall thereafter be entitled to payment only out of the
moneys or the United States Governmental Obligations deposited with the Trustee as aforesaid.
Section 10.03 Provision for Payment of a Portion of Bonds. If the Authority shall pay or
provide for the payment of the entire indebtedness on any portion of the Bonds outstanding, in
one or more of the following ways:
(a) by paying or causing to be paid the principal of (including premium, if
any) and interest on such portion of the Bonds as and when the same shall become due and
payable;
(b) by depositing with the Trustee, in trust, at or before Maturity, moneys in
an amount sufficient to pay or redeem (when redeemable) such portion of the Bonds (including
® the payment of premium, if any, and interest payable on such portion of the Bonds to the
Maturity or redemption date thereof), provided that such moneys, if invested, shall be invested in
United States Governmental Obligations which are not repayable or callable prior to the date the
moneys therefrom are anticipated to be required in an amount, without consideration of any
income or increment to accrue thereon, sufficient to pay or redeem (when redeemable) and
discharge the indebtedness on such portion of the Bonds at or before their respective Maturity
dates, it being understood that the investment income on such Governmental Obligations may be
used for any other purpose under the Act;
(c) by delivering to the Trustee, for cancellation by it, any such portion of the
Bonds outstanding; or
(d) by depositing with the Trustee, in trust, United States Governmental
Obligations which are not repayable or callable prior to the date the moneys therefrom are
anticipated to be required in such amount as the Trustee shall determine (based upon a
verification report delivered by a nationally recognized independent certified public accountant
or firm of nationally recognized independent certified public accountants) will, together with the
income or revenue to accrue thereon, without consideration of any reinvestment thereof, and
with any uninvested cash, be fully sufficient to pay or redeem (when redeemable) and discharge
the indebtedness on such portion of the Bonds at or before their respective Maturity dates;
and if the Authority shall also pay or cause to be paid all other sums payable hereunder and
under the Credit Agreement by the Authority with respect to such portion of the Bonds, and, if
® such portion of the Bonds is to be redeemed prior to the Maturity thereof, notice of such
redemption shall have been given as in Article IV of this Indenture provided, or provisions
93
satisfactory to the Trustee shall have been made for the giving of such notice, such portion of the
Bonds shall cease to be entitled to any lien, benefit or security under this Indenture. In such
event, the Trustee shall reduce the Credit Facility as provided in Section 6.14 hereof. The
liability of the Authority in respect of such Bonds or such portion thereof shall continue but the
Owners thereof shall thereafter be entitled to payment (to the exclusion of all other Bondholders)
only out of the moneys or Governmental Obligations deposited with the Trustee as aforesaid.
Section 10.04 When Refunding Is Not Permitted. None of the Bonds outstanding
hereunder may be refunded as aforesaid nor may this Indenture be discharged if under any
circumstances interest on such refunded Bonds is thereby made subject to any federal income
taxation to which such interest would not otherwise be subject. As a condition precedent to the
advance refunding of any Bonds outstanding hereunder, the Trustee shall obtain an Opinion of
Bond Counsel to the effect that, such advance refunding would not result in the loss of any
exclusion of interest on the Bonds from gross income for federal income tax purposes under
Section 103(a) of the Code to which the interest on such Bonds would otherwise be entitled.
A Bond bearing interest at a Short Rate, an Annual Rate or a Flexible Pricing Long-Term
Rate may only be advance refunded if (1)(a) such Bond matures or is called for redemption on or
prior to the next date upon which such Bond is subject to purchase pursuant to Section 4.01,
4.02, 4.03, 4.04, 4.05, 4.06 or 4.07 hereof, or (b) the Trustee and the Authority receive evidence
from independent certified public accountants satisfactory to the Trustee that the moneys on
deposit in the escrow established to advance refund such Bonds are in an amount sufficient to
pay any portion of the Bonds which may be Tendered Bonds during the period prior to payment
in full of principal, premium, if any, and interest payable on such Bonds, in which case the
Tendered Bonds purchased with moneys in the escrow will be cancelled; (2) the Authority
waives, to the satisfaction of the Trustee, its right to convert the method for determining the
interest rate borne by such Bond pursuant to Sections 5.01, 5.02 and 5.03 hereof and a
verification report delivered by a nationally recognized independent certified public accountant
or firm of nationally recognized independent certified public accountants confirms that the
moneys and United States Governmental Obligations deposited with the Trustee for such
purpose pursuant to and subject to the foregoing provisions of this Article will be sufficient to
pay in full (in addition to the principal of and premium, if any on the Bonds) all interest which
may accrue on the Bonds at the Maximum Interest Rate until their final payment; and (3) the
moneys deposited with the Trustee in trust constitute Available Moneys or the United States
Governmental Obligations deposited with the Trustee in trust have been purchased with
Available Moneys. Bank Bonds shall not be advance refunded pursuant to Section 10.01(b) or
(d), or Section 10.03(b) or (d) hereof, without the consent of the Bank.
ARTICLE XI
MANNER OF EVIDENCING OWNERSHIP OF BONDS
Section 11.01 Proof of Ownership. Any request, direction, consent or other instrument
required by this Indenture to be signed and executed by Bondholders may be in any number of
concurrent writings of similar tenor and may be signed or executed by such Bondholders in
® person or by agent appointed in writing. Proof of the execution of any such request, direction,
consent or other instrument or of the writing appointing any such agent and of the Ownership of
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Bonds, if made in the following manner, shall be sufficient for any of the purposes of this
Indenture and shall be conclusive in favor of the Trustee and the Authority, with regard to any
action taken by them, or either of them, under such request or other instrument:
(a) the fact and date of the execution by any person of any such writing may
be proved by the certificate of any officer in any jurisdiction who by law has power to take
acknowledgments in such jurisdiction that the person signing such writing acknowledged before
the officer the execution thereof, or by an affidavit of a witness of such execution; and
(b) the Ownership of Bonds and the amounts and registration numbers of such
Bonds and the date of holding the same shall be proved by the Bond Register.
Any action taken or suffered by the Trustee pursuant to any provision of this Indenture,
upon the request or with the assent of any person who at the time is the Owner of any Bond or
Bonds, shall be conclusive and binding upon all future Owners of the same Bond or Bonds.
In determining whether the Owners of the required principal amount of Bonds
outstanding have taken any action under this Indenture, Authority Bonds shall be disregarded
and deemed not to be outstanding, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such action, only such Bonds which the Trustee knows are so
owned shall be so disregarded. Bonds so owned which have been pledged in good faith
(including but not limited to the Bank Bonds) 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
Bonds and that the pledgee is not the Authority or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Authority. In case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
ARTICLE XII
AMENDMENT OF BOND RESOLUTION AND COOPERATION AGREEMENT
Section 12.01 Amendments, Etc. to Bond Resolution and Cooperation Aareement Not
Requiring Consent of Registered Owners of the Bonds. The Authority and the Trustee shall
without the consent of or notice to the Registered Owners of the Bonds, but with the consent of
the Bank, consent to any amendment, change or modification of the Bond Resolution or the
Cooperation Agreement, (a) required by the provisions of the Bond Resolution, the Cooperation
Agreement or this Indenture, (b) for the purpose of curing any ambiguity or formal defect or
omission so long as such cure does not materially adversely affect the interests of the Registered
Owners of the Bonds, (c) to add additional rights acquired in accordance with the provisions of
the Bond Resolution or the Cooperation Agreement, or (d) in connection with any other change
therein which, in the judgment of the Trustee, is not materially prejudicial to the Trustee or the
Registered Owners of the Bonds, or (e) in connection with any amendment of the Cooperation
Agreement authorized by Section 12.03 of this Indenture.
Section 12.02 Amendments, Etc. to Bond Resolution and Cooperation Agreement
Requiring Consent of Registered Owners of the Bonds. Except for the amendments, changes or
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modifications as provided in Section 12.01 hereof, neither the Authority nor the Trustee shall
consent to any other amendment, change or modification of the Bond Resolution or the
Cooperation Agreement without the giving of notice and the written approval or consent of the
Bank, or if the Credit Facility is not in effect and no obligations remain unpaid under the Credit
Agreement or if the Bank has failed to honor a properly presented and conforming drawing
under the Credit Facility the Registered Owners of not less than two-thirds in aggregate principal
amount of the Bonds at the time Outstanding given and procured as provided in this Section
12.02. If at any time the Authority shall request the consent of the Trustee to any such proposed
amendment, change or modification of the Bond Resolution or the Cooperation Agreement, the
Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of
such proposed amendment, change or modification to be mailed in the same manner as provided
by Section 9.02 hereof with respect to supplemental indentures. Such notice shall briefly set
forth the nature of such proposed amendment, change or modification and shall state that copies
of the instrument embodying the same are on file with the Trustee for inspection by all
Registered Owners of the Bonds. Nothing contained in this Section shall permit, or be construed
as permitting, a reduction of the aggregate principal amount of Bonds, the Registered Owners of
which are required to consent to any amendment, change or modification of the Bond Resolution
or the Cooperation Agreement or a reduction in, or a postponement of, the payments of Pledged
Revenues, without the consent of the Registered Owners of all the Bonds then Outstanding.
In the event the Authority shall determine that an amendment is necessary to one
or more of the Cooperation Agreement in order to accomplish the objectives of the Urban
Renewal Plan in accordance with the Act, the Cooperation Agreement and this Indenture, the
Authority may enter into such an amendment to one or more of the Cooperation Agreement
without notice to or the consent of the Registered Owners of the Bonds but with the consent of
the Bank so long as the Credit Facility is in effect, or, if the Credit Facility is not in effect and no
obligations remain unpaid under the Credit Agreement, or if the Bank has failed to honor a
properly presented and conforming drawing under the Credit Facility, the Registered Owners of
not less than two-thirds in aggregate principal amount of the Bonds at the time Outstanding
given and procured as provided in Section 12.02.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds
is intended or shall be construed to give to any person other than the Authority, the Trustee, the
Bank, the Remarketing Agent and the Owners of the Bonds, any legal or equitable right, remedy
or claim under or in respect to this Indenture or any covenants, conditions and provisions herein
contained; this Indenture and all of the covenants, conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the Authority, the Trustee, the
Bank, the Remarketing Agent and the Owners of the Bonds as herein provided.
Section 13.02 Bank Deemed Sole Owner. So long as the Credit Facility or Substitute
Credit Facility is in effect or any Bank Bonds remain outstanding, the Bank shall at all times be
deemed the sole and exclusive Owner of the Outstanding Bonds for the purposes of all
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approvals, consents, waivers, institution of any action, and the direction of all remedies pursuant
to this Indenture, the Bond Resolution and the Cooperation Agreement, including but not limited
to approval of or consent to any amendment of or supplement to this Indenture, the Bond
Resolution and the Cooperation Agreement which requires the consent or approval of the
Owners.
Section 13.03 No Recourse Against Officers or Agents. Pursuant to Section 11-57-209
of the Supplemental Act, if a member of the Board of Commissioners of the Authority, or any
officer or agent of the Authority acts in good faith, no civil recourse shall be available against
such member, officer, or agent for payment of the principal or interest on the Bonds. Such
recourse shall not be available either directly or indirectly through the Board of Commissioners
of the Authority, the Authority, or otherwise, whether by virtue of any constitution, statute, rule
of law, enforcement of penalty, or otherwise. By the acceptance of the Bonds and as a part of the
consideration of their sale or purchase, any person purchasing or selling such Bond specifically
waives any such recourse.
Section 13.04 Pledge of Revenues. The creation, perfection, enforcement, and priority
of the pledge of revenues to secure or pay the Bonds and amounts due under the Credit
Agreement as provided herein shall be governed by Section 11-57-208 of the Supplemental Act
and this Indenture. The revenues pledged hereunder, as received by or otherwise credited to the
Authority, shall immediately be subject to the lien of such pledge without any physical delivery,
filing, or further act. The lien of such pledge on the revenues pledged for payment of the Bonds
and the obligation to perform the contractual provisions made herein shall have priority over any
or all other obligations and liabilities of the Authority. The lien of such pledge shall be valid,
binding, and enforceable as against all persons having claims of any kind in tort, contract, or
otherwise against the Authority irrespective of whether such persons have notice of such liens.
Section 13.05 Severability. If any provision of this Indenture shall be held or deemed to
be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any
other provision or provisions or any constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative or unenforceable to any extent
whatever.
The invalidity of any one or more phrases, sentences, clauses or Sections in this Indenture
contained shall not affect the remaining portions of this Indenture or any part thereof.
Section 13.06 Notices. Except as otherwise provided in this Indenture, all notices,
certificates or other communications hereunder shall be sufficiently given and shall be deemed
given when in writing and either mailed by first class mail, postage prepaid, with proper address
as indicated below or sent by facsimile (with written confirmation by first class mail, postage
prepaid). Any of such parties may, by written notice given by such party to the others, designate
any address or addresses to which notices, certificates or other communications to them shall be
is sent when required as contemplated by this Indenture. Until otherwise provided by the
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® respective parties, all notices, certificates and communications to each of them shall be addressed
as follows:
To the Authority:
Avon Urban Renewal Authority
400 Benchmark Rd.
P. O. Box 975
Avon, Colorado 81620
Telephone: 970.748.405 5
Facsimile: 970.949.9139
Attn: Executive Director/Town Manager
To the Trustee:
UMB Bank, n.a.
1670 Broadway
Denver, Colorado 80202
Telephone: (303) 839-2283
Facsimile: (303) 839-2287
Attention: Corporate Trust and Escrow Services
To the Remarketing Agent:
Stifel, Nicolaus & Company, Incorporated
1125 Seventeenth Street - Suite 1600
Denver, Colorado 80202
Telephone: (303) 291-5207
Facsimile: (303) 291-5323
To the Initial Credit Facility Provider:
DEPFA BANK plc
623 Fifth Avenue, 22nd Floor
New York, New York 10022
Attention: General Manager
Telephone: (212) 796-9170
Facsimile: (212) 796-9217
With a copy to:
DEPFA BANK plc
30 North LaSalle Street
Chicago, Illinois 60602
Attention: Marnin Lebovits
Telephone: (312) 332-9100
Facsimile: 312-332-9192
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0 To Rating Agencies:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Public Finance Group - Fully Supported Group
Facsimile: (212) 553-4090
Standard & Poor's Ratings Services,
A division of the McGraw-Hill Companies
55 Water Street - 38th Floor
New York, New York 10041
Attention: Public Finance Surveillance
Telephone: (212) 438-2000
Notwithstanding anything herein to the contrary, at such time as all of the Bonds
outstanding hereunder have been converted to the Fixed Mode, no notices shall be required to be
given hereunder to the Remarketing Agent, the Bank.
Section 13.07 Counterparts. This Indenture may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
® same instrument.
Section 13.08 Governing. This Indenture shall be governed exclusively by and
construed in accordance with the laws of the State.
Section 13.09 Additional Notices to Rating Agencies. The Trustee hereby agrees that if
at any time (i) payment of principal of and interest on the Bonds is accelerated pursuant to the
provisions of Section 7.02 hereof, (ii) the Authority shall redeem any portion of the Bonds
outstanding hereunder prior to Maturity, excluding redemptions pursuant to Section 4.11(c)
hereof, (iii) the Authority shall provide for the payment of any portion of the Bonds pursuant to
Article X hereof, (iv) a successor Trustee is appointed hereunder, (v) any supplement to the
Bond Indenture shall become effective. or any party thereto shall waive any provision of this
Indenture, (vi) any change in the Remarketing Agent occurs, (vii) any Conversion Date occurs,
(viii) a Flexible Pricing Long-Term Mode of greater than three years is established, (ix) the
Credit Facility then in effect expires or terminates or a Substitute Credit Facility is delivered, (x)
the Stated Expiration Date of the Credit Facility is changed, then, in each case, the Trustee shall
give notice to each Rating Agency then maintaining a rating on the Bonds, or (xi) any
amendment takes effect with respect to the Replenishment Resolution, the Credit Agreement or
the Credit Facility. The Trustee shall send any other information the Rating Agency then
maintaining a rating on the Bonds shall request in order to maintain a rating on the Bonds.
Section 13.10 Unclaimed Moneys. Any moneys deposited with the Trustee by the
Authority in accordance with the terms and provisions of this Indenture in order to redeem or pay
any Bond in accordance with the provisions of this Indenture, and remaining unclaimed by the
Registered Owner of the Bond for four years after the date fixed for final Maturity or redemption
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of all Bonds, as the case may be, shall be repaid by the Trustee to the Authority upon its Written
Request therefor; and thereafter the Registered Owner of the Bond shall be entitled to look only
to the Authority for payment thereof.
Section 13.11 Holidays. If the date for making any payment or the last date for
performance of any act or the exercising of any right, as provided in this Indenture, shall not be a
Business Day, such payment may be made or act performed or right exercised on the next
Business Day with the same force and effect as if done on the nominal date provided in this
Indenture, and no interest shall accrue for the period after such nominal date; provided, however,
that nothing herein shall be deemed to extend the Stated Termination Date or otherwise affect the
obligations of the Bank under the Credit Agreement.
Section 13.12 References to Bank and Substitute Bank. References in this Indenture to
the Bank or Substitute Bank shall be effective only so long as the Bank or Substitute Bank has
not failed to honor a properly presented and conforming drawing under the Credit Facility and a
Credit Facility is required by the provisions of Section 6.14 hereof or otherwise remains in effect
or any Bank Bonds remain outstanding.
Section 13.13 Rules of Interpretation.
(a) In this Indenture, unless the context otherwise requires:
®
(i) The terms "herein , hereunder , hereby, hereto, hereof and
any similar terms refer to this Indenture as a whole and not to any particular article, section or
subdivision hereof, and the term "heretofore" means before the date of execution of this
Indenture, the term "now" means at the date of execution of this Indenture, and the term
"hereafter" means after the date of execution of this Indenture;
(ii) Words of the masculine gender include correlative words of the
feminine and neuter genders and words importing the singular number include the plural number
and vice versa; and
(iii) If at any time there shall be one Person who shall be the Registered
Owner of all of the Outstanding Bonds and this Indenture shall require the consent of the Trustee
for a particular purpose, then the consent of that Person shall be required in lieu of the consent of
the Trustee for that purpose, unless that Person shall have been notified and shall not have
responded within a reasonable period of time.
(b) Nothing expressed or implied in this Indenture is intended or shall be
construed to confer upon or to give any Person, other than the Authority, the Trustee and the
Registered Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture
or any covenant, agreement, condition or stipulation contained in this Indenture.
Section 13.14 Captions. The captions and headings in this Indenture are for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of
this Indenture.
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® Section 13.15 Certificates and Opinions. Except as otherwise specifically provided in
this Indenture, each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include: (a) a statement that the Person making the
certificate or opinion has read the covenant or condition and the definitions set forth in this
Indenture 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 such Person, he or she has made such examination
and investigation as is necessary to enable him or her to express an informed opinion as to
whether the covenant or condition has been complied with; (d) a statement as to whether, in the
opinion of such Person, the condition or covenant has been complied with; and (e) an
identification of any certificate or opinions relied on in such certificate or opinion.
Any opinion of Independent Counsel may be qualified by reference to the constitutional
powers of the United States of America, the police powers of the State, judicial discretion and
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights generally.
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 Persons may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Authority may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by, Independent 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 his or her certificate or
opinion is based are erroneous. Any such certificate or opinion of Independent 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 Authority stating that the information with respect to such factual
matters is in the possession of the Authority, unless such Independent Counsel knows, or in the
exercise of reasonable care should know, that the certificates or opinion or representations with
respect to such matters are erroneous.
When any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, such
instruments may, but need not, be consolidated and form one instrument.
Section 13.16 Exhibits. Attached hereto and by reference made a part of this Indenture
are the following exhibits:
Exhibit A: Form of Series 2008 Bond;
Exhibit B: Description of Urban Renewal Project Area; and
is Exhibit C: Description of Certain Subordinate Debt of the Authority.
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® IN WITNESS WHEREOF, the Authority has caused these presents to be
executed in its corporate name and with its official seal hereunto affixed and attested by its duly
authorized officials; and to evidence its acceptance of the trusts hereby created, the Trustee has
caused these presents to be executed in its corporate name and with its corporate seal hereunto
affixed and attested by its duly authorized officers, as of the date first above written.
[SEAL] AVON URBAN RENEWAL
AUTHORITY
Attest:
By:
Chairman, Board of Commissioners
By:
Executive Director/Secretary
UMB Bank, n.a., as Trustee
By:
Title: Senior Vice President
E
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Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the Authority or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
(BOND FORMS)
EXHIBIT A
(FORM OF SERIES 2008 BOND)
AVON URBAN RENEWAL AUTHORITY
TAX INCREMENT ADJUSTABLE RATE REVENUE BOND
(TOWN CENTER WEST AREA URBAN RENEWAL PROJECT)
SERIES 2008
No. R-1
® MATURITY DATE
June 1, 2032
CURRENT MODE:
REGISTERED OWNER
PRINCIPAL AMOUNT:
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$25,000,000
ORIGINAL
ISSUE DATE
February 22, 2008
WEEKLY
CEDE & CO.
TWENTY FIVE MILLION DOLLARS
CUSIP
The Avon Urban Renewal Authority ("the Authority"), a public body corporate and
politic duly organized and existing as an urban renewal authority under the laws of the State of
Colorado, for value received, hereby promises to pay in lawful money of the United States of
America to the registered owner named above, or registered assigns, on the maturity date stated
above, unless this Bond shall have previously been called for redemption and payment of the
redemption price made or provided for, but solely from amounts specified herein, upon surrender
hereof, the principal amount specified above, and to pay interest on such principal amount in like
manner, but solely from. amounts specified herein, from the Interest Payment Date next
preceding the authentication date hereof to which interest has been paid in full, unless this Bond
has been authenticated on the date of first authentication and delivery of the Bonds or on an
Interest Payment Date to which interest has been paid in full, in which event interest shall be
computed from such authentication date, at the rates per annum and on the dates determined as
described in the Indenture until payment of the principal amount, or provision therefor, shall
have been made. This Bond bears interest, matures, is payable, is subject to optional and
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mandatory redemption, is subject to optional and mandatory purchase, and is transferable as
provided in the Indenture.
This is one of an authorized series of bonds issued under a Indenture of Trust dated as of
February 15, 2008 (the "Indenture") between the Authority and UMB Bank, n.a., as Trustee, or
its successors in trust (the "Trustee"), in the aggregate principal amount of $25,000,000 (the
"Bonds"). Pursuant to the Indenture, the Authority has issued $25,000,000 aggregate principal
amount of its Tax Increment Adjustable Rate Revenue Bonds (Town Center West Area Urban
Renewal Project) Series 2008 (the "Series 2008 Bonds"). The Bonds are being issued for the
purpose of providing funds to finance certain of the activities of the Authority in connection
with the Urban Renewal Project (the "Urban Renewal Project"), a redevelopment project located
in an area (the "Urban Renewal Project Area") within the boundaries of the Town of Avon,
Colorado (the "Town"). The Bonds are issued under the authority of the Colorado Urban
Renewal Law, Section 31-25-101 et seq., Colorado Revised Statutes (C.R.S.), as amended (the
"Act"), Title 11, Article 57, Part 2, C.R.S. (the "Supplemental Act"), and the Indenture. The
Bonds are all issued under and equally and ratably secured by and entitled to the security of the
Indenture. To the extent not defined herein, terms used in this Bond shall have the same
meanings as set forth in the Indenture.
The principal of and premium, if any, on the Bonds shall be payable at the Principal
Office of the Trustee, upon presentation and surrender of such Bonds. Any payment of the
purchase price of a Tendered Bond shall be payable at the Principal Office of the Trustee, upon
is presentation and surrender of such Tendered Bond as described in the Indenture. Except as
otherwise provided in the Indenture, payment of interest on Bonds bearing interest at a Daily
Rate, a Weekly Rate, an Annual Rate, a Flexible Pricing Long-Term Rate or a Fixed Rate shall
be paid by check mailed on the Interest Payment Date to the person appearing on the Bond
Register as the registered owner thereof as of the close of business of the Trustee on the Record
Date to the address of such owner as it appears on the Bond Register. Except as otherwise
provided in the Indenture, payment of interest on Bonds bearing interest at a Flexible Pricing
Short-Term Rate shall be made to the person appearing on the Bond Register as the registered
owner thereof as of the close of business of the Trustee on the Record Date, upon presentation
and surrender of such Bond at the Principal Office of the Trustee on the applicable Interest
Payment Date.
Reference is made to the Indenture and to all indentures supplemental thereto, with
respect to the nature and extent of the security, rights, duties and obligations of the Authority and
the Trustee, the rights of the owners of the Bonds, the events of defaults and remedies, including
acceleration, the circumstances under which any Bond is no longer Outstanding, the issuance of
Additional Bonds and the terms on which such Additional Bonds is or may be issued under and
secured by the Indenture, the ability to amend the Indenture, and to all the provisions of which
the owner hereof by the acceptance of this Bond assents.
The Trust Estate which is pledged to pay the principal of and interest on the Bonds from
time to time Outstanding, includes the Pledged Revenues, the rights of the Authority under
certain Cooperation Agreement, amounts on deposit in certain Trust Funds, and the Trustee's
® interest in the Credit Facility.
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® THE SERIES 2008 BONDS ARE ISSUED PURSUANT TO AND IN FULL
COMPLIANCE WITH THE CONSTITUTION AND LAWS OF THE STATE OF
COLORADO, PARTICULARLY THE ACT, AND PURSUANT TO A RESOLUTION
ADOPTED BY THE AUTHORITY WHICH AUTHORIZES THE EXECUTION AND
DELIVERY OF THE INDENTURE. THE BONDS ARE SPECIAL, LIMITED
OBLIGATIONS OF THE AUTHORITY, SECURED BY THE TRUST ESTATE. THE
BONDS DO NOT CONSTITUTE A DEBT OF THE CITY OF AVON, COLORADO, THE
STATE OF COLORADO OR ANY POLITICAL SUBDIVISION THEREOF, AND NEITHER
THE CITY, THE STATE NOR ANY OF THE POLITICAL SUBDIVISIONS THEREOF IS
LIABLE THEREFOR. NEITHER THE MEMBERS OF THE AUTHORITY NOR ANY
PERSONS EXECUTING THIS BOND SHALL BE PERSONALLY LIABLE FOR THIS
BOND.
The Bonds are also issued pursuant to Supplemental Act. Pursuant to Section I I -
57-210 of the Supplemental Act, this recital shall be conclusive evidence of the validity and the
regularity of the issuance of the Bonds after their delivery for value.
The Authority hereby certifies that all conditions, acts and things required to exist,
happen and be performed under the Act and under the Indenture precedent to and in the issuance
of this Bond exist, have happened and have been performed, and that the issuance and delivery
of this Bond have been duly authorized by resolution of the Authority duly adopted.
® This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Indenture until the certificate of authentication hereon shall have
been duly executed by the Trustee.
IN WITNESS WHEREOF, the Avon Urban Renewal Authority has caused this Bond to
be executed in its name by the signature of its Vice Chairman and its corporate seal to be
hereunto impressed or imprinted hereon and attested by the signature of its Executive
Director/Secretary, all as of February 22, 2008.
[AUTHORITY'S SEAL] AVON URBAN RENEWAL
AUTHORITY
Attest:
By:
Chairman, Board of Commissioners
By:
Executive Director/Secretary
(END OF FORM OF SERIES 2008 BOND)
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A-3
0 (FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture of Trust.
Authentication Date: February 22, 2008
UMB Bank, n.a.,
AS TRUSTEE
By
Authorized Agent
n
(END OF FORM OF CERTIFICATE OF AUTHENTICATION)
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A-4
® (FORM OF ASSIGNMENT)
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfer unto
the within bond and hereby irrevocably constitutes and appoints
attorney, to transfer the same on the books of the Registrar, with
full power of substitution in the premises.
Dated:
Signature Guaranteed:
Signature must be guaranteed by a member
of a Medallion Signature Program.
® Address of Transferee:
Social Security or other tax
identification number of transferee:
NOTE: The signature to this Assignment must correspond with the name as written on the face
of the within bond in every particular, without alteration or enlargement or any change
whatsoever.
0 (END OF FORM OF ASSIGNMENT)
A-5
(FORM OF PREPAYMENT PANEL)
PREPAYMENT PANEL
The following installments of principal (or portions thereof) of this Bond have been
prepaid in accordance with the terms of the Indenture of Trust.
Signature of
Date of Principal Authorized Representative
Prepayment Prepaid of the Depository
(END OF FORM OF PREPAYMENT PANEL)
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A-6
® EXHIBIT B
DESCRIPTION OF URBAN RENEWAL PROJECT AREA
E
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0 EXHIBIT C
DESCRIPTION OF CERTAIN SUBORDINATE
DEBT OF THE AUTHORITY
Amounts due under the Cooperation Agreement.
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