EXHIBIT 10.7
PAGE 184
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
and
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
as Trustee
(Burlington Coat Factory Warehouse
of New Jersey, Inc. - 1995 Project)
INDENTURE OF TRUST
Dated as of August 1, 1995
PAGE 185
INDENTURE OF TRUST
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 101. Definitions . . . . . . . . . . . . . . . . .7
Section 102. Rules of Construction . . . . . . . . . . . 19
ARTICLE II
THE BONDS
Section 201. Authorized Amount of Bonds. . . . . . . . . 21
Section 202. Purposes for Issuance of Bonds. . . . . . . 21
Section 203. Manner of Payment of Bonds. . . . . . . . . 21
Section 204. Maturities, Interest Rates, and Certain
Other Provisions. . . . . . . . . . . . . . 21
Section 205. Execution . . . . . . . . . . . . . . . . . 24
Section 206. Authentication. . . . . . . . . . . . . . . 24
Section 207. Limited Obligations . . . . . . . . . . . . 24
Section 208. Mutilated, Lost, Stolen or Destroyed
Bonds . . . . . . . . . . . . . . . . . . . 25
Section 209. Bond Register; Registration and
Transferability of Bonds. . . . . . . . . . 26
Section 210. Cancellation and Destruction of
Surrendered Bonds . . . . . . . . . . . . . 27
Section 211. Form of Bonds . . . . . . . . . . . . . . . 27
Section 212. Delivery of Bonds . . . . . . . . . . . . . 27
Section 213. Temporary Bonds . . . . . . . . . . . . . . 29
Section 214. Payments Due on Saturdays, Sundays and
Holidays. . . . . . . . . . . . . . . . . . 30
Section 215. Notice of Determination of Taxability . . . 30
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption. . . . . . . . . . . . . . . . . 31
Section 302. Selection of Bonds to be Redeemed . . . . . 33
Section 303. Notice of Redemption; Rights of Holders . . 34
Section 304. Payment of Redeemed Bonds . . . . . . . . . 35
ARTICLE IV
REVENUES; FUNDS; LETTER OF CREDIT
Section 401. Source of Payment of Bonds. . . . . . . . . 37
Section 402. Creation of Bond Fund . . . . . . . . . . . 37
Section 403. Use of Moneys in Bond Fund. . . . . . . . . 40
Section 404. The Letter of Credit. . . . . . . . . . . . 40
Section 405. Satisfaction of Obligations . . . . . . . . 43
Section 406. No Interest of Authority or Borrower. . . . 43
Section 407. Creation of Acquisition Fund. . . . . . . . 43
Section 408. Payments from Acquisition Fund. . . . . . . 43
PAGE 186
Section 409. [Intentionally Omitted] . . . . . . . . . . 44
Section 410. NonPresentment of Bonds . . . . . . . . . . 44
Section 411. Moneys To Be Held in Trust. . . . . . . . . 44
Section 412. Repayment to the Bank from Bond Fund. . . . 45
Section 413. Rebate Fund . . . . . . . . . . . . . . . . 45
ARTICLE V
GENERAL REPRESENTATIONS AND COVENANTS
Section 501. Payment of Principal, Premium and
Interest. . . . . . . . . . . . . . . . . . 46
Section 502. Performance of Covenants. . . . . . . . . . 46
Section 503. Authorization . . . . . . . . . . . . . . . 46
Section 504. Creation of Liens; Indebtedness . . . . . . 47
Section 505. Inspection of Project Books . . . . . . . . 47
Section 506. Rights under Loan Agreement . . . . . . . . 47
Section 507. Enforcement of Duties and Obligations of
the Borrower. . . . . . . . . . . . . . . . 47
Section 508. Recordation and Filing of Documents . . . . 48
Section 509. Instruments of Further Assurance. . . . . . 48
Section 510. Transfer of Letter of Credit. . . . . . . . 48
Section 511. Furnishing Documents to the Authority . . . 48
Section 512. No Litigation . . . . . . . . . . . . . . . 48
Section 513. No Other Encumbrances . . . . . . . . . . . 49
Section 514. No Personal Liability . . . . . . . . . . . 49
Section 515. Compliance with Rule 15c2-12. . . . . . . . 49
ARTICLE VI
INVESTMENTS
Section 601. Investment of Bond Fund and Acquisition
Fund. . . . . . . . . . . . . . . . . . . . 53
Section 602. Investment of Letter of Credit Account. . . 54
Section 603. General Provisions of Investments . . . . . 54
ARTICLE VII
THE TRUSTEE, PAYING AGENTS
Section 701. Appointment of Trustee; Acceptance of the
Trusts. . . . . . . . . . . . . . . . . . . 56
Section 702. Fees, Charges and Expenses of Trustees
and Paying Agents . . . . . . . . . . . . . 59
Section 703. [Intentionally Omitted] . . . . . . . . . . 60
Section 704. Intervention by Trustee . . . . . . . . . . 60
Section 705. Successor Trustee . . . . . . . . . . . . . 60
Section 706. Resignation by the Trustee. . . . . . . . . 61
Section 707. Removal of the Trustee. . . . . . . . . . . 61
Section 708. Appointment of Successor Trustee by the
Borrower or Bondholders . . . . . . . . . . 61
Section 709. Concerning any Successor Trustee. . . . . . 62
Section 710. Trustee Protected in Relying upon
Resolutions, etc. . . . . . . . . . . . . . 62
Section 711. Successor Trustee as Trustee of the
Funds, Bond Registrar and Paying Agent. . . 63
Section 712. Trustee and Authority Required to Accept
PAGE 187
Directions and Actions of Borrower. . . . . 63
Section 713. Paying Agent or Agents. . . . . . . . . . . 63
Section 714. Maintenance of Records. . . . . . . . . . . 64
Section 715. Consent of Borrower and Letter of Credit
Issuer. . . . . . . . . . . . . . . . . . . 64
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 801. Supplemental Indentures Not Requiring
Consent of Bondholders. . . . . . . . . . . 65
Section 802. Supplemental Indentures Requiring Consent
of Bondholders. . . . . . . . . . . . . . . 66
Section 803. Consent of Borrower and Bank. . . . . . . . 67
Section 804. Bond Counsel Opinion. . . . . . . . . . . . 67
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND BONDHOLDERS
Section 901. Events of Default . . . . . . . . . . . . . 69
Section 902. Acceleration. . . . . . . . . . . . . . . . 69
Section 903. Preservation of Security. . . . . . . . . . 71
Section 904. Other Remedies. . . . . . . . . . . . . . . 71
Section 905. Right of Letter of Credit Issuer or
Bondholders to Direct Proceedings . . . . . 72
Section 906. Appointment of Receiver . . . . . . . . . . 73
Section 907. Application of Moneys . . . . . . . . . . . 73
Section 908. Remedies Vested in Trustee. . . . . . . . . 75
Section 909. Rights and Remedies of Bondholders. . . . . 75
Section 910. Termination of Proceedings. . . . . . . . . 76
Section 911. Waivers and Non-Waiver of Events of
Default . . . . . . . . . . . . . . . . . . 76
Section 912. Notice of Defaults. . . . . . . . . . . . . 77
Section 913. Waiver of Redemption Rights . . . . . . . . 78
Section 914. Rights of Bank Regarding Collateral . . . . 78
ARTICLE X
AMENDMENT OF LOAN AGREEMENT
Section 1001. Amendments to Loan Agreement Not
Requiring Consent of Bondholders . . . . . 79
Section 1002. Amendments to Loan Agreement Requiring
Consent of Bondholders . . . . . . . . . . 79
ARTICLE XI
DISCHARGE OF LIEN
Section 1101. Defeasance of Bonds. . . . . . . . . . . . 80
ARTICLE XII
MISCELLANEOUS
Section 1201. Consent of Bondholders . . . . . . . . . . 83
Section 1202. Limitation of Rights . . . . . . . . . . . 84
PAGE 188
Section 1203. Limitation on Liability of Members of
Authority. . . . . . . . . . . . . . . . . 84
Section 1204. Severability . . . . . . . . . . . . . . . 84
Section 1205. Notices. . . . . . . . . . . . . . . . . . 84
Section 1206. Notice to Xxxxx'x. . . . . . . . . . . . . 86
Section 1207. Counterparts . . . . . . . . . . . . . . . 86
Section 1208. Table of Contents and Section Headings
Not Controlling. . . . . . . . . . . . . . 86
Section 1209. Governing Law. . . . . . . . . . . . . . . 86
Section 1210. Third Party Beneficiary. . . . . . . . . . 86
PAGE 189
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as of the first day of
August, 1995 (the "Indenture"), by and between the NEW JERSEY
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority"), a public body
corporate and politic constituting an instrumentality of the
State of New Jersey and Shawmut Bank Connecticut, National
Association, a national banking association duly organized and
validly existing and authorized to accept and execute the trusts
of the character hereinafter set forth under and by virtue of the
laws of the United States of America, with its principal
corporate trust office located at Hartford, Connecticut, as
Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the New Jersey Economic Development Authority
Act, constituting N.J.S.A. 34:1B-1 et seq., as amended (the
"Act"), declares that the legislature has determined that
Department of Labor and Industry statistics of recent years
indicate a continuing decline in manufacturing employment within
the State of New Jersey (the "State") which is a contributing
factor to the unemployment existing within the State, which
exceeds the national average, thus adversely affecting the
economy of the State and the prosperity, safety, health and
general welfare of its inhabitants and their standard of living;
and that the availability of financial assistance and suitable
facilities are important inducements to new and varied employment
promoting enterprises to locate in the State, and to existing
enterprises to remain and expand in the State; and
WHEREAS, the Authority was created to aid in remedying
the aforesaid conditions and further to implement the purposes of
the Act, and the legislature has determined and declared as a
matter of express legislative determination that the Authority
and powers conferred upon the Authority under the Act and the
expenditure of moneys pursuant thereto constitutes a serving of a
valid public purpose and that the enactment of the provisions set
forth in the Act is in the public interest and for the public
benefit and good; and
WHEREAS, the Authority, to accomplish the purposes of
the Act, is empowered to extend credit or make loans to any
person for the planning, designing, acquiring, constructing,
reconstructing, improving, equipping and furnishing of a project,
for which credits or loans may be secured by loan agreements,
security agreements, mortgages, leases, contracts and any other
instruments, upon such terms and conditions as the Authority
shall deem reasonable, and to require the inclusion in any loan
PAGE 190
agreement, security agreement, mortgage, lease, contract, and any
other instrument, such provisions for the construction, use,
operation and maintenance and financing of a project as the
Authority may deem necessary or desirable and to enter into
contracts with respect to the improvement, equipping, furnishing,
operation and maintenance of a project, for such consideration
and upon such terms and conditions as the Authority may determine
to be reasonable; and
WHEREAS, the Borrower submitted an application (the
"Original Application") to the Authority for financial assistance
in the principal amount of $10,000,000 for financing a portion of
the costs of a project (the "1985 Project") consisting of the
acquisition of 46.779 acres of land in the Township of
Burlington, Burlington County, New Jersey, the construction of an
approximately 500,000 square foot building situate thereon for
use as a national distribution center for the Borrower's products
containing about 25,000 square feet of office space, the
equipping of such building with conveyor systems, rolling racks
and automated machinery and the construction of a parking lot
adjacent to such building, and the Authority, by resolution duly
adopted July 3, 1985 in accordance with the Act, accepted the
application of the Borrower for assistance in financing the 1985
Project; and
WHEREAS, the Authority, by resolution duly adopted
September 4, 1985 in accordance with the Act, authorized the
issuance of not to exceed $10,000,000 aggregate principal amount
of its Economic Development Bonds (Burlington Coat Factory
Warehouse of New Jersey, Inc. - 1985 Project) for the purpose of
making a loan to the Borrower to finance the 1985 Project (the
"Original Loan"); and
WHEREAS, on September 20, 1985 the Authority issued
$10,000,000 of its Economic Development Bonds dated September 1,
1985 to finance the 1985 Project (the "Prior Bonds") pursuant to
the provisions of an Indenture of Trust by and between the
Authority and National Westminster Bank, USA, as Trustee, dated
as of September 1, 1985 (the "Prior Indenture"); and
WHEREAS, aforesaid Prior Bonds maturing on or after
September 1, 1996 are subject to redemption prior to maturity, at
the option of the Borrower, on any interest payment date on or
after September 1, 1995; and
WHEREAS, the Borrower is desirous of redeeming the
Prior Bonds dated September 1, 1985 maturing on or after
September 1, 1996 (the "Refunded Bonds") on September 1, 1995;
and
WHEREAS, the Borrower, by letter dated May 10, 1995,
has notified the Authority of its intent to redeem the Refunded
Bonds on September 1, 1995 and has requested the Authority's
PAGE 191
assistance in the issuance of not to exceed $10,000,000 aggregate
principal amount of bonds to refinance the 1985 Project and to
redeem the Refunded Bonds; and
WHEREAS, on July 11, 1995, the Authority by resolution
duly adopted (the "Resolution"), authorized the issuance of its
Economic Development Refunding Bonds (Burlington Coat Factory
Warehouse of New Jersey, Inc. - 1995 Project) (the "Refunding
Bonds" or the "Bonds") for the purpose of providing funds for the
Borrower to refinance the 1985 Project and redeem the Refunded
Bonds (the "Project"); and
WHEREAS, the Authority has determined that the
issuance, sale and delivery of said Bonds, as hereinafter
provided, is needed to finance the cost of the Project, including
necessary expenses incidental thereto and concurrently herewith,
the Authority and the Borrower have entered into a Loan
Agreement, dated as of August 1, 1995, providing for the
financing of the Project (the "Loan Agreement" or "Agreement");
and
WHEREAS, the Borrower has caused to be delivered to the
Trustee an Irrevocable Direct Pay Letter of Credit No. 40017969
(the "Initial Letter of Credit") issued by First Fidelity Bank,
National Association (the "Bank") providing for the payment of
principal and up to 210 days interest on the Bonds calculated at
the rate of six and one hundred twenty-five thousandths percentum
(6.125%) per annum accrued on the Bonds; and
WHEREAS, the Bank will be entitled to reimbursement by
the Borrower for all amounts drawn under the Initial Letter of
Credit (as hereinafter defined) pursuant to the terms of a Letter
of Credit Reimbursement Agreement (the "Reimbursement
Agreement"), dated as of the date hereof, between the Borrower
and the Bank, a copy of which has been delivered to the Trustee;
and
WHEREAS, the obligation of the Borrower to reimburse
the Bank for payments made under the Initial Letter of Credit and
the Reimbursement Agreement shall be additionally secured by a
mortgage from the Borrower to the Bank on the real property and
improvements thereon more specifically described in Exhibit A
thereto (the "Mortgage"), a guaranty of payment by the Corporate
Guarantor (as hereinafter defined), an Assignment of Leases and
by filed Financing Statements creating a security interest in
Machinery and Equipment; and
WHEREAS, the execution and delivery of this Indenture
have been duly authorized by the Authority, and all conditions,
acts and things necessary and required by the Constitution or
statutes of the State of New Jersey or otherwise, to exist, to
have happened, or to have been performed precedent to and in the
PAGE 192
execution and delivery of this Indenture and in the issuance of
the Bonds herein authorized, do exist, have happened and have
been performed in regular form, time and manner; and
WHEREAS, the said Trustee has power to enter into this
Indenture and to execute the trusts hereby created and has
accepted the trusts so created and in evidence thereof has joined
in the execution hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Authority, in consideration of the premises,
of the acceptance by the Trustee of the trusts hereby created, of
the mutual covenants herein contained, of the purchase and
acceptance of the Bonds by the Holders thereof, of the issuance
of the Letter of Credit by the Bank, and of the sum of One
Dollar, in 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 whereof is hereby acknowledged, and in order to
secure (A) the payment of the principal of, redemption premium,
if any, and interest on the Bonds according to their terms, (B)
the obligations of the Borrower under the Loan Agreement, (C) all
of the obligations of the Borrower under the Reimbursement
Agreement to reimburse the Letter of Credit Issuer for all draws
under the Letter of Credit, to perform its covenants contained
therein and to repay all amounts owing thereunder, whether for
fees, expenses, reimbursements of drawings under the Letter of
Credit or otherwise, and (D) the performance and observance by
the Authority of all the covenants expressed or implied herein
and in the Bonds, does by these presents (i) sell, grant,
bargain, assign, transfer, convey, pledge and set over to the
Trustee, and (ii) grant to the Trustee for the benefit of the
owners of the Bonds a security interest in:
(A) All of the Authority's right, title to and
interest in, to and under the Loan Agreement (but none
of its obligations thereunder), including, but not
limited to, all payments due and to become due
thereunder (except for payments to or for the benefit
of the Authority under Sections 4.4, 5.22 and 5.23 of
the Loan Agreement, and reserving its right to xxx in
its own name and for its own benefit to recover damages
for breach by the Borrower of, or to seek specific
performance of the Borrower's obligations as set forth
in the Loan Agreement and including other Reserved
Rights), and all moneys, securities, Funds and Accounts
(including investments, if any) held and to be held by
the Trustee pursuant to this Indenture; and
(B) the Revenues; and
PAGE 193
(C) all substitutions and replacements for any of
the foregoing and all proceeds of any of the foregoing;
the same to be held in trust and applied by the Trustee
as provided herein;
PROVIDED, HOWEVER, that the Authority, in order to
accomplish the purposes and objectives of the New Jersey Economic
Development Authority Act (P.L. 1974, c. 80), as amended and
supplemented, retains the right, jointly and severally with the
Trustee, upon the happening of an Event of Default, to enforce
the provisions contained in the Loan Agreement, whether or not
the Trustee or the Holders shall have exercised any rights or
remedies under this Indenture or the Loan Agreement, to the
extent reasonably necessary to enforce the public purposes
thereof. In addition, the Authority shall have the right and
remedy, without posting bond or other security, to have
provisions of the Loan Agreement specifically enforced by any
court having equity jurisdiction, it being acknowledged and
agreed that any breach or threatened breach of a provision of the
Loan Agreement will cause irreparable injury to the Authority and
that money damages will not provide an adequate remedy therefor;
PROVIDED THAT THE STATE OF NEW JERSEY IS NOT OBLIGATED
TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE
STATE OF NEW JERSEY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR
REDEMPTION PRICE OF, IF ANY, OR INTEREST ON THE BONDS. THE BONDS
ARE SPECIAL, LIMITED OBLIGATIONS OF THE NEW JERSEY ECONOMIC
DEVELOPMENT AUTHORITY (THE "AUTHORITY"), PAYABLE SOLELY OUT OF
THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE AUTHORITY
PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE
AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE
BONDS DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE
GENERAL CREDIT OF THE AUTHORITY. THE AUTHORITY HAS NO TAXING
POWER; AND PROVIDED FURTHER THAT THE OBLIGATION TO REIMBURSE THE
LETTER OF CREDIT ISSUER FOR DRAWS UNDER THE LETTER OF CREDIT AND
THE OTHER OBLIGATIONS UNDER THE REIMBURSEMENT AGREEMENT (AS
HEREIN DEFINED) ARE SOLELY OBLIGATIONS OF THE BORROWER AND ARE
NOT IN ANY MANNER OBLIGATIONS OF THE AUTHORITY, THE STATE OF NEW
JERSEY OR ANY POLITICAL SUBDIVISION THEREOF;
TO HAVE AND TO HOLD the same unto the Trustee and its
successors in trust forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein
set forth, for the equal and proportionate benefit, security and
protection of all Holders of the Bonds issued under and secured
by this Indenture without preference, priority or distinction as
to lien or otherwise of any Bonds over any other Bonds, and for
the security of the Bank, except that moneys available to the
Trustee under the Letter of Credit shall be available solely for
the payment of the principal of and interest on the Bonds.
IT IS HEREBY COVENANTED, declared and agreed by and
PAGE 194
between the parties hereto that all Bonds issued and secured
hereunder are to be issued, authenticated and delivered and all
said property hereby sold, granted, bargained, assigned,
transferred, conveyed, pledged and set-over is to be dealt with
and disposed of under, upon and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the Authority does hereby agree and
covenant with the Trustee, with the respective Holders from time
to time of the Bonds and with the Bank as follows:
PAGE 195
ARTICLE I
DEFINITIONS
Section 101. Definitions. The following words and
terms as used herein shall have the following meanings unless the
context or use indicates another or different meaning or intent.
Capitalized terms found herein, but not defined herein shall have
the same meanings as defined in the Loan Agreement.
"Account" shall mean any account created under this
Indenture;
"Acquisition Fund" shall mean the fund so designated
which is established pursuant to Section 407 hereof;
"Act" shall mean the New Jersey Economic Development
Authority Act, constituting N.J.S.A. 34:1B-1 et seq., as amended,
or any successor legislation, and the regulations promulgated
thereunder;
"Act of Bankruptcy" shall mean the filing of a petition
in bankruptcy (or other commencement of a bankruptcy or similar
proceeding) by or against the Borrower, the Corporate Guarantor
or the Authority under any applicable bankruptcy, insolvency,
reorganization or similar law, now or hereafter in effect;
"Act of Bankruptcy of the Bank" shall occur when the
Bank, as issuer of the Letter of Credit, or any Letter of Credit
Issuer, becomes insolvent or fails to pay its debts generally as
such debts become due or admits in writing its inability to pay
any of its indebtedness or consents to or petitions for or
applies to any authority for the appointment of a receiver,
liquidator, trustee or similar official for itself or for all or
any substantial part of its properties or assets or any such
trustee, receiver, liquidator or similar official is otherwise
appointed or when insolvency, reorganization, arrangement or
liquidation proceedings (or similar proceedings) are instituted
by or against the Bank, or any Letter of Credit Issuer, provided
that any such proceedings brought against the Bank or any Letter
of Credit Issuer, will constitute such an Act of Bankruptcy only
if not dismissed within one hundred twenty (120) days;
"Agreement" or "Loan Agreement" shall mean the Loan
Agreement dated as of August 1, 1995 by and between the Authority
and the Borrower and any amendments thereof and supplements
thereto relating to the Project to be financed from proceeds of
the Bonds;
"Alternate Letter of Credit" shall mean any letter of
credit substituted for the Initial Letter of Credit, including
any renewals or extensions of the Initial Letter of Credit by the
Letter of Credit Issuer, pursuant to and meeting the requirements
PAGE 196
of Section 404 hereof;
"Alternate Letter of Credit Issuer" shall mean the
issuer of an Alternate Letter of Credit which meets the standards
set forth in Section 404(d) hereof;
"Application" shall mean the Borrower's letter to the
Authority, dated May 10, 1995, with respect to the Project, and
all attachments, exhibits, correspondence and modifications
submitted in writing to the Authority in connection with said
application;
Articles and Sections mentioned by number only are the
respective Articles and Sections of this Indenture so numbered;
"Assignment of Leases and Rents" shall mean the
assignment dated as of August 1, 1995, which is made a part of
the Record of Proceedings, executed by the Borrower and assigning
to the Bank the benefits of existing and future leases on the
Project Facility, as the same may be amended from time to time;
"Authority" shall mean the New Jersey Economic
Development Authority, a public body corporate and politic
constituting an instrumentality of the State of New Jersey
exercising governmental functions and any body, board, authority,
agency or political subdivision or other instrumentality of the
State which shall hereafter succeed to the powers, duties and
functions thereof;
"Authority's Fee" shall mean the fee in the amount of
$25,000, payable to the Authority for its services in connection
with the issuance of the Bonds;
"Authorized Authority Representative" shall mean any
individual or individuals duly authorized by the Authority to act
on its behalf pursuant to the Resolution;
"Authorized Borrower Representative" shall mean any
individual or individuals duly authorized by the Borrower to act
on its behalf;
"Authorized Denominations" shall mean minimum denomina-
tions of $25,000 and integral multiples of $5,000 thereafter;
"Authorized Trustee Representative" shall mean such
person or persons designated by the Trustee to act on its behalf;
"Available Moneys" shall mean, with respect to the
payment of principal of, redemption premium, if any and interest
on the Bonds (i) moneys which are paid to the Trustee by the
Letter of Credit Issuer pursuant to a draw on the Letter of
Credit, (ii) moneys which have been deposited in the Bond Fund,
(other than moneys drawn under the Letter of Credit and deposited
PAGE 197
in the Letter of Credit Account within the Bond Fund pursuant to
Section 402 hereof), which moneys have remained on deposit in the
Bond Fund for at least 123 days during and prior to which there
has been no Act of Bankruptcy, (iii) moneys which have been
deposited directly by the Borrower with the Trustee in the Bond
Fund and which have remained on deposit therein for at least 123
days during and prior to which there has been no Act of
Bankruptcy, (iv) the proceeds of the sale of refunding
obligations, if, in the opinion, acceptable to Xxxxx'x, of
nationally recognized counsel experienced in bankruptcy matters,
the application of such moneys will not constitute a voidable
preference in the event of the occurrence of an Act of
Bankruptcy, or (v) the proceeds from investment of moneys
qualifying as Available Moneys under clauses (ii) or (iii) of
this definition, if, in the opinion, acceptable to Xxxxx'x, of
nationally recognized counsel experienced in bankruptcy matters,
the application of such moneys will not constitute a voidable
preference in the event of an Act of Bankruptcy;
"Bank" shall mean, with respect to the Initial Letter
of Credit, First Fidelity Bank, National Association, issuer of
the irrevocable direct pay Initial Letter of Credit, dated the
Issue Date, with its office located at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 and its successors and assigns,
and with respect to an Alternate Letter of Credit, the Alternate
Letter of Credit Issuer;
"Bond" or "Bonds" or "Refunding Bond" or "Refunding
Bonds" shall mean the Authority's not to exceed $10,000,000
aggregate principal amount of Economic Development Refunding
Bonds (Burlington Coat Factory Warehouse of New Jersey, Inc. -
1995 Project) issued to provide funds to finance the Project,
substantially in the form attached as Exhibit A to the Indenture;
"Bond Counsel" shall mean the law firm of Wilentz,
Xxxxxxx & Xxxxxxx, P.A., 00 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx,
Xxx Xxxxxx or any other nationally recognized bond counsel
acceptable to the Authority, the Trustee and the Letter of Credit
Issuer;
"Bondholder" or "Holder" or "Owner" shall mean any
person who shall be the registered owner of any Bond or Bonds as
shown on the registration books maintained on behalf of the
Authority by the Bond Registrar;
"Bond Fund" shall mean the Fund so designated which is
established and created by Section 402 hereof;
"Bond Proceeds" shall mean the amount, including any
accrued interest, paid to the Authority by the Placement Agent
pursuant to the Placement Agreement as the purchase price of the
Bonds, and any interest income earned thereon;
PAGE 198
"Bond Year" shall mean the one-year period commencing
September 1 and ending on the following August 31; except that
the first Bond Year shall commence on the Issue Date and end on
August 31, 1996;
"Borrower" shall mean Burlington Coat Factory Warehouse
of New Jersey, Inc., a corporation organized and existing under
the laws of the State of New Jersey and its successors and
assigns;
"Business Day" shall mean a day of the year, other than
a Saturday, Sunday or other day, on which banks located in the
municipality in which the Principal Offices of the Trustee, the
Paying Agent, the Bond Registrar (as defined in Section 209
hereof) or the Bank are located are authorized or required by law
to close;
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations and rules promulgated
thereunder;
"Collateral" shall mean all the real property subject
to the lien of the Mortgage and the Assignment of Leases, the
Machinery and Equipment, as well as all those assets of the
Borrower in which the Authority or the Bank are granted a
security interest and all other real and personal property owned
by the Borrower and pledged, conveyed or in which the Authority
or the Bank are otherwise granted a lien and/or security interest
in connection with the Reimbursement Agreement (as hereinafter
defined) or any other Loan Document;
"Corporate Guarantor" shall mean Burlington Coat
Factory Warehouse Corporation, a corporation of the State of
Delaware, the Borrower's parent corporation;
"Cost" shall mean those items set forth in Section 3(c)
of the Act and all expenses as may be necessary or incident to
acquiring, constructing, installing or restoring the Project;
"Debt Service Payment" shall mean, with respect to any
Interest Payment Date, (i) the interest payable on such Interest
Payment Date on all Bonds then Outstanding, plus (ii) the
principal, if any, payable on such Interest Payment Date on all
such Bonds, plus (iii) the redemption premium, if any, payable on
such Interest Payment Date on all such Bonds;
"Determination of Taxability" shall be deemed to have
occurred upon the happening of any of the following:
(i) the issuance of a published or private written
ruling of the Internal Revenue Service in which the Borrower
or any "related person" has participated or with respect to
which the Borrower or "related person" has been given
PAGE 199
written notice and the opportunity to participate, to the
effect that the interest payable on the Bonds is wholly
includable in the gross income for Federal income tax
purposes of one or more Owners thereof; or
(ii) a final, nonappealable determination by a court of
competent jurisdiction in the United States in a proceeding
with respect to which the Borrower or "related person" has
been given written notice and the opportunity to participate
and defend, to the effect that the interest payable on the
Bonds is wholly includable in the gross income for Federal
income tax purposes of one or more Owners thereof; or
(iii) the enactment of legislation of the Congress of
the United States with the effect that interest payable on
the Bonds is, or would be, in the opinion of Bond Counsel,
includable in the gross income of the Owners (except Owners
who are "substantial users" or "related persons" within the
meaning of Section 147(a) of the Code);
"Escrow Agent" shall mean Shawmut Bank Connecticut,
National Association, Hartford, Connecticut or its successor in
interest;
"Escrow Deposit Agreement" shall mean the Escrow
Deposit Agreement dated as of August 1, 1995 pursuant to which
proceeds of the Bonds will be deposited with the Escrow Agent
which will be used to redeem the Refunded Bonds;
"Event of Default" shall have the meaning given to such
term in Section 901 hereof;
"Excess Investment Earnings" are determinable as of the
end of each Bond Year on the basis of the period from the date of
original delivery and payment for the Bonds through the last day
of the most recently completed Bond Year, and are the excess of:
(a) the aggregate amount earned on investments held
under this Indenture (including unrealized gains and losses
upon the retirement of the last Bond, but excluding (i)
investments in evidences of indebtedness described in
Section 103(a)(1) of the Code and (ii) investments of
amounts held in the Rebate Fund) over
(b) the amount that would have been earned on such
investments if they had a Yield equal to the Yield of the
Bonds (determined on a present value basis from the date of
original delivery and payment for the Bonds, without
adjustment for costs of issuance);
"Fiduciary" shall mean the Trustee or Paying Agent;
PAGE 200
"Funds" shall mean the Acquisition Fund and the Bond
Fund and shall not include the Rebate Fund;
"Gross Proceeds" shall have the meaning set forth in
Section 1.148-1(b) of the Treasury Regulations, presently
including, without limitation:
(a) Sale proceeds, which are amounts actually or
constructively received on the sale (or other disposition)
of the Bonds, excluding amounts included in the issue price
used to pay accrued interest within one (1) year of the date
of issuance;
(b) Investment proceeds, which are amounts actually or
constructively received from the investment of sale proceeds
or investment proceeds;
(c) Transferred proceeds, which are proceeds of a
refunded issue that are allocable to a refunding issue at
the time the refunded issue is discharged;
(d) Replacement proceeds, which are amounts replaced
by proceeds of an issue, including amounts held in a sinking
fund, pledged fund, or reserve or replacement fund for an
issue; and
(e) Amounts not otherwise taken into account which are
received as a result of investing the amounts described
above;
"Guaranty" or "Guaranty Agreement" shall mean the
guaranty and suretyship agreement dated as of August 1, 1995,
executed and delivered by the Corporate Guarantor to the Bank;
The terms "herein", "hereunder", "hereby", "hereto",
"hereof" and any similar terms, refer to this Indenture; the term
"heretofore" means before the date of execution of this
Indenture; and the term "hereafter" means after the date of
execution of this Indenture;
The term "Holder" shall have the meaning ascribed to
"Bondholder" in this Section;
"Indenture" shall mean this Indenture of Trust, as the
same may have been from time to time amended, modified or
supplemented by Supplemental Indentures as permitted hereby;
"Initial Letter of Credit" shall mean the irrevocable
direct pay Letter of Credit dated the Issue Date, in the form of
Annex A attached to the Reimbursement Agreement (as herein
defined), issued by the Bank;
PAGE 201
"Interest Payment Date" shall mean March 1, 1996 and
each September 1 and March 1 thereafter;
"Issue Date" shall mean August 24, 1995;
"Letter of Credit" shall mean the Initial Letter of
Credit or any Alternate Letter of Credit;
"Letter of Credit Account" shall mean the account so
designated which is established and created as a separate account
within the Bond Fund pursuant to Section 402 hereof;
"Letter of Credit Issuer" shall mean the Bank as issuer
of the Initial Letter of Credit and any issuer of an Alternate
Letter of Credit;
"Letter of Credit Maturity Date" shall mean the date of
expiration of the Initial Letter of Credit which is September 15,
2000, unless extended or renewed, or if the Initial Letter of
Credit has been replaced with an Alternate Letter of Credit, then
the expiration date of the Alternate Letter of Credit;
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), or preference, priority or other
security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the
Uniform Commercial Code (other than any such financing statement
filed for information purposes only) or comparable law of any
jurisdiction to evidence any of the foregoing);
"Loan" shall mean the issuance of an amount not to
exceed $10,000,000 by the Authority for the purposes of redeeming
the Refunded Bonds;
"Loan Documents" shall mean any or all of this
Indenture, the Loan Agreement, the Mortgage, the Financing
Statements, the Guaranty Agreement, the Placement Agreement, the
Assignment of Leases, the Reimbursement Agreement, the Letter of
Credit, the Escrow Deposit Agreement, any documents securing the
Borrower's obligations under the Loan Agreement, the Indenture
and the Reimbursement Agreement, and all documents and
instruments executed in connection therewith and all amendments
and modifications thereto;
"Moody's" shall mean Xxxxx'x Investors Service, a
corporation organized and existing under the laws of the State of
Delaware, its successors and assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the
PAGE 202
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, with the approval of
the Borrower, by notice to the Trustee and the Borrower;
"Mortgage" shall mean the first mortgage lien on and
security interest in the Premises securing the obligations of the
Borrower to the Bank, which Mortgage is made a part of the Record
of Proceedings, executed by the Borrower, as Mortgagor, and given
to the Bank, as Mortgagee;
"Net Proceeds" shall mean the Bond Proceeds less any
amounts placed in a reasonably required reserve or replacement
fund within the meaning of Section 150(a)(3) of the Code;
"1985 Project" shall mean the acquisition of 46.779
acres of land in the Township of Burlington, Burlington County,
New Jersey and the construction of an approximately 500,000
square foot building situate thereon for use as a national
distribution center for the Borrower's products containing about
25,000 square feet of office space, the equipping of such
building with conveyor systems, rolling racks and automated
machinery and the construction of a parking area adjacent to such
building, a portion of such costs being financed with the
proceeds of the Prior Bonds;
"Nonpurpose Investment" shall mean any "investment
property" (within the meaning of Section 148(b)(2) of the Code)
which is (i) acquired with the Gross Proceeds of the Bonds and
(ii) not acquired in order to carry out the governmental purpose
of the Bonds;
"Outstanding", when used with reference to Bonds and as
of any particular date, shall describe all Bonds theretofore and
thereupon being authenticated and delivered except (a) any Bond
canceled by the Trustee or proven to the satisfaction of the
Trustee to have been canceled by the Authority or by any other
Fiduciary, at or before said date, (b) any Bond for payment or
Redemption of which moneys equal to the principal amount or
redemption price thereof, as the case may be, with interest to
the date of maturity or redemption date, shall have theretofore
been deposited with one or more of the Fiduciaries in trust
(whether upon or prior to maturity or the redemption date of such
Bond) and, except in the case of a Bond to be paid at maturity,
of which notice of redemption shall have been given or provided
for in accordance with Article III hereof, (c) any Bond in lieu
of or in substitution for which another Bond shall have been
authenticated and delivered pursuant to Article II hereof, and
(d) any Bond held by the Borrower;
"Paragraph" shall mean a specified paragraph of a
Section, unless otherwise indicated;
PAGE 203
"Paying Agent" shall mean any paying agent for Bonds
appointed by or pursuant to Section 713 hereof, and its successor
or successors and any other corporation or association which may
at any time be substituted pursuant to this Indenture;
"Permitted Encumbrances" shall mean, as of any
paricular time: (i) liens for taxes and assessments not then
delinquent or, provided there is no risk of forfeiture or sale of
any of the Collateral, which are being contested in good faith
and for which reserves have been established by the Borrower
which are satisfactory to the Bank, all in accordance with the
provisions of Section 5.8 of the Reimbursement Agreement; (ii)
liens granted pursuant to the Reimbursement Agreement, the
Indenture, the Loan Agreement, the Mortgage, the Assignment of
Leases, the Financing Statements and the other Loan Documents;
(iii) liens securing claims or demands of mechanics and
materialmen or other liens similar in nature; (iv) utility access
and other easements and rights of way, restrictions and
exceptions that the Title Insurance Policy insures will not
interfere with or impair the Premises or the Project Facility and
previously approved by and acceptable to the Bank; (v) purchase
money security interests encumbering (A) property other than the
Collateral or (B) property acquired after
the date hereof and otherwise comprising Collateral, provided,
however, that the Bank's lien shall remain in effect with respect
to such Collateral subject only to such purchase money security
interest(s); (vi) those exceptions shown on Schedule B of the
Title Insurance Policy acceptable to the Bank and the Authority;
(vii) liens of or resulting from any litigation or legal
proceeding which are being contested in good faith by appropriate
actions or proceedings or any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired,
or in respect of which the Borrower shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured and for which a
supersedeas bond has been timely posted; (viii) minor survey
exceptions or minor encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real
properties which are necessary to the conduct of the activities
of the Borrower or which customarily exist on properties of
corporations engaged in similar activities and similarly situated
and which do not in the aggregate materially impair the operation
of the business of the Borrower; and (ix) liens in favor of the
City of Burlington in connection with an Urban Development Act
Grant (UDAG Grant Number B-85-AB-34-0262), which liens are
subordinate to the lien of and Mortgage in favor of the Bank;
"Permitted Investments" shall mean those investments
described in Article VI hereof;
"Person" or "Persons" shall mean any individual,
PAGE 204
corporation, partnership, joint venture, trust, or unincorporated
organization, or a governmental agency or any political
subdivision thereof;
"Placement Agent" shall mean First Fidelity Bank, N.A.,
in its capacity as agent in connection with the placement of the
Bonds;
"Placement Agreement" shall mean the Placement
Agreement dated as of August 1, 1995 by and among the Placement
Agent, the Bank, the Authority and the Borrower;
"Premises" shall mean the premises and all improvements
thereon located in the Project Municipality, all as described in
Schedule A to the Loan Agreement and the Mortgage;
"Principal Office" shall mean (i) in the case of the
Trustee, the principal corporate trust office of the Trustee
located at Hartford, Connecticut, or which at any particular time
its corporate trust business shall be administered; (ii) in the
case of the Bank, its office at which documents for drawing on
the Letter of Credit are to be presented; (iii) in the case of
the Placement Agent, the office thereof designated in writing to
the Trustee, the Bank and the Borrower and (iv) in the case of
any care of their attorney Xxxxx Xxxx Xxxxxxx, other Person, the
office thereof designated in writing to the Trustee and the Bank;
"Project" shall mean the refinancing of the 1985
Project and the redemption of the Refunded Bonds with the
proceeds of the Bonds;
"Project Facility" or "Project Facilities" shall mean
the land, the improvements and the building situate thereon
located in the Project Municipality acquired and constructed by
the Borrower, including any additions, substitutions or
replacements which have been constructed or acquired thereon with
the proceeds of the Refunded Bonds;
"Project Municipality" shall mean the Township of
Burlington, County of Burlington, State of New Jersey;
"Proper Charge" shall mean (i) issuance costs for the
Bonds, including, without limitation, certain attorneys' fees,
printing costs, initial trustee's fees and similar expenses; or
(ii) an expenditure for the Project incurred for the purposes of
redeeming the Refunded Bonds which were issued for the purposes
of.acquiring and constructing the 1985 Project;
"Rebate Fund" shall mean the fund so designated which
is.established and created by Section 413 hereof;
"Record Date" shall mean the fifteenth day of the
calendar month immediately preceding each Interest Payment Date
PAGE 205
(whether or not a Business Day);
"Record of Proceedings" shall mean the Loan Documents,
certificates, affidavits, opinions and other documentation
xxxxxxxx.xx connection with the sale of the Bonds and the making
of xxx.Xxxx;
"Redemption" shall mean payment of the principal of any
Bond prior to its stated maturity date;
"Redemption Price", when used with respect to a Bond or
portion thereof, shall mean the principal amount of such Bond or
Bonds or portion thereof plus the applicable redemption premium,
if.any, payable upon Redemption thereof in the manner
contemplated in.accordance with its terms pursuant to this
Indenture;
"Reimbursement Agreement" shall mean the Letter of
Credit.Reimbursement Agreement dated as of August 1, 1995 between
the.Borrower and the Bank, as the same may be amended from time
to time.and filed with the Trustee, under which terms the Bank
agrees to.issue the Initial Letter of Credit, and any successor
agreement of.the Borrower with a Letter of Credit Issuer under
which terms the.Borrower and such Letter of Credit Issuer agree
to issue a Letter.of Credit;
"Reserved Rights" shall mean those certain rights of
the.Authority under the Loan Agreement to indemnification and to
payments of certain Authority fees and expenses, indemnity
payments, its right to enforce notice and reporting requirements,
restrictions on transfer of ownership, its right to inspect and
audit the books, records and the Project Facilities, of the
Borrower, collection of attorneys' fees, its right to enforce the
Borrower's covenant to comply with applicable Federal tax law,
its.rights set forth in the provisions to the granting clause in
the.preamble hereto (to the extent not recited herein) and its
right to.receive certain notices;
"Resolution" shall mean the resolution duly adopted by
the Authority on July 11, 1995, accepting the Application, making
certain findings and determinations and authorizing the issuance
and sale of the Bonds and determining other matters in connection
with the Project, as the same may be amended or supplemented from
time to time;
"Revenues" shall mean (i) all amounts payable by the
Borrower under the Loan Agreement and assigned to the Trustee
hereunder, (ii) any proceeds of Bonds originally deposited with
the Trustee for the payment of interest accrued on the Bonds or
otherwise paid to the Trustee by or on behalf of the Borrower or
the Authority for deposit in the Bond Fund or moneys remaining in
the Acquisition Fund established in connection with the issuance
of the Bonds following the payment of all Costs associated with
PAGE 206
the Project, (iii) investment income with respect to any moneys
held by the Trustee, except investment income with respect to
moneys held in the Rebate Fund, (iv) proceeds held in the Bond
Fund of any bonds which may be issued by the Authority to provide
for the payment of the Bonds in the manner set forth in Article
XI hereof and the proceeds of investments of such proceeds, (v)
any moneys paid to the Trustee under the Letter of Credit, and
(vi) any insurance proceeds, sale proceeds or moneys paid to the
Trustee by the Bank in respect of the Project Facilities,
including any moneys received upon taking possession of or
foreclosure on the Project Facilities;
"Section" shall mean a specified section hereof, unless
otherwise indicated;
"Special Record Date" shall mean any date as may be
fixed for the payment of defaulted interest in accordance with
Section 204 hereof;
"Standard & Poor's" shall mean Standard & Poor's
Corporation, 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,
"Standard & Poor's" shall be deemed to refer to any other
nationally recognized securities rating agency designated by the
Authority, with the approval of the Borrower, by notice to the
Trustee and the Borrower;
"State" shall mean the State of New Jersey;
"Supplemental Indenture" shall mean any indenture,
amending, modifying or supplementing this Indenture made, signed
and becoming effective in accordance with the terms of Article
VIII;
"Tax Certificate" shall mean the certificate executed
by the Borrower in form and substance acceptable to the
Authority, wherein the Borrower certifies as to such matters as
the Authority shall require;
"Treasury Regulations" shall mean the Income Tax
Regulations promulgated by the Department of Treasury pursuant to
Sections 103 and 141-150 of the Code as the same shall be amended
or supplemented from time to time;
"Trust Estate" shall mean all property which may from
time to time be subject to the lien of this Indenture;
"Trustee" shall mean Shawmut Bank Connecticut, National
Association, a national banking association duly organized and
validly existing and authorized to accept and execute the trusts
of the character hereinafter set forth under and by virtue of the
PAGE 207
laws of the United States of America, with its principal
corporate trust office located in Hartford, Connecticut, or its
successor and assigns in interest of such capacities;
"Yield" shall mean the yield as calculated in the
manner set forth in Section 148 of the Code; thus, yield with
respect to an investment allocated to the Bonds is that discount
rate which produces the same present value when used in computing
the present value of all receipts received and to be received
with respect to investments and the present value of all the
payments with respect to the investments. The yield on the Bonds
is that discount rate which produces the same present value on
the date hereof when used in computing the present value of all
payments of principal, interest and charges for a "qualified
guarantee" to be made with respect to the Bonds and the present
value of all of the issue prices for the Bonds. The issue price
for each maturity of the Bonds is the initial offering price of
such Bonds to the public.
Section 102. Rules of Construction. Unless the
context or use indicates another or different meaning or intent,
the following rules shall apply to the construction of the
Indenture:
(i) Words importing the
singular number shall include the plural number and
vice versa.
(ii) Words importing the
Redemption or calling for Redemption of Bonds shall not
be deemed to refer to or connote the payment of Bonds
at their stated maturity or upon the acceleration of
the principal thereof by the Trustee pursuant to
Section 902 hereof.
(iii) All references herein to
particular articles or sections are references to
articles or sections of this Indenture unless otherwise
noted.
(iv) The captions and headings
herein are solely for convenience of reference and
shall not constitute a part of this Indenture nor shall
they affect its meaning, construction or effect.
(v) All references to "hereof"
and "hereto" and words of like import shall refer to
this Indenture.
(vi) References to any time of
the day in this Indenture shall refer to Eastern
standard time or Eastern daylight saving time, as in
effect in the City of New York, New York on such day.
PAGE 208
(vii) Defined terms used in this
Indenture which are defined in the Loan Agreement and
not in this Indenture shall have the meaning set forth
in the Loan Agreement.
PAGE 209
ARTICLE II
THE BONDS
Section 201. Authorized Amount of Bonds. No Bonds may
be issued under the provisions of this Indenture except in
accordance with this Article. There is hereby created for
issuance under this Indenture a series of Bonds designated the
"Economic Development Refunding Bonds, (Burlington Coat Factory
Warehouse of New Jersey, Inc. - 1995 Project)" in the aggregate
principal amount not to exceed $10,000,000. No additional Bonds
are authorized pursuant to the terms of this Indenture.
Section 202. Purposes for Issuance of Bonds. The
Authority has authorized Bonds to be issued for the purpose of
financing the Cost of the Project, including necessary expenses
incidental thereto and to the issuance of the Bonds, as
applicable.
Section 203. Manner of Payment of Bonds. Principal or
Redemption Price of the Bonds together with accrued interest, if
any, up to and including the redemption date, maturity date or a
date of acceleration of the Bonds, shall be payable from the
sources specified in Section 401 hereof and in the order
specified in Section 402 hereof to the Holders of such Bonds upon
presentation and surrender of such Bonds as they respectively
become due at the Principal Office of the Trustee, as Paying
Agent for the Bonds. Interest on the Bonds which will be due on
an Interest Payment Date shall be paid by check or bank draft
drawn upon the Bond Fund by the Trustee and mailed to the Holders
of such Bonds as of the close of business on the Record Date next
preceding the Interest Payment Date at the registered addresses
of such Holders as they shall appear as of the close of business
on such Record Date on the registration books maintained pursuant
to Section 209 hereof. Payment as aforesaid shall be made in
such coin or currency of the United States of America as, at the
respective times of payment, shall be legal tender for the
payment of public and private debts. Any Holder of at least one
million dollars ($1,000,000) of Bonds may request interest
payments by wire transfer to an account designated by such
Holder.
Section 204. Maturities, Interest Rates, and Certain
Other Provisions. The Bonds shall be dated August 1, 1995, shall
bear interest from such date, calculated on a 360 day year basis
consisting of twelve (12) thirty (30) day months, at the rates
set forth below payable on the first day of each March and
September, commencing March 1, 1996, until maturity or
Redemption, and shall mature on the dates set forth below:
PAGE 210
SERIAL BONDS
Maturity Interest
(September 1) Amount Rate
1996 $320,000 3.75%
1997 350,000 4.15
1998 385,000 4.45
1999 420,000 4.75
2000 460,000 4.90
2001 505,000 5.05
2002 555,000 5.20
2003 605,000 5.40
TERM BONDS
Maturity
(September 1) Amount Interest Rate
2005 $1,400,000 5.600%
2010 $5,000,000 6.125%
The Bonds maturing on September 1, 2005 and September
1, 2010, respectively, shall be redeemed from sinking fund
payments commencing September 1, 2004 and September 1, 2006,
respectively, and each September 1 as follows:
Term Bonds Due September 1, 2005
Year Sinking Fund Installment
2004 $665,000
2005* 735,000
Term Bonds Due September 1, 2010
Year Sinking Fund Installment
2006 $ 810,000
2007 895,000
2008 990,000
2009 1,095,000
2010 1,210,000
Each such payment on the Bonds shall be payable as set
forth in this Section 204 with respect to principal or Redemption
Price, and interest, 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.
All Bonds shall be issued in minimum denominations of
$25,000 and thereafter in any integral multiple of $5,000. The
Bonds shall be numbered consecutively from EDRB-1 upward. The
Bonds may contain or have words as are (a) not inconsistent with
the provisions of this Indenture or the Resolution, (b) not
prejudicial to the Bondholders, and (c) authorized by a
PAGE 211
supplemental resolution adopted by the Authority and a
Supplemental Indenture prior to the authentication and delivery
thereof. The Bond text may be amended to reflect the security of
the Bonds by any Alternate Letter of Credit without further
action by the Authority upon the effective date of such Alternate
Letter of Credit. Each Bond issued subsequent to the initial
Bonds shall be dated the Issue Date.
The Bonds shall be subject to Redemption to the extent,
in the order, at the times, on the terms, at such Redemption
Price and subject to all other terms, conditions and provisions
in conformity with Article III hereof.
Interest on the Bonds shall be payable from the
Interest Payment Date next preceding the date of authentication
thereof to which interest has been paid or duly provided for,
unless the date of authentication thereof is an Interest Payment
Date to which interest has been paid or duly provided for, in
which case from the date of authentication thereof, or unless no
interest has been paid or duly provided for on the Bonds, in
which case from August 1, 1995, until payment of the principal
thereof has been made or duly provided for. Notwithstanding the
foregoing, if the date of authentication of any Bond is after any
date which is a Record Date next preceding any Interest Payment
Date and before such Interest Payment Date, such Bond shall bear
interest from such Interest Payment Date; provided, however, that
if the Authority shall default in the payment of interest due on
such Interest Payment Date, then such Bond shall bear interest
from the next preceding Interest Payment Date to which interest
has been paid or duly provided for, or, if no interest has been
paid or duly provided for on the Bonds, from August 1, 1995. In
the event of any such default, such defaulted interest shall be
payable to the Person in whose name such Bond is registered at
the close of business on a record date for the payment of such
defaulted interest (the "Special Record Date") established by
notice mailed by or on behalf of the Authority to the registered
Holders of Bonds not less than fifteen (15) days preceding such
Special Record Date. Such notice shall be mailed to the Person
in whose name each Bond is registered at the close of business on
the fifth (5th) day preceding the date of mailing. Payments of
interest on the Bonds shall be payable from the Bond Fund to the
Bondholders by check or bank draft mailed to the respective
addresses of the Bondholders as they appear on the registration
books of the Trustee on the Record Date. Any Holder of at least
one million dollars ($1,000,000) of Bonds may request such
interest payments by wire transfer to an account designated by
such Holder. All payments of principal of the Bonds shall be
payable at the Principal Office of the Trustee or at such
other place as the Trustee and the Holder of a Bond may agree,
upon surrender of the Bond for cancellation thereof.
PAGE 212
Section 205. Execution. The Bonds shall be executed
on behalf of the Authority by manual or facsimile signature of
the Chairman, Vice Chairman, Executive Director or Deputy
Director of Investment Banking of the Authority and shall have
impressed thereon the corporate seal of the Authority or shall
have reproduced thereon a facsimile thereof. Such facsimile
signatures on the Bonds shall have the same force and effect as
if the Chairman, Vice Chairman, Executive Director or Deputy
Director of Investment Banking of the Authority had manually
signed each Bond. In case any officer of the Authority the
facsimile of whose signature shall appear on the Bonds shall
cease to be such officer before the delivery of such Bonds, such
facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such officer had remained in office
until delivery; and any Bond may be signed on behalf of the
Authority, manually or in facsimile, by the person who, on the
date of execution of such Bond, shall be the proper officer of
the Authority, although on the date of execution of this
Indenture such person was not such officer.
Section 206. Authentication. The Trustee is hereby
appointed as an authenticating agent for the Bonds. No Bond
shall be valid for any purpose hereunder until it shall have
endorsed thereon a certificate of authentication substantially in
the form attached to the form of Bond, duly executed and dated by
the Trustee and such authentication shall be conclusive evidence
that such Bond has been authenticated and delivered under the
Indenture and that the Holder thereof is entitled to the benefits
of the trust hereby created. The certificate of authentication
on any Bond shall be deemed to have been executed by the Trustee
if signed by an authorized signatory of the Trustee, as the case
may be, but it shall not be necessary that the same person sign
the certificate of authentication on all of the Bonds issued
hereunder.
Section 207. Limited Obligations. (a) The Bonds,
together with interest thereon, shall be special, limited
obligations of the Authority payable solely from the Revenues and
other moneys, securities, funds and accounts (including
investments, if any) held and to be held by the Trustee pursuant
to this Indenture and shall be a valid claim of the respective
Holders thereof against such Revenues and such other moneys,
securities, funds and accounts; and there shall be no other
recourse against the Authority or any other property now or
hereafter owned by it.
THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHER THE
FAITH AND CREDIT NOR TAXING POWER OF THE STATE OF NEW JERSEY IS
PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF,
IF ANY, OR INTEREST ON THE BONDS. THE BONDS ARE SPECIAL, LIMITED
OBLIGATIONS OF THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (THE
"AUTHORITY"), PAYABLE SOLELY OUT OF THE REVENUES OR OTHER
RECEIPTS, FUNDS OR MONEYS OF THE AUTHORITY PLEDGED UNDER THE
INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE
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INDENTURE FOR THE PAYMENT OF THE BONDS. THE BONDS DO NOT NOW AND
SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE
AUTHORITY. THE AUTHORITY HAS NO TAXING POWER.
(b) No Holder of any Bond has the right to compel
any exercise of taxing power of the Authority to pay such Bond or
the interest or redemption premium, if any, thereon. No recourse
shall be had for the payment of principal of or interest or
redemption premium, if any, on the Bonds or for any claim based
thereon or upon any indenture against any past, present or future
official, officer or employee of the Authority or any successor
corporation, as such, either directly or through the Authority,
or any successor corporation under any rule of law or equity,
statute or constitution, or by the enforcement of any assessment
or penalty or otherwise; and all such liability of any such
official, officer or employee, as such, is hereby expressly
waived and released as a condition of and in consideration for
the execution of this Indenture and the issuance of the Bonds.
Section 208. Mutilated, Lost, Stolen or Destroyed
Bonds. (a) In the event any Bond is mutilated, lost, stolen or
destroyed, the Authority may execute, upon request of the
registered Owner thereof and, upon its written request, the
Trustee shall authenticate, a duplicate Bond of like series,
date, maturity and denomination as that mutilated, lost, stolen
or destroyed Bond; provided that, in the case of any mutilated
Bond, such mutilated Bond shall first be surrendered to the
Authority, which Bond shall be canceled by the Trustee, 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, and as may
be required by applicable law; provided further that, with
respect to any such Bond which shall have matured, the Trustee
may pay the same without surrender thereof if there shall have
been furnished to the Authority, the Trustee and the Borrower
indemnity satisfactory to them and as may be required under
applicable law. The Authority and the Trustee may charge the
Holder of such Bond with their reasonable fees and expenses
relating to the replacement of any Bond pursuant to this Section.
(b) Every Bond issued pursuant to the provisions
of this Section 208 shall constitute an additional contractual
obligation of the Authority (whether or not the lost, stolen or
destroyed Bond shall be found at any time to be enforceable) and
shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued under
this Indenture.
(c) All Bonds shall be held and owned upon the
express condition that the provisions of this Section 208 are
exclusive, with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude
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all other rights or remedies, notwithstanding any law or statute
existing or hereinafter enacted to the contrary.
Section 209. Bond Register; Registration and
Transferability of Bonds. (a) All Bonds shall be issued in
fully registered form. The Bonds shall be registered upon
original issuance and upon subsequent registrations of transfer
or exchange as provided in this Indenture. While any of the
Bonds issued hereunder is Outstanding, there shall be maintained
and kept at the Principal Office of the Trustee books for the
registration of the Bonds (herein sometimes referred to as the
"Bond Register"). The Trustee is hereby appointed bond registrar
(the "Bond Registrar") for the Authority for the purpose of
registering and making transfers on such Bond Register. All
Bonds shall be registered as to principal and interest. By
executing this Indenture the Trustee accepts the duties and
obligations of Bond Registrar for the Authority.
(b) Bonds shall be transferable only on the Bond
Register upon surrender thereof at the Principal Office of the
Trustee by the registered Owner thereof in person or by his
attorney duly authorized in writing, together with a written
instrument of transfer executed by the registered Owner thereof
or by his duly appointed attorney and satisfactory to the
Trustee. Upon such surrender, the Authority shall execute and
the Trustee shall authenticate and deliver in the name of the
transferee or transferees, one or more new fully registered Bonds
of the same series in Authorized Denominations in the aggregate
principal amount which the registered Owner is entitled to
receive. At the option of the Holder, Bonds may be exchanged for
other Bonds of the same series in any other Authorized
Denomination of a like aggregate principal amount upon surrender
of the Bonds to be exchanged at any such office. All Bonds
presented for registration of transfer or for exchange,
Redemption or payment (if so required by the Authority, the Bond
Registrar or the Trustee), shall be accompanied by a written
instrument or instruments of transfer or authorization for
exchange, in form satisfactory to the Bond Registrar. No service
charge shall be made for any exchange or registration of transfer
of Bonds, but the Trustee may require payment of its expenses and
a sum sufficient to cover all taxes or other governmental charges
that may be imposed in relation thereto. New Bonds delivered
upon any registration of transfer or exchange shall be valid
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 Bonds surrendered.
(c) A Person in whose name a Bond shall be
registered shall for all purposes of this Indenture, be deemed
the absolute Owner and, so long as the same shall be registered,
PAGE 215
payments of or on account of the principal, redemption premium,
if any, and interest with respect to such Bond shall be made only
to the registered Owner or his legal representative. All such
payments so made to any such registered Owner or upon his order
shall be valid and effectual to satisfy and discharge the
liability of the Authority upon such Bond to the extent of the
sum or sums so paid. The Authority and the Trustee shall not be
affected by any notice to the contrary.
(d) The Trustee shall not register, register the
transfer of, or exchange Bonds for the period from the Record
Date preceding an Interest Payment Date to the related Interest
Payment Date, nor shall the Trustee register the transfer of or
exchange any Bond during the period fifteen (15) days next
preceding the giving of a notice of redemption.
Section 210. Cancellation and Destruction of
Surrendered Bonds. All Bonds which have been purchased by or on
behalf of the Authority and all Bonds surrendered for payment,
Redemption, registration of transfer or exchange and Bonds
surrendered to the Trustee by the Authority or by the Borrower
for cancellation shall be canceled and destroyed by the Trustee.
The Trustee shall deliver to the Authority and to the Borrower
certificates of destruction in respect of all Bonds so destroyed.
Section 211. Form of Bonds. The Bonds issued under
this Indenture may have printed thereon such legend or legends as
may be required to comply with any law, rule or regulation or to
conform to general usage or as may, consistent herewith, be
determined to be advisable by the Authority and the Trustee. All
Bonds shall be substantially in the form of Exhibit A attached
hereto with such appropriate variations, omissions and insertions
as are permitted or required by this Indenture.
Section 212. Delivery of Bonds. (a) Upon the
execution and delivery of this Indenture, the Authority shall
execute and deliver the Bonds to the Trustee and the Trustee,
upon written order of the Authority, shall authenticate the Bonds
and deliver them to the Placement Agent in accordance with the
provisions of this Section 212.
(b) Prior to or simultaneously with the delivery
by the Trustee of any of the Bonds there shall be filed with the
Trustee the following:
(i) Original executed counterparts of the Loan
Agreement, this Indenture, the Escrow Deposit
Agreement, the Reimbursement Agreement, the originally
executed Initial Letter of Credit and the other
originally executed Loan Documents.
(ii) A copy, duly certified by the Secretary or
Assistant Secretary of the Borrower, of the resolution
PAGE 216
or resolutions adopted by the Borrower authorizing the
execution and delivery of the Loan Agreement, the
Escrow Deposit Agreement, the Reimbursement Agreement,
and the Loan Documents.
(iii) A copy, duly certified by the Executive
Director, Secretary or Assistant Secretary of the
Authority, of the resolution or resolutions adopted by
the Authority authorizing the execution and delivery of
the Loan Agreement, the Escrow Deposit Agreement, the
Placement Agreement and this Indenture and the
issuance, execution and delivery of the Bonds.
(iv) An opinion of counsel for the Borrower and
Corporate Guarantor stating in the opinion of such
counsel that the Loan Agreement, the Reimbursement
Agreement and the Loan Documents have each been duly
authorized by and lawfully executed and delivered on
behalf of the Borrower and Corporate Guarantor, as
applicable, are in full force and effect and are valid,
binding and enforceable against the Borrower and
Corporate Guarantor in accordance with the respective
terms thereof, except to the extent certain bankruptcy
laws and equitable principles may affect
enforceability.
(v) An opinion of Bond Counsel for the
Authority stating in the opinion of such counsel that
the Loan Agreement, the Escrow Deposit Agreement and
this Indenture have each been duly authorized by and
lawfully executed and delivered on behalf of the
Authority, are in full force and effect and are valid,
binding and enforceable against the Authority in
accordance with the respective terms thereof, except to
the extent certain bankruptcy laws and equitable
principles may affect enforceability.
(vi) An original executed counterpart of a
certificate with respect to the compliance with Federal
arbitrage requirements from the Authority given in part
in reliance on a certificate from the Borrower along
with an original executed counterpart of the Borrower's
certificate.
(vii) An opinion of Bond Counsel for the
Authority stating in the opinion of such Bond Counsel
that: (a) the Authority is duly authorized and
entitled to issue the Bonds and, upon the execution,
authentication and delivery thereof, the Bonds will be
duly and validly issued and will constitute valid and
binding special obligations of the Authority; and (b)
interest income on the Bonds is exempt from inclusion
as gross income under the Code subject to certain
PAGE 217
limitations, more fully set forth therein; and (c)
interest income is not includable as gross income under
the New Jersey Gross Income Tax Act (P.L. 1976, Chapter
47).
(viii) An opinion of counsel for the Bank stating
in the opinion of such counsel addressed to the
Authority, the Borrower and the Trustee that: the
Letter of Credit has been duly authorized by and
lawfully executed and delivered on behalf of the Bank,
is in full force and effect and is valid and
enforceable against the Bank in accordance with its
terms, except (i) as may be limited by (a) bankruptcy,
insolvency, liquidation, reorganization, moratorium or
other similar laws relating to or limiting creditors'
rights generally as such laws would apply in the event
of the bankruptcy, insolvency, liquidation,
reorganization, moratorium or other similar occurrence
with respect to or affecting the Bank, (b) the powers
of Federal Regulatory bodies to appoint the Federal
Deposit Insurance Corporation as receiver to take
possession of the Bank's assets and to pay creditors of
the Bank and (c) general principles of equity, and (ii)
no opinion is expressed as to (a) the ability of a
court of appropriate jurisdiction to enjoin the ability
of the Bank to honor a draft or demand for payment
under the Letter of Credit in the event of a
presentation of documents that are forged or fraudulent
or there is fraud in the transaction or (b) the
availability of equitable remedies to persons seeking
to enforce the Letter of Credit.
(ix) An opinion of Bond Counsel for the
Authority addressed to the Authority and the Trustee to
the effect that payments on the Bonds from Available
Moneys will not constitute preferential payments
pursuant to the provisions of the Federal Bankruptcy
Code in a bankruptcy proceeding by or against the
Authority, the Borrower, the Corporate Guarantor or the
Bank.
(x) An authorization to the Trustee, signed by
an Authorized Authority Representative, to authenticate
and deliver the Bonds to the Placement Agent therein
identified.
and (xi) An executed copy of the Placement
Agreement.
Section 213. Temporary Bonds. (a) Pending
preparation of definitive Bonds, there may be executed, and, upon
written request of the Authority, the Trustee shall authenticate
and deliver to the Authority, in lieu of definitive Bonds and
PAGE 218
subject to the same limitations, conditions and requirements as
to date, temporary printed, engraved, lithographed or typewritten
Bonds, in the form of fully registered Bonds in Authorized
Denominations as the Authority by resolution may provide and with
such appropriate omissions, insertions and variations as may be
required.
(b) If temporary Bonds shall be issued, the
Authority shall cause definitive Bonds to be prepared and to be
executed and delivered to the Trustee, and the Trustee shall,
upon written request of the Authority and upon presentation to it
at its Principal Office of any temporary Bond, cancel the same
and authenticate and deliver in exchange therefor at the
Principal Office of the Trustee, without charge to the Holder
thereof, a definitive Bond or Bonds of an equal aggregate
principal amount, of the same maturity and bearing interest at
the same rate as the temporary Bond surrendered. Until so
exchanged, the temporary Bonds shall in all respects be entitled
to the same benefit and security of this Indenture as the
definitive Bonds to be issued and authenticated hereunder.
Section 214. Payments Due on Saturdays, Sundays and
Holidays. Except as otherwise provided in this Indenture, in any
case where the date of maturity of interest or principal of Bonds
or the date fixed for Redemption of Bonds shall not be a Business
Day, then payment of interest on or principal or Redemption Price
of such Bonds need not be made on such date but may be made on
the next succeeding Business Day with the same force and effect
as if made on the date of maturity or the date fixed for
Redemption, and no interest shall accrue for the period after
such date.
Section 215. Notice of Determination of Taxability.
If the Trustee is notified in writing by the Internal Revenue
Service or any Bondholder of the occurrence of a Determination of
Taxability, the Trustee shall give written notice thereof to the
Authority, the Letter of Credit Issuer and the Borrower. The
Trustee shall then give written notice of any Determination of
Taxability of which it receives written notice, to the Holders by
registered or certified first class mail promptly following the
receipt of such notice. Such notice shall state that the Bonds
are subject to Redemption pursuant to Section 301(a) hereof and
shall state the matters set forth in Section 303 hereof.
PAGE 219
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption. The Bonds are subject to
Redemption prior to maturity as provided in the form of the Bonds
and as follows, subject to the notice requirements set forth in
Section 303 hereof:
(a) Special Mandatory Redemption. The Bonds are
subject to special mandatory redemption in whole as soon as
practicable but not later than the 90th day following (i) the
Trustee's receipt of written notice of the occurrence of a
Determination of Taxability or (ii) the Authority's written
notice to the Trustee, the Letter of Credit Issuer and the
Borrower that (A) the Borrower has ceased to operate the Project
Facility or ceased to cause the Project Facility to be operated
as an authorized project under the Act for twelve (12)
consecutive months without first obtaining the prior written
consent of the Authority, or (B) any of the representations and
warranties of the Borrower contained in the Loan Agreement have
proven to have been false or misleading in any material respect
when made. In such event, the Bonds shall be redeemed by the
Authority at a Redemption Price equal to 100% of the principal
amount thereof plus accrued interest up to and including the
redemption date.
(b) Mandatory Redemption. The Bonds are subject to
mandatory redemption, as a whole or in part, in minimum
denominations of $25,000 and in integral multiples of $5,000
thereafter, on any Interest Payment Date, at a Redemption Price
equal to 100% of the principal amount thereof, together with
interest accrued up to such redemption date in the case of
damage, destruction or condemnation of the Project, in an amount
equal to the net proceeds of any insurance, casualty or
condemnation award received by the Bank and at the option of the
Bank pursuant to Section 5.24 of the Loan Agreement and Section
304(d) hereof.
(c) Extraordinary Mandatory Redemption. The Bonds are
subject to extraordinary mandatory redemption by the Authority,
in whole, on the Interest Payment Date immediately preceding the
termination date of the Initial Letter of Credit on September 15,
2000, (or the Interest Payment Date immediately preceding the
Letter of Credit Maturity Date of a renewal of the Initial Letter
of Credit or an Alternate Letter of Credit), at a Redemption
Price equal to 100% of the principal amount thereof, in the event
the Borrower does not provide the Trustee, at least sixty (60)
days prior to the Letter of Credit Maturity Date, with (i)
written notice from the Bank to the Trustee that the Letter of
Credit will be renewed by the Bank upon the termination date
thereof, which Letter of Credit shall have an expiration date of
September 15 of any subsequent year, or written notice from
PAGE 220
another bank to the Trustee that an Alternate Letter of Credit
will be issued prior to the Letter of Credit Maturity Date, which
Alternate Letter of Credit shall have an expiration date of
September 15 of any subsequent year, and (ii) (A) an Alternate
Letter of Credit meeting the requirements set forth in Section
404(d)(i) hereof and which shall be presented to the Trustee
sixty (60) days prior to the Letter of Credit Maturity Date and
(B) the documents required to be delivered in Section 404(d)(ii)
hereof sixty (60) days prior to the Letter of Credit Maturity
Date.
(d) Mandatory Redemption Due to Act of Bankruptcy of
Bank. The Bonds are subject to mandatory redemption, as a whole,
at a Redemption Price equal to 100% of the principal amount of
the Outstanding Bonds together with interest accrued thereon to
the redemption date which is at least forty-five (45) days, but
not more than seventy (70) days, after the date on which an Act
of Bankruptcy of the Bank occurs, unless within thirty (30) days
after the occurrence of an Act of Bankruptcy of the Bank, the
Borrower has provided the Trustee with (i) an Alternate Letter of
Credit, which Alternate Letter of Credit shall have an expiration
date of September 15, of any subsequent year and (ii) the
opinions and written notice set forth in Section 404 hereof.
(e) Optional Redemption. Subject to the provisions
of Section 304(c) hereof regarding the payment of the redemption
premium, if any, by the Borrower, the Bonds maturing on or after
September 1, 2006 are subject to optional redemption by the
Authority, at the direction of the Borrower, in whole at any
time, or in part on any Interest Payment Date, in minimum
denominations of $25,000 and in integral multiples of $5,000
thereafter if in part, on or after September 1, 2005, at the
Redemption Prices (expressed as percentages of the principal
amount) for the Redemption Periods set forth below, plus unpaid
interest, if any, accrued up to the redemption date:
Redemption Periods Redemption
(Dates Inclusive) Prices
September 1, 2005 to August 31, 2006 102.00%
September 1, 2006 to August 31, 2007 101.00%
September 1, 2007 and thereafter 100.00%
(f) Sinking Fund Redemption. The Bonds maturing
September 1, 2005 and September 1, 2010, respectively, shall be
subject to Redemption commencing September 1, 2004 and September
1, 2006, respectively, and on each September 1 thereafter, as
applicable, at a Redemption Price equal to 100% of the principal
amount thereof being redeemed plus accrued interest up to the
redemption date. The Trustee shall cause to be redeemed such
Bonds in the aggregate principal amounts of the following Sinking
Fund Installments on September 1 of each of the following years:
PAGE 221
Term Bonds Due September 1, 2005
Year Sinking Fund Installment
2004 $665,000
2005 735,000
Term Bonds Due September 1, 2010
Year Sinking Fund Installment
2006 $ 810,000
2007 895,000
2008 990,000
2009 1,095,000
2010* 1,210,000
On or before the thirtieth (30th) day next preceding a
Sinking Fund Installment due date, the Trustee shall select for
Redemption on such date the principal amount of Bonds, in an
amount not exceeding that necessary to complete the retirement of
such Sinking Fund Installment, as of such Sinking Fund
Installment due date. Accrued interest on such Bonds so redeemed
shall be paid from the Bond Fund, and all expenses in connection
with such Redemption shall be paid by the Borrower. All Bonds
redeemed under the provisions of this Section shall be redeemed
in the manner provided in Section 302 hereof. The principal
amount of Bonds to be redeemed in the years 2004 through 2010
shall be reduced by the amount of such Bonds that the Trustee has
previously redeemed pursuant to Section 301(b) or (e) hereof.
Section 302. Selection of Bonds to be Redeemed. (a) A
Redemption of Bonds shall be a Redemption of the whole or any
part of the Bonds from any funds available for that purpose in
accordance with the provisions of this Indenture. If less than
all the Bonds shall be called for Redemption under any provision
of this Indenture permitting such partial redemption, the
particular Bonds (or Authorized Denominations thereof), to be
redeemed shall be selected by the Trustee by lot, using such
method as the Trustee in its sole discretion may deem proper, in
the principal amount designated in writing to the Trustee by the
Borrower or otherwise as required by this Indenture. The Trustee
and the Letter of Credit Issuer, as applicable, shall be notified
in writing by the (i) Authority in the case of a Redemption
pursuant to Section 301(a) hereof, (ii) by the Borrower in the
case of a Redemption pursuant to Section 301(e) hereof and (iii)
by the Letter of Credit Issuer in the case of a Redemption
pursuant to Sections 301(b), 301(c) and 301(d) hereof, not less
than sixty (60) days prior to the redemption date of a Redemption
pursuant to Section 301(a), (b), (c) and (e) hereof and in the
case of a Redemption pursuant to Section 301(d) hereof, not more
than ten (10) days following an Act of Bankruptcy of the Bank.
PAGE 222
(b) Except as otherwise provided herein, any
Bonds selected for Redemption which are deemed to be paid in
accordance with the Indenture will bear interest up to, but not
including, the date fixed for Redemption.
Section 303. Notice of Redemption; Rights of Holders.
(a) When Bonds are to be redeemed pursuant to Section 301
hereof, the Trustee shall give notice of such redemption to the
Holders in the name of the Authority, stating: (i) the Bonds to
be redeemed; (ii) the redemption date; (iii) that such Bonds will
be redeemed at the Principal Office of the Trustee; (iv) that on
such redemption date there shall become due and payable upon each
Bond to be redeemed the Redemption Price thereof together with
unpaid interest accrued prior to the redemption date; (v) the
CUSIP numbers assigned to the Bonds to be redeemed; (vi) the
serial numbers and maturities of Bonds selected for Redemption,
except that where all the Bonds are to be redeemed, the serial
numbers and maturities need not be specified; (vii) the interest
rates and maturity dates of the Bonds to be redeemed; (viii) the
date of mailing notice to Bondholders; and (ix) the record date
for the Redemption (which shall be forty-five (45) days prior to
the redemption date).
(b) Such redemption notice shall further state
that on such date there shall become due and payable upon each
Bond or portion thereof being redeemed the Redemption Price
thereof, or the Redemption Price of the specified portion of the
principal thereof in the case of a Bond to be redeemed in part
only, together with interest accrued to such date, and that from
and after such date, if the aggregate of the amounts then on
deposit in the Bond Fund is sufficient to pay the Redemption
Price together with interest accrued to such date, interest
thereon shall cease to accrue and be payable. In case any Bond
is to be redeemed in part only, the notice of redemption which
relates to such Bond shall state the portion of the principal
thereof to be redeemed and that on or after the redemption date,
upon surrender of such Bond, a new Bond or Bonds of the same
maturity and in principal amount equal to the unredeemed portion
of such Bond shall be issued. The notice of redemption shall
state that Redemption is subject to receipt by the Trustee of
Available Moneys from the Letter of Credit or, as applicable and
limited by the provisions of this Indenture, other Available
Moneys sufficient to pay the Redemption Price of the Bonds to be
redeemed on or before the redemption date.
(c) The Trustee shall mail the notice required by
subsection (a) above, postage prepaid by first class mail, not
less than thirty (30) days, nor more than sixty 60) days, prior
to the applicable date to the Holders of any Bonds to be redeemed
at the addresses thereof appearing on the Bond Register kept for
such purpose. Failure to duly give such notice by mail, or any
defect therein, shall not affect the validity of any proceeding
for the Redemption of the Bonds.
PAGE 223
Section 304. Payment of Redeemed Bonds. (a) After
notice shall have been given in the manner provided in Section
303 hereof, Bonds or portions thereof called for Redemption shall
become due and payable on the redemption date so designated.
Upon presentation and surrender of such Bonds at the Principal
Office of the Trustee, such Bonds shall be paid at a price equal
to the Redemption Price plus unpaid interest, if any, accrued up
to and including the redemption date. If there shall be called
for Redemption less than all of a fully registered Bond, the
Authority shall, upon the surrender of such fully registered Bond
and without charge to the Owner thereof, (i) pay the Redemption
Price of the Authorized Denominations called for Redemption and
(ii) execute and cause the Trustee to authenticate and deliver
for the unredeemed balance of the principal amount of such Bond
so surrendered, Bonds of like series, maturity and interest rate
in any Authorized Denominations.
(b) If on any redemption date Available Moneys
from the Letter of Credit or, as applicable and limited by the
terms of this Indenture and in the case of the payment of
redemption premium by the Borrower in the event of an optional
redemption pursuant to Section 301(e) hereof, other Available
Moneys for the Redemption of all Bonds or portions thereof to be
redeemed, together with interest thereon to such redemption date,
shall be held by the Trustee so as to be available therefor on
such date, the Bonds or portions thereof so called for Redemption
shall cease to bear interest and such Bonds or portions thereof
shall no longer be Outstanding hereunder or be secured by or be
entitled to the benefits of this Indenture. If such Letter of
Credit moneys or, as applicable, other Available Moneys shall not
be so available on such date, such Bonds or portions thereof
shall continue to bear interest until paid at the same rate as
they would have borne had they not been called for Redemption and
shall continue to be secured by and be entitled to the benefits
of this Indenture.
(c) In the event a redemption premium is due from
the Borrower pursuant to an optional redemption in accordance
with Section 301(e) hereof, the following shall apply: the
amount of the redemption premium paid by the Borrower to the
Trustee shall be deposited by the Trustee into the Ineligible
Moneys Account in immediately available funds at least one
hundred twenty-three (123) days prior to the date on which notice
of such optional redemption is to be sent by the Borrower to the
Trustee pursuant to Section 302(a) hereof, or the amount of the
redemption premium paid by the Borrower to the Trustee shall be
deposited in the Eligible Moneys Account prior to the date fixed
for Redemption, if such moneys are delivered with an opinion,
acceptable to Moody's or the then current rating agency on the
Bonds, of a nationally recognized counsel experienced in
bankruptcy matters, stating that the application of such moneys
will not constitute a voidable preference in the event of the
occurrence of an Act of Bankruptcy. If no Act of Bankruptcy has
PAGE 224
occurred prior to the date fixed for Redemption and such moneys
become Available Moneys then such Available Moneys shall be
transferred by the Trustee to the Eligible Moneys Account and
shall be utilized to pay the redemption premium on the Bonds to
effect an optional redemption pursuant to Section 301(e) hereof.
If an Act of Bankruptcy has occurred prior to the date fixed for
such Redemption, or sufficient Available Moneys are not held by
the Trustee to pay the redemption premium on the Bonds, the
notice of redemption shall be deemed rescinded and the Trustee
shall be directed in writing by the Borrower or the Authority to
mail a notice of rescission to the Holders of the Bonds. If such
notice of redemption is rescinded, the moneys deposited by the
Borrower with the Trustee for payment of the redemption premium
which are Available Moneys shall be transferred into the Eligible
Moneys Account and shall be applied by the Trustee in accordance
with the provisions of Section 404(a) hereof to reimburse the
Letter of Credit Issuer for any drawing on the Letter of Credit
up to the amount of any such drawing. From the date of the
deposit of the redemption premium by the Borrower with the
Trustee, the Borrower shall have no control whatsoever over such
funds and the Trustee shall invest such funds in Permitted
Investments (as defined under Article VI hereof) to mature prior
to the date set for Redemption.
(d) In the event the Letter of Credit Issuer
provides the Trustee with written notice to effect a mandatory
redemption of the Bonds pursuant to Section 301(b) hereof, the
Trustee shall call for Redemption the amount of Bonds which (i)
does not exceed the amount of net proceeds received by the Bank
for any insurance, casualty or condemnation award and (ii) is in
Authorized Denominations and the Trustee shall present a draft to
the Letter of Credit Issuer for a draw under the Letter of Credit
in an amount which does not exceed the requirements of (i) and
(ii) herein.
(e) The Trustee shall promptly notify the
Authority in writing of the Redemption of all Outstanding Bonds,
whether at maturity or otherwise.
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ARTICLE IV
REVENUES; FUNDS; LETTER OF CREDIT
Section 401. Source of Payment of Bonds. (a) The
Bonds issued hereunder and all payments required by the Authority
hereunder are limited obligations payable solely from the
Revenues and moneys, securities, Funds and Accounts (including
investments, if any) held and to be held by the Trustee pursuant
to the Indenture, as authorized by the Act and provided herein.
The foregoing are collectively the "Security" and are
hereby pledged to the Trustee, for the benefit of the Bondholders
for the payment of the principal of, redemption premium, if any,
and interest on, the Bonds in accordance with the terms and
provisions of this Indenture, and for the benefit of the Bank for
the payment of all amounts owing to it under the Letter of Credit
and the Reimbursement Agreement. This pledge shall be valid and
binding from and after the date of execution of this Indenture,
and the security hereby pledged shall immediately be subject to
the lien of such pledge without any physical delivery thereof or
further act, and the lien of such pledge shall be valid and
binding as against all parties having claims of any kind in tort,
contract or otherwise against the Authority, irrespective of
whether such parties have notice thereof.
(b) The payments under the Loan Agreement are to
be remitted directly to the Trustee for the account of the
Authority and deposited, as herein provided, in the Bond Fund.
The Loan Agreement provides that the payments to be made shall be
sufficient in amount to ensure the prompt payment of the
principal of, redemption premium, if any, and interest on the
Bonds and the entire amount of said payments are pledged to the
payment of the principal of, redemption premium, if any, and
interest on the Bonds. The Loan Agreement further provides for a
credit for such payments to the extent that such payments have
been derived from drawings under the Letter of Credit.
Section 402. Creation of Bond Fund. (a) There is
hereby created and established a trust fund for the benefit of
the Holders of the Bonds to be held by the Trustee and designated
the "Bond Fund", which shall be used to pay the principal of,
redemption premium, if any, and interest on the Bonds. There are
hereby established with the Trustee three (3) separate and
segregated accounts to be evidenced by journal entry, to be
designated "Eligible Moneys Account", "Ineligible Moneys Account"
and "Letter of Credit Account", which collectively comprise the
Bond Fund.
(b) There shall be deposited into the accounts of
the Bond Fund from time to time the following:
PAGE 226
(i) into the Ineligible Moneys Account,
(1) all payments of principal, redemption premium, if
any, or interest under the Loan Agreement and (2) all
other moneys received by the Trustee under and pursuant
to the provisions of this Indenture (except moneys
described in Section 402(b)(ii) and Section 402(b)(iii)
hereof) or of the Loan Agreement; provided that, in
each case (but subject to Section 413 hereof and the
last paragraph of Section 402(c)(iii) hereof), after
such moneys shall become Available Moneys, such moneys
shall be transferred first to the Rebate Fund in the
amount required by and pursuant to Section 413 hereof
and the remainder to the Eligible Moneys Account; and
provided, further, that any moneys deposited by the
Borrower into the Ineligible Moneys Account to pay a
redemption premium on the Bonds pursuant to Section
304(c) hereof which shall thereafter become Available
Moneys shall be transferred by the Trustee directly
into the Eligible Moneys Account and shall be used
solely for the purposes of Section 304(c) hereof; and
(ii) into the Letter of Credit Account, all
moneys drawn by the Trustee under the Letter of Credit
to pay principal of the Bonds and interest accrued on
the Bonds; and
(iii) into the Eligible Moneys Account, all
moneys held in the Ineligible Moneys Account which
shall become Available Moneys and are not applied as
provided in Section 413 hereof and accrued interest on
the Bonds from August 1, 1995 to the Issue Date.
(c) Moneys in the Bond Fund shall be used solely
for the payment of the principal plus any interest accrued on the
Bonds, whether on a date of maturity, Redemption or acceleration
or on any Interest Payment Date (excepting moneys deposited by
the Borrower to effectuate an optional redemption pursuant to
Section 304(c) hereof, and except as provided in this Section
402(c) and in Section 413 hereof with respect to the Rebate Fund)
from the following source or sources but only in the following
order of priority:
(i) Available Moneys from the Letter of
Credit held in the Letter of Credit Account; provided
that in no event shall moneys held in the Letter of
Credit Account be used to pay any amount that may be
due on Bonds held by or for the account of the
Borrower, the redemption premium, if any, or fees or
expenses of the Trustee or the Paying Agent; and
(ii) Available Moneys held in the Eligible
Moneys Account; and
PAGE 227
(iii) Moneys held in the Ineligible Moneys
Account; provided that no moneys held in the Ineligible
Moneys Account shall be used to make any payments of
principal, redemption premium, if any, or interest on
the Bonds unless there are no further draws available
to be made on the Letter of Credit.
Moneys deposited into the Ineligible Moneys
Account (excepting those moneys deposited by the
Borrower to pay a redemption premium pursuant to
Section 304(c) hereof) which shall become Available
Moneys shall be transferred to the Rebate Fund at the
times and in the amounts required by Section 413
hereof, prior to the transfer of such moneys to the
Eligible Moneys Account.
(d) Except as set forth in subparagraph (e)
herein, to pay principal and/or interest on the Bonds on the date
any such payment becomes due, whether at maturity or on an
Interest Payment Date or as a result of Redemption pursuant to
Sections 301(a), 301(b), 301(c), 301(d), 301(e) and 301(f) hereof
or as a result of acceleration of the Bonds pursuant to Section
902 hereof, the Trustee, to make timely payment thereof, shall
present a draft for a draw upon the Letter of Credit in an amount
equal to the principal of and/or interest on the Bonds which then
shall be due and payable on such date, in accordance with the
provisions of the Letter of Credit and in accordance with Section
404 hereof and such amounts shall be deposited in the Letter of
Credit Account.
(e) Notwithstanding the provisions of
subparagraph (d) above, the following provisions shall govern the
payment of principal of and interest on the Bonds to effect a
Redemption pursuant to Section 301(b) hereof:
1. In the event of damage, destruction or
condemnation of part or all of the Project Facilities, the
Borrower shall notify the Trustee and the Bank not later than
five (5) days after the occurrence of such event (the "Initial
Notice") and the following provisions shall apply:
(i) In the event of any partial damage,
destruction or condemnation of the Project Facilities in an
amount aggregating less than $5,000,000, the Borrower shall apply
the proceeds of any claim or award related thereto to
reconstruct, repair or restore the Project Facilities to a
substantially equivalent condition or value existing immediately
prior to such event or to a condition of at least an equivalent
value, in accordance with the provisions of Section 407 hereof.
In the event the Borrower shall not or shall fail to commence to
repair, reconstruct or restore the Project Facilities within
sixty (60) days after the Initial Notice to the Trustee and the
Bank or in the event such proceeds exceed in the aggregate
PAGE 228
$5,000,000, the Bank shall notify the Trustee in writing, within
seventy (70) days after the Borrower's Initial Notice to the Bank
and the Trustee, of the Bank's election to (A) apply such funds
to the Cost of repair, reconstruction and restoration of the
Project, in which case such funds shall be deposited with the
Trustee in the Acquisition Fund in accordance with Section 407
hereof and paid in accordance with Section 408(b) hereof, or (B)
redeem Bonds to effect a mandatory redemption pursuant to Section
301(b) hereof, in which case the Trustee shall effect such
mandatory redemption of Bonds by making a draw under the Letter
of Credit pursuant to Section 301(b) hereof, which Redemption
shall be in an amount equal to the net proceeds received by the
Bank and in Authorized Denominations pursuant to Section 304(d)
hereof and the Bank shall utilize the net proceeds of any
casualty, insurance or condemnation award to reimburse itself for
a draw under the Letter of Credit for such Redemption, but only
to the extent of the amount of net proceeds received by the Bank
for any such casualty, insurance or condemnation award, or (C)
such funds can be used by the Bank to reduce any outstanding
balance of unreimbursed draws under the Letter of Credit and
remit the balance to the Borrower, or (D) the Bank can retain
such proceeds (up to the amount of the Borrower's obligations to
the Bank under the Letter of Credit) as cash collateral for the
Borrower's obligations thereunder. Notwithstanding the above, the
Trustee shall continue to present drafts to the Bank for a draw
under the Letter of Credit for the payment of principal and
interest on the Bonds when due and payable whether at maturity or
as a result of other redemption or acceleration of the Bonds.
(f) The Authority hereby covenants and agrees
that, so long as any of the Bonds issued hereunder are
Outstanding, it will deposit or cause to be deposited in the Bond
Fund all sums received by it derived from the Loan Agreement, but
not including sums received by it in respect of its
administrative costs, taxes and indemnification.
(g) The Trustee shall maintain such other records
of accounts based on written certifications received from the
Borrower and the Bank, as applicable, so that the Trustee may at
all times have written records of the source and date of deposit
of the funds in each such account. Funds in a particular
subaccount shall not be in any way commingled with funds in any
other trust account maintained by the Trustee.
Section 403. Use of Moneys in Bond Fund. Except as
provided in Sections 413 and 905 hereof, moneys in the Bond Fund
shall be used solely for the payment of principal of, redemption
premium, if any, and interest on, the Bonds in the manner set
forth in Section 402 hereof.
Section 404. The Letter of Credit. (a) If, pursuant
to Section 402(d), the Trustee must draw upon the Letter of
Credit, the Trustee shall present a draft for a draw under the
PAGE 229
Letter of Credit in accordance with the terms thereof no later
than 10:00 a.m., local prevailing time, no later than one (1)
Business Day prior to the day on which the principal of and/or
interest on any Outstanding Bond is due and payable in the amount
necessary to make payments of the principal of, whether at
maturity or upon acceleration or Redemption or otherwise, and/or
interest on the Bonds required to be made from the Bond Fund.
The amount of money drawn under the Letter of Credit on each such
date shall equal the amount of the principal and/or interest on
all Outstanding Bonds which is then due and payable. Amounts on
deposit in the Eligible Moneys Account (excepting any amount paid
by the Borrower pursuant to Section 304(c) hereof to effectuate
an optional redemption pursuant to Section 301(e) hereof) upon
any such drawing of the Letter of Credit, shall be applied by the
Trustee to reimburse the Letter of Credit Issuer up to the amount
of such drawing.
(b) Subject to the provisions set forth in
subparagraph (c) below, the Trustee shall not enter into any
amendment or modification of the Letter of Credit without notice
and the written approval or consent of all Bondholders and
Moody's. If at any time the Authority or the Borrower shall
request in writing the consent of the Bondholders to any such
proposed amendment or modification, the Trustee shall cause
notice of such proposed amendment, change or modification to be
provided to the Holders in the name of the Authority. 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 at the Principal
Office of the Trustee for inspection by all Bondholders.
(c) Notwithstanding the provisions of subparagraph (b)
hereinabove, the Trustee, within ten (10) Business Days following
a payment of principal on the Bonds, shall execute and deliver to
the Bank a certificate, in the form of Annex C attached to the
Letter of Credit, the effect of which shall be to permanently
reduce, as applicable, (i) the Principal Component of the Letter
of Credit (as defined in the Letter of Credit) to reflect the
aggregate principal amount of Bonds Outstanding and (ii) the
Interest Component of the Letter of Credit (as defined in the
Letter of Credit) to reflect the amount of interest allocable to
the reduced Principal Component (the "Certificate for the
Permanent Reduction of the Stated Amount"). The execution and
delivery of the Certificate for the Permanent Reduction of the
Stated Amount shall not constitute an amendment or modification
of the Letter of Credit requiring the consent of Bondholders.
(d) The Borrower may provide an Alternate Letter of
Credit subject to the conditions set forth below. An Alternate
Letter of Credit must be presented to the Trustee on or before
the sixty (60) days immediately preceding the Letter of Credit
Maturity Date.
PAGE 230
(i) Any Alternate Letter of Credit must be issued
by a banking institution which, at the time it issues an
Alternate Letter of Credit, has a credit rating established by
Moody's or the then current rating agency which is not less than
the credit rating of the Letter of Credit Issuer which is being
replaced by such banking institution in effect at the time of
such substitution from Moody's or the then current rating agency
and which credit rating will not result in a withdrawal or
reduction of the rating on the Bonds by Moody's or the then
current rating agency.
(ii) The Trustee shall only accept delivery of an
Alternate Letter of Credit upon prior receipt of (A) an opinion
of Bond Counsel stating that the delivery of such Alternate
Letter of Credit to the Trustee is authorized under the Loan
Agreement and complies with the terms of the Loan Agreement and
this Indenture, (B) an opinion of Bond Counsel stating that the
delivery of such Alternate Letter of Credit will not result in a
Determination of Taxability, (C) an opinion of Bond Counsel that
such Alternate Letter of Credit shall otherwise contain the same
material terms, including without limitation, the same Letter of
Credit Maturity Date as the Letter of Credit or the Alternate
Letter of Credit being replaced or a later Letter of Credit
Maturity Date or the final maturity date of the Bonds, (D) the
legal opinion, dated on the delivery date of the Alternate Letter
of Credit, of counsel to the issuer thereof, addressed to the
Trustee and the Borrower, opining that (i) the issuer has the
authority to issue the Alternate Letter of Credit; (ii) the
Alternate Letter of Credit has been duly authorized, executed and
delivered; (iii) payments of the principal of, redemption
premium, if any, and interest on the Bonds will not constitute
voidable preferences under the Federal Bankruptcy Code in the
event of an Act of Bankruptcy of the Borrower or the Authority
(except that the opinion referred to herein may be given by
either Bond Counsel or Counsel to the Bank); and (iv) the
Alternate Letter of Credit is a legal, valid and binding
obligation of the issuer, enforceable against the issuer in
accordance with its terms, and (E) a certificate of the issuer
thereof dated the date of issuance of the Alternate Letter of
Credit, signed by an authorized officer of the issuer to the
effect that (i) the issuer is duly organized and validly
existing, in good standing; (ii) the Alternate Letter of Credit
has been duly authorized, executed and delivered; and (iii) the
performance by the issuer of the Alternate Letter of Credit is
within the corporate power of the issuer, requires no consents,
approvals or filings, other than in the ordinary course of the
issuer's business with any governmental or regulatory agencies
and (F) written confirmation of the credit rating of the
Alternate Letter of Credit Issuer established by Moody's or the
then current rating agency and that such rating will not result
in a withdrawal or reduction of the rating of the Bonds. Upon
receipt of the foregoing, the Trustee shall accept such Alternate
Letter of Credit and promptly surrender the previously held
PAGE 231
Letter of Credit to the issuer thereof, in accordance with the
terms thereof, for cancellation.
Section 405. Satisfaction of Obligations. Any
obligations of the Authority under this Indenture and the Bonds
or of the Borrower under the Loan Agreement which are satisfied
by moneys drawn by the Trustee under the Letter of Credit shall
be deemed satisfied for all purposes, except any obligation to
reimburse the Bank for any draws on such Letter of Credit.
Section 406. No Interest of Authority or Borrower.
Neither the Authority nor the Borrower shall have any control
over the use of, or any right to withdraw any moneys from, the
Bond Fund. Neither the Authority nor the Borrower shall have any
right, title or interest in the Rebate Fund, except as otherwise
provided in Section 413 hereof.
Section 407. Creation of Acquisition Fund. There is
hereby created and established a trust fund in the name of the
Authority but for the account of the Borrower to be held by the
Trustee and designated the "Acquisition Fund" for the payment of
the Costs of the Project. The Acquisition Fund shall consist of
any other amounts the Authority, the Bank, or the Borrower, upon
written direction from the Bank, may deposit or cause to be
deposited therein including any moneys from the damage,
destruction or condemnation of the Project as set forth in
Section 5.24 of the Loan Agreement. The amounts in the
Acquisition Fund, until applied as hereinafter provided in
Section 408 hereof, shall be held for the Security of all Bonds
Outstanding hereunder. The Trustee shall maintain a record of
the income on investments and interest earned on deposit of
amounts held in the Acquisition Fund and on proceeds of Bonds in
respect of accrued or capitalized interest held by the Trustee as
Revenues. Subject to the provisions of Section 413 hereof, such
income or interest may be expended at any time or from time to
time to pay Costs of the Project in the same manner as the moneys
deposited in the Acquisition Fund are expended.
Section 408. Payments from Acquisition Fund. (a) The
Trustee is authorized to pay from the Acquisition Fund in
connection with the issuance of the Bonds, in the amounts set
forth in a requisition signed by an Authorized Borrower
Representative, and approved in writing by the Bank, any or all
costs of issuance of the Bonds, including but not limited to the
Authority fee, Trustee fees, Letter of Credit issuance fees,
placement fees, legal fees and expenses and printing costs, upon
receipt of a requisition executed by an Authorized Borrower
Representative in accordance with Article III of the Loan
Agreement (and approved in writing by the Bank) within ten (10)
days of receipt of same.
(b) In the event the Borrower shall or the Bank elects
PAGE 232
to repair the Project Facility pursuant to Section 5.24 of the
Loan Agreement and Section 5.21 of the Reimbursement Agreement
and net proceeds from any insurance, casualty or condemnation
award are deposited in the Acquisition Fund pursuant to the
provisions of Section 402(e) hereof, the Trustee shall make
payments from the Acquisition Fund upon proper requisition
therefor by the Borrower pursuant to Section 3.3 of the Loan
Agreement (and approved inwriting by the Bank) to restore,
renovate or reconstruct the Project Facility.
(c) In the event there are moneys remaining in the
Acquisition Fund not applied to pay the Costs of the Project or
retained by the Trustee for Costs of the Project not yet due or
payable or, if due and payable, not yet paid, then upon the
delivery of the certificate of an Authorized Borrower
Representative reflecting such amounts to be retained therein,
such moneys shall be transferred to the Bond Fund and applied
pursuant to the terms of Section 402 hereof.
Except during the continuance of an Event of Default
hereunder, the Trustee shall continue to make payments from the
Acquisition Fund upon proper requisition therefor.
Section 409. [Intentionally Omitted]
Section 410. Non-Presentment of Bonds. In the event
any Bond shall not be presented for payment when the principal
thereof becomes due, either at maturity or at the date fixed for
Redemption thereof or otherwise, if Available Moneys in the Bond
Fund sufficient to pay the principal of, redemption premium, if
any, and interest on such Bond shall be available to the Trustee
for the benefit of the Holder or Holders thereof, all liability
of the Authority to the Holder thereof for the payment of such
Bond, or portion thereof, as the case may be, shall forthwith
cease, determine and be completely discharged, and thereupon it
shall be the duty of the Trustee to hold such fund or funds
uninvested and without liability to the Holder of such Bond for
interest thereon, for the benefit of the Holder of such Bond, who
shall thereafter be restricted exclusively to such fund or funds,
for any claim of whatever nature on his part on, or with respect
to, said Bond, or portion thereof. Any such funds held by the
Trustee remaining unclaimed by such Holder or former Holder for
two (2) years after such principal, or premium, if any, has
become due and payable and made available to the Trustee and,
upon written instructions of the Borrower, shall be paid to the
Borrower and such Holder or former Holder shall thereafter be
entitled to look only to the Borrower for payment thereof, and
the Authority and the Trustee shall have no further
responsibility or liability with respect to such funds.
Section 411. Moneys To Be Held in Trust. All moneys
required to be deposited with or paid to the Trustee for account
of the Bond Fund or the Acquisition Fund under any provision of
PAGE 233
this Indenture shall be held by the Trustee in its trust
department in trust for the purposes specified herein; provided,
however, that any moneys which have been deposited with, paid to
or received by the Trustee (i) for the Redemption of a portion of
the Bonds, notice of the redemption of which has been given, or
(ii) for the payment of Bonds or interest thereon due and payable
otherwise than upon acceleration by declaration, shall be held in
trust for and subject to a Lien in favor of only the Holders of
such Bonds so called for Redemption or so due and payable.
Section 412. Repayment to the Bank from Bond Fund.
Any amounts remaining in the Bond Fund after payment in full of
principal of, redemption premium, if any, and interest on all the
Bonds (or after provision for the payment thereof has been made
in accordance with Article XI hereof), and payment of the fees,
charges and expenses including legal fees of the Trustee and the
Paying Agent and all other amounts required to be paid hereunder,
shall be paid to the Bank to the extent it remains unreimbursed
for payments made under the Letter of Credit or any other amounts
due and owing to the Bank under the Reimbursement Agreement and
then to the Borrower pursuant to Section 907(c) hereof.
Section 413. Rebate Fund. There is hereby established
with the Trustee a Rebate Fund which shall be held separate and
apart from all other Funds established under this Indenture. The
Borrower shall comply with the provisions of Section 5.29 of the
Loan Agreement and instruct the Trustee in writing to transfer
from the Ineligible Moneys Account of the Bond Fund to the Rebate
Fund, or shall otherwise pay to the Trustee for deposit into the
Rebate Fund, such amounts as shall be necessary to cause the
aggregate amount transferred to or otherwise deposited in the
Rebate Fund to equal the Excess Investment Earnings as of the end
of such Bond Year; provided that no such transfers or deposits
shall be necessary if the proceeds of the Bonds are fully
expended within six (6) months of the date of issue. Withdrawals
from the Rebate Fund may be made on account of negative arbitrage
in other Funds, but not on account of negative arbitrage in the
Rebate Fund. All amounts in the Rebate Fund, including income
earned from investment of the Rebate Fund, shall be held by the
Trustee free and clear of the Lien of this Indenture, and the
Trustee shall pay said amounts over to the United States from
time to time as the Trustee shall be instructed in writing by the
Borrower, provided that the Trustee shall so pay over to the
United States: (1) not less frequently than sixty (60) days
following each fifth anniversary of the original issuance of the
Bonds, an amount equal to ninety percent (90%) of the net
aggregate amount transferred or deposited to or earned in the
Rebate Fund during such period (and not theretofore paid to the
United States or withdrawn on account of negative arbitrage in
other Funds) and (2) not later than sixty (60) days after the
Redemption, payment at maturity or other retirement of the last
Bond, 100% of all moneys remaining in the Rebate Fund.
PAGE 234
ARTICLE V
GENERAL REPRESENTATIONS AND COVENANTS
Section 501. Payment of Principal, Premium and
Interest. The Authority hereby covenants that it will promptly
pay or cause to be paid the principal of, redemption premium, if
any, and interest on every Bond issued under this Indenture at
the place, on the dates and in the manner provided herein and in
the Bonds appertaining hereto according to the true intent and
meaning hereof. The principal of, redemption premium, if any,
and interest on the Bonds are payable solely from the Revenues
and moneys, securities, Funds and Accounts (including
investments, if any) held and to be held by the Trustee pursuant
to this Indenture and moneys available to the Trustee under the
Letter of Credit. Such Revenues and moneys, securities, funds
and accounts (other than moneys available to the Trustee under
the Letter of Credit) have been specifically pledged to the
payment of the Bonds in the manner and to the extent herein
specified.
Section 502. Performance of Covenants. (a) The
Authority by executing this Indenture covenants that it will
promptly and faithfully observe and perform at all times any and
all covenants, undertakings, stipulations and provisions to be
observed or performed on its part contained (i) in this
Indenture, (ii) in any and every Bond executed, authenticated and
delivered hereunder, (iii) in the Loan Agreement and (iv) in all
proceedings of the Authority pertaining thereto.
(b) The Authority agrees that the Trustee in its
name or in the name of the Authority may enforce against the
Borrower or any Person any rights of the Authority under or
arising from the Bonds or the Loan Agreement whether or not the
Authority is in default hereunder or under the Loan Agreement,
but the Trustee shall not be deemed to have hereby assumed the
obligations of the Authority under the Loan Agreement, but rather
shall have no obligations under the Loan Agreement except as
specifically provided herein. The Authority shall fully
cooperate with the Trustee in the enforcement by the Trustee of
any such rights. At the request of the Authority, the Trustee,
upon receiving indemnity satisfactory to it (including indemnity
for its fees, costs and expenses, including the fees and expenses
of its attorneys and paralegals), shall in its name commence
legal action or take such other actions as the Authority shall
reasonably request to enforce the rights of the Authority or the
Trustee under or arising from the Bonds or the Loan Agreement.
Section 503. Authorization. The Authority hereby
represents, warrants and covenants that it 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 assign and pledge the Revenues and the
PAGE 235
moneys, securities, funds and accounts (including investments, if
any) held and to be held by the Trustee pursuant to this
Indenture, and to assign its rights and interests with respect to
the Loan Agreement in the manner and to the extent herein
specified; that all actions on its part relating to the issuance
of the Bonds have been duly taken, as provided herein, and that
the Bonds in the hands of the Holders thereof are and will be
valid and enforceable obligations of the Authority, subject to
the limitations set forth herein.
Section 504. Creation of Liens; Indebtedness. The
Authority hereby covenants that it shall not create or suffer to
be created or to exist any Lien or charge upon the Revenues or
upon the moneys, securities, funds or Accounts (including
investments, if any) held and to be held by the Trustee pursuant
to this Indenture, except as provided in this Indenture. The
Authority shall not incur any indebtedness, or issue any
evidences of indebtedness, secured by a pledge of the Revenues or
the moneys, securities, funds and Accounts (including
investments, if any) held and to be held by the Trustee pursuant
to this Indenture, other than the Bonds.
Section 505. Inspection of Project Books. The
Authority hereby covenants and agrees that all books and
documents in its possession relating to the Project or the
Project Facilities and the Revenues shall at all times be open to
inspection by such accountants or other agencies as the Trustee
may from time to time designate.
Section 506. Rights under Loan Agreement. The Loan
Agreement sets forth the covenants and obligations of the
Authority and the Borrower, including provisions that subsequent
to the issuance of the Bonds and prior to their payment in full,
or provision for payment thereof in accordance with the
provisions hereof, the Loan Agreement may not be amended or
terminated (other than as provided herein or therein) without the
prior written consent of the Trustee and the Bank, and reference
is hereby made to the same for a detailed statement of said
covenants and obligations of the Borrower thereunder.
Section 507. Enforcement of Duties and Obligations of
the Borrower. The Authority hereby covenants that it shall
require the Borrower fully to perform all duties and acts and
fully to comply with the covenants of the Borrower required by
the Loan Agreement in the manner and at the times provided in the
Loan Agreement. The Authority agrees that the Trustee in its own
name may enforce all rights of the Authority and all obligations
of the Borrower under and pursuant to the Loan Agreement for and
on behalf of the Bondholders and the Bank, whether or not an
Event of Default exists hereunder; provided that the Trustee
shall not be deemed to assume the Authority's obligations under
the Loan Agreement and shall have no obligations under the Loan
Agreement except as expressly provided herein. Subject to the
PAGE 236
limitation of liability herein set forth, the Authority hereby
agrees to cooperate fully with the Trustee in any proceedings, or
to join in any proceedings, necessary to enforce the rights of
the Authority and all obligations of the Borrower under and
pursuant to the Loan Agreement if the Trustee shall so request.
Section 508. Recordation and Filing of Documents. The
Authority hereby covenants that it will cause this Indenture, the
Loan Agreement (or a memorandum thereof) and all supplements
hereto and thereto, together with all other security instruments
and financing statements, to be recorded and filed, as the case
may be, in such manner and in such places as may be required by
law in order to perfect the Lien of, and the security interests
created by, this Indenture.
Section 509. Instruments of Further Assurance. The
Authority covenants that it will do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and
delivered, such further acts, instruments and transfers as the
Trustee may reasonably require for the better assuring, pledging,
assigning and confirming unto the Trustee of all the Revenues and
moneys, securities, funds and accounts (including investments, if
any) held and to be held by the Trustee pursuant to the
Indenture, pledged as contemplated herein to the payment of the
principal of, redemption premium, if any, and interest on the
Bonds and to the reimbursement of the Bank for draws on the
Letter of Credit.
Section 510. Transfer of Letter of Credit. The
Trustee shall not sell, assign or transfer the Letter of Credit,
except to a successor trustee under this Indenture, in accordance
with the provisions of the Letter of Credit.
Section 511. Furnishing Documents to the Authority.
The Trustee agrees that it shall hold all documents, affidavits,
certificates and opinions delivered to the Trustee pursuant to
Section 3.3 of the Loan Agreement for a period of at least two
(2) years after the defeasance of the Bonds and the release of
all liens created under this Indenture. The Authority shall have
the right to inspect such documents, affidavits, certificates and
opinions at the principal corporate trust office of the Trustee
at reasonable times and upon reasonable notice. The Trustee
shall provide copies of such documents, affidavits, certificates
and opinions to the Authority at its request.
Section 512. No Litigation. The Authority represents
and warrants that (a) no litigation or administrative action of
any nature has been served upon it and is now pending restraining
or enjoining the issuance or delivery of the Bonds or the
execution and delivery of this Indenture or the Agreement or in
any manner questioning the proceedings or authority under which
the same have been had, or affecting the validity of the same;
(b) no contest is pending as to its existence or authority or
PAGE 237
that of its present member or officers; (c) no authority or
proceeding for the issuance of the Bonds or for the payment or
Security thereof has been repealed, revoked or rescinded; (d) no
petition seeking to initiate any resolution or other measure
affecting the same or the proceedings therefor has been filed;
and (e) to the best of the knowledge of the officers of the
Authority, none of the foregoing actions are threatened.
Section 513. No Other Encumbrances. The Authority
covenants that except as otherwise provided herein and in the
Agreement, it will not sell, convey, mortgage, encumber or
otherwise dispose of any portion of the Security.
Section 514. No Personal Liability. No member,
officer, director, agent, employee or attorney of the Authority,
or any other future, past or present members, officers,
directors, agents or attorneys of the Authority, including any
Person executing this Indenture or the Bonds, shall be liable
personally on the Bonds or for any reason relating to the
issuance of the Bonds.
Section 515. Compliance with Rule 15c2-12. 1. The
Authority shall cause the Borrower (the Borrower, the Corporate
Guarantor and any entity that may become obligated directly or
indirectly to pay the principal of and interest on the Bonds in
the future, shall be the "Obligated Person" herein) to provide,
and the Borrower shall, in accordance with the provisions of Rule
15c2-12 (the "Rule"), promulgated by the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, provide, and cause the Corporate Guarantor to
provide to each nationally recognized municipal securities
information repository ("NRMSIR"), in each case as designated by
the Commission in accordance with the Rule, the following annual
financial information and operating data commencing with the
fiscal year ended December 31, 1996:
(a) annual financial statements and annual reports,
prepared in accordance with generally accepted
accounting principles and certified by independent
public accountants, and
(b) material financial information and operational
data.
The Obligated Person reserves the right to modify from
time to time the specific types of information provided
or the format of the presentation of such information,
to the extent necessary or appropriate in the judgment
of the Obligated Person; provided that, the Obligated
Personagrees that any such modification will be done in
a manner consistent with the Rule.
PAGE 238
(c) Such annual information and operating
datadescribed above is to be provided on or before
one hundred and twenty (120) days after the end of
each fiscal year ending on the preceding July 1
and will be made available, in addition to the
NRMSIR's, to the Trustee and to each holder of the
Bonds who makes a request for such information.
2. The Obligated Person agrees to provide or cause to
be provided, in a timely manner, to (i) each NRMSIR or to the
Municipal Securities Rulemaking Board ("MSRB"), notice of the
occurrence of any of the following events with respect to the
Bonds, if such event is material:
(a) principal and interest payment delinquencies;
(b) non-payment related defaults;
(c) unscheduled draws on the Bond Fund reflecting
financial difficulties;
(d) unscheduled draws on the Letter of Credit
reflecting financial difficulties;
(e) substitution of the Letter of Credit Issuer or its
failure to perform;
(f) adverse tax opinions or events affecting the tax-
exempt status of the Bonds;
(g) modifications to rights of the Holders of the
Bonds;
(h) notices of optional or mandatory redemptions of
the Bonds given pursuant to the provisions of
Article III hereof;
(i) defeasances;
(j) release, substitution, or sale of property
securing repayment of the Bonds; and
(k) rating changes.
The Obligated Person may from time to time choose to
provide notice of the occurrence of certain other events, in
addition to those listed above, if such other event is material
with respect to the Bonds, but the Obligated Person does not
undertake to commit to provide any such notice of the occurrence
of any material event except those events listed above.
3. The Obligated Person agrees to provide or cause to
be provided, in a timely manner, to each NRMSIR, notice of a
PAGE 239
failure by the Obligated Person to provide the annual financial
information with respect to the Obligated Person described above
on or prior to the date set forth above; to the extent that the
Obligated Person is aware of a failure by any other 'obligated
person' with respect to the Bonds to provide annual financial
information with respect to that 'obligated person' pursuant to a
separate undertaking by that 'obligated person', the Obligated
Person also will provide notice of such failure by such
'obligated person'.
4. The Obligated Person reserves the right to
terminate its obligation to provide annual financial information
and notices of material events, as set forth above, if and when
the Obligated Person no longer remains an 'obligated person' with
respect to the Bonds within the meaning of the Rule; the
Obligated Person will provide notice of such termination to the
NRMSIR's, the MSRB and the Trustee.
5. The Obligated Person agrees that its undertaking
pursuant to the Rule set forth in this section is intended to be
for the benefit of the Holders of the Bonds and shall be
enforceable by the Trustee on behalf of such holders or by any
Holder; (or by any beneficial holder in the event the Bonds are
registered in the name of Cede & Co. on behalf of The Depository
Trust Company); provided that, such right to enforce the
provisions of this undertaking shall be limited to a right to
obtain specific enforcement of the Obligated Person's obligations
hereunder and any failure by the Obligated Person to comply with
the provisions of this undertaking shall not be an event of
default with respect to the Bonds under the Indenture.
6. Notwithstanding the provisions of Article IX
hereof, the provisions in the previous paragraphs shall not be
amended, except under the following conditions:
(a) The amendment may only be made in connection
with a change in circumstances that arises
from a change in legal requirements, change
in law, or change in the identity, nature, or
status of the Obligated Person, or type
ofbusiness conducted;
(b) This section of the Indenture, as amended,
would have complied with the requirements at
the time of the primary offering, after
taking into account any amendments or
interpretationsof the rule, as well as any
change incircumstances; and
(c) The amendment does not materially impair the
interests of holders, as determined either by
parties unaffiliated with the Authority or
Obligated Person (such as the Trustee or Bond
PAGE 240
Counsel), or by approving vote of Holders
pursuant to the terms of the Indenture at the
time of the amendment.
PAGE 241
ARTICLE VI
INVESTMENTS
Section 601. Investment of Bond Fund and Acquisition
Fund. (a) So long as no Event of Default has occurred and is
continuing, moneys held as part of the Acquisition Fund and of
the Bond Fund (other than moneys held in the Letter of Credit
Account) shall be invested or reinvested by the Trustee, in
accordance with written directions, or oral directions confirmed
in writing, of the Authorized Borrower Representative in any of
the following obligations or securities (collectively "Permitted
Investments"):
(i) direct obligations of the United States
of America for which its full faith and credit
ispledged;
(ii) obligations issued by any
instrumentality or agency of the United States of
America, whether now existing or hereafter organized,
and the payment of the principal, premium, if any, and
interest on which is fully and unconditionally
guaranteed as a full faith and credit obligation by the
United States of America;
(iii) obligations issued or guaranteed by
any State of the United States or the District of
Columbia which are rated at least "Aa" by Moody's or an
equivalent rating of the then current rating agency of
the Bonds;
(iv) interest-bearing deposits in any bank
or trust company (which may include the Trustee) or any
other bank or trust company which has a combined
capital surplus and undivided profits of at least
$50,000,000, which bank or trust company having an
investment grade rating by Moody's or an equivalent
rating of the then current rating agency of the Bonds;
(v) prime commercial paper with one of the
two (2) highest ratings by Moody's or an equivalent
rating of the then current rating agency of the Bonds;
and
(vi) deposits in a common trust fund holding
short-term government obligations established pursuant
to law as a legal depository of public moneys, any such
common trust fund having a "Aaa" rating by Moody's or
the highest long term rating of the then current rating
agency of the Bonds.
(b) The Trustee, in purchasing securities of the
PAGE 242
type described in clauses (i) and (ii) of subsection (a) above:
(i) may make any such purchase subject to agreement with the
seller for repurchase by the seller at a later date, and in such
connection may accept the seller's agreement for the payment of
interest in lieu of the right to receive the interest payable by
the issuer of the security purchased, provided that title to the
security so purchased by the Trustee shall vest in the Trustee,
that the Trustee shall have a perfected security interest in such
security, and that the current market value of such security (or
of cash or additional securities of the type described in said
clauses pledged with the Trustee as collateral for the purpose)
is at all times at least equal to the total amount thereafter to
become payable by the seller under said agreement, or (ii) may
purchase shares of a fund whose sole assets are of a type
described in clauses (i), (ii) and (iii) of subsection (a) above
and such repurchase agreements thereof.
(c) If any Event of Default has occurred and is
continuing hereunder, the Trustee may make such investments in
Permitted Investments (as described in Section 601(a)(i) hereof)
as permitted under applicable laws as it deems advisable;
provided that in no event shall it invest in securities issued by
or obligations of, or guaranteed by, the Authority, the Borrower
or any affiliate or agent of either of the foregoing.
Section 602. Investment of Letter of Credit Account.
Moneys held in the Letter of Credit Account shall remain
uninvested.
Section 603. General Provisions of Investments. (a)
Any permissible investments of money in the Bond Fund or
Acquisition Fund shall be held by or under the control of the
Trustee and shall be deemed at all times as part of the fund or
account from which the investment was made and the interest
accruing on any such investment and any profit realized from such
investment shall be credited to such fund or account and any loss
resulting from such investment shall be charged to such fund or
account.
(b) The Trustee shall sell and reduce to cash a
sufficient portion of investments held for the account of the
Eligible Moneys Account in the Bond Fund whenever the cash
balance of Available Moneys in the Eligible Moneys Account is
insufficient to make a payment required to be made therefrom or
when such cash balance therein is insufficient to meet any
Redemption of said Bonds that may be required under the
provisions hereof or of the Loan Agreement. The Trustee shall
sell and reduce to cash a sufficient portion of investments held
for the account of the Acquisition Fund whenever the cash balance
in the Acquisition Fund is insufficient to make a payment in
respect of a certificate of requisition when presented.
(c) Notwithstanding the foregoing, the Borrower
PAGE 243
shall not direct the Trustee to invest the proceeds of the Bonds
or payments due under the Loan Agreement, or any other funds
which may be deemed to be proceeds of the Bonds pursuant to
Section 103 or 148 of the Code and the applicable Regulations
thereunder, in such a way as to cause the Bonds to be treated as
"arbitrage bonds" within the meaning of Section 103 or 148 of the
Code and such Treasury Regulations issued thereunder, as
applicable to the Bonds. In accordance with the foregoing,
unless the Trustee shall have been furnished with an approving
opinion of Bond Counsel, the Borrower shall not direct the
Trustee to invest moneys in the Acquisition Fund or the Bond Fund
except as provided in the Authority's Tax Certificate dated the
Issue Date.
(d) The Trustee, except for its willful
misconduct or gross negligence, shall have no liability to any
Person for any breach by the Borrower of provisions of the
foregoing paragraph as long as the Trustee invests or reinvests,
pursuant to directions of the Authorized Borrower Representative
properly given in accordance with Section 601, the Bond Fund and
Acquisition Fund moneys in Permitted Investments pursuant to
Section 601 hereof. The Trustee may refuse to invest in
obligations directed by the Authorized Borrower Representative
which violate the provisions of Sections 601(a) and 603(c)
hereof, but the Trustee shall be under no obligation to verify
any such direction received by it in accordance with the terms of
this Indenture.
PAGE 244
ARTICLE VII
THE TRUSTEE, PAYING AGENTS
Section 701. Appointment of Trustee; Acceptance of the
Trusts. (a) Shawmut Bank Connecticut, National Association,
Hartford, Connecticut, is hereby appointed as Trustee. The
Trustee hereby accepts the trusts imposed upon it by this
Indenture, and agrees to perform said trusts, but only upon and
subject to the following express terms and conditions:
(i) The Trustee may execute any of the
trusts or powers hereof and perform any of its duties
by or through attorneys or agents (provided that
neither the Authority, the Borrower or any affiliate or
agent of any of the foregoing shall act as an agent of
the Trustee) and shall not be answerable for any
misconduct or negligence on the part of any attorney or
agent appointed hereunder and shall be entitled to
advice of counsel concerning all matters of the trusts
hereof and the duties hereunder and may in all cases
pay such reasonable compensation to all such attorneys
and agents as may reasonably be employed in connection
with the trusts hereof. The Trustee may act upon the
opinion or advice of any attorney (who may be the
attorney or attorneys for the Authority or the
Borrower) approved by the Trustee in the exercise of
its reasonable judgment. The Trustee shall not be
responsible for any loss or damage resulting from any
action or nonaction in good faith in reliance upon such
opinion or advice.
(ii) The Trustee shall not be responsible
for any recital herein or in the Bonds (except in
respect of the Certificate of Authentication of the
Trustee endorsed on the Bonds) or for insuring the
Project Facilities, or collecting any insurance moneys,
or for the validity of execution by the Authority of
this Indenture or of any supplements hereto or any
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 Project Facilities or otherwise
as to the maintenance of the security hereof, or,
except as provided in Article VI hereof, for the
eligibility of any security as an investment of trust
funds held by it.
(iii) The Trustee shall not be accountable
for the use of any Bonds authenticated or delivered
hereunder after such Bonds shall have been delivered in
accordance with the instructions of the Authority or
the Borrower, as the case may be. The Trustee may
PAGE 245
become the Owner of Bonds secured hereby with the same
rights which it would have if not Trustee.
(iv) The Trustee shall be protected in
acting in good faith upon any notice, request,
investment instruction, consent, certificate, order,
affidavit, letter, telegram or other paper or document
believed 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.
(v) As to the existence or nonexistence of
any fact or as to the sufficiency or validity of any
instrument, paper or proceeding, the Trustee shall be
entitled, in the absence of bad faith on its part, to
rely upon a certificate of the Authority signed by
(a) the Executive Director or Deputy Director of the
Authority or an Authorized Authority Representative, or
(b) any other duly authorized Person (such authority to
be conclusively evidenced by an appropriate resolution of
the Authority), or any certificate signed by an
Authorized Borrower Representative, as sufficient
evidence of the facts therein contained, and prior to the
occurrence of an Event of Default of which the Trustee
has been notified in writing or deemed notified as
provided in Section 901 hereof, shall also be at liberty
to 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 Secretary 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.
(vi) The permissive right of the Trustee to
take any actions or to refrain from taking any actions
enumerated in this Indenture shall not be construed as a
duty. The Trustee shall not be answerable for other than
its gross negligence, willful misconduct, or willful
default in connection with the acceptance or
administration of the trusts hereunder. The Trustee
shall act on behalf of the Authority hereunder only
insofar as its duties are expressly set forth and shall
not have implied duties. The Trustee shall not
PAGE 246
a duty to inquire into or pass upon the validity,
effectiveness, genuineness or value of the Mortgage, the
Loan Agreement or the other Loan Documents and shall
assume that the same are valid, effective and genuine and
what they purport to be. The Trustee may consult with
legal counsel selected by it and shall be entitled to
rely upon the opinion of such counsel in taking or
omitting to take any action. The Trustee shall have the
same rights and powers as any other bank or lender and
may exercise the same as though it were not the Trustee,
and it may accept deposits from, lend money to and
generally engage in any kind of business with the
Borrower as though it were not the Trustee.
(vii) The Trustee shall not be personally
liable for any debts contracted or for damages to Persons
or to personal property injured or damaged, or for
salaries or non-fulfillment of contracts during any
period.
(viii) Subject to the provisions of the Loan
Agreement, the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and
representatives shall have the right at any and all
reasonable times, fully to inspect the Project
Facilities, including all books, papers and records of
the Authority pertaining to the Project Facilities and
the Bonds, and to take such memoranda from and in regard
thereto as may be desired.
(ix) 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 to the
premises.
(x) Notwithstanding anything contained
elsewhere in this Indenture, 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 actions or evidence thereof, in
addition to that by the terms hereof required as a
condition of such action by the Trustee, deemed desirable
for the purpose of establishing the right of the
Authority to the authentication of any Bonds, the
withdrawal of any cash, or the taking of any other action
by the Trustee.
(xi) Before taking any action under the
Indenture the Trustee may require that a satisfactory
indemnity bond be furnished for the reimbursement of all
PAGE 247
expenses to which it may be put and to protect it against
all liability, except liability which is adjudicated to
have resulted from gross negligence, willful misconduct
or willful default by reason of any action so taken;
provided that the Trustee may not require such an
indemnity bond to be furnished when the Trustee is
presenting a draft for a draw or drawing upon the Letter
of Credit, paying the principal and accrued interest due
on the Bonds when due at maturity or upon Redemption or
acceleration of the Bonds in accordance with this
Indenture; provided, further, however, that while the
Trustee may not require indemnification prior to the
specific acts of presenting a draft under the Letter of
Credit or paying the principal of and interest accrued on
the Bonds when due whether at maturity, Redemption,
acceleration or otherwise as set forth herein, the
Trustee shall continue to be entitled to such
indemnification as otherwise provided herein.
(xii) All moneys received by the Trustee or
any Paying Agent shall, until used or applied or invested
as herein provided, be held in trust in the manner and
for the purposes for which they were received.
(xiii) The Trustee shall have no obligation
with respect to any Financial Statements forwarded to the
Trustee by the Borrower pursuant to Article V of the Loan
Agreement other than the obligation to make such
Financial Statements available for review by any Holder
of any Bond upon receipt of a written request to do so
from any such Holder.
(b) In the case of and during the continuance of an
Event of Default or upon the occurrence of an Event of Default as
to which the Trustee has received a notice as provided herein, the
Trustee shall exercise the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of his own affairs.
Section 702. Fees, Charges and Expenses of Trustees and
Paying Agents. The Trustee and Paying Agent shall be entitled to
payment or reimbursement for reasonable fees for services rendered
hereunder and all reasonable expenses (including advances, counsel
fees and other expenses reasonably and necessarily made or incurred
by the Trustee and Paying Agent in connection with such services).
The Trustee and Paying Agent shall be entitled to be indemnified
for, and be held harmless against, any loss, liability or expense,
incurred without gross negligence, willful misconduct or bad faith
on the part of the Trustee and Paying Agent, arising out of or in
connection with the acceptance or administration of the trusts
hereunder, including the costs and expenses of defending itself
against any claim or liability in the premises. The indemnity set
PAGE 248
forth in the Loan Agreement at Section 5.23 is hereby incorporated
by reference as if set forth herein in its entirety. All fees,
charges and other compensation to which the Trustee and Paying
Agent may be entitled under the provisions of this Indenture are
required to be paid by the Borrower under the terms of the Loan
Agreement and, accordingly, except for moneys that the Authority
may derive from the foregoing, neither the Authority nor the Bank
shall be liable to indemnify the Trustee and Paying Agent for fees,
charges and other compensation to which the Trustee and Paying
Agent may be entitled, and by acceptance of the trusts hereunder
the Trustee and Paying Agent shall be deemed to have agreed to the
foregoing. The Trustee is hereby granted a lien to be perfected by
possession on all moneys held by it hereunder (other than moneys
held by it in the Letter of Credit Account and Rebate Fund) for the
payment of the foregoing; provided, however, that while the Trustee
may not require indemnification prior to the specific acts of
presenting a draft under the Letter of Credit or paying the
principal of and interest accrued on the Bonds when due whether at
maturity, Redemption, acceleration or otherwise as set forth
herein, the Trustee shall continue to be entitled to such
indemnification as otherwise provided herein.
Section 703. [Intentionally Omitted]
Section 704. 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 Holders of the Bonds, the Trustee may, and if
requested in writing by the Holders of at least twenty-five percent
(25%) of the aggregate principal amount of Bonds then Outstanding
shall, intervene on behalf of Bondholders.
Section 705. Successor Trustee. 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 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 a trust
company or national or state bank within or outside the State
having trust powers, in good standing, having reported capital
surplus and undivided profits of not less than $50 million ipso
facto and having a Xxxxx'x rating of at least Baa3 or P3 or be
otherwise acceptable to Xxxxx'x or the then current rating agency
of the Bonds, shall be and become successor Trustee hereunder and
vested with all the trusts, powers, discretions, immunities,
privileges and all other matters as was its predecessor, without
the execution or filing of any instrument or any further act, deed
or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 706. Resignation by the Trustee. The Trustee
and any successor Trustee may at any time resign by giving not less
PAGE 249
than thirty (30) days' written notice to the Authority, the Letter
of Credit Issuer and the Borrower and by first class mail to each
registered Owner of Bonds then Outstanding as shown on the records
of the Trustee. Such resignation shall take effect only upon the
appointment of a successor Trustee by the Bondholders or the
Borrower. Such notice to the Authority, the Letter of Credit
Issuer and the Borrower may be served personally or sent by
registered mail or telegram. In case at any time the Trustee shall
resign and no appointment of a successor Trustee shall be made
prior to the date specified in the notice of resignation as the
date when such resignation shall take effect, the resigning Trustee
may forthwith apply to a court of competent jurisdiction for the
appointment of a successor Trustee. The Trustee shall be
compensated for all costs of seeking and appointing a successor
should the Bondholders and Authority fail to so appoint a successor
Trustee within the thirty (30) day time period to do so.
Section 707. Removal of the Trustee. (a) The Trustee
may be removed at any time, by an instrument or concurrent
instruments in writing delivered to the Trustee, the Authority and
the Borrower by the Letter of Credit Issuer, which after the
occurrence of an Event of Default or an Event of Default by the
Letter of Credit Issuer of its obligations under the Letter of
Credit must be signed by the Owners of fifty-one percent (51%) in
aggregate principal amount of Bonds then Outstanding.
(b) The Trustee may also be removed at any time for
any breach of trust or for acting or proceeding in violation of, or
for failing to act or proceed in accordance with, any provisions of
this Indenture, by any court of competent jurisdiction upon the
application by the Authority, the Letter of Credit Issuer, the
Borrower or the Owners of fifty-one percent (51%) in aggregate
principal amount of the Bonds then Outstanding.
Section 708. Appointment of Successor Trustee by the
Borrower or Bondholders. (a) In case the Trustee hereunder shall
resign, or be removed, or be dissolved, or shall be in the course
of dissolution or liquidation, or otherwise become incapable of
acting hereunder as fiduciary for Holders of the Bonds, or in case
it shall be taken under the control of any public officer or
officers, or of a receiver appointed by a court, upon the request
of the Borrower or the Owners of fifty-one percent (51%) in
aggregate principal amount of Bonds Outstanding, the Authority by
an instrument executed and signed by the Executive Director, Deputy
Director or any other Authorized Authority Representative of the
Authority and attested by the Secretary or Assistant Secretary of
the Authority under its seal shall forthwith appoint a Trustee to
fill such vacancy. Such appointment shall become final upon the
written acceptance of such trusts by the successor Trustee so
appointed as provided in Section 709 hereof.
(b) Every such Trustee appointed pursuant to the
provisions of this Section shall be a national banking association
PAGE 250
or a domestic bank or trust company within or outside the State
having trust powers, in good standing and having a reported capital
surplus and undivided profits of not less than $50 million ipso
facto and having a Xxxxx'x rating of at least Baa3 or P3 or be a
banking institution otherwise acceptable to Xxxxx'x or the then
current rating agency of the Bonds.
Section 709. Concerning any Successor Trustee. (a)
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to its predecessor Trustee and to the
Authority and the Borrower an instrument in writing accepting such
appointment hereunder as fiduciary for Holders of the Bonds.
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
predecessors.
(b) Every predecessor Trustee shall, on the written
request of the Authority, or of the successor Trustee, execute and
deliver an instrument transferring to such successor Trustee all
the estates, properties, rights, powers and trusts, duties and
obligations of such predecessor hereunder. Every predecessor
Trustee shall deliver all securities and moneys held by it as
Trustee hereunder to its successor for direct deposit in the
appropriate successor trust accounts. Should any instrument in
writing from the Authority be required by a successor Trustee for
more fully and certainly vesting in such successor the estates,
properties, rights, powers, trusts, duties and obligations hereby
vested or intended to be vested in the predecessor Trustee, any and
all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the Authority. Every predecessor
Trustee shall transfer the Letter of Credit and all required
documents to effectively transfer such Letter of Credit to its
successor Trustee in accordance with the provisions of the Letter
of Credit.
(c) The resignation of any Trustee and the
instrument or instruments removing any Trustee and appointing a
successor hereunder, or the instrument evidencing the transfer of
the Trust Estate shall be filed and/or recorded by the successor
Trustee in each filing or recording office where this Indenture (or
a memorandum thereof) shall have been filed and/or recorded.
(d) The Borrower shall give prompt written notice
to the Letter of Credit Issuer as to the appointment of any
successor Trustee hereunder.
Section 710. Trustee Protected in Relying upon
Resolutions, etc. The resolutions, opinions, certificates and
other instruments provided for in this Indenture may be accepted by
the Trustee as conclusive evidence of the facts and conclusions
stated therein and shall be full warrant, protection and authority
to the Trustee for the withdrawal of cash hereunder and the taking
PAGE 251
of or omitting to take any other action under this Indenture.
Section 711. Successor Trustee as Trustee of the Funds,
Bond Registrar and Paying Agent. Any Trustee which has resigned or
been removed shall cease to be Trustee of the Funds, Bond Registrar
and Paying Agent for principal and interest of the Bonds, and the
successor Trustee shall become such Trustee, Bond Registrar and
Paying Agent. Every predecessor Trustee shall deliver to its
successor Trustee all books of account, the registration books, the
list of Bondholders and all other records, documents and
instruments relating to its duties as such custodian and Bond
Registrar.
Section 712. Trustee and Authority Required to Accept
Directions and Actions of Borrower. (a) Whenever, after a
reasonable request by the Borrower, the Authority shall fail,
refuse or neglect to give any direction to the Trustee or to
require the Trustee to take any other action which the Authority is
required to have the Trustee take pursuant to the provisions of the
Loan Agreement or this Indenture, the Borrower instead of the
Authority may give any such direction to the Trustee or require the
Trustee to take any such action. Upon receipt by the Trustee of a
written notice from the Borrower stating that the Borrower has made
reasonable request of the Authority, and that the Authority has
failed, refused or neglected to give any direction to the Trustee
or to require the Trustee to take any such action, the Trustee is
hereby irrevocably empowered and directed, subject to other
provisions of this Indenture, to accept such direction from the
Borrower as sufficient for all purposes of this Indenture. The
Borrower shall have the direct right to cause the Trustee to comply
with any of the Trustee's obligations under this Indenture to the
same extent that the Authority is empowered so to do.
(b) Certain actions or failures to act by the
Authority under this Indenture may create or result in an Event of
Default under this Indenture and the Authority hereby agrees that
the Borrower may, to the extent permitted by law, perform any and
all acts or take such action as may be necessary for and on behalf
of the Authority to prevent or correct said Event of Default and
the Trustee shall take or accept such performance by the Borrower
as performance by the Authority in such event.
Section 713. Paying Agent or Agents. (a) The Trustee is
hereby designated, and by executing this Indenture agrees to act,
as Paying Agent for and with respect to the Bonds.
(b) The Authority from time to time may appoint one
or more additional Paying Agents and, in the event of the
resignation or removal of any Paying Agent, a successor Paying
Agent, pursuant to the provisions hereof. Each Paying Agent
appointed shall be a national banking association or a domestic
bank or trust company within or outside the State, having trust
powers, in good standing, having a reported capital surplus and
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undivided profits aggregating at least $50 million ipso facto and
having a Xxxxx'x rating of Baa3 or P3 or be a banking institution
otherwise acceptable to Xxxxx'x or the then current rating agency
of the Bonds and willing and able to accept the office on
reasonable and customary terms and authorized by law to perform all
the duties imposed on it by this Indenture. Each Paying Agent
shall accept in writing its appointment as a fiduciary for Holders
of the Bonds and shall hold in one or more separate trust accounts,
maintained by it in its own name, all moneys transferred to it for
the payment of principal, redemption premium, if any, and interest
on the Bonds.
(c) Any Paying Agent may at any time resign and be
discharged of the duties and obligations created by the Indenture
by giving at least thirty (30) days' written notice to the
Authority and the Trustee. Any Paying Agent may be removed at any
time by an instrument filed with such Paying Agent and the Trustee
and signed by the Authority. In the event of the resignation or
removal of any Paying Agent, such Paying Agent shall pay over,
assign and deliver any moneys held by it as Paying Agent to its
successor, or if there be no successor, to the Trustee.
(d) Any Paying Agent shall be entitled to payment
of reimbursement for fee charges and expenses as provided in
Section 702 hereof.
Section 714. Maintenance of Records. The Trustee hereby
agrees to hold all documents, affidavits, certificates and opinions
delivered to it pursuant to Section 3.3 of the Loan Agreement for
a period of at least two (2) years after the defeasance of the
Bonds and the release of all liens created under the Indenture
associated therewith. The Authority shall have the right to
inspect such documents, affidavits, certificates and opinions at
the principal corporate trust office of the Trustee at reasonable
times and upon reasonable notice. The Trustee shall be obligated
to provide copies of such documents, affidavits, certificates and
opinions to the Authority at its request.
Section 715. Consent of Borrower and Letter of Credit
Issuer. Whenever in this Article VII an appointment of a successor
fiduciary is to be made, such appointment (other than an
appointment by a court of competent jurisdiction pursuant to
Section 706 hereof) shall be made only with the prior written
consent of the Borrower and Letter of Credit Issuer, provided that
if either party is in default of its obligations under the Loan
Agreement, the Reimbursement Agreement or the Letter of Credit,
such defaulting party's consent shall not be required to effectuate
such appointment.
PAGE 253
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 801. Supplemental Indentures Not Requiring
Consent of Bondholders. (a) The Authority and the Trustee may
without the consent of, or notice to, any of the Bondholders, enter
into an indenture or indentures supplemental hereto as shall not be
inconsistent with the terms and provisions hereof for any one or
more of the following purposes:
(i) To cure any ambiguity or formal defect
or omission in the Indenture;
(ii) To grant to or confer upon the Trustee,
with its consent, for the benefit of the Bondholders any
additional rights, remedies, powers or authority that may
lawfully be granted to or conferred upon the Bondholders
or the Trustee;
(iii) To grant or pledge to the Trustee for
the benefit of Bondholders any additional security;
(iv) To modify, amend or supplement the
Indenture or any indenture supplemental thereto in such
manner as to permit the qualification thereof under the
Trust Indenture Act of 1939 or any similar Federal
statute then in effect or to permit the qualification of
the Bonds for sale under the securities laws of any of
the States of the United States, and, if they so
determine, to add to the Indenture or any indenture
supplemental thereto such other terms, conditions and
provisions as may be permitted by the Trust Indenture Act
of 1939 or similar Federal statute;
(v) To add to the covenants and agreements
of the Authority in this Indenture, other covenants and
agreements to be observed by the Authority;
(vi) To obtain a rating on the Bonds from
Xxxxx'x or Standard & Poor's, or any similar credit
agency;
(vii) To provide for book-entry only bonds;
(viii) To make any other change which, in the
judgment of the Trustee acting in reliance upon an
opinion of independent counsel, is not to the prejudice
of the Trustee or the Holders of the Bonds.
(b) The Trustee may rely upon an opinion of
independent counsel as conclusive evidence that any such
Supplemental Indenture complies with the foregoing conditions and
PAGE 254
provisions.
Section 802. Supplemental Indentures Requiring Consent
of Bondholders. (a) Exclusive of Supplemental Indentures covered
by Section 801 hereof and subject to the terms and provisions
contained in this Section 802, the Holders of not less than 66 2/3%
aggregate principal amount of the Bonds then Outstanding shall have
the right, from time to time, 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 herein or in any supplemental
indenture; provided that nothing contained in this Section shall
permit, or be construed as permitting without the consent of all
the Holders of Bonds Outstanding:
(i) an extension of the maturity of the
principal of or the interest on any Bond issued
hereunder; or
(ii) a reduction in the principal amount of
any Bond or the rate of interest thereon or a change in
the method of calculation of the rate of interest
thereon; or
(iii) a privilege, preference or priority of
any Bond or Bonds over any other Bond or Bonds (except
with respect to the Letter of Credit or similar credit
instrument issued with respect to the Bonds); or
(iv) a reduction in the aggregate principal
amount of the Bonds required for consent to such
supplemental indenture; or
(v) the creation of a lien upon the Trust
Estate ranking prior to or on a parity with the lien
created by this Indenture.
(b) If at any time the Authority shall request the
Trustee to enter into a Supplemental Indenture for any of the
purposes of this Section 802, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses and unless such
notice is waived by 100% of the Bondholders, cause notice of the
proposed execution of such Supplemental Indenture to be mailed, by
first class mail, to all registered Owners of Bonds then
Outstanding at their addresses as they appear on the registration
books kept by the Trustee. 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.
(c) If, within such period after the mailing of the
PAGE 255
notice required by Section 802(b) as the Authority shall prescribe
with the approval of the Trustee, the Authority shall deliver to
the Trustee an instrument or instruments executed by the Holders of
not less than 66 2/3% in aggregate principal amount of the Bonds
then Outstanding, referring to the proposed Supplemental Indenture
as described in such notice and consenting to and approving the
execution thereof, the Trustee shall execute such Supplemental
Indenture.
(d) If, within sixty (60) days or such longer
period as shall be prescribed by the Authority following the
mailing of such notice, the Holders of not less than 66 2/3% in
aggregate principal amount of the Bonds Outstanding at the time of
the adoption of any such Supplemental Indenture shall have
consented to and approved the adoption thereof as herein provided,
no Holder 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 adoption thereof,
or to enjoin or restrain the Trustee or the Authority from taking
any action pursuant to the provisions thereof. Upon the adoption
of any such Supplemental Indenture as in this Section 802 permitted
and provided, this Indenture shall be and be deemed to be modified
and amended in accordance therewith.
(e) The Trustee may rely upon an opinion of
independent counsel as conclusive evidence that (i) any
Supplemental Indenture entered into by the Authority and the
Trustee and (ii) the evidence of requisite Bondholder consent
thereto comply with the provisions of this Section 802.
Section 803. Consent of Borrower and Bank. (a)
Anything herein to the contrary notwithstanding, no Supplemental
Indenture under this Article VIII shall become effective unless and
until the Borrower shall have consented to the adoption of such
Supplemental Indenture. The Borrower shall be deemed to have
consented to the adoption of any such Supplemental Indenture if the
Authority does not receive a letter of protest or objection thereto
signed by or on behalf of the Borrower on or before 3:30 p.m., on
the 30th day after the mailing of a notice and a copy of the
proposed Supplemental Indenture to the Borrower.
(b) Anything herein to the contrary notwithstand-
ing, no Supplemental Indenture as described in Sections 801 and 802
hereof shall be entered into without the prior written consent of
the Letter of Credit Issuer so long as any Bonds are Outstanding.
Section 804. Bond Counsel Opinion. As a precondition to
the execution and delivery of any Supplemental Indenture hereunder
there shall be delivered to the Authority, the Trustee, the
Borrower and the Letter of Credit Issuer an opinion of Bond Counsel
stating that such Supplemental Indenture is authorized or permitted
by this Indenture and the Act, complies with their respective
terms, will be valid and binding upon the Authority in accordance
PAGE 256
with its terms and will not adversely affect exclusion from gross
income of interest on the Bonds for Federal income tax purposes.
PAGE 257
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND BONDHOLDERS
Section 901. Events of Default. Each of the following
events is hereby defined as and shall constitute an "Event of
Default" under this Indenture:
(a) if payment of any installment of interest on
any Bond is not made when it becomes due and payable;
(b) if payment of any portion of the principal or
Redemption Price on any Bond is not made when it becomes due and
payable whether at stated Redemption, by call for Redemption other
than an optional redemption pursuant to Sections 301(e), 304(b) and
304(c) hereof, acceleration or otherwise;
(c) receipt by the Trustee from the Letter of
Credit Issuer of (i) a written declaration from the Letter of
Credit Issuer of the occurrence of an "Event of Default" under the
Reimbursement Agreement or (ii) notice that the Letter of Credit
Issuer has elected not to reinstate an "A Drawing" under the Letter
of Credit in accordance with the terms of the Letter of Credit,
together with a written direction from the Letter of Credit Issuer
to declare an Event of Default hereunder and under the Loan
Agreement and to accelerate the Bonds;
(d) if the Letter of Credit Issuer shall wrongfully
refuse to honor the Letter of Credit; and
(e) receipt by the Trustee of written notice from
the Authority of the occurrence of an Event of Default under the
Loan Agreement (but only with the consent of the Letter of Credit
Issuer as long as the Letter of Credit is in full force and effect
and the Letter of Credit Issuer is not in default in its obliga-
tions under the Letter of Credit), other than an Event of Default
under Subsection 901(a) or (b) above.
Section 902. Acceleration. (a) (i) Upon any Event of
Default under Section 901 hereof (except an Event of Default under
Section 901(c) which shall be treated as set forth in 902(a)(ii)
below), while the Letter of Credit is not in effect or while the
Letter of Credit Issuer is then in default of its obligations
thereunder, upon the written request of the Holders of not less
than fifty-one percent (51%) in aggregate principal amount of Bonds
then Outstanding or (ii) upon the occurrence of any Event of
Default under Section 901(c), the Trustee shall, by notice in
writing delivered to the Authority, the Borrower and the Letter of
Credit Issuer, declare the principal of all Bonds then Outstanding
and the interest accrued on such Bonds to the date of the
declaration of acceleration to be due and payable, whereupon such
principal and interest shall become and be immediately due and
PAGE 258
payable and declare that interest shall cease to accrue on the date
of the declaration of acceleration.
(b) Upon the occurrence and during the continuance
of any Event of Default under Section 901 hereof, while the Letter
of Credit is in effect and the Letter of Credit Issuer is not in
default of its obligations thereunder, the Trustee shall, but only
if so directed by the Letter of Credit Issuer, without any notice
to the Authority and the Borrower, declare the principal of all
Bonds then Outstanding and the interest accrued on the Bonds to the
date of the declaration of acceleration immediately due and
payable, and such principal and interest shall thereupon become and
be immediately due and payable and declare that interest shall
cease to accrue on the date of the declaration of acceleration.
(c) If all of the Bonds Outstanding shall become so
immediately due and payable pursuant to Sections 902(a) or 902(b)
hereof, the Trustee shall, as soon as practicable, declare by
written notice to the Borrower all unpaid installments payable by
the Borrower under Section 4.2 of the Loan Agreement to be
immediately due and payable. Upon any acceleration of the Bonds,
the Trustee shall immediately draw under the Letter of Credit in
accordance with Section 404 hereof and make payment to the
Bondholders of principal of all Bonds then Outstanding and interest
accrued on such Bonds to the date of declaration of acceleration.
(d) Upon receipt by the Trustee of payment of the
full amount drawn on the Letter of Credit and provided sufficient
moneys are available in the Bond Fund to pay sums due on the Bonds,
the Letter of Credit Issuer shall be subrogated to the right, title
and interest of the Trustee and Bondholders in and to the Trust
Estate and any other security held by the Trustee for payment of
the Bonds and the Trustee shall be required to execute such
documents as the Bank may reasonably request to evidence such
subrogation.
(e) If, after the principal of the Bonds has been
so declared to be due and payable (other than by reason of or in
connection with an Event of Default under Section 901(c) unless and
until the Letter of Credit Issuer shall have withdrawn in writing
its notice specified in such Section and has given written notice
of reinstatement of the Letter of Credit in full):
(i) the Authority pays or causes to be paid
all arrears of interest and interest on overdue
installments of interest (if lawful) at the rate or rates
per annum borne by the Bonds and the principal and
premium, if any, on all the Bonds then Outstanding which
shall have become due and payable otherwise than by
acceleration;
(ii) the Authority pays or causes to be paid
all other sums payable under this Indenture, except the
PAGE 259
principal of and interest on the Bonds which by such
declaration shall have become due and payable, upon the
Bonds;
(iii) the Authority also performs all other
things in respect to which it may have been in default
hereunder and pays the reasonable charges of the Trustee,
the Bondholders and any trustee appointed under law,
including the Trustee's reasonable attorneys' fees; and
(iv) no Event of Default under this Indenture
or the Agreement is then continuing;
then, in every such case, the Trustee shall annul such declaration
and its consequences (but if the Letter of Credit has been drawn on
in connection with such acceleration, only if the Trustee has
received written notice from the Letter of Credit Issuer that the
Letter of Credit has been fully reinstated), and such annulment
shall be binding upon all Holders of Bonds issued hereunder. No
such annulment shall extend to or affect any subsequent Event of
Default or impair any right or remedy consequent thereon. The
Trustee shall forward a copy of any such annulment notice pursuant
to this paragraph to the Authority, the Borrower, the Paying Agent
and the Letter of Credit Issuer.
Section 903. Preservation of Security. Subject to the
provisions of Sections 905, 912 and 914 hereof, upon the occurrence
and during the continuance of any Event of Default, the Trustee
may, and upon the written request of the Holders of not less than
fifty-one percent (51%) in aggregate principal amount of the Bonds
then Outstanding, and provided the Trustee is furnished with
security and indemnity satisfactory to it, shall institute and
maintain such suits and proceedings as it may be advised by counsel
shall be necessary or expedient to prevent any impairment of the
Security under this Indenture by any acts which may be unlawful or
in violation of this Indenture and such suits and proceedings as
the Trustee may be advised shall be necessary or expedient to
preserve or protect its interests and the interests of the
Bondholders and the Letter of Credit Issuer.
Section 904. Other Remedies. (a) Subject to Sections
905 and 914 hereof, upon the occurrence and during the continuance
of any Event of Default the Trustee may, as an alternative, proceed
to pursue any available remedy to enforce the payment of the
principal of, redemption premium, if any, and interest on the Bonds
then Outstanding, including, without limitation, an action or writ
of mandamus.
(b) Subject to Sections 905 and 914 hereof, upon
the occurrence and during the continuance of any Event of Default,
then and in every case the Trustee may proceed, and upon the
written request of the Holders of not less than fifty-one percent
(51%) in aggregate principal amount of the Bonds then Outstanding
PAGE 260
shall proceed, to protect and enforce its rights, the rights of the
Bondholders under the Act and under the Indenture and the rights of
the Letter of Credit Issuer forthwith by such suits, actions or
special proceedings in equity or at law, or by proceedings in the
office of any board or officer having jurisdiction (provided the
Trustee is furnished with security and indemnity satisfactory to
it), whether for the specific performance of any covenant or
agreement contained in this Indenture or the Agreement or in aid of
the execution of any power granted herein or in the Agreement, or
in the Act or for the enforcement of any legal or equitable right
or remedy, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce such rights or to perform any
of its duties under this Indenture.
(c) If an Event of Default shall have occurred and
be continuing, and if requested to do so by the Holders of not less
than fifty-one percent (51%) in aggregate principal amount of the
Bonds then Outstanding or the Letter of Credit Issuer, as
applicable, pursuant to Section 905 and indemnified as provided in
Section 903 hereof, the Trustee shall be obligated to exercise such
one or more of the rights and powers conferred by this Section and
by Sections 903 and 906 hereof as the Trustee, being advised by
counsel, shall deem most expedient and in the interest of the
Bondholders.
(d) No remedy by the terms of this Indenture
conferred upon or reserved to the Trustee (or to the Bondholders)
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, the Letter of Credit Issuer or
to the Bondholders hereunder or now or hereafter existing by law.
(e) No waiver of any Event of Default hereunder,
whether by the Trustee, the Letter of Credit Issuer or by the
Bondholders, shall extend to or shall affect any subsequent Event
of Default or shall impair any rights or remedies consequent
thereon.
Under no circumstances shall the Trustee be required to
resort to any other remedy prior to drawing under the Letter of
Credit.
Section 905. Right of Letter of Credit Issuer or
Bondholders to Direct Proceedings. Anything in this Indenture to
the contrary notwithstanding, following an acceleration of the
payment of the Bonds as provided in Section 902 hereof, the Letter
of Credit Issuer (so long as the Letter of Credit is in effect and
not wrongfully dishonored) or, upon the termination of the Letter
of Credit or a default by the Letter of Credit Issuer thereunder,
the Holders of at least fifty-one percent (51%) 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, to direct the method and place of
PAGE 261
conducting all proceedings to be taken in connection with the
enforcement of the terms and conditions of this Indenture or for
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 or of this Indenture; and
further provided that the Trustee shall be indemnified to its
satisfaction pursuant to Section 903 hereof; provided, further,
however, that while the Trustee may not require indemnification
prior to the specific acts of presenting a draft under the Letter
of Credit or paying the principal of and interest accrued on the
Bonds when due whether at maturity, Redemption, acceleration or
otherwise as set forth herein, the Trustee shall continue to be
entitled to such indemnification as otherwise provided herein.
Section 906. Appointment of Receiver. Upon the
occurrence and during the continuance of an Event of Default, and
upon the filing of a suit or other commencement of judicial
proceedings to enforce the rights of the Trustee, the Letter of
Credit Issuer and/or 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 the payments derived from the
Agreement, together with such other powers as the court making such
appointments shall confer.
Section 907. Application of Moneys. (a) All moneys
received by the Trustee pursuant to any right given or action taken
under the provisions of this Article IX (except moneys derived from
a draw under the Letter of Credit) shall be applied first to the
payment of the reasonable costs and expenses of the proceedings,
including reasonable attorneys' fees, resulting in the collection
of such moneys and of the expenses, liabilities and advances
incurred or made by the Trustee hereunder, including reasonable
attorneys' fees, except as a result of its gross negligence,
willful misconduct or bad faith. The balance of such moneys, after
providing for the foregoing, shall be deposited by the Trustee in
the Eligible Moneys Account in the Bond Fund and all moneys in the
Bond Fund shall be applied as follows:
(i) 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 to the Holders of the
Bonds entitled thereto of all installments of
interest then due on the Bonds, in order of
maturity of the installments of such interest and,
if the amount available shall not be sufficient to
pay in full any particular installment, then to the
amounts due on such installment, to the Holders
entitled thereto, ratably, without any
discrimination or preference;
Second -- To the payment to the Holders of the
PAGE 262
Bonds entitled thereto of the unpaid principal or
Redemption Price of any of the Bonds which shall
have become due (other than Bonds called for
Redemption for the payment of which moneys are held
pursuant to the provisions of this Indenture), in
order of their due dates, and to the payment of
interest on such Bonds from the respective dates
upon which they became due. 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 principal and redemption
premium, if any, due on such date, to the Persons
entitled thereto without any discrimination or
preference; and
Third -- To the payment of the principal or
Redemption Price of and interest on the Bonds as
the same become due and payable.
(ii) If the principal of all Bonds shall have become
due or shall have been declared due and payable, all such
moneys applied to the payment of the principal of,
redemption premium, if any, and interest then due and
unpaid on the Bonds, 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,
redemption premium, if any, and interest, to the Holders
of Bonds entitled thereto without any discrimination or
preference.
(iii) 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 IX then, subject to the
provisions of paragraph (ii) of this Section 907(a) 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 (i) of this Section 907(a).
(b) Whenever moneys are to be applied pursuant to
the provisions of this Section 907, 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 funds, it shall fix the date (which shall be an
Interest Payment Date unless another date shall be deemed more
suitable) upon which such application is to be made and upon such
date interest on the amounts of principal to be paid on such dates
PAGE 263
shall cease to accrue, except if the Bonds were immediately due and
payable by acceleration then the interest on such principal amounts
to be paid shall have ceased to accrue on the date of the
declaration of acceleration and the date fixed for payment shall be
as near as possible to the date of the declaration of acceleration.
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 shall not be required to make payment to the Holder
of any Bond until such Bond shall be presented to the Trustee for
appropriate endorsement or for cancellation if fully paid.
(c) Whenever all Bonds and interest thereon have
been paid under the provisions of this Section 907 and all expenses
and charges of the Trustee have been paid, any balance remaining in
the Bond Fund and Letter of Credit Account shall be paid, first to
the Letter of Credit Issuer as provided in Section 412 hereof and
then to the Borrower.
Section 908. Remedies Vested in Trustee. All rights of
action (including the right to file proof of claims) under the
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 proceedings instituted by the Trustee shall be brought
in its name as Trustee without the necessity of joining as
plaintiffs or defendants any Holders of the Bonds. Subject to the
provisions of Section 907 hereof, any recovery of judgment shall be
for the equal and ratable benefit of the Holders of the Outstanding
Bonds in respect of which such proceedings shall be brought.
Section 909. Rights and Remedies of Bondholders. (a)
No Holder of any Bond shall have any right to institute any suit,
action or proceeding for the enforcement of any covenant or
provision of the Indenture or for the appointment of a receiver or
any other remedy hereunder, unless:
(i) an event of default has occurred of which the
Trustee has been notified or is deemed to have notice as
provided in this Article IX;
(ii) such event of default shall have become an
Event of Default;
(iii) the Holders of at least fifty-one percent (51%)
in aggregate principal amount of Bonds then Outstanding
shall have made written request to the Trustee, shall
have offered reasonable opportunity either to proceed to
exercise the powers hereinbefore granted or to institute
such action, suit or proceeding in the Trustee's name and
shall have offered to the Trustee indemnity satisfactory
to the Trustee, as provided in Section 903 hereof; and
(iv) the Trustee shall thereafter have failed or
PAGE 264
refused to exercise the powers hereinbefore granted, or
to institute such action, suit or proceeding in its own
name.
Such notification, request and offer of indemnity 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 Holders of the Bonds shall have any right in
any manner whatsoever to enforce any right hereunder except in the
manner herein provided, and that all proceedings shall be
instituted, had and maintained in the manner herein provided and
for the equal and ratable benefit of the Holders of all Bonds then
Outstanding. The provisions of this Section 909 shall no longer be
of any effect after all of the right, title and interest of the
Bondholders under this Indenture shall have been subrogated to the
Letter of Credit Issuer, pursuant to Section 902(d) hereof.
(b) Nothing contained in the Indenture shall affect
or impair any right of enforcement conferred on any Bondholder by
law, including the Act, or the right of any Bondholder to enforce
the payment of the principal of, redemption premium, if any, and
interest on any Bond at and after the maturity thereof, or the
obligation of the Authority to pay the principal of, redemption
premium, if any, and interest on each of the Bonds issued hereunder
to the respective Holders thereof at the time, place, from the
source and in the manner as provided herein and in the Bonds.
Section 910. Termination of Proceedings. In case the
Trustee shall have proceeded to enforce any right hereunder 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, then and in every such case the
Authority, the Letter of Credit Issuer and the Trustee shall be
restored to their former positions and rights hereunder and all
rights, remedies and powers of the Trustee shall continue as if no
such proceedings had been taken.
Section 911. Waivers and Non-Waiver of Events of
Default. Subject to the provisions of Section 914 hereof, (a) to
the extent not precluded by the Act, the Trustee may in its
discretion waive any Event of Default hereunder (other than an
Event of Default under Section 901(c)) and its consequences and
rescind any declaration of acceleration of maturity of principal,
and shall waive any Event of Default hereunder and its consequences
upon the written request of the Holders of not less than fifty-one
percent (51%) in aggregate principal amount of all the Bonds then
Outstanding; provided that an Event of Default under Section 901(c)
hereof may only be waived if the Letter of Credit Issuer withdraws
in writing its notice specified in Section 901(c); provided,
further that an Event of Default under Section 901(c) hereof may
PAGE 265
only be waived if the Trustee has received written notice from the
Letter of Credit Issuer that the Letter of Credit has been fully
reinstated; provided, further that there shall not be waived any
Event of Default unless prior to such waiver or rescission, all
arrears of interest and payment of principal when due, as the case
may be, together with interest (to the extent permitted by law) on
overdue principal and interest, at the applicable rate of interest
borne by the Bonds, and all expenses of the Trustee in connection
with such Event of Default shall have been paid or provided for.
In case of any such waiver or rescission, or in case any proceeding
taken by the Trustee on account of any such Event of Default shall
have been discontinued or abandoned or determined adversely, then
and in every such case the Authority, the Trustee, the Bondholders
and the Letter of Credit Issuer shall be restored to their former
positions and rights hereunder respectively. No such waiver or
rescission shall extend to any subsequent or other Event of
Default, or impair any right consequent thereon.
(b) No delay or omission of the Trustee or of any
Holder of the Bonds to exercise any right or power accruing upon
any Event of Default shall impair any such right or power or shall
be construed to be a waiver of any such Event of Default or an
acquiescence therein. Every power and remedy given by this Article
IX to the Trustee, the Letter of Credit Issuer and the Holders of
the Bonds, respectively, may be exercised from time to time and as
often as may be deemed expedient.
(c) The Trustee may waive any Event of Default,
other than an Event of Default under Section 901(c) hereof, which
in its opinion shall have been remedied before the entry of final
judgment or decree in any suit, action or proceeding instituted by
it under the provisions of this Indenture or the Agreement, or
before the completion of the enforcement of any other remedy under
this Indenture or the Agreement.
Section 912. Notice of Defaults. (a) Within ninety
(90) days after (i) the receipt of notice of an Event of Default as
provided in Section 901 hereof or (ii) the occurrence of an Event
of Default under 901(a) or (b), the Trustee shall, unless such
Event of Default shall have theretofore been cured, give written
notice thereof by certified or registered first class mail to each
Owner of Bonds then Outstanding, provided that, except in the case
of a default in the payment of the principal or Redemption Price of
or interest on any of the Bonds, the Trustee may withhold such
notice if, in its sole judgment, it determines that the withholding
of such notice is in the best interests of the Bondholders.
(b) The Trustee shall, as soon as practicable,
notify the Authority, the Letter of Credit Issuer and the Borrower
of any Event of Default known to the Trustee.
Section 913. Waiver of Redemption Rights. Upon the
occurrence and continuance of an Event of Default, to the extent
PAGE 266
that such rights may then lawfully be waived, neither the
Authority, nor anyone claiming through or under it, shall set up,
claim, or seek to take advantage of any appraisement, valuation,
stay, extension or Redemption laws now or hereafter in force, in
order to prevent or hinder the enforcement of this Indenture or a
foreclosure under this Indenture. The Authority, for itself and
all who may claim through or under it, hereby waives, on or after
the date of foreclosure, to the extent that it lawfully may do so,
the benefit of all such laws and all rights of appraisement and
Redemption to which it may be entitled under the laws of the State
of New Jersey.
Section 914. Rights of Bank Regarding Collateral. So
long as the Letter of Credit is in effect and the Letter of Credit
Issuer is making all required payments with respect to the Bonds in
accordance with the terms of the Letter of Credit, the right of the
Trustee hereunder to grant consents, grant waivers, direct
proceedings, pursue remedies and otherwise exercise any rights
under this Indenture with respect to the Collateral shall be
exercised by the Letter of Credit Issuer acting alone and the
Trustee will execute any documents and take or refrain from taking
all actions which the Trustee is required or entitled to execute or
take or refrain from taking hereunder in accordance with the
written request and instructions of the Letter of Credit Issuer
provided that the Letter of Credit Issuer shall pay or agree to pay
(subject to the Letter of Credit Issuer's right to reimbursement
under the Reimbursement Agreement) any and all costs and expenses
incurred or to be incurred in connection therewith.
PAGE 267
ARTICLE X
AMENDMENT OF LOAN AGREEMENT
Section 1001. Amendments to Loan Agreement Not Requiring
Consent of Bondholders. Except for the amendments as provided in
Section 1002 hereof, the Authority and the Trustee may, with the
consent of the Letter of Credit Issuer but without the consent of
or notice to the Bondholders, consent to any amendment of the Loan
Agreement including those which may be required (i) by the
provisions of the Loan Agreement or the Indenture, (ii) for the
purpose of curing any ambiguity or formal defect or omission, (iii)
to grant or pledge to the Trustee for the benefit of the
Bondholders any additional security, or (iv) in connection with any
other change therein which, in the judgment of the Trustee acting
in reliance upon an opinion of independent counsel, does not
materially and adversely affect the rights of the Holders of the
Bonds. Nothing in this Section contained shall permit, or be
construed as permitting, any reduction in the payments required to
be paid under the Loan Agreement without the consent of all Holders
of the Outstanding Bonds and the Letter of Credit Issuer.
Section 1002. Amendments to Loan Agreement Requiring
Consent of Bondholders. Any reduction in the payments required to
be paid under the Loan Agreement shall not be permitted without the
publication of notice and the consent of all Holders of the
Outstanding Bonds and the Letter of Credit Issuer. Such consent
shall be given and procured as provided in Section 802 hereof.
PAGE 268
ARTICLE XI
DISCHARGE OF LIEN
Section 1101. Defeasance of Bonds. (a) If the
Authority shall pay or cause to be paid to all the Holders of any
Outstanding Bonds the principal of, redemption premium, if any, and
interest to become due thereon at the times and in the manner
stipulated therein and herein with Available Moneys, and if the
Authority shall keep, perform and observe all and singular the
covenants and promises in the Bonds so paid and in this Indenture
expressed as to be kept, performed and observed by it or on its
part, then such Bonds shall cease to be subject to the Lien of this
Indenture and the rights hereby granted shall cease, determine and
be void, whereupon the Trustee shall cancel and discharge this
Indenture; provided that the Trustee's obligation to pay to the
Holders of the Outstanding Bonds the principal of, redemption
premium, if any, and interest to become due thereon shall survive
the cancellation and discharge of this Indenture; and provided
further that in the event there has been a drawing under the Letter
of Credit for which the Letter of Credit Issuer has not been fully
reimbursed pursuant to the Reimbursement Agreement or any other
obligations are then due and owing to the Letter of Credit Issuer
under the Reimbursement Agreement, and upon written instructions
from the Letter of Credit Issuer, the Trustee shall assign and turn
over to the Letter of Credit Issuer, as subrogee or otherwise, all
of the Trustee's right, title and interest under this Indenture,
all balances held hereunder not required for the payment of the
Bonds and such other sums and the Trustee's right, title and
interest in, to and under the Loan Agreement. In such event the
Trustee shall execute and deliver to the Authority such instruments
in writing as shall be requisite to cancel the Lien hereof and
shall assign and deliver to the Authority any property at the time
subject to the Indenture which may then be in its possession,
except amounts required to be paid to the Borrower under Section
413 hereof, which shall be assigned and delivered to the Borrower,
and except cash or securities held by the Trustee for the payment
of the principal of, redemption premium, if any, and interest on
the Bonds. The Authority and the Borrower shall have no right to
draw under the Letter of Credit for the payment of Bonds pursuant
to this Section 1101.
(b) Any Bond shall be deemed to be paid within the
meaning of this Article and for all purposes of this Indenture when
(i) payment of the principal of and redemption premium, if any, on
such Bond, plus interest thereon to the due date thereof (whether
such due date is by reason of maturity or upon redemption as
provided herein) shall have been made or caused to be made in
accordance with the terms thereof with Available Moneys, or shall
have been made or caused to be made by irrevocably depositing in
the Eligible Moneys Account of the Bond Fund other moneys of the
Borrower, in the form of cash and/or obligations described in
Section 601(a)(i) hereof of the United States of America, maturing
PAGE 269
as to principal and interest in such amounts and at such times as
will ensure the availability of sufficient moneys to make such
payment, and (ii) all necessary and proper fees, compensation and
expenses, including legal fees of the Trustee, the Registrar, and
the Paying Agent pertaining to the Bonds with respect to which such
deposit is made shall have been paid or the payment thereof
provided for to the satisfaction of the Trustee. At such times as
a Bond shall be deemed to be paid hereunder, as aforesaid, such
Bond shall no longer be secured by or subject to the lien of this
Indenture, except for the purposes of any such payment from cash or
such moneys or obligations described in Section 601(a)(i) hereof of
the United States of America and shall be canceled pursuant to
Section 210 hereof.
(c) Notwithstanding the foregoing subparagraph (b)
hereinabove, no deposit thereunder shall be deemed a payment of the
Bonds unless and until (i) proper notice of Redemption shall have
been given in accordance with Article III of this Indenture or, in
the event that the Bonds are not by their terms subject to
Redemption within the next succeeding sixty (60) days, until the
Borrower shall have given the Trustee, on behalf of the Authority,
irrevocable instructions to notify the Owners of the Bonds, in
accordance with Article III of this Indenture, that the deposit
required by Section 1101(b) hereof has been made and that said
Bonds are deemed to have been paid in accordance with the
provisions hereof and stating the maturity or redemption date upon
which the moneys are to be available for the payment of the
principal of and the applicable redemption premium, if any, on said
Bonds plus interest thereon to the due date thereof or the maturity
date of such Bonds; (ii) a certificate from a nationally recognized
accounting firm, acceptable to Moody's, verifying that the
Available Moneys (but not including investment earnings thereon)
deposited with the Trustee shall have been sufficient to pay when
due the principal of, redemption premium, if any and interest
accrued on such Outstanding Bonds to the date fixed for redemption;
(iii) legal opinion of Bond Counsel to the effect that the Bonds
have been paid in accordance with the terms of this Indenture (such
opinion being given in reliance on the verification report
identified in (ii) above); and (iv) an opinion, acceptable to
Moody's, of nationally recognized counsel experienced in bankruptcy
matters stating the application of such Available Moneys or other
moneys of the Borrower will not constitute a voidable preference in
the event of an occurrence of an Act of Bankruptcy.
(d) The payment of principal of, redemption
premium, if any, and interest due thereon shall be made at the
Principal Office of the Trustee upon surrender of the Bonds for
cancellation.
(e) The Trustee shall provide written notice to the
Authority upon the maturity or defeasance of all of the Bonds
Outstanding.
PAGE 270
ARTICLE XII
MISCELLANEOUS
Section 1201. Consent of Bondholders. (a) Any consent,
request, direction, approval, objection or other instrument
required by this Indenture to be signed and executed by the
Bondholders may be in any number of writings of similar tenor and
may be signed or executed by such Bondholders in person or by
agents appointed in writing and may, but shall not be required to,
be obtained at a meeting of Bondholders called in such manner as
the Trustee shall specify. Proof of the execution of any such
consent, request, direction, approval, objection or other
instrument or of the writing appointing any such agent and of the
ownership of Bonds, if made in the following manner, shall be
sufficient for any of the purposes of this Indenture, and may be
conclusively relied on by the Trustee with regard to any action
taken thereunder:
(i) 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 within such
jurisdiction that the Person signing such writing
acknowledged before him the execution thereof, or by an
affidavit of any witness to such execution. The
authority of the Person or Persons executing any such
instrument on behalf of a corporate Bondholder may be
established without further proof if such instrument is
signed by a Person purporting to be the president or a
vice-president of such corporation with a corporate seal
affixed and attested by a Person purporting to be its
secretary or an assistant secretary.
(ii) The ownership of Bonds and the amount,
number and other identification, and the date of holding
shall be determined by reference to the books of
registration maintained by the Trustee as Bond Registrar.
(b) For all purposes of the Indenture and of the
proceedings for the enforcement hereof, such Person shall be deemed
to continue to be the Holder of such Bond.
(c) Any request, consent or vote of the Owner of
any Bond shall bind all future Owners of such Bond with respect to
anything done or suffered to be done or omitted to be done by the
Authority or the Trustee in accordance therewith, unless and until
such request, consent or vote is revoked by the filing with the
Trustee of a writing, signed and executed by the Owner of the Bond,
in form and substance and within such time as shall be satisfactory
to the Trustee. The Trustee shall be entitled to rely on such
request, consent or vote until such time, if any, until the same
shall have been revoked.
PAGE 271
Section 1202. 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 Borrower, the Holders of the Bonds,
and the Letter of Credit Issuer any legal or equitable right,
remedy or claim under or in respect to this Indenture, or any
covenants, conditions and provisions herein contained. The
Indenture and all of the covenants, conditions and provisions
thereof are intended to be and are for the sole and exclusive
benefit of such Persons.
Section 1203. Limitation on Liability of Members of
Authority. No covenant, condition or agreement contained herein
shall be deemed to be a covenant, agreement or obligation of a
present or future member of the Authority or any officer, employee
or agent of the Authority in his or her individual capacity, and
neither the Authority nor any officer thereof executing the Bonds
shall be liable personally on the Bonds or be subject to any
personal liability or accountability by reason of the issuance
thereof. No member, officer, employee or agent of the Authority
shall incur any personal liability with respect to any other action
taken by him or her pursuant to this Indenture or the Act, provided
such member, officer, employee or agent acts in good faith.
Section 1204. Severability. (a) If any of the
provisions 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 hereof 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 therein contained
invalid, inoperative or unenforceable to any extent whatever.
(b) The invalidity of any one or more phrases,
sentences, clauses or Sections in this Indenture shall not affect
the remaining portions hereof.
Section 1205. Notices. All notices, certificates,
requests, complaints, demands or other communications hereunder
shall be in writing unless otherwise specified herein and shall be
deemed sufficiently given when sent by telegram, telex or
registered mail, postage prepaid, return receipt requested, or
first class mail unless registered or certified mail is specified
herein addressed as follows:
(a) If to the Authority:
New Jersey Economic Development Authority
000 Xxxxx Xxxxxx Xxxxxx
PAGE 000
Xxxxxxx Xxxxx Xxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Executive Director
with a copy to:
Wilentz, Xxxxxxx & Xxxxxxx, P.A.
00 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Esq./
Xxxxxx X. Xxxxxxxx, Esq.
(b) If to the Trustee:
Shawmut Bank Connecticut, National Association
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust
Administration
(c) If to the Borrower:
Burlington Coat Factory Warehouse
of New Jersey, Inc.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Accounting Officer
with a copy of such notice to:
Xxxx X. Xxxx, Esq., general counsel, at the above
address
(d) If to the Letter of Credit Issuer:
First Fidelity Bank, National Association,
New Jersey
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, V.P.
with a copy to:
Pepper, Xxxxxxxx & Xxxxxxx
3000 Two Xxxxx Square
00xx xxx Xxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
The Authority and the Trustee may by notice given hereunder to the
other, the Borrower and the Letter of Credit Issuer designate any
further or different addresses to which subsequent notices,
certificates, requests, complaints, demands or other communications
PAGE 273
hereunder shall be sent. All notices required to be sent by the
Trustee, the Authority, the Borrower, the Bondholders or the
Placement Agent shall also be sent to the Letter of Credit Issuer,
provided failure to so notify the Letter of Credit Issuer shall not
negate the effect of such notice.
Section 1206. Notice to Moody's. As long as the Bonds
are rated by Moody's, the Trustee shall provide prior written
notice in the manner provided in Section 1205 hereof to Moody's
upon the occurrence of (i) the execution of any amendment,
modification or supplement to the Loan Agreement pursuant to
Article X hereof; (ii) the execution of a Supplemental Indenture
pursuant to Article VIII of the Indenture; (iii) any expiration,
termination, revocation or extension of the Letter of Credit; (iv)
any change in a Trustee or Paying Agent; (v) any material
amendments, supplements or modification of the provisions of the
Letter of Credit; and (vi) when all Bonds have been paid or deemed
to have been paid pursuant to the terms of this Indenture.
Section 1207. Counterparts. This Indenture may be
executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.
Section 1208. Table of Contents and Section Headings Not
Controlling. The table of contents and the headings of the several
sections of this Indenture have been prepared for convenience of
reference only and shall not control, affect the meaning of, or be
taken as an interpretation of any provision of this Indenture.
Section 1209. Governing Law. This Indenture and each
Bond shall be deemed to be a contract made under the laws of the
State of New Jersey and for all purposes shall be construed in
accordance with the laws of said State of New Jersey.
Section 1210. Third Party Beneficiary. So long as the
Initial Letter of Credit Issuer honors its obligations under the
Letter of Credit, the parties hereto acknowledge that the Initial
Letter of Credit Issuer is a third party beneficiary hereunder.
PAGE 274
IN WITNESS WHEREOF, the NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY has caused this Indenture to be executed by one of its
officers thereunto duly authorized, its corporate seal to be
hereunto affixed, and the same to be attested by one of its
officers duly authorized, and Shawmut Bank Connecticut, National
Association has caused this Indenture to be executed by one of its
officers thereunto duly authorized, and its corporate seal to be
hereunto affixed, all as of the day and year first above written.
ATTEST: NEW JERSEY ECONOMIC
DEVELOPMENT AUTHORITY
[SEAL]
By:
XXXXX X. XXXXXXX, XX. XXXXX X. XXXXXXXX
Assistant Secretary Executive Director
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
as Trustee
By:___________________________
XXXXX X. XXXXXX
Assistant Vice President
PAGE 275
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
ECONOMIC DEVELOPMENT REFUNDING BONDS
(BURLINGTON COAT FACTORY WAREHOUSE
OF NEW JERSEY, INC. - 1995 Project)
No. EDRB-_
MATURITY DATE: DATED DATE: August 1, 1995
AUTHENTICATION DATE:
CUSIP:
INTEREST RATE:
REGISTERED OWNER:
PRINCIPAL SUM: ___________________ Dollars ($ )
THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the
"Authority"), a body politic and corporate and a public
instrumentality of the State of New Jersey (the "State") and duly
existing under the Constitution and laws of the State, including
the New Jersey Economic Development Authority Act (the "Act"), for
value received hereby promises to pay, (but solely from the sources
described in this Bond), to the REGISTERED OWNER identified above,
or registered assigns, the PRINCIPAL SUM, on the MATURITY DATE or
on the date fixed for Redemption, as the case may be, together with
INTEREST on the PRINCIPAL SUM from the DATED DATE, until the
Authority's obligations with respect to the payments of such
PRINCIPAL SUM shall be discharged, at the INTEREST RATE per annum
stated above semiannually on the first days of March and September,
commencing March 1, 1996.
This Bond (as hereinafter defined) shall be payable as
to principal or Redemption Price when due, upon presentation and
surrender thereof, at the principal corporate trust office of
Shawmut Bank Connecticut, National Association, Hartford,
Connecticut, as Trustee, Bond Registrar and Paying Agent (the
"Trustee"), or at the duly designated office of any duly appointed
alternate or successor thereto. The interest on this Bond will be
payable by check or bank draft and will be mailed to the Person in
whose name each Bond is registered which appears on the
registration books of the Authority held by the Trustee as
determined as of the close of business on the fifteenth day
(whether or not a Business Day) of February and August (the "Record
Date"). Upon request, any Holder of at least one million dollars
($1,000,000) of Bonds shall be entitled to receive interest
payments from the Trustee by wire transfer. Payment of the
principal or Redemption Price of and interest on this Bond shall be
PAGE 276
made in any coin or currency of the United States of America which
at the time of payment is legal tender for the payment of public
and private debts.
THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHER THE
FAITH AND CREDIT NOR TAXING POWER OF THE STATE OF NEW JERSEY IS
PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF, IF
ANY, OR INTEREST ON THE BONDS. THE BONDS ARE SPECIAL, LIMITED
OBLIGATIONS OF THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (THE
"AUTHORITY"), PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS,
FUNDS OR MONEYS OF THE AUTHORITY PLEDGED UNDER THE INDENTURE (AS
HEREAFTER DEFINED) AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER
THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE BONDS DO NOT NOW
AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF
THE AUTHORITY. THE AUTHORITY HAS NO TAXING POWER.
No recourse shall be had for the payment of the principal
or Redemption Price of or interest on this Bond or for any claim
based hereon or on the Indenture, against any member, officer or
employee, past, present or future of the Authority or of any
successor body, as such, either directly or through the Authority
or any successor body, under any constitutional provision, statute,
rule of law, or by the enforcement of any assessment thereof by any
legal or equitable proceedings or otherwise.
Reference is made to the further provisions of this Bond
set forth on the reverse side of this Bond; such provisions shall
for all purposes have the same effect as if set forth at this
place.
It is hereby certified and recited that all acts, things
and conditions required by the Constitution or statutes of the
State or the Indenture to exist, to have happened or to have been
performed precedent to or in the issuance of this Bond exist, have
happened and have been performed in due time, form and manner as
required by law and that said issue of Bonds, together with all
other indebtedness of the Authority, is within every debt and other
limit prescribed by said Constitution or statutes.
This Bond shall not be entitled to any right or benefit
under the Indenture, or be valid or become obligatory for any
purpose, until this Bond shall have been authenticated by the
execution by the Trustee, or its successor as Trustee, or an
authenticating agent thereof, of the certificate of authentication
inscribed hereon.
IN WITNESS WHEREOF, THE NEW JERSEY ECONOMIC DE
AUTHORITY has caused this Bond to be executed in its name by the
manual or printed facsimile signature of its Executive Director and
attested by the printed facsimile signature of its Assistant
Secretary, and the facsimile of its corporate seal to be impressed
or imprinted hereon.
PAGE 277
CERTIFICATE OF AUTHENTICATION
This Bond is one of the issue of
Economic Development Refunding Bonds
described and delivered pursuant
to the within mentioned
Indenture.
SHAWMUT BANK CONNECTICUT, NEW JERSEY ECONOMIC
NATIONAL ASSOCIATION, DEVELOPMENT AUTHORITY
as Trustee
By:_____________________ By:_________________________
Authorized Signatory Name: Xxxxx X. Xxxxxxxx
Title: Executive Director
Attest:
By:_________________________
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Assistant Secretary
[SEAL]
PAGE 278
[REVERSE OF BOND]
1. Indenture; Loan Agreement. This Bond is one of an
authorized issue of bonds (the "Bonds"), limited in aggregate
principal amount to $10,000,000. The Bonds are issued under and
governed by the Indenture of Trust dated as of August 1, 1995 (the
"Indenture") between the Authority and Shawmut Bank Connecticut,
National Association, Hartford, Connecticut, as Trustee and
pursuant to a resolution of the Authority duly adopted July 11,
1995. THE TERMS AND PROVISIONS OF THE BONDS INCLUDE THOSE IN THE
INDENTURE. BONDHOLDERS ARE REFERRED TO THE INDENTURE FOR A
STATEMENT OF THOSE TERMS AND PROVISIONS. ANY CAPITALIZED TERMS
USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE SAME MEANINGS
ASCRIBED TO SUCH TERMS IN THE INDENTURE.
The Bonds are issued pursuant to and in full compliance
with the Act which authorizes the execution and delivery of the
Loan Agreement (as hereinafter defined) and the Indenture.
The Bonds are being issued for the purpose of providing
funds to refund, on a current basis, $10,000,000 aggregate
principal amount Economic Development Bonds (Burlington Coat
Factory Warehouse of New Jersey, Inc. - 1985 Project) of the New
Jersey Economic Development Authority dated as of September 1, 1985
(the "Prior Bonds"), maturing on or after September 1, 1996 (the
"Refunded Bonds") on September 1, 1995 (the "Project"), the
proceeds of which Prior Bonds were used to finance a portion of a
project which consisted of the acquisition of land and the
construction of a building thereon to house the national
distribution center of the Borrower, including the equipping of
such building with rolling racks, conveyor systems and automated
machinery, all located in the Township of Burlington, Burlington
County, New Jersey (the "1985 Project"), and further providing,
among other things, for the execution and delivery of the Indenture
and the payment of necessary costs incidental thereto. To provide
for the payment of the Bonds, the Authority and the Borrower have
entered into a Loan Agreement dated as of the date of the Indenture
(the "Loan Agreement"), under which the Borrower is obligated to
pay, among other payments, all amounts coming due on the Bonds. The
Authority has assigned all its rights except for certain Reserved
Rights to such payments under the Loan Agreement to the Trustee as
security for the Bonds.
Executed counterparts of the Indenture, the Loan
Agreement, the Reimbursement Agreement (as hereinafter defined),
the Letter of Credit (as hereinafter defined) and all documents and
instruments executed in connection therewith, are on file at the
principal corporate trust office of the Trustee.
2. Source of Payments. The Bonds are special limited
obligations of the Authority and, as provided in the Indenture, the
Authority shall be obligated to pay the principal of, redemption
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premium, if any, and interest on the Bonds solely from payments to
be made by the Borrower under the Loan Agreement and from the
Letter of Credit as described below (but only so long as the Letter
of Credit is in effect) and from any other Revenues and moneys,
securities, Funds and Accounts (including investments, if any)
pledged to or held by the Trustee under the Indenture for such
purpose, and there shall be no other recourse against the Authority
or any other property now or hereafter owned by it. Except as
otherwise provided in the Indenture, this Bond is entitled to the
benefits of the Indenture equally and ratably both as to principal
or Redemption Price of and interest under the Indenture to which
reference is made for a description of the rights of the Holders of
the Bonds, the rights and obligations of the Authority, and the
rights, duties and obligations of the Trustee. No additional bonds
may be issued under the Indenture. The Holder of this Bond shall
have no right to enforce the provisions of the Indenture, the Loan
Agreement or the Letter of Credit or the rights and remedies
thereunder, except as provided in the Indenture.
3. Security. The Borrower has caused an Irrevocable,
Direct-Pay Letter of Credit (the "Initial Letter of Credit") to be
issued by First Fidelity Bank, National Association (as issuer of
the Initial Letter of Credit the "Letter of Credit Issuer") to be
delivered to the Trustee (the Initial Letter of Credit or any
replacement or alternate Letter of Credit, the "Alternate Letter of
Credit", collectively the "Letter of Credit"). The Initial Letter
of Credit entitles the Trustee to draw an amount equal to the
principal amount of the Outstanding Bonds to pay the principal of
the Bonds when due at maturity or upon redemption or acceleration
as described herein and in the Indenture, plus an amount equal to
210 days' interest accrued on the Outstanding Bonds (computed at a
maximum rate of 6.125%). Unless extended, the Initial Letter of
Credit expires September 15, 2000 or on the earlier occurrence of
events specified therein. Subject to the provisions of the
Indenture, the Borrower may cause an Alternate Letter of Credit to
be substituted for the Letter of Credit then in effect, having
terms substantially similar to the Initial Letter of Credit with
the exception of the expiration date thereof. Unless the Initial
Letter of Credit or an Alternate Letter of Credit substituted
therefor is extended or replaced in accordance with the terms of
the Indenture, this Bond will become subject to mandatory
redemption as described below. The Initial Letter of Credit is
being issued pursuant to a Letter of Credit Reimbursement Agreement
dated August 1, 1995 (the "Reimbursement Agreement") between the
Borrower and the Letter of Credit Issuer, under which the Borrower
is obligated, among other things, to reimburse the Letter of Credit
Issuer for any draws under the Initial Letter of Credit.
4. Redemption. The Bonds are subject to Redemption
prior to maturity as provided herein and in the Indenture.
(a) Special Mandatory Redemption. The Bonds are subject
to special mandatory redemption in whole as soon as practicable but
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not later than the 90th day following (i) the Trustee's receipt of
written notice of the occurrence of a Determination of Taxability
or (ii) written notification by the Authority to the Trustee, the
Letter of Credit Issuer and the Borrower that (a) the Borrower has
ceased to operate the Project Facility or ceased to cause the
Project Facility to be operated as an authorized project under the
Act for twelve (12) consecutive months without first obtaining the
prior written consent of the Authority, or (b) any of the
representations and warranties of the Borrower contained in the
Loan Agreement have proven to have been false or misleading in any
material respect when made. In such event, the Bonds shall be
redeemed by the Authority at a Redemption Price equal to 100% of
the principal amount thereof plus accrued interest up to and
including the redemption date.
(b) Mandatory Redemption. The Bonds are subject to
mandatory redemption, as a whole or in part, in minimum
denominations of $25,000 and in integral multiples of $5,000
thereafter, on any Interest Payment Date, at a Redemption Price
equal to 100% of the principal amount thereof, together with
interest accrued up to such redemption date in the case of damage,
destruction or condemnation of the Project in an amount equal to
the net proceeds of any insurance, casualty or condemnation award
received by the Bank and at the option of the Bank pursuant to
Section 5.24 of the Loan Agreement.
(c) Extraordinary Mandatory Redemption. The Bonds are
subject to extraordinary mandatory redemption by the Authority, in
whole, on the Interest Payment Date immediately preceding the
termination of the Initial Letter of Credit on September 15, 2000
(the "Letter of Credit Maturity Date") or the Interest Payment Date
immediately preceding the Letter of Credit Maturity Date of an
Alternate Letter of Credit, at a Redemption Price equal to 100% of
the principal amount thereof, in the event the Borrower does not
provide the Trustee, at least sixty (60) days prior to the Letter
of Credit Maturity Date, with (i) written notice from the Letter of
Credit Issuer to the Trustee that the Letter of Credit will be
renewed by the Letter of Credit Issuer upon the Letter of Credit
Maturity Date, which Letter of Credit shall have an expiration date
of September 15 of any subsequent year or written notice from
another bank to the Trustee that an Alternate Letter of Credit will
be issued on or prior to the Letter of Credit Maturity Date, which
Alternate Letter of Credit shall have an expiration date of
September 15 of any subsequent year, and (ii) (A) an Alternate
Letter of Credit meeting the requirements of Section 404(d)(i) of
the Indenture which shall be presented to the Trustee at least
sixty (60) days prior to the Letter of Credit Maturity Date and (B)
the documents required to be delivered in Section 404(d)(ii) of the
Indenture sixty (60) days prior to the Letter of Credit Maturity
Date.
(d) Mandatory Redemption Due to Act of Bankruptcy of
Bank. The Bonds are subject to mandatory redemption, as a whole,
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at a Redemption Price equal to 100% of the principal amount of the
Outstanding Bonds together with interest accrued thereon to the
redemption date which is at least forty-five (45) days, but not
more than seventy (70) days, after the date on which an Act of
Bankruptcy of the Bank occurs, unless within thirty (30) days after
the occurrence of an Act of Bankruptcy of the Bank, the Borrower
has provided the Trustee with (i) an Alternate Letter of Credit,
which Alternate Letter of Credit shall have an expiration date of
September 15, of any subsequent year and (ii) the opinions and
written notice set forth in Section 404 of the Indenture.
(e) Optional Redemption. Subject to the payment of the
redemption premium by the Borrower pursuant to Section 304 of the
Indenture, the Bonds maturing on or after September 1, 2006 are
subject to optional redemption by the Authority, at the direction
of the Borrower, in whole at any time or in part on any Interest
Payment Date, in minimum amounts of $25,000 and in integral
multiples of $5,000 thereafter, on or after September 1, 2005, at
the Redemption Prices (expressed as percentages of the principal
amount) for the Redemption Periods set forth below, plus unpaid
interest, if any, accrued up to the redemption date:
Redemption Periods Redemption
(Dates Inclusive) Prices
September 1, 2005 to August 31, 2006 102.00%
September 1, 2006 to August 31, 2007 101.00%
September 1, 2007 and thereafter 100.00%
(f) Sinking Fund Redemption. The Bonds maturing on
September 1, 2005 and September 1, 2010, respectively, shall be
subject to redemption commencing September 1, 2004 and September 1,
2006, respectively, and on each September 1 thereafter, at a
Redemption Price equal to 100% of the principal amount thereof
being redeemed plus accrued interest up to the redemption date.
The Trustee shall cause to be redeemed such Bonds in the aggregate
principal amounts of the following Sinking Fund Installments on
September 1 of each of the following years: Page 282
TERM BONDS DUE SEPTEMBER 1, 2005
Year Sinking Fund Installment
2004 $665,000
2005* 735,000
TERM BONDS DUE SEPTEMBER 1, 2010
Year Sinking Fund Installment
2006 $ 810,000
2007 895,000
2008 990,000
2009 1,095,000
2010 1,210,000
Accrued interest on such Bonds so redeemed shall be paid
from the Bond Fund, and all expenses in connection with such
Redemption shall be paid by the Borrower. All Bonds redeemed under
the Indenture shall be redeemed in the manner provided in the
Indenture. The principal amount of Bonds to be redeemed in the
years 2004 through 2010 shall be reduced by the amount of such
Bonds that the Trustee has previously redeemed pursuant to Section
301(b) (special mandatory redemption) or 301(e) (optional
redemption) of the Indenture.
5. Selection of Bonds to be Redeemed. (a) A
Redemption of Bonds shall be a Redemption of the whole or any part
of the Bonds from any funds available for that purpose in
accordance with the provisions of the Indenture. If less than all
of the Bonds shall be called for Redemption under any provision of
the Indenture permitting such partial redemption, the particular
Bonds (or Authorized Denominations thereof), to be redeemed shall
be selected by the Trustee by lot, using such method as the Trustee
in its sole discretion may deem proper, in the principal amount
designated in writing to the Trustee by the Borrower or otherwise
as required by the Indenture. The Trustee shall be notified in
writing pursuant to the Indenture not less than sixty (60) days
prior to the date fixed for Redemption, but in the case of a
Mandatory Redemption due to an Act of Bankruptcy of the Bank, not
more than ten (10) days following the occurrence thereof.
(b) Except as otherwise provided in the Indenture,
any Bonds selected for Redemption which are deemed to be paid in
accordance with the Indenture will bear interest up to, but not
including, the date fixed for redemption.
6. Notice of Redemption; Rights of Holders.
When Bonds are to be redeemed, the Trustee shall give
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notice of such Redemption to the Holders in the name of the
Authority, stating, among other things: (i) the Bonds to be
redeemed; (ii) the redemption date; (iii) that such Bonds will be
redeemed at the Principal Office of the Trustee; (iv) that on such
redemption date there shall become due and payable upon each Bond
to be redeemed the Redemption Price thereof together with unpaid
interest accrued prior to the redemption date; (v) the CUSIP
numbers assigned to the Bonds to be redeemed; (vi) the serial
numbers and maturities of Bonds selected for Redemption, (except
that where all of the Bonds are to be redeemed the serial numbers
and maturities need not be specified); (vii) the interest rates and
maturity dates of the Bonds to be redeemed; (viii) the date of
mailing the notice of redemption; (ix) the record date for the
Redemption (which shall be forty-five (45) days prior to the
redemption date); and (x) that on the redemption date interest
thereon shall cease to accrue. The notice of redemption shall
state that Redemption is subject to receipt by the Trustee of
Available Moneys sufficient to pay the Redemption Price of the
Bonds to be redeemed on or before the redemption date.
The Trustee shall mail the required notice, postage
prepaid by first class mail, not less than thirty (30) days, nor
more than sixty (60) days, prior to the applicable date to the
Holders of any Bonds to be redeemed at the addresses thereof
appearing on the Bond Register kept for such purpose. Failure to
duly give such notice by mail, or any defect therein, shall not
affect the validity of any proceeding for the Redemption of the
Bonds.
Pursuant to Section 304(b) of the Indenture, if on any
redemption date Available Moneys for the Redemption of all Bonds or
portions thereof to be redeemed, together with interest thereon to
such redemption date, shall be held by the Trustee so as to be
available therefor on such date, the Bonds or portions thereof so
called for Redemption shall cease to bear interest and such Bonds
or portions thereof shall no longer be Outstanding under the
Indenture or be secured by or be entitled to the benefits of the
Indenture. If such Available Moneys shall not be so available on
such date, such Bonds or portions thereof shall continue to bear
interest until paid at the same rate as they would have borne had
they not been called for Redemption and shall continue to be
secured by and be entitled to the benefits of the Indenture.
7. Denominations; Transfer; Exchange. The Bonds are
in registered form without coupons in minimum principal
denominations of $25,000 and in integral multiples of $5,000
thereafter.
8. Transferability of Bonds. This Bond is
transferable only on the Bond Register upon surrender thereof at
the Principal Office of the Trustee by the registered Owner thereof
or by his attorney duly authorized in writing together with a
written instrument of transfer satisfactory to the Trustee. Upon
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such surrender, the Authority shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or
transferees, one or more new fully registered Bonds of the same
series in Authorized Denominations in the aggregate principal
amount which the registered Owner is entitled to receive. At the
option of the Holder, Bonds may be exchanged for other Bonds of the
like aggregate principal amount upon surrender of the Bonds to be
exchanged at any such office. All Bonds presented for registration
of transfer or for exchange, Redemption or payment (if so required
by the Authority, the Bond Registrar or the Trustee), shall be
accompanied by a written instrument or instruments of transfer or
authorization for exchange, in form satisfactory to the Bond
Registrar. No service charge shall be made for any exchange or
registration of transfer of Bonds, but the Trustee may require
payment of its expenses and a sum sufficient to cover all taxes or
other governmental charges that may be imposed in relation thereto.
New Bonds delivered upon any registration of transfer or exchange
shall be valid obligations of the Authority, evidencing the same
debt as the Bonds surrendered, shall be secured by the Indenture
and shall be entitled to all of the security and benefits thereof
to the same extent as the Bonds surrendered.
A Person in whose name a Bond shall be registered
shall for all purposes of the Indenture, be deemed the absolute
Owner thereof and, so long as the same shall be registered,
payments of or on account of the principal, redemption premium, if
any, and interest with respect to such Bond shall be made only to
the registered Owner or his legal representative. All such
payments so made to any such registered Owner or upon his order
shall be valid and effectual to satisfy and discharge the liability
of the Authority upon such Bond to the extent of the sum or sums so
paid. The Authority and the Trustee shall not be affected by any
notice to the contrary.
The Authority and the Trustee shall not register,
register the transfer of, or exchange Bonds for the period from the
Record Date preceding an Interest Payment Date to the related
Interest Payment Date, nor shall the Trustee register the transfer
of or exchange any Bond during the period fifteen (15) days before
the giving of a notice of redemption.
9. Defaults and Remedies. The Indenture provides
that the occurrence of certain events constitute Events of Default.
If an Event of Default occurs and is continuing, the Trustee may,
and shall, upon the written direction of the Letter of Credit
Issuer, declare the principal of all the Bonds Outstanding and the
interest accrued on such Bonds then to be due and payable
immediately in the manner and with the effects and subject to the
conditions set forth in the Indenture. An Event of Default and its
consequences may be waived as provided in the Indenture.
Bondholders may not enforce the Indenture or the Bonds except as
provided in the Indenture. Under certain circumstances, the
Trustee may refuse to enforce the Indenture or the Bonds unless it
Page 285
receives indemnity from the Holders satisfactory to it. Subject to
certain limitations, Holders of fifty-one percent (51%) in
aggregate principal amount of the Bonds then Outstanding may direct
the Trustee in its exercise of any trust or power.
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{Form of Abbreviations }
The following customary abbreviations, when used in the
inscription of the face of the within Bond, shall be construed as
though they were written out in full according to applicable laws
and regulations.
TEN COM = as tenants in common
TEN ENT = as tenants by the entireties
JT TEN = as joint tenants with right of survivorship
and not as tenants in common
Uniform Gifts to Minors Act -_______, Custodian _________________
(Cust) (Minor)
under Uniform Gift to Minors Act
_________________________
(State)
Additional Abbreviations may also be used though not in the above
list.
{ Form of Assignment }
COMPLETE AND SIGN THIS FORM FOR ORDINARY
ASSIGNMENT AND REGISTRATION OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
(Insert Name/Address and Taxpayer Identification No. of Assignee)
the within Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints ________________________, as attorney to
transfer said Bond on the Bond Register with full power of
substitution and revocation in the premises.
Assignor's Signature:
Dated: _______________________________________________
Signature Guaranteed: _________________________________
NOTE: Signature(s) must be guaranteed by a member firm of the New
York Stock Exchange or a commercial bank or trust company.
NOTICE: The signature to this Assignment must correspond with the
name of the registered Owner as it appears upon the face of the
within Bond in every particular, without alteration or enlargement
or any change whatever.
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