EXHIBIT 4.26
EXECUTION COPY
================================================================================
INDENTURE OF TRUST
between
MARICOPA COUNTY, ARIZONA POLLUTION CONTROL CORPORATION
and
JPMORGAN CHASE BANK,
as Trustee
Dated as of August 1, 2002
Relating to
$37,100,000
Maricopa County, Arizona Pollution Control Corporation
Pollution Control Refunding Revenue Bonds
2002 Series A
(El Paso Electric Company, Palo Verde Project)
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions ............................................. 3
Section 1.02 Number and Gender ....................................... 11
Section 1.03 Articles, Sections, Etc ................................. 11
Section 1.04 Content of Certificates and Opinions .................... 12
Section 1.05 Findings ................................................ 12
ARTICLE II
THE BONDS
Section 2.01 Authorization and Terms of Bonds ........................ 13
Section 2.02 Execution of Bonds ...................................... 25
Section 2.03 Transfer and Exchange of Bonds .......................... 27
Section 2.04 Bond Register ........................................... 27
Section 2.05 Bonds Mutilated, Lost, Destroyed or Stolen .............. 27
Section 2.06 Disposition of Cancelled Bonds .......................... 28
Section 2.07 CUSIP Numbers ........................................... 28
Section 2.08 Other Obligations ....................................... 28
Section 2.09 Temporary Bonds ......................................... 28
ARTICLE III
ISSUANCE OF BONDS
Section 3.01 Authentication and Delivery of Bonds .................... 29
Section 3.02 Application of Proceeds of Bonds ........................ 29
Section 3.03 Payment of Principal and Interest ....................... 29
ARTICLE IV
REDEMPTION AND PURCHASE OF BONDS
Section 4.01 Redemption of Bonds ..................................... 30
Section 4.02 Selection of Bonds to be Redeemed ....................... 34
Section 4.03 Notice for Redemption ................................... 34
Section 4.04 Partial Redemption of Bonds ............................. 35
Section 4.05 Effect of Redemption .................................... 35
Section 4.06 Payment of Redemption Price ............................. 36
Section 4.07 Bank Purchase Option .................................... 36
Section 4.08 Purchase of Bonds ....................................... 39
Section 4.09 Delivery of Tendered Bonds .............................. 41
Section 4.10 Bonds Deemed Purchased .................................. 41
i
ARTICLE V
THE BOND FUND
Section 5.01 Creation of Bond Fund ..................................... 42
Section 5.02 Deposits into Bond Fund ................................... 42
Section 5.03 Use of Moneys in Bond Fund ................................ 43
Section 5.04 Credit Facility ........................................... 43
Section 5.05 Custody of Bond Fund; Withdrawal of Moneys ................ 45
Section 5.06 Bonds Not Presented for Payment ........................... 45
Section 5.07 Moneys Held in Trust ...................................... 45
Section 5.08 Payment to the Bank and to the Borrower ................... 46
ARTICLE VI
[RESERVED]
ARTICLE VII
INVESTMENTS
Section 7.01 Investments ............................................... 46
ARTICLE VIII
GENERAL COVENANTS
Section 8.01 Limited Obligation; Payment of Principal and Interest ..... 47
Section 8.02 Performance of Agreements; Authority ...................... 47
Section 8.03 Maintenance of Corporate Existence; Compliance with Laws .. 47
Section 8.04 Enforcement of Borrower's Obligations under the Agreement.. 47
Section 8.05 Further Assurances ........................................ 48
Section 8.06 No Disposition or Encumbrance of Issuer's Interests ....... 48
Section 8.07 Trustee's Access to Books Relating to Facilities .......... 48
Section 8.08 Filing of Financing Statements ............................ 48
Section 8.09 Tax Covenant .............................................. 48
Section 8.10 Notices by Trustee ........................................ 49
Section 8.11 No Transfer of Credit Facility ............................ 49
ARTICLE IX
DEFEASANCE
Section 9.01 Defeasance ................................................ 49
Section 9.02 Survival of Certain Provisions ............................ 50
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.01 Events of Default ......................................... 51
Section 10.02 Remedies .................................................. 53
ii
Section 10.03 Restoration to Former Position ........................... 54
Section 10.04 Owner's Right to Direct Proceedings ...................... 54
Section 10.05 Limitation on Owners' Right to Institute Proceedings ..... 54
Section 10.06 No Impairment of Right to Enforce Payment ................ 55
Section 10.07 Proceeding by Trustee Without Possession of Bonds ........ 55
Section 10.08 No Remedy Exclusive ...................................... 55
Section 10.09 No Waiver of Remedies .................................... 55
Section 10.10 Application of Moneys .................................... 55
Section 10.11 Severability of Remedies ................................. 57
Section 10.12 Waivers of Events of Default ............................. 57
Section 10.13 No Obligation of Issuer to Act ........................... 58
ARTICLE XI
TRUSTEE; PAYING AGENT; REGISTRAR
Section 11.01 Acceptance of Trusts ..................................... 58
Section 11.02 Trustee Not Responsible for Recitals, Maintenance,
Insurance, etc ........................................... 58
Section 11.03 Limitations on Liability ................................. 58
Section 11.04 Compensation, Expenses and Advances ...................... 59
Section 11.05 Notice of Events of Default .............................. 59
Section 11.06 Action by Trustee ........................................ 60
Section 11.07 Good Faith Reliance ...................................... 60
Section 11.08 Dealings in Bonds and with the Issuer and the Borrower ... 60
Section 11.09 Several Capacities ....................................... 61
Section 11.10 Construction of Indenture ................................ 61
Section 11.11 Resignation of Trustee ................................... 61
Section 11.12 Removal of Trustee ....................................... 61
Section 11.13 Appointment of Successor Trustee ......................... 61
Section 11.14 Qualifications of Successor Trustee ...................... 62
Section 11.15 Judicial Appointment of Successor Trustee ................ 62
Section 11.16 Acceptance of Trusts by Successor Trustee ................ 62
Section 11.17 Successor by Merger or Consolidation ..................... 62
Section 11.18 Standard of Care ......................................... 63
Section 11.19 Notice of Event of Default ............................... 63
Section 11.20 Intervention in Litigation ............................... 63
Section 11.21 Paying Agent ............................................. 63
Section 11.22 Qualifications of Paying Agent; Resignation; Removal ..... 64
Section 11.23 Registrar ................................................ 64
Section 11.24 Qualifications of Registrar; Resignation; Removal ........ 65
Section 11.25 Appointment of Co-Trustee ................................ 65
Section 11.26 Notices to Rating Agencies ............................... 66
iii
ARTICLE XII
EXECUTION OF INSTRUMENTS BY
OWNERS AND PROOF OF OWNERSHIP OF BONDS
Section 12.01 Execution of Instruments; Proof of Ownership ........... 66
ARTICLE XIII
MODIFICATION OF INDENTURE, DOCUMENTS
Section 13.01 Limitations ............................................. 67
Section 13.02 Modification without Consent of Owners .................. 67
Section 13.03 Modification with Consent of Owners ..................... 68
Section 13.04 Effect of Supplemental Indenture ........................ 69
Section 13.05 Consent of the Borrower and the Bank .................... 69
Section 13.06 Amendment of Agreement without Consent of Owners ........ 69
Section 13.07 Amendment of Agreement with Consent of Owners ........... 70
Section 13.08 Issuance of Bonds Under Other Indentures; Recognition
of Prior Pledges ........................................ 70
ARTICLE XIV
REMARKETING AGENT; TENDER AGENT; PURCHASE AND REMARKETING OF
BONDS
Section 14.01 Remarketing Agent and Tender Agent ...................... 70
Section 14.02 Qualifications of Remarketing Agent and Tender Agent;
Resignation; Removal .................................... 72
Section 14.03 Notice of Bonds Delivered for Purchase; Purchase of
Bonds ................................................... 73
Section 14.04 Remarketing of Bonds; Notice of Interest Rates .......... 74
Section 14.05 Delivery of Bonds ....................................... 75
Section 14.06 Drawings on Credit Facility ............................. 76
Section 14.07 Delivery of Proceeds of Sale ............................ 76
ARTICLE XV
MISCELLANEOUS
Section 15.01 Indenture to Bind and Inure to Benefit of Successors
to Issuer ............................................... 77
Section 15.02 Parties in Interest ..................................... 77
Section 15.03 Severability ............................................ 77
Section 15.04 No Personal Liability of Issuer Under Indenture ......... 77
Section 15.05 Bonds Owned by the Issuer or the Borrower ............... 77
Section 15.06 Governing Law ........................................... 78
Section 15.07 Notices ................................................. 78
Section 15.08 Non-Business Days ....................................... 79
Section 15.09 Opinions ................................................ 79
Section 15.10 Headlines; Table of Contents ............................ 79
Section 15.11 Execution in Several Counterparts ....................... 79
iv
Section 15.12 Statutory Notice ...................................... 79
EXHIBIT A Form of Bond
v
THIS INDENTURE OF TRUST is made and entered into as of August 1, 2002, by
and between MARICOPA COUNTY, ARIZONA POLLUTION CONTROL CORPORATION, an Arizona
nonprofit corporation designated as a political subdivision under the laws of
the State of Arizona incorporated for and with the approval of the County of
Maricopa, Arizona, pursuant to the provisions of the Constitution of the State
of Arizona and Title 9, Chapter 12, Arizona Revised Statutes, enacted by Chapter
69, Section 2, Laws of Arizona of 1972, renumbered as Title 35, Chapter 6,
Arizona Revised Statutes, by Chapter 281, Section 2, Laws of Arizona of 1986,
and all acts supplemental thereto or, amendatory thereof (hereinafter, together
with any successor to its functions, called the "Issuer"), and JPMorgan Chase
Bank, a New York banking corporation authorized to exercise corporate trust
powers, with its principal corporate trust offices in Texas in Houston, Texas
(hereinafter, together with any successor in such capacity, called the
"Trustee").
W I T N E S S E T H:
WHEREAS, Title 35, Chapter 6, Arizona Revised Statutes (formerly Title 9,
Chapter 12, Arizona Revised Statutes, enacted by Chapter 69, Section 2, Laws of
Arizona of 1972), as amended (hereinafter called the "Act"), empowers any
pollution control corporation organized pursuant to Article 1 of the Act to
issue revenue bonds in accordance with Article 2 of the Act and to make secured
or unsecured loans for the purpose of financing or refinancing the acquisition,
construction, improvement or equipping of pollution control facilities, to
charge and collect interest on such loans and pledge the proceeds of loan
agreements as security for the payment of the principal of and interest on
bonds, or designated issues of bonds, issued by the corporation and any
agreements made in connection therewith, whenever the board of directors finds
such loans to be in furtherance of the purposes of the corporation; and
WHEREAS, Chapter 69, Section 1, Laws of Arizona of 1972, declares it to
be the purpose of the Act to authorize the incorporation in the several
municipalities and counties of the State of Arizona of corporations which shall
constitute political subdivisions of the State, to finance the acquisition and
installation of, or the construction and leasing of, properties, machinery and
equipment intended to prevent or limit air, water and other forms of pollution
for the purpose of protecting the health and welfare of the citizens of the
State of Arizona, and to facilitate compliance with existing or future air,
water and other quality standards designed to improve the environment, and
declares that such corporations shall serve a public purpose and perform an
essential governmental function; and
WHEREAS, in response to an application by four qualified electors of the
County of Maricopa, Arizona (the "County"), a political subdivision of the State
of Arizona, the Board of Supervisors of said County on December 5, 1983, adopted
a resolution by which it determined that it was wise, expedient, advisable and
in the public interest that said application be approved, approved said
application, and authorized said four electors to proceed with the incorporation
of the Issuer as a pollution control corporation for said County, all in
accordance with Section 35-802 of the Act to issue bonds and to carry out the
other functions and fulfill the purposes of the Issuer; and
WHEREAS, the Issuer was thereupon organized and incorporated in
accordance with the provisions of the Act, and, on December 5, 1983, the
Articles of Incorporation of the Issuer were filed with the Arizona Corporation
Commission, in accordance with Section 35-809 of the Act; and
WHEREAS, the Issuer has heretofore issued and sold its $37,100,000
aggregate principal amount of Pollution Control Refunding Revenue Bonds, 1984
Series E (El Paso Electric Company, Palo Verde Project) (the "Prior Bonds"), the
proceeds of which were used to finance and refinance such costs of acquisition,
construction, improvement or equipping of the Project; and
WHEREAS, the Board of Directors of the Issuer on June 25, 2002
determined to sell additional revenue bonds of the Issuer to provide a portion
of the moneys necessary to redeem and refund the outstanding principal amount of
the Prior Bonds; and
WHEREAS, appropriate certifications have been received stating that the
portion of the Generating Station which constitutes the pollution control
facilities, as described in Exhibit A to the Agreement (defined below), as
designed, are in furtherance of the purpose of abating or controlling
atmospheric or water pollutants or contaminants resulting from the generation of
electricity at the Generating Station; and
WHEREAS, the Issuer and the Borrower have executed and delivered that
certain Loan Agreement, dated as of August 1, 2002 (hereinafter called the
"Agreement"), setting forth the undertaking by the Issuer to issue and sell its
revenue bonds under the Act (hereinafter called the "Bonds"), and to lend the
proceeds of the Bonds to the Borrower to provide a portion of the moneys
necessary to redeem and refund the outstanding principal amount of Prior Bonds;
and
WHEREAS, in the Agreement the Borrower releases the Issuer and agrees
that the Issuer shall not be liable for, and will indemnify and hold the Issuer
and the Trustee harmless from, certain matters; and
WHEREAS, certain findings and determinations relating to the Agreement
and the Generating Station and the Project have heretofore been made and are set
forth in this Indenture; and
WHEREAS, the execution and delivery of the Agreement and this Indenture
and the issuance of the Bonds have been in all respects duly and validly
authorized, and duly adopted and approved by resolutions of the Board of
Directors of the Issuer, and the Project, the plan of financing for the Project
and the issuance of the Bonds have been duly approved by the Board of
Supervisors of the County, as required by the Act and otherwise; and
WHEREAS, all other things necessary to make the Bonds, when issued,
executed and delivered by the Issuer and authenticated by the Trustee pursuant
to this Indenture, the valid, legal and binding limited obligations of the
Issuer, and to constitute this Indenture a valid pledge and assignment of all
right, title and interest of the Issuer in the Agreement (except as to certain
payments to the Issuer under provisions for indemnification of, and
reimbursement of expenses of, the Issuer), and of certain income and revenues
derived from the Agreement, for the payment of the principal of and interest on
the Bonds authenticated and delivered under this Indenture,
2
and the creation, execution and issuance of the Bonds, subject to the terms
hereof, have in all respects been duly authorized;
NOW, THEREFORE, the Issuer, in consideration of the covenants herein
contained and of the purchase and acceptance of the Bonds by the holders
thereof, in order to secure the payment of all Bonds at any time outstanding
under this Indenture, according to their tenor and effect, and the performance
and observance of all the covenants and conditions in the Bonds and herein
contained, and to declare the terms and conditions upon and subject to which the
Bonds are issued and secured, does grant a security interest in and pledge to
the Trustee (as hereinafter defined), and to its successors and assigns forever,
the Trust Estate (as hereinafter defined) for the equal and proportionate
benefit, security and protection of all holders and owners of the Bonds issued
under and secured by this Indenture without privilege, priority or distinction
as to the lien or otherwise of any of the Bonds over any other of the Bonds, all
upon the terms stated in this Indenture.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The terms defined in this Article I shall,
for all purposes of this Indenture and of any indenture supplemental hereto have
the meanings herein specified, unless the context clearly requires otherwise.
Capitalized terms used herein, defined in the Agreement and not otherwise
defined herein, shall have the meaning specified in the Agreement.
"Act" shall mean Title 35, Chapter 6, Arizona Revised Statutes (formerly
Title 9, Chapter 12, Arizona Revised Statutes, enacted by Chapter 69, Section 2,
Laws of Arizona of 1972), and all acts supplemental thereto or amendatory
thereof.
"Agreement" shall mean the Loan Agreement, of even date herewith, between
the Issuer and the Borrower and relating to the loan of the proceeds of the
Bonds, as originally executed or as it may from time to time be supplemented or
amended.
"Alternate Credit Support" shall mean any letter of credit, credit
facility, insurance policy, guarantee or other credit support agreement or
security mechanism provided by the Borrower in accordance with Section 6.08 of
the Agreement and any extension thereof.
"Authorized Borrower Representative" shall mean each person at the time
designated to act on behalf of the Borrower by written certificate furnished to
the Issuer and the Trustee containing the specimen signature of such person and
signed on behalf of the Issuer.
"Authorized Denominations" shall mean (a) with respect to any Long-Term
Interest Rate Period, $5,000 and any integral multiple thereof; (b) with respect
to any Daily Interest Rate Period, Weekly Interest Rate Period or Short-Term
Interest Rate Period, $100,000 and any integral multiple of $5,000 in excess of
$100,000.
"Available Moneys" shall mean (i) with respect to any date occurring
during the term of a Credit Facility, (a) proceeds of a drawing under a Credit
Facility which have been directly
3
deposited in the Bond Fund or the Purchase Fund, as applicable, (b) moneys
deposited in the Bond Fund or the Purchase Fund by or on behalf of the Borrower
and which have been on deposit with the Trustee or the Tender Agent, as
applicable, for at least one hundred and twenty-four (124) days prior to and
during which no petition by or against the Issuer or the Borrower or any
affiliate of the Borrower, under any Bankruptcy Act shall have been filed or any
bankruptcy or similar proceeding shall have been commenced, unless such petition
or proceeding shall have been dismissed and such dismissal shall be final and
not subject to appeal, (c) any other money (including the proceeds of the sale
of refunding obligations of the Issuer) the application of which would not, in
the written opinion of Bond Counsel or other nationally recognized counsel
experienced in bankruptcy matters and acceptable to the Issuer, the Rating
Agencies, if any, and the Trustee and delivered to the Trustee and the Tender
Agent, constitute a voidable preference in the case of a filing for protection
under the Bankruptcy Act of the Issuer or the Borrower or any affiliate of the
Borrower and (d) the proceeds from the investment of moneys described above, and
(ii) with respect to any date not occurring during the term of a Credit
Facility, any moneys furnished to the Trustee or the Tender Agent, as
applicable, and the proceeds from the investment thereof.
"Bank" shall mean the issuer of a Letter of Credit, if any, with respect
to the Bonds, and, any subsequently issued Credit Facility, the issuer of such
other Credit Facility so long as such other Credit Facility shall be in effect,
in its capacity as such issuer, its successors in such capacity and their
assigns.
"Bankruptcy Act" shall mean the United States Bankruptcy Code, any
successor act thereto or amendment thereof or any other applicable federal or
state bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar law, now or hereafter in effect.
"Bond" or "Bonds" shall mean the bonds issued in accordance with this
Indenture as referenced in Section 2.01(a).
"Bond Counsel" shall mean any firm of nationally recognized bond counsel
which is experienced in the financing of pollution control facilities and
acceptable to the Issuer, the Remarketing Agent, the Trustee and the Borrower.
"Bond Fund" shall mean the fund created by Section 5.01.
"Bond Interest Term" or "BIT" shall mean, with respect to each Bond
bearing interest at a BIT Rate, the period established in accordance with the
terms of Section 2.01(c)(v) hereof.
"Bond Interest Term Rate" or "BIT Rate" shall mean the interest rate on
any Bond established in accordance with Section 2.01(c)(v) hereof.
"Book-Entry Bonds" shall mean any Bonds which are then held in book-entry
form as provided in Section 2.01(e) hereof.
"Borrower" shall mean (i) El Paso Electric Company, a corporation
organized under the laws of the State of Texas and its successors and assigns,
and (ii) any surviving, resulting or transferee corporation as provided in
Section 6.02 of the Agreement.
4
"Business Day" shall mean a day on which banks located in the cities in
which the Principal Offices of the Trustee, the Registrar, the Paying Agent, the
Tender Agent, if any, and the Remarketing Agent, if any, are located, and in the
city or cities in which drawings under a Credit Facility are required to be
made, are not required or authorized by law or executive order to remain closed
and on which the New York Stock Exchange, Inc. is not closed.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time. Each reference herein to a section of the Code shall be deemed to
include the United States Treasury Regulations adopted under the Code, as the
same may be in effect from time to time, unless the context clearly requires
otherwise.
"Credit Facility" shall mean, collectively, the Letter of Credit, if any,
and any extensions thereof, and, upon the issuance and delivery of any Alternate
Credit Support in accordance with Section 6.08 of the Agreement, "Credit
Facility" shall mean such Alternate Credit Support.
"County" shall mean the County of Maricopa, Arizona.
"Daily Interest Rate" shall mean the variable interest rate on any Bond
established in accordance with Section 2.01(c)(ii) hereof.
"Daily Interest Rate Period" shall mean each period during which a Daily
Interest Rate is in effect.
"Determination of Taxability" means a determination that, due to the
untruth or inaccuracy of any representation or warranty made by the Borrower in
the Agreement or the breach of any covenant or warranty of the Borrower
contained in the Agreement, interest on the Bonds, or any of them, is determined
not to be Tax-Exempt by a final administrative determination of the Internal
Revenue Service or a final judicial decision of a court of competent
jurisdiction in a proceeding of which the Borrower received notice and in which
the Borrower was afforded an opportunity to participate to the full extent
permitted by law. A determination or decision will not be considered final for
purposes of the preceding sentence unless (A) the Issuer or the holder or Owners
of the Bonds involved in the proceeding in which the issue is raised (i) shall
have given the Borrower and the Trustee prompt written notice of the
commencement thereof, and (ii) shall have offered the Borrower the opportunity
to control the proceeding; provided the Borrower agrees to pay all expenses in
connection therewith and to indemnify such holder or holders against all
liability for such expenses (except that any such holder may engage separate
counsel, and the Borrower shall not be liable for the fees or expenses of such
counsel); and (B) such proceeding shall not be subject to a further right of
appeal or shall not have been timely appealed.
"Electronic" notice shall mean notice by any form of electronic
transmission capable of producing a written record and shall constitute written
notice as required herein.
"Facilities" or "Project" shall mean the pollution control, solid waste
disposal and sewage disposal facilities at the Plant, which are described in
Exhibit A to the Agreement, as from time to time revised, changed, amended or
modified, and related improvements and any substitutions therefor.
5
"Favorable Opinion of Bond Counsel" shall mean an opinion of Bond Counsel
addressed to the Issuer, the Bank and the Trustee to the effect that the action
proposed to be taken (i) is authorized or permitted by the laws of the State of
Arizona and this Indenture, and all conditions precedent, if any, have been
satisfied and (ii) will not adversely affect any exclusion from gross income for
federal income tax purposes of interest on the Bonds.
"Government Obligations" shall mean direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed as to full
and timely payment by, the United States of America and which are not subject to
prepayment or redemption prior to maturity.
"Indenture" shall mean this Indenture of Trust, as originally executed or
as it may from time to time be supplemented, modified or amended by any
supplemental indenture entered into pursuant to the provisions hereof.
"Initial Interest Rate Period" shall mean the Interest Rate Period for
the Bonds on the date of issuance and delivery of the Bonds as specified in
Section 2.01(b) hereof.
"Initial Long-Term Interest Rate Period" shall mean the period commencing
August 1, 2002 and ending July 31, 2005.
"Interest Accrual Date" shall mean (i) with respect to any Daily Interest
Rate Period, the first day thereof and, thereafter, the first day of each
calendar month during that Daily Interest Rate Period, (ii) with respect to any
Weekly Interest Rate Period, the first day thereof and, thereafter, the first
day of each calendar month during that Weekly Interest Rate Period, (iii) with
respect to any Long-Term Interest Rate Period, the first day thereof and,
thereafter, each Interest Payment Date in respect thereof, other than the last
such Interest Payment Date, and (iv) with respect to each Bond Interest Term
within a Short Term Interest Rate Period, the first day thereof.
"Interest Payment Date" shall mean (i) with respect to any Daily Interest
Rate Period or Weekly Interest Rate Period, the first Business Day of each
calendar month, (ii) with respect to any Long-Term Interest Rate Period, each
May 1 and November 1 occurring during such Long-Term Interest Rate Period and
the Business Day next succeeding the last day thereof, (iii) with respect to any
Short-Term Interest Rate Period, the Business Day next succeeding the last day
of thereof, and (iv) in all events, the redemption date or the final maturity
date of the Bonds.
"Interest Rate Period" shall mean any Daily Interest Rate Period, Weekly
Interest Rate Period, Short-Term Interest Rate Period or Long- Term Interest
Rate Period.
"Investment Securities" shall mean any of the following obligations or
securities (only to the extent investment therein would not violate the laws of
the State of Arizona) on which the Borrower (or any affiliate) is not the
obligor, maturing at such time or times as to enable disbursements to be made
from the Bond Fund in accordance with the terms hereof, or which shall be
marketable prior to the maturities thereof:
(i) direct obligations of, or obligations the principal and
interest of which are guaranteed as to the full and timely payment
by, the United States of
6
America, which obligations, in either case, are not subject to
redemption or prepayment at less than par by anyone other than
the holder;
(ii) obligations issued or guaranteed by an
instrumentality of the United States of America pursuant to
authority granted by the Congress of the United States of America,
including obligations of the Federal National Mortgage
Association, Federal Intermediate Credit Banks, Banks for
Cooperatives, Federal Land Banks or Federal Home Loan Banks;
(iii) commercial paper rated at the time of investment in
the highest short-term grade by the Rating Agencies;
(iv) bankers' acceptances drawn on and accepted by
commercial banks (including the Trustee, the Paying Agent, and the
Bank) having at least $10,000,000 in capital stock, surplus and
undivided profits the unsecured, uninsured obligations of which
are rated not less than "Prime - 1" or "Aa2" by Moody's and "A-1"
or "A+" by S&P;
(v) certificates of deposit, deposit accounts and
savings accounts fully insured by the Federal Deposit Insurance
Corporation;
(vi) repurchase agreements with solvent banking or other
financial institutions (including the Trustee, the Paying Agent,
and the Bank) rated at the time of investment not less than the
then current rating of the Bonds by each of the Rating Agencies;
(vii) obligations of a state, a Territory, Puerto Rico, or
a possession of the United States of America, or any political
subdivision of the foregoing, or of the District of Columbia and
which are rated at the time of investment not less than the then
current rating of the Bonds by each of the Rating Agencies;
(viii) money market funds registered under the federal
Investment Company Act of 1940, whose shares are registered under
the federal Securities Act of 1933, and having a rating by S&P of
"AAAm-G", "AAAm" or "Aam", and by Moody's of "Ass" or "As";
(ix) custodial agreements providing for the investment of
moneys through a custodian, reverse purchase agreements, option
agreements and agreements to lend securities; and
(x) any other obligations and securities not prohibited
by law and which are rated at least "Aaa" or "A8" by Moody's and
"AAA" or `AA' by S&P.
"Issue Date" shall mean August 1, 2002, the date of issuance and delivery
of the Bonds.
"Issuer" shall mean Maricopa County, Arizona Pollution Control
Corporation, an Arizona nonprofit corporation designated as a political
subdivision existing under the laws of the
7
State of Arizona, incorporated for and with the approval of the County, pursuant
to the provisions of the Constitution of the State of Arizona and the Act, and
its successors and assigns.
"Letter of Credit" shall mean the irrevocable direct pay letter of
credit, if any, issued by the Bank and delivered to the Trustee in accordance
with Section 6.08 of the Agreement and any extension thereof.
"Long-Term Interest Rate" shall mean with respect to each Bond, a fixed,
non-variable interest rate on such Bond established in accordance with Section
2.01(c)(iv) hereof.
"Long-Term Interest Rate Period" shall mean each period during which a
Long-Term Interest Rate is in effect.
"Maturity Date" shall mean May 1, 2037
"Maximum Interest Rate" shall mean fifteen percent (15%) per annum.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors
and their assigns, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "Moody's"
shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Borrower, with the approval of the Remarketing Agent
and the Bank, by notice to the Trustee, the Tender Agent and the Issuer.
"Nominee" shall have the meaning specified in Section 2.01(e) hereof.
"Outstanding" when used in reference to the Bonds, shall mean, as at any
particular date, the aggregate of all Bonds authenticated and delivered in
accordance with this Indenture except:
i. those cancelled at or prior to such date or delivered to or
held by the Trustee at or prior to such date for
cancellation;
ii. those deemed to be paid in accordance with Article IX
hereof;
iii. those in lieu of or in exchange, replacement or
substitution for which other Bonds shall have been
authenticated and delivered in accordance with this
Indenture, unless proof satisfactory to the Trustee and the
Borrower is presented that such Bond is held by a bona fide
holder in due course; and
iv. Bonds deemed purchased pursuant to Section 4.10 hereof.
"Owner" shall mean the person or entity in whose name any Bond is
registered upon the registration books maintained pursuant to Section 2.04
hereof.
"Paying Agent" shall mean the initial and any successor paying agent or
agents appointed in or in accordance with Section 11.21 hereof. "Principal
Office" of the Paying Agent shall mean the Principal Office of the Trustee (if
the Trustee is the Paying Agent) or such other office
8
of the Paying Agent designated in writing to the Issuer, the Trustee, the Bank,
the Tender Agent and the Remarketing Agent.
"Plant" shall mean Units 1, 2 and 3 of the Palo Verde Nuclear Generating
Station, a nuclear power generating plant located in Maricopa County, Arizona,
at which the Project is located.
"Prior Bonds" shall have the meaning set forth in the 5th Whereas clause
of this Indenture.
"Purchase Fund" shall mean the fund created by Section 14.01 hereof.
"Rating Agencies" shall mean S&P or Xxxxx.
"Receipts and Revenues" shall mean (a) the Repayment Installments
including all moneys drawn by the Trustee under a Credit Facility in
satisfaction of the Borrower's obligations to make Repayment Installments (b)
all other moneys received by the Trustee (for the account of the Issuer)
pursuant to the Agreement, (c) all moneys and investments in the Bond Fund and
(d) all income and profit from the investment of the foregoing moneys. The term
"Receipts and Revenues" does not include any moneys or investments in the
Purchase Fund or amounts required to be paid to the Issuer pursuant to Sections
5.04, 5.08, 8.03 and 8.05 of the Agreement.
"Record Date" shall mean (a) with respect to any Interest Payment Date in
respect of any Daily Interest Rate Period, the last Business Day of each
calendar month or, in the case of the last Interest Payment Date in respect of a
Daily Interest Rate Period, the Business Day immediately preceding such Interest
Payment Date, (b) with respect to any Interest Payment Date in respect of any
Weekly Interest Rate Period or any Bond Interest Term within a Short-Term
Interest Rate Period, the Business Day immediately preceding such Interest
Payment Date, and (c) with respect to any Interest Payment Date in respect of
any Long-Term Interest Rate Period, the fifteenth day of the month immediately
preceding such Interest Payment Date or, in the event that an Interest Payment
Date shall occur within 16 days after the first day of a Long-Term Interest Rate
Period, such first day
"Registrar" shall mean the registrar or registrars appointed in or in
accordance with Section 11.23 hereof. "Principal Office" of the Registrar shall
mean the Principal Office of the Trustee (if the Trustee is the Registrar) or
such other office of the Registrar designated in writing to the Issuer, the
Trustee, the Tender Agent and the Remarketing Agent.
"Reimbursement Agreement" shall mean the Reimbursement Agreement, between
the Borrower and the Bank issued in connection with the Letter of Credit and
delivered to the Trustee in connection with Section 6.08 of the Agreement and
any extension thereof.
"Remarketing Agent" shall mean Xxxxxxx Xxxxx Barney Inc. and any
successor remarketing agent appointed in accordance with Section 14.01 hereof.
"Principal Office" of the Remarketing Agent shall mean Xxxxxxx Xxxxx Xxxxxx
Inc., 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Debt
Capital Markets, or such other office thereof designated in writing to the
Issuer, the Trustee, the Bank and the Tender Agent.
9
"Remarketing Agreement" shall mean the Remarketing Agreement, executed
and delivered at or prior to the initial issuance of the Bonds, between the
Borrower and the Remarketing Agent, relating to the Bonds, as supplemented or
amended in accordance with the provisions thereof.
"Repayment Installment" shall mean any amount that the Borrower is
required to pay to the Trustee pursuant to Section 5.02(a) of the Agreement as a
repayment of the loan made by the Issuer under the Agreement.
"Representation Letter" shall have the meaning set forth in Section
2.01(e) hereof.
"S&P" shall mean Standard & Poor's Ratings Group (a Division of
XxXxxx-Xxxx Inc.), a corporation organized and existing under the laws of the
State of New York, its successors and their assigns, and, if such corporation
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Borrower, with the
approval of the Remarketing Agent and the Bank, by notice to the Trustee, the
Tender Agent and the Issuer.
"Short-Term Interest Rate Period" shall mean, with respect to each Bond
bearing interest at a BIT Rate, the period established in accordance with
Section 2.01(c)(v) hereof.
"Special Record Date" shall mean, with respect to any Bond, the date
established by the Trustee in connection with the payment of overdue interest on
that Bond pursuant to Section 2.01(b) hereof.
"Supplemental Indenture" shall mean any supplemental indenture hereafter
duly authorized and entered into between the Issuer and the Trustee in
accordance with the provisions of this Indenture.
"Tax Certificate" shall mean "The Tax Certificate as to Arbitrage and the
Provisions of Sections 141-150 of the Internal Revenue Code of 1986", executed
by the Issuer in connection with the issuance of the Bonds.
"Tax Exempt" shall mean, with respect to interest on any obligations of a
state or local government, including the Bonds, that such interest is excluded
from the gross income of the holders thereof (other than any holder who is a
"substantial user" of facilities financed with such obligations or a "related
person" within the meaning of Section 147(a) of the Code) for federal income tax
purposes, whether or not such interest is includable as an item of tax
preference or otherwise includable directly or indirectly for purposes of
calculating other tax liabilities, including any alternative minimum tax or
environmental tax under the Code.
"TBMA Municipal Index" means The Bond Market Association Municipal Index
as of the most recent date for which such index was published or such other
weekly, high-grade index comprised of seven-day, Tax-Exempt variable rate demand
notes produced by Municipal Market Data, Inc., or its successor, or as otherwise
designated by The Bond Market Association; provided, however, that, if such
index is no longer produced by Municipal Market Data, Inc. or its successor,
then "TBMA Municipal Index" shall mean such other reasonably comparable index
selected by the Borrower with the advice of the Remarketing Agent, if any.
10
"Tender Agent" shall mean Xxxxxxx Xxxxx Xxxxxx Inc. and any successor
tender agent appointed in accordance with Section 14.01 hereof. "Principal
Office" of the Tender Agent shall mean the Principal Office of the Remarketing
Agent (if the Remarketing Agent is the Tender Agent), or such other office
thereof designated in writing to the Issuer, the Trustee and the Remarketing
Agent.
"Tender Agreement" shall mean the Tender Agreement, if any, executed and
delivered at or prior to the initial issuance of the Bonds, between the Borrower
and the Tender Agent, relating to the Bonds, as supplemented or amended in
accordance with the provisions thereof.
"Trustee" shall mean JPMorgan Chase Bank, as trustee under this
Indenture, and its successor or successors hereunder. "Principal Office" of the
Trustee shall mean the principal office of the Trustee at which at any
particular time its corporate trust business shall be administered in Texas,
which office at the date of the execution of this Indenture, is 000 Xxxxxx,
Xxxxx 0000 Xxxxxxx, XX 00000, Attention: Institutional Trust Services; except
that with respect to the presentation of Bonds for payment or for registration
of transfer, exchange or tender, such term shall mean the office or agency of
the Trustee at 0000 Xxxxx Xxxxxx, 0/xx/ Xxxxx, Xxxxxx, Xxxxx 00000, Attention:
Registered Bond Events.
"Trust Estate" shall mean at any particular time all right, title and
interest of the Issuer in and to the Agreement (except its rights under Sections
5.04, 5.08 and 8.05 thereof and any rights of the Issuer to receive notices,
certificates, requests, requisitions, directions and other communications
thereunder), including without limitation the Receipts and Revenues, all moneys
and obligations which at such time are deposited or are required to be deposited
with, or are held or are required to be held by or on behalf of, the Trustee or
any Paying Agent in trust under any of the provisions of this Indenture and all
other rights, titles and interests which at such time are subject to the lien of
this Indenture, except for moneys or obligations deposited with or paid to the
Trustee or any Paying Agent for the redemption or payment of Bonds which are
deemed to have been paid in accordance with Article IX hereof and funds held
pursuant to Section 5.06 hereof.
"Weekly Interest Rate" shall mean a variable interest rate on the Bonds
established in accordance with Section 2.01(c)(iii) hereof.
"Weekly Interest Rate Period" means each period during which a Weekly
Interest Rate is in effect.
Section 1.02 Number and Gender. The singular form of any word used
herein, including the terms defined in Section 1.01, shall include the plural,
and vice versa. The use herein of a word of any gender shall include all
genders.
Section 1.03 Articles, Sections, Etc. All references herein to
"Articles," "Sections" and other subdivisions are to the corresponding Articles,
Sections or subdivisions of this Indenture as originally executed; and the words
"herein," "hereof," "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or subdivision
hereof. The headings or titles of the several Articles and Sections hereof,
11
and any table of contents appended to copies hereof, shall be solely for
convenience of reference and shall not affect the meaning, construction or
effect of this Indenture.
Section 1.04 Content of Certificates and Opinions. Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture or the Agreement (except for the certificate of
cancelled Bonds provided for in Sections 2.05, 2.06 and 4.05 hereof) shall
include (a) a statement that the person or persons making or giving such
certificate or opinion have read such covenant or condition and the definitions
herein relating thereto; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in the opinion of
the signers, they have made or caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such covenant or condition has been complied with; and (d) a
statement as to whether, in the opinion of the signers, such condition or
covenant has been complied with.
Any such certificate or opinion made or given by an officer of the Issuer
or the Borrower may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his or her certificate or opinion may be based as aforesaid
are erroneous, or in the exercise of reasonable care should have known that the
same were erroneous. Any such certificate or opinion made or given by counsel
may be based, insofar as it relates to factual matters (with respect to which
information is in the possession of the Issuer or the Borrower), upon the
certificate or opinion of or representations by an officer of the Issuer or the
Borrower, as applicable, unless such counsel knows that the certificate or
opinion or representations with respect to the matters upon which his or her
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
Section 1.05 Findings. It is hereby found and determined that:
(a) The Borrower is a corporation which is conducting operations
in the County and is qualified under the Act to borrow the proceeds of the
sale of the Bonds from the Issuer to redeem and repay the outstanding
principal amount of the Prior Bonds for purposes of the Act;
(b) The Project promotes the purposes of the Act by preventing
or limiting air, water and other forms of pollution for the purpose of
protecting the health and welfare of the citizens of the State of Arizona,
and facilitate compliance by the Borrower with existing and possible future
air, water and other quality standards designed to improve the environment
in the State of Arizona;
(c) The loan pursuant to the Agreement is in furtherance of the
purposes of the Issuer;
(d) It is advisable that the Bonds be subject to redemption as
provided in this Indenture;
12
(e) The manner in which the Bonds are sold is most advantageous
and it is necessary and advantageous that the expenses, premiums and
commissions, if any, in connection with the issuance of the Bonds be paid
by the Borrower; and
(f) It is advisable that this Indenture contain the provisions
set forth herein.
ARTICLE II
THE BONDS
Section 2.01 Authorization and Terms of Bonds.
(a) Authorization. Bonds designated as "Maricopa County, Arizona
Pollution Control Corporation Pollution Control Refunding Revenue Bonds
2002 Series A (El Paso Electric Company, Palo Verde Project)" may be issued
under this Indenture. The aggregate principal amount of Bonds which may be
issued and Outstanding under this Indenture shall not exceed Thirty-Seven
Million One Hundred Thousand Dollars ($37,100,000). No Bonds may be issued
hereunder except in accordance with this Article.
(b) General Terms. The Bonds shall be issued as fully registered
Bonds, without coupons, in Authorized Denominations and shall be dated as
of the Issue Date. The Bonds shall mature, subject to prior redemption as
provided in Article IV, upon the terms and conditions hereinafter set
forth, on the Maturity Date. The Bonds shall bear interest at a Long-Term
Interest Rate for a Long-Term Interest Rate Period commencing August 1,
2002 and ending July 31, 2005 (the "Initial Interest Rate Period"). The
Initial Long-Term Interest Rate shall be 6.25% per annum.
The Bonds shall be numbered from R-1 consecutively upwards in order of
authentication. Each Bond shall bear interest from the last date to which
interest has been paid in full or, if no interest has been paid in full or duly
provided on such Bond from the Issue Date. All Bonds shall mature on the date
set forth above and shall bear interest at the rates determined from time to
time in accordance with the provisions of this Indenture. Payment of the
interest on any Bond shall be made to the person appearing on the bond
registration books of the Registrar as the registered holder thereof as of the
close of business on the Record Date, such interest to be paid by the Paying
Agent to such registered holder (i) in the event such Bond is a Book-Entry Bond,
in immediately available funds on the Interest Payment Date in accordance with
the Representation Letter, and (ii) in the event such Bond is not a Book-Entry
Bond (A) in immediately available funds (by wire transfer or by deposit to the
account of the holder of at least $1,000,000 of Bonds if such account is
maintained with the Paying Agent), according to the written instructions given
by such holder to the Registrar prior to the Record Date or (B) in all other
cases, by check mailed by first class mail to the holder at such holder's
address as it appears as of the Record Date on the registration books of the
Registrar; except, in each case, that, if and to the extent that there shall be
a default in the payment of the interest due on such Interest Payment Date, such
defaulted interest shall be paid to the holders in whose name any such Bonds are
registered as of a special record date to be fixed by the Trustee, notice of
which shall be given to such holders not less than ten (10) days prior thereto.
Both the principal of and
13
premium, if any, on the Bonds shall be payable upon surrender thereof in lawful
money of the United States of America at the Principal Office of the Paying
Agent. Notwithstanding the foregoing, interest on any Bond bearing a Bond
Interest Term Rate (except any such Bond which is a Book-Entry Bond) shall be
paid only upon presentation to the Tender Agent of the Bond on which such
payment is due. The Bonds shall be dated as of the Issue Date. The Bonds shall
be substantially in the form attached hereto as Exhibit A.
If and to the extent, however, that the Issuer fails to make payment or
provision for payment of interest on any Bond on any Interest Payment Date, that
interest shall cease to be payable to the Owner of that Bond on the applicable
Record Date. When moneys become available for payment of the interest, (a) the
Trustee shall, pursuant to Section 10.10 hereof, establish a Special Record Date
for the payment of that interest which shall be not more than 15 nor fewer than
10 days prior to the date of the proposed payment, and (b) the Trustee shall
give notice by first-class mail of the proposed payment and of the Special
Record Date to each owner not fewer than 10 days prior to the Special Record
Date and, thereafter, the interest shall be payable to the owners of the Bonds
as of the Special Record Date at the close of business on the Special Record
Date.
(c) Interest Rates and Rate Periods. The Bonds shall bear
interest until final payment of the principal or redemption price thereof
shall have been made in accordance with the provisions hereof, whether at
maturity, upon redemption or otherwise. During Daily Interest Rate Periods,
interest on the Bonds shall be computed on the basis of a 365- or 366-day
year for the number of days actually elapsed during Daily Interest Rate
Periods. During Short-Term Interest Rate Periods or Weekly Interest Rate
Periods, interest on the Bonds shall be computed on the basis of a 365- or
366-day year for the number of days actually elapsed based on the calendar
year in which the Short-Term Interest Rate Period or Weekly Interest Rate
Period commences. During any Long-Term Interest Rate Period, interest on
the Bonds shall be computed upon the basis of a 360-day year, consisting of
twelve 30-day months.
(i) Rate Periods. The Bonds shall initially bear interest
as set forth in Section 2.01(b), and shall remain in such
Interest Rate Period until adjusted to a different Interest Rate
Period as provided herein. After any such adjustment, the term of
the Bonds shall be divided into consecutive Interest Rate Periods
during which the Bonds may bear interest at the Daily Interest
Rate, Weekly Interest Rate, Bond Interest Term Rate or Long-Term
Interest Rate. Any Daily Interest Rate Period, Weekly Interest
Rate Period or Short-Term Interest Rate Period established with
respect to the Bonds shall continue in effect unless and until
adjusted to a different Interest Rate Period as provided herein.
(ii) Daily Interest Rate.
(A) Determination of Daily Interest Rate. During each Daily
Interest Rate Period, the Bonds shall bear interest at the Daily
Interest Rate , determined by the Remarketing Agent on or before
each Business Day for such Business Day. The Daily Interest Rate
shall be the rate of interest per annum determined by the
Remarketing Agent to be the lowest interest rate which would
enable the
14
Remarketing Agent to sell the Bonds for delivery on the effective
date of such interest rate at a price (without regard to accrued
interest) equal to 100% of the principal amount thereof. The
Remarketing Agent shall provide the Trustee and the Borrower with
telephonic or Electronic notice of the Daily Interest Rate
determined by 10:30 a.m. (New York City time) on the date of
determination. If the Remarketing Agent shall not have determined
a Daily Interest Rate for any day by 10:30 a.m. (New York City
time) on such day, the Daily Interest Rate shall be the same as
the Daily Interest Rate for the immediately preceding day. In no
event shall the Daily Interest Rate be greater than the Maximum
Interest Rate.
(B) Adjustment to a Daily Interest Rate Period. At any
time, the Borrower, by written notice to the Issuer, the Trustee,
the Bank, the Tender Agent and the Remarketing Agent may elect
that the Bonds shall bear interest at a Daily Interest Rate. Such
notice (1) shall specify the effective date of such adjustment to
a Daily Interest Rate, which shall be (a) a Business Day not
earlier than thirty-five (35) days after delivery of such notice
(or such shorter period as shall be acceptable to the Trustee);
(b) in the case of an adjustment from a Long-Term Interest Rate
Period, a day on which the Bonds would be permitted to be
redeemed at the option of the Borrower pursuant to Section
4.01(a)(ii)(C) hereof; and (c) in the case of an adjustment from
a Weekly Interest Rate Period or a Short-Term Interest Rate
Period, an Interest Payment Date on which interest is payable for
the Weekly Interest Rate Period or Bond Interest Term from which
the adjustment is to be made; provided, however, that if prior to
the Borrower's making such election, any Bonds shall have been
called for redemption and such redemption shall not have
theretofore been effected, the effective date of such Daily
Interest Rate Period shall not precede such redemption date; and
(2) if the adjustment is from a Long-Term Interest Rate Period,
shall be accompanied by a Favorable Opinion of Bond Counsel
addressed to the Trustee to the effect that such adjustment (a)
is authorized or permitted by the Indenture and the Act, and (b)
will not adversely affect the Tax-Exempt status of the interest
on the Bonds.
(C) Notice of Adjustment to a Daily Interest Rate. The
Trustee shall give notice by first class mail of an adjustment to
a Daily Interest Rate Period to the Owners of the Bonds not less
than 15 days (30 days if the then current Interest Rate Period is
a Long-Term Interest Rate Period) prior to the effective date of
such Daily Interest Rate Period. Such notice shall state (1) that
the interest rate on the Bonds will be adjusted to a Daily
Interest Rate (subject to the Borrower's ability to rescind its
election as described in Section 2.01(c)(viii) hereof), (2) the
effective date of the Daily Interest Rate Period, (3) that the
Bonds are subject to mandatory tender for purchase on such
effective date (except in the case of adjustment between Daily
Interest Rate Periods and Weekly Interest Rate Periods), (4) the
procedures for such mandatory tender, and (5) the purchase price
of the Bonds on such effective date (expressed as a percentage of
the principal amount thereof).
(iii) Weekly Interest Rate.
15
(A) Determination of Weekly Interest Rate. During each
Weekly Interest Rate Period, the Bonds shall bear interest at the
Weekly Interest Rate, which shall be determined by the
Remarketing Agent no later than the first day of such Weekly
Interest Rate Period and thereafter no later than 10:00 a.m. (New
York City time) on Wednesday of each week during such Weekly
Interest Rate Period, unless any such Wednesday shall not be a
Business Day, in which event the Weekly Interest Rate shall be
determined by the Remarketing Agent no later than the Business
Day immediately preceding such Wednesday. The Weekly Interest
Rate shall be the rate of interest per annum determined by the
Remarketing Agent to be the lowest interest rate which would
enable the Remarketing Agent to sell the Bonds for delivery on
the effective date of such interest rate at a price (without
regard to accrued interest) equal to 100% of the principal amount
thereof. If for any reason, a Weekly Interest Rate is not so
established for any period by the time specified above by the
Remarketing Agent, the Weekly Interest Rate shall be the same as
the Weekly Interest Rate in effect for the immediately preceding
week. In no event shall any Weekly Interest Rate exceed the
Maximum Interest Rate. The first Weekly Interest Rate determined
for each Weekly Interest Rate Period shall apply to the period
commencing on the first day of such Weekly Interest Rate Period
and ending on the next succeeding Tuesday. Thereafter, each
Weekly Interest Rate shall apply to the period commencing on each
Wednesday and ending on the next succeeding Tuesday, unless such
Weekly Interest Rate Period shall end on a day other than
Tuesday, in which event the last Weekly Interest Rate for such
Weekly Interest Rate Period shall apply to the period commencing
on the Wednesday preceding the last day of such Weekly Interest
Rate Period and ending on such last day. The Remarketing Agent
shall provide the Trustee and the Borrower with written,
telephonic or Electronic notice of each Weekly Interest Rate, as
determined, by 12:00 noon (New York City time) on the effective
date of such Weekly Interest Rate.
(B) Adjustment to Weekly Interest Rate. At any time, the
Borrower, by written direction to the Issuer, the Trustee, the
Bank, the Tender Agent and the Remarketing Agent may elect that
the Bonds shall bear interest at a Weekly Interest Rate. Such
direction (1) shall specify the effective date of such adjustment
to a Weekly Interest Rate, which shall be (a) a Business Day not
earlier than thirty-five (35) days after delivery of such notice
(or such shorter period as shall be acceptable to the Trustee);
(b) in the case of an adjustment from a Long-Term Interest Rate
Period, a day on which the Bonds would otherwise be permitted to
be redeemed at the option of the Borrower pursuant to Section
4.01(a)(ii)(C) hereof; and (c) in the case of an adjustment from
a Daily Interest Rate Period or Short-Term Interest Rate Period,
an Interest Payment Date on which interest is payable for the
Daily Interest Rate Period or Bond Interest Term from which the
adjustment is to be made; provided, however, that if prior to the
Borrower's making such election, any Bonds shall have been called
for redemption and such redemption shall not have theretofore
been effected, the effective date of such Weekly Interest Rate
Period shall not precede such redemption date; and (2) if the
adjustment is from a Long-Term Interest Rate Period, shall be
accompanied by a Favorable Opinion of Bond Counsel addressed
16
to the Trustee to the effect that such adjustment (a) is
authorized or permitted by the Indenture and the Act, and (b)
will not adversely affect the Tax-Exempt status of interest on
the Bonds.
(C) Notice of Adjustment to a Weekly Interest Rate Period.
The Trustee shall give notice by first class mail of an
adjustment to a Weekly Interest Rate Period to the Owners of the
Bonds not less than fifteen (15) days (thirty (30) days if the
then current Interest Rate Period is a Long-Term Interest Rate
Period) prior to the effective date of such Weekly Interest Rate
Period. Such notice shall state (1) that the Interest Rate on the
Bonds will be adjusted to a Weekly Interest Rate (subject to the
Borrower's ability to rescind its election as provided in Section
2.01(c)(viii) hereof), (2) the effective date of the Weekly
Interest Rate Period, (3) that the Bonds are subject to mandatory
tender for purchase on such effective date (except in the case of
adjustments between Daily Interest Rate Periods and Weekly
Interest Rate Periods), (4) the procedures for such mandatory
tender, and (5) the purchase price of such Bonds on such
effective date (expressed as a percentage of the principal amount
thereof).
(iv) Long-Term Interest Rate.
(A) Determination of Long-Term Interest Rate. During each
Long-Term Interest Rate Period, the Bonds shall bear interest at
the Long-Term Interest Rate, which shall be determined by the
Remarketing Agent on a Business Day selected by the Remarketing
Agent, but not more than forty (40) days prior to and not later
than the effective date of such Long-Term Interest Rate Period.
The Long-Term Interest Rate shall be the rate of interest per
annum determined by the Remarketing Agent on such date, and
communicated by the close of business on such date to the
Trustee, the Paying Agent and the Borrower, by written,
telephonic or Electronic notice, as being the lowest interest
rate which would enable the Remarketing Agent to sell the Bonds
for delivery on the effective date of such Long-Term Interest
Rate Period at a price (without regard to accrued interest) equal
to 100% of the principal amount thereof; provided, however, that
if, for any reason, a Long-Term Interest Rate for any Long-Term
Interest Rate Period shall not be determined or effective or if
an adjustment from a Long-Term Interest Rate Period to another
Interest Rate Period shall not be effective, the Interest Rate
Period for the Bonds shall automatically convert to a Daily
Interest Rate Period; provided, further, however, that if the
Favorable Opinion of Bond Counsel required by Section
2.01(c)(ii)(B) in connection with an adjustment to a Daily
Interest Rate Period from a Long-Term Interest Rate Period cannot
be obtained, then the Interest Rate Period for the Bonds shall
automatically convert to a Long-Term Interest Rate Period of one
year and one day. If a Daily Interest Rate for the first day of
such Daily Interest Rate Period is not determined as provided in
Section 2.01(c)(ii) hereof, the Daily Interest Rate for the first
day of such Daily Interest Rate Period shall be equal to the TBMA
Municipal Index. In no event shall any Long-Term Interest Rate be
greater than the Maximum Interest Rate.
17
(B) Adjustment to or Continuation of a Long-Term Interest
Rate Period. At any time, the Borrower, by written notice to the
Issuer, the Bank, the Trustee, the Tender Agent and the
Remarketing Agent may elect that the Bonds shall bear, or
continue to bear, interest at a Long-Term Interest Rate, and if
it shall so elect, shall determine the duration of the Long-Term
Interest Rate Period during which the Bonds shall bear interest
at such Long-Term Interest Rate. Each Long-Term Interest Rate
Period shall have a duration such that the last day of such
Long-Term Interest Rate Period is (1) a day which both
immediately precedes a Business Day and is at least one year
after the effective date of such Long-Term Interest Rate Period
or (2) if earlier, the day immediately preceding the final
maturity date of the Bonds. At the time the Borrower so elects an
adjustment to or continuation of a Long-Term Interest Rate
Period, the Borrower may specify two or more consecutive
Long-Term Interest Rate Periods and, if the Borrower so
specifies, shall specify the duration of each such Long-Term
Interest Rate Period as provided in this paragraph. Such notice
shall specify the effective date of each Long-Term Interest Rate
Period, which shall be (a) a Business Day not earlier than
thirty-five (35) days after delivery of such notice (or such
shorter period as shall be acceptable to the Trustee); (b) in the
case of an adjustment from or continuation of a Long-Term
Interest Rate Period, a day on which the Bonds would be permitted
to be redeemed by the Borrower pursuant to Section 4.01(a)(ii)(C)
hereof; and (c) in the case of an adjustment from a Daily, Weekly
or Short-Term Interest Rate Period, an Interest Payment Date on
which interest is payable for the Daily or Weekly Interest Rate
Period or Bond Interest Term from which the adjustment is to be
made; provided, however, that if prior to the Borrower's making
such election, any Bonds shall have been called for redemption
and such redemption shall not have theretofore been effected, the
effective date of such Long-Term Interest Rate Period shall not
precede such redemption date. In addition, such notice (i) shall
specify the last day of such Long-Term Interest Rate Period, and
(ii) if the adjustment is from a Daily, Weekly or Short-Term
Interest Rate Period, shall be accompanied by a Favorable Opinion
of Bond Counsel addressed to the Trustee to the effect that such
adjustment (a) is authorized or permitted by the Indenture and
the Act, and (b) will not adversely affect the Tax-Exempt status
of interest on the Bonds.
If, by the thirty-fifth day prior to the last day of any
Long-Term Interest Rate Period, the Trustee shall not have
received notice of the Borrower's election that, during the next
succeeding Interest Rate Period, the Bonds shall bear interest at
a Daily Interest Rate, a Weekly Interest Rate, a Long-Term
Interest Rate or a Bond Interest Term Rate accompanied by
appropriate opinions of Bond Counsel, if required by Section
2.01(c)(ii)(B), (iii)(B), (iv)(B) or (v)(B) hereof, the next
succeeding Interest Rate Period for the Bonds shall be a Daily
Interest Rate Period; provided, however, that if the opinion of
Bond Counsel required by Section 2.01(c)(ii)(B) in connection
with an adjustment to a Daily Interest Rate Period from a
Long-Term Interest Rate Period cannot be obtained, then the
Interest Rate Period for the Bonds shall automatically convert to
a Long-Term Interest Rate Period of one year and one day. If a
Daily Interest Rate for the first day of such Daily Interest Rate
Period is not determined as provided in Section
18
2.01(c)(ii) hereof, the Daily Interest Rate for the first day of
such Daily Interest Rate Period shall be equal to the TBMA
Municipal Index.
At the same time that the Borrower elects to have the Bonds
bear interest at a Long-Term Interest Rate or continue to bear
interest at a Long-Term Interest Rate, the Borrower may also
specify to the Trustee optional redemption prices and periods
different from (including that there be no such optional
redemption) those set out in Section 4.01(a)(ii)(C) during the
Long-Term Interest Rate Period(s) with respect to which such
election is made; provided, however, that such notice shall be
accompanied by a Favorable Opinion of Bond Counsel addressed to
the Trustee to the effect that such changes (i) are authorized or
permitted by the Act and this Indenture, and (ii) will not
adversely affect the Tax-Exempt status of interest on the Bonds.
(C) Notice of Adjustment to or Continuation of a Long-Term
Interest Rate. The Trustee shall give notice by first class mail
of an adjustment to or continuation of a Long-Term Interest Rate
Period to the Owners of the Bonds not less than fifteen (15) days
(thirty (30) days if the then current Interest Rate Period is a
Long-Term Interest Rate Period) prior to the effective date of
such Long-Term Interest Rate Period. Such notice shall state (1)
that the interest rate on the Bonds will be adjusted to, or
continue to be, a Long-Term Interest Rate (subject to the
Borrower's ability to rescind its election as provided in Section
2.01(c)(viii) hereof), (2) the effective date of such Long-Term
Interest Rate Period, (3) that the Bonds shall be subject to
mandatory tender for purchase on such effective date, (4) the
procedures for such mandatory tender, and (5) the purchase price
of the Bonds on such effective date (expressed as a percentage of
the principal amount thereof).
(v) Bond Interest Term Rate.
(A) Determination of Bond Interest Terms and Bond Interest
Term Rates. During each Short-Term Interest Rate Period, each
Bond shall bear interest during each Bond Interest Term for such
Bond at the Bond Interest Term Rate for such Bond. Each Bond
Interest Term for any Bond shall be a period of at least one day
but not more than the lesser of (x) 270 days or (y) the number of
days of interest coverage on the Bonds provided for in any Credit
Facility then in effect minus five (5) days. When a Credit
Facility, if any, other than a Letter of Credit is in effect with
respect to the Bonds or no Credit Facility is in effect with
respect to the Bonds, each Bond Interest Term for any Bond shall
be a period of at least one day but not more than 270 days. Each
Bond Interest Term for any Bond shall be a period determined by
the Remarketing Agent to be, in its judgment, the period which,
taking into account prevailing market conditions and all other
Bond Interest Terms and Bond Interest Term Rates for all Bonds
then Outstanding, is likely to result in the lowest overall net
interest expense on all such Bonds; provided, however, that any
such Bond purchased on behalf of the Borrower and remaining
unsold in the hands of the Remarketing Agent as of 1:00 p.m. (New
York City time) on the effective date of the Bond Interest Term
for such Bond
19
shall have a Bond Interest Term of one day or, if such Bond
Interest Term would not end on a day immediately preceding a
Business Day, a Bond Interest Term of more than one day ending on
the day immediately preceding the next Business Day; provided,
further, however, that (1) each Bond Interest Term shall end on a
day which immediately precedes a Business Day and no Bond
Interest Term shall extend beyond the day immediately preceding
the final maturity date of the Bonds or, if a Credit Facility, if
any, is then in effect with respect to the Bonds, the scheduled
expiration date of such Credit Facility, and (2) if for any
reason the Remarketing Agent fails or is unable to determine a
Bond Interest Term on any Bond, the Bond Interest Term for such
Bond shall be one day, unless such Bond Interest Term would end
on a day which does not precede a Business Day, in which case
such Bond Interest Term shall end on the day immediately
preceding the next succeeding Business Day.
The Bond Interest Term Rate for each Bond Interest Term for
each Bond shall be the rate of interest per annum determined by
the Remarketing Agent no later than 1:00 p.m. (New York City
time) on the first day of such Bond Interest Term to be the
lowest interest rate which would enable the Remarketing Agent to
sell such Bonds on the effective date of such interest rate at a
price (without regard to accrued interest) equal to 100% of the
principal amount thereof. The Remarketing Agent shall provide the
Trustee and the Borrower with telephonic or Electronic notice of
each Bond Interest Term Rate and Bond Interest Term by 1:00 p.m.
(New York City time) on the date of determination. If a Bond
Interest Term Rate for a Bond Interest Term of one day is not
determined or effective by 1:00 p.m. (New York City time) on such
day, the Bond Interest Term Rate for such Bond Interest Term of
one day shall be equal to the TBMA Municipal Index. In no event
shall any Bond Interest Term Rate exceed the Maximum Interest
Rate.
Notwithstanding the foregoing, in the event that notice of
redemption with respect to any Bond in a Short-Term Interest Rate
Period shall have been given to the holder of such Bond by the
Trustee pursuant to Section 4.03 hereof, no subsequent Bond
Interest Terms or Bond Interest Term Rates shall be determined
with respect to such Bond.
(B) Adjustment to or Continuation of Bond Interest Term
Rates. At any time, the Borrower, by written direction to the
Issuer, the Trustee, the Bank, if any, the Tender Agent and the
Remarketing Agent may elect that the Bonds shall bear interest at
Bond Interest Term Rates. Such direction (1) shall specify the
effective date of the Short-Term Interest Rate Period during
which the Bonds shall bear interest at Bond Interest Term Rates,
which shall be (a) a Business Day not earlier than thirty-five
(35) days after delivery of such notice (or such shorter period
as shall be acceptable to the Trustee), (b) in the case of an
adjustment from a Long-Term Interest Rate Period, a day on which
the Bonds would be permitted to be redeemed at the option of the
Borrower pursuant to Section 4.01(a)(ii)(C) hereof; and (c) in
the case of an adjustment from a Daily or Weekly Interest Rate
Period, an Interest Payment Date on which interest is payable for
the Daily or Weekly Interest Rate Period from which the
adjustment is to be made; provided,
20
however, that if prior to the Borrower's making such election
any Bonds shall have been called for redemption and such
redemption shall not have theretofore been effected, the
effective date of such Short-Term Interest Rate Period shall
not precede such redemption date; and (2) shall be accompanied
by a Favorable Opinion of Bond Counsel addressed to the
Trustee to the effect that such adjustment (a) is authorized
or permitted by the Indenture and the Act and (b) will not
adversely affect the Tax-Exempt status of interest on the
Bonds.
(C) Notice of Adjustment to a Bond Interest Term. The
Trustee shall give notice by first class mail of an adjustment
to a Short-Term Interest Rate Period to the Owners of the
Bonds not less than fifteen (15) days (thirty (30) days if the
then current Interest Rate Period is a Long-Term Interest Rate
Period) prior to the effective date of such Short-Term
Interest Rate Period. Such notice shall state (1) that the
interest rate on the Bonds will be adjusted to Bond Interest
Term Rates (subject to the Borrower's ability to rescind its
election as provided in Section 2.01(c)(viii) hereof), (2) the
effective date of the Short-Term Interest Rate Period, (3)
that the Bonds are subject to mandatory tender for purchase on
the effective date of such Short-Term Interest Rate Period,
(4) the procedures for such mandatory tender, and (5) the
purchase price of the Bonds on such effective date (expressed
as a percentage of the principal amount thereof).
(D) Adjustment from a Short-Term Interest Rate Period.
At any time during a Short-Term Interest Rate Period, the
Borrower may elect that the Bonds shall no longer bear
interest at Bond Interest Term Rates and shall instead bear
interest as otherwise permitted under this Indenture. The
Borrower shall give written notice to the Issuer, the Trustee,
the Paying Agent and the Remarketing Agent, if any, of such
election and shall specify the Interest Rate Period to follow
with respect to such Bonds upon cessation of the Short-Term
Interest Rate Period and instruct the Remarketing Agent to (1)
determine Bond Interest Terms of such duration that, as soon
as possible, all Bond Interest Terms shall end on the same
date, not earlier than twenty-four (24) days (or such shorter
period acceptable to the Trustee) following the delivery by
the Borrower of such written notice, and upon the
establishment of such Bond Interest Term the day next
succeeding the last day of all such Bond Interest Terms shall
be the effective date of the Interest Rate Period elected by
the Borrower; or (2) determine Bond Interest Terms that will
best promote an orderly transition to the next succeeding
Interest Rate Period to apply to the Bonds, beginning not
earlier than twenty-four (24) days (or such shorter period
acceptable to the Trustee) following the delivery by the
Borrower of such written notice. If the alternative in clause
(2) above is selected, the day next succeeding the last day of
the Bond Interest Term for each Bond shall be with respect to
such Bond the effective date of the Interest Rate Period
elected by the Borrower. The Remarketing Agent, promptly upon
the determination thereof, shall give written notice of such
last day and such effective dates to the Borrower, the Trustee
and the Tender Agent. During any transitional period from a
Short-Term Interest Rate Period to the next succeeding
Interest Rate Period in accordance with clause (2) above, the
provisions of this Indenture shall be deemed to apply to the
Bonds as follows: the Bonds continuing to bear interest at
21
Bond Interest Term Rates shall have applicable to them the
provisions hereunder theretofore applicable to such Bonds as
if all Bonds were continuing to bear interest at Bond Interest
Term Rates and the Bonds bearing interest in the Interest Rate
Period to which the transition is being made will have
applicable to them the provisions hereunder as if all Bonds
were bearing interest in such Interest Rate Period.
(vi) Terms of Credit Facility, If Any. If a Credit
Facility in the form of a letter of credit, municipal bond
insurance policy or surety bond is to be held by the Trustee
after the effective date of any adjustment from one Interest
Rate Period to another Interest Rate Period, such Credit
Facility, if any, shall be in an amount sufficient to provide
payment of (x) the principal amount of the Outstanding Bonds
plus (y) the amount of interest (computed on the basis of a
365-day year in the case of an adjustment to a Daily Interest
Rate Period, Weekly Interest Rate Period or Short-Term
Interest Rate Period, and on the basis of a 360-day year
consisting of twelve 30-day months in the case of an
adjustment to a Long-Term Interest Rate Period) which will
accrue on the Outstanding Bonds for a period equal to the
maximum number of days between Interest Payment Dates during
the new Interest Rate Period plus five (5) days. In the case
of an adjustment to a Long-Term Interest Rate Period, a Credit
Facility, if any, to be in effect after the effective date of
such adjustment shall (i) extend for a period ending on a date
no earlier than five (5) days after the first date on which
the Bonds may be called for redemption pursuant to Section
4.01(a)(ii)(C) and (ii) cover the premium, if any, which would
be included in the purchase price upon mandatory purchase of
the Bonds pursuant to Section 4.08(b) hereof if the term of
such Credit Facility was not extended beyond the expiration
date set forth therein.
(vii) Determination Conclusive. The determination of
any Bond Interest Term Rate, Daily Interest Rate, Weekly
Interest Rate and Long-Term Interest Rate and each Bond
Interest Term and the calculation of interest payable on the
Bonds by the Remarketing Agent shall be conclusive and binding
upon such Remarketing Agent, the Trustee, the Tender Agent,
the Issuer, the Borrower, the Bank and the Owners of the
Bonds.
(viii) Rescission of Election. Notwithstanding
anything herein to the contrary, the Borrower may rescind any
election by it to adjust to or continue an Interest Rate
Period pursuant to Section 2.01(c)(ii)(B), (iii)(B), (iv)(B)
or (v)(B) hereof prior to the effective date of such
adjustment or continuation by giving written notice thereof to
the Issuer, the Trustee, the Tender Agent and the Remarketing
Agent, if any, prior to such effective date. If the Trustee
receives notice of such rescission prior to the time the
Trustee has given notice to the Owners of the Bonds pursuant
to Section 2.01(c)(ii)(C), (iii)(C), (iv)(C) or (v)(C), as
applicable, then the notice of adjustment or continuation
previously delivered by the Borrower shall be of no force and
effect. If the Trustee receives notice from the Borrower of
rescission of an adjustment to or continuation of an Interest
Rate Period after the Trustee has given notice to the Owners
of the Bonds pursuant to Section 2.01(c)(ii)(C), (iii)(C),
(iv)(C) or (v)(C), as applicable, then
22
the Interest Rate Period for the Bonds shall automatically
adjust to a Daily Interest Rate Period on the date originally
scheduled for such adjustment or continuation; provided,
however, that if the Bonds are then in a Long-Term Interest
Rate Period and the Favorable Opinion of Bond Counsel required
by Section 2.01(c)(ii)(B) in connection with an adjustment to
a Daily Interest Rate Period from a Long-Term Interest Rate
Period cannot be obtained, then the Interest Rate Period for
the Bonds shall automatically convert to a Long-Term Interest
Rate Period of one year and one day. If a Daily Interest Rate
for the first day of such Daily Interest Rate Period is not
determined as provided in Section 2.01(c)(ii) hereof, the
Daily Interest Rate for the first day of such Daily Interest
Rate Period shall be equal to the TBMA Municipal Index.
(d) Form of Bonds. The Bonds may be engraved, printed,
lithographed or typewritten, shall be in Authorized Denominations and
may contain such references to any of the provisions of this Indenture
as may be appropriate. The form of the Bonds, the certificate of
authentication to be executed on all the Bonds by the Trustee and the
forms for registration of transfer shall be in substantially the forms
thereof set forth in Exhibit A hereto, with necessary or appropriate
variations, omissions and insertions as permitted or required by this
Indenture. The Bonds and the certificate of authentication to be
executed thereon shall be in substantially the form attached hereto as
Exhibit A, with such appropriate variations, omissions and insertions
as are permitted or required by this Indenture. Pursuant to
recommendations promulgated by the Committee on Uniform Security
Identification Procedures, "CUSIP" numbers may be printed on the Bonds.
The Bonds may bear such endorsement or legend relating thereto as may
be required to conform to usage or law with respect thereto. If
appropriate, the Bonds may be printed with a portion of the text
printed on the reverse side thereof and with a legend printed on the
front referring to such text to the following effect: "Reference is
hereby made to the further provisions of this Bond set forth on the
back hereof and such further provisions are hereby incorporated by
reference as if set forth here in full." Upon adjustment to a Long-Term
Interest Rate Period, the form of Bond may include a summary of the
mandatory and optional redemption provisions to apply to the Bonds
during such Long-Term Interest Rate Period, or a statement to the
effect that the Bonds will not be optionally redeemed during such
Long-Term Interest Rate Period, provided that the Registrar shall not
authenticate such a revised Bond form prior to receiving a Favorable
Opinion of Bond Counsel that such Bond form conforms to the terms of
the Act and of this Indenture and that authentication thereof will not
adversely affect the Tax-Exempt status of the Bonds.
(e) Book-Entry System.
Bonds shall be issued in the form of a single certificated
fully registered Bond, registered in the name of Cede & Co., as nominee
of the Depository Trust Company (such entity and its successors and
assigns are referred to herein as "DTC"), or such other name as may be
requested by an authorized representative of DTC, or any successor
nominee (the "Nominee"). Except as provided in paragraph (C) below, all
of the Outstanding Bonds shall be so registered in the registration
books kept by the Registrar, and the provisions of this Section 2.01(e)
shall apply thereto.
23
(i) The Issuer, the Borrower, the Remarketing Agent, the
Tender Agent, the Trustee, the Registrar, the Paying Agent and any
Co-Registrar and Co-Paying Agent shall have no responsibility or
obligation to any DTC participant or to any person on behalf of which a
DTC participant holds an interest in the Bonds, except as otherwise
expressly provided herein. Without limiting the immediately preceding
sentence, the Issuer, the Borrower, the Trustee, the Registrar, the
Paying Agent, the Tender Agent, the Remarketing Agent and any
Co-Registrar and Co-Paying Agent shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, the
Nominee, any DTC participant or indirect participant with respect to
any ownership interest in the Bonds, (ii) the delivery to any DTC
participant or any other person, other than an Owner as shown in the
registration books kept by the Registrar, of any notice with respect to
the Bonds, including any notice of redemption (except that the Trustee
and Tender Agent, if any, shall have the obligation to deliver notices
of optional and mandatory tender to the Remarketing Agent, if any, as
provided herein) or (iii) the payment to any DTC participant or any
other person, other than an Owner, as shown in the registration books
kept by the Registrar, of any amount with respect to principal or
purchase price of, premium, if any, or interest on the Bonds. The
Paying Agent shall pay all principal, premium, if any, and interest on
the Bonds only to or upon the order of the respective Owners, as shown
in the registration books kept by the Registrar, or their respective
attorneys duly authorized in writing, and all such payments shall be
valid and effective to fully satisfy and discharge the Issuer's
obligations with respect to payment of principal of, premium, if any,
and interest on the Bonds to the extent of the sum or sums so paid. The
Issuer, the Borrower, the Trustee, the Registrar, the Paying Agent, the
Tender Agent, the Remarketing Agent and any Co-Registrar and Co-Paying
Agent may treat and consider the person in whose name each Bond is
registered in the registration books kept by the Registrar as the
holder and absolute owner of such Bond for the purpose of payment of
principal, purchase price, premium and interest with respect to such
Bond, for the purpose of giving notices of redemption and other matters
with respect to such Bond, for the purpose of registering transfers
with respect to such Bond, and for all other purposes whatsoever;
provided, however, notwithstanding the foregoing provisions, the Tender
Agent, if any, shall accept any notice of optional tender pursuant to
Section 4.08(a) from any Owner of any Book-Entry Bond, but shall make
payment of the purchase price thereof only to the registered owner of
such Bond in the manner provided in the Representation Letter (as
defined below); and provided further, that no person other than an
Owner, as shown in the registration books kept by the Registrar, shall
receive a certificated Bond evidencing the obligation of the Issuer to
make payments of principal, premium, if any, and interest pursuant to
this Indenture.
(ii) The Issuer, the Paying Agent, the Registrar, the Tender
Agent and/or the Trustee shall, if not previously on file, execute and
deliver to DTC a letter of representation in customary form with
respect to the Bonds (the "Representation Letter"), but such
Representation Letter shall not in any way limit the provisions of the
foregoing paragraph (i) or in any other way impose upon the Issuer any
obligation whatsoever with respect to persons having interests
24
in the Bonds other than the Owners, as shown on the registration books
kept by the Registrar. The Trustee, the Tender Agent and the Paying
Agent shall take all actions necessary for representations of the
Issuer in the Representation Letter with respect to the Trustee, the
Tender Agent and the Paying Agent to be complied with at all times.
(iii) The Issuer, with the consent of the Borrower, may, and
upon request of the Borrower shall, terminate the services of DTC with
respect to the Bonds. DTC may determine to discontinue providing its
services with respect to the Bonds at any time by giving written notice
and all relevant information on the beneficial owners of the Bonds to
the Issuer, the Borrower, the Tender Agent, if any, and the Trustee and
discharging its responsibilities with respect thereto under applicable
law. Upon the discontinuance or termination of the services of DTC with
respect to the Bonds, unless a substitute securities depository is
appointed by the Issuer (with the consent, or at the request, of the
Borrower) to undertake the functions of DTC hereunder, the Issuer, at
the expense of the Borrower, is obligated to deliver Bond certificates
to the Owners of such Bonds, as described in this Indenture, and such
Bonds shall no longer be restricted to being registered in the
registration books kept by the Registrar in the name of the Nominee,
but may be registered in whatever name or names Owners transferring or
exchanging such Bonds shall designate, in accordance with the
provisions of this Indenture.
(iv) In connection with any notice or other communication to
be provided to Owners pursuant to this Indenture by the Issuer, the
Borrower the Remarketing Agent, the Tender Agent, the Trustee, the
Registrar, the Paying Agent, and any Co-Registrar and Co-Paying Agent
with respect to any consent or other action to be taken by the Owners
of the Bonds, the Issuer, the Borrower the Remarketing Agent, the
Tender Agent, the Trustee, the Registrar, the Paying Agent, any
Co-Registrar and Co-Paying Agent, as the case may be, the Trustee shall
establish a record date for such consent or other action and give DTC
notice of such record date not less than 15 calendar days in advance of
such record date to the extent possible.
(v) So long as any Bond is registered in the name of the
Nominee, all payments with respect to principal, purchase price,
premium, if any, and interest on such Bond and all notices with respect
to such Bond shall be made and given, respectively, in the manner
provided in the Representation Letter. Owners shall have no lien or
security interest in any rebate or refund paid by DTC to the Tender
Agent, if any, or the Paying Agent which arises from the payment by the
Tender Agent, if any, or Paying Agent of principal of or purchase
price, premium, if any, or interest on the Bonds in immediately
available funds to DTC.
Section 2.02 Execution of Bonds. The Bonds shall be executed on
behalf of the Issuer by its President, a Vice President, Secretary, Treasurer,
Assistant Secretary or Assistant Treasurer and such execution shall be attested
by its President, a Vice-President, Secretary, Treasurer, Assistant Secretary or
Assistant Treasurer; provided that the officer so attesting such execution shall
not be the same officer that executed such Bond. The signatures of the
President,
25
a Vice President, Secretary, Treasurer, Assistant Secretary or Assistant
Treasurer of the Issuer may be facsimile signatures.
In case any officer of the Issuer whose signature or a facsimile of
whose signature shall appear on the Bonds shall cease to be such officer before
the authentication by the Trustee and delivery of such Bonds, such signature or
such facsimile shall nevertheless be valid and sufficient for all purposes, the
same as if he had remained in office until delivery; and any Bond may be signed
on behalf of the Issuer by such persons as at the time of execution of such Bond
shall be the proper officers of the Issuer, even though at the date of such Bond
or the execution of this Indenture any such person was not such officer.
The Bonds and the interest thereon shall not be general obligations or
an indebtedness of the Issuer but shall be limited obligations of the Issuer,
which is obliged to pay the principal and premium, if any, and interest on the
Bonds only out of the Receipts and Revenues of the Issuer from the Agreement and
other moneys pledged therefor under this Indenture. The Bonds shall never
constitute an indebtedness of the State of Arizona, or the County, or the Issuer
within the meaning of any Arizona Constitutional provision or statutory
limitation and shall never constitute or give rise to a pecuniary liability of
the State of Arizona, or the County, or the Issuer or a charge against the
general credit or taxing powers of the State of Arizona, or the County, or the
general credit of the Issuer and such fact shall be plainly stated on each Bond.
The Issuer has no taxing power.
The Bonds shall then be delivered to the Trustee for authentication by
the Trustee. In case any officer who shall have signed any of the Bonds shall
cease to be such officer before the Bonds so signed or attested shall have been
authenticated or delivered by the Trustee or issued by the Issuer, such Bonds
may nevertheless be authenticated, delivered and issued and, upon such
authentication, delivery and issuance, shall be as binding upon the Issuer as
though those who signed and attested the same had continued to be such officers
of the Issuer. Also, any Bond may be signed on behalf of the Issuer by such
persons as on the actual date of the execution of such Bond shall be the proper
officers although on the nominal date of such Bond any such person shall not
have been such officer.
Only such of the Bonds as shall bear thereon a certificate of
authentication in the form recited in Exhibit A hereto, manually executed by the
Trustee, shall be valid or obligatory for any purpose or entitled to the
benefits of this Indenture, and such certificate of the Trustee shall be
conclusive evidence that the Bonds so authenticated have been duly authenticated
and delivered hereunder and are entitled to the benefits of this Indenture. The
Trustee's certificate of authentication on any Bond shall be deemed to have been
executed by it if manually signed by an authorized signatory on behalf of the
Trustee but it shall not be necessary that the same person sign the certificate
of authentication on all of the Bonds issued hereunder.
Upon authentication of any Bond, the Trustee, Registrar or the Tender
Agent, if any, as the case may be, shall set forth on such Bond (1) the date of
such authentication and (2) in the case of a Bond bearing interest at a Bond
Interest Term Rate which is not a Book-Entry Bond, such Bond Interest Term Rate,
the day next succeeding the last day of the applicable Short-Term Interest Rate
Period, the number of days comprising such Short-Term Interest Rate Period and
the amount of interest to accrue during such Short-Term Interest Rate Period.
26
So long as JPMorgan Chase Bank is serving as Trustee hereunder, it
shall also serve as Registrar hereunder.
Section 2.03 Transfer and Exchange of Bonds. Registration of any Bond
may, in accordance with the terms of this Indenture, be transferred, upon the
books of the Registrar required to be kept pursuant to the provisions of Section
2.04, by the person in whose name it is registered, in person or by his duly
authorized attorney, upon surrender of such Bond for cancellation, accompanied
by a written instrument of transfer in a form approved by the Registrar, duly
executed. Whenever any Bond shall be surrendered for registration of transfer,
the Issuer shall execute and the Trustee shall authenticate and deliver a new
Bond or Bonds of the same tenor in Authorized Denominations. No registration of
transfer of Bonds upon the books of the Registrar required to be kept pursuant
to the provisions of Section 2.04 hereof shall be required to be made during the
period after any Record Date and prior to the related Interest Payment Date or
during the period of fifteen (15) days immediately preceding the date on which
the Trustee mails any notice of redemption, nor shall any registration of
transfer of Bonds called for redemption be required.
Bonds may be exchanged at the Principal Office of the Trustee for a
like aggregate principal amount of Bonds of the same tenor of Authorized
Denominations. The Trustee shall require the payment by the Owner requesting
such exchange of any tax or other governmental charge required to be paid with
respect to such exchange, and there shall be no other charge to any Owners for
any such exchange. Except with respect to Bonds remarketed after being purchased
pursuant to Sections 4.07 and 4.08 hereof, no exchange of Bonds shall be
required to be made during the period after any Record Date and prior to the
related Interest Payment Date or during the period of fifteen (15) days
immediately preceding the date on which the Trustee gives notice of redemption,
nor shall any exchange of Bonds called for redemption be required. If a Bond is
presented for transfer or exchange after notice of redemption of such Bond has
been given as provided in Section 4.03 hereof, the Registrar shall deliver a
copy of such notice of redemption to the new owner of such Bond.
Section 2.04 Bond Register. The Registrar will keep or cause to be kept
at its Principal Office sufficient books for the registration and the
registration of transfer of the Bonds, which shall at all times, during regular
business hours, be open to inspection by the Issuer, the Trustee and the
Borrower; and, upon presentation for such purpose, the Registrar shall, under
such reasonable regulations as it may prescribe, register the transfer or cause
to be registered the transfer, on said books, of Bonds as hereinbefore provided.
Section 2.05 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond
shall become mutilated, the Issuer, upon the request and at the expense of the
holder of said Bond, shall execute, and the Trustee shall thereupon authenticate
and deliver a new Bond of like tenor in exchange and substitution for the Bond
so mutilated, but only upon surrender to the Registrar of the Bond so mutilated.
Every mutilated Bond so surrendered to the Registrar shall be treated by the
Trustee in accordance with its document retention policies (provided that the
Trustee shall not be required to destroy such Bonds) and, upon the written
request of the Issuer, a certificate evidencing such disposition shall be
delivered to the Issuer, with a copy to the Borrower. If any Bond issued
hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction
or theft may be submitted to the Issuer, the Borrower and the Registrar, and if
such evidence be
27
satisfactory to them and indemnity satisfactory to them shall be given by or on
behalf of the holder of such lost, destroyed or stolen Bond, the Issuer, at the
expense of the holder, shall execute, and the Trustee shall thereupon
authenticate and deliver, a new Bond of like tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall be about to mature, instead of issuing a substitute
Bond the Trustee shall, at the direction of the Issuer, pay the same without
surrender thereof). The Issuer may require payment of a reasonable fee for each
new Bond issued under this Section and payment of the expenses which may be
incurred by the Issuer and the Trustee. Any Bond issued under the provisions of
this Section in lieu of any Bond mutilated or alleged to be lost, destroyed or
stolen shall constitute an original additional contractual obligation on the
part of the Issuer whether or not the Bond mutilated or so alleged to be lost,
destroyed or stolen shall be at any time enforceable by anyone, and shall be
equally and proportionately entitled to the benefits of this Indenture with all
other Bonds secured by this Indenture.
All Bonds shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of lost, destroyed or improperly
cancelled Bonds, notwithstanding any law or statute now existing or hereafter
enacted.
Section 2.06 Disposition of Cancelled Bonds. When paid in
full, all Bonds shall be delivered to the Trustee, who shall forthwith cancel
such Bonds and deliver upon request a certificate evidencing such cancellation
to the Issuer and the Borrower. The Trustee shall treat such cancelled Bonds in
accordance with its document retention policies and shall not be required to
destroy such Bonds.
Section 2.07 CUSIP Numbers. As provided in Section 2.01(d) of
this Indenture, the Issuer in issuing the Bonds may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to holders of Bonds; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Bonds or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such CUSIP numbers. The Issuer shall promptly
notify the Trustee of any changes in the CUSIP numbers.
Section 2.08 Other Obligations. The Issuer expressly reserves
the right to issue, to the extent permitted by law, obligations under another
ordinance or ordinances to provide additional funds or, at the request of the
Borrower, to refund all or any principal amount of the Bonds.
Section 2.09 Temporary Bonds. Pending the preparation of
definitive Bonds, the Issuer may execute and the Trustee shall authenticate and
deliver temporary Bonds. Temporary Bonds shall be issuable as fully registered
Bonds, of any Authorized Denomination, and substantially in the form of the
definitive Bonds but with such omissions, insertions and variations as may be
appropriate for temporary Bonds, all as may be determined by the Issuer.
Temporary Bonds may contain such reference to any provisions of this Indenture
as may be appropriate. Every temporary Bond shall be executed by the Issuer and
be authenticated by the
28
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Bonds. As promptly as practicable, the Issuer
shall execute and shall furnish definitive Bonds and thereupon temporary Bonds
may be surrendered in exchange therefor without charge at the Principal Office
of the Trustee, and the Trustee shall authenticate and deliver in exchange for
such temporary Bonds a like aggregate principal amount of the definitive Bonds
of Authorized Denominations. Until so exchanged the temporary Bonds shall be
entitled to the same benefits under this Indenture as definitive Bonds.
ARTICLE III
ISSUANCE OF BONDS
Section 3.01 Authentication and Delivery of Bonds. Forthwith
upon the execution and delivery of this Indenture, the Issuer shall execute and
deliver to the Trustee and the Trustee shall authenticate the Bonds and deliver
the Bonds to the initial purchasers thereof as directed hereinafter in this
Section 3.01. Without any further action on the part of the Issuer, the Trustee
shall authenticate the Bonds in an aggregate principal amount of Thirty-Seven
Million One Hundred Thousand Dollars ($37,100,000). Prior to the delivery on
original issuance by the Trustee of any authenticated Bonds there shall be or
have been delivered to the Trustee:
(i) An original duly executed counterpart of this
Indenture.
(ii) An original duly executed counterpart of the
Agreement.
(iii) A written order of the Issuer to the Trustee to
authenticate and deliver the Bonds to the purchaser or
purchasers therein identified upon payment to the Trustee, but
for the account of the Issuer, of a sum specified in such
request and authorization plus any accrued interest on such
Bonds to the date of delivery.
(iv) A written statement on behalf of the Borrower,
executed by an Authorized Borrower Representative, (i)
approving the issuance and delivery of the Bonds and (ii)
consenting to each and every provision of this Indenture.
(v) The duly executed Credit Facility, if any.
Section 3.02 Application of Proceeds of Bonds. The proceeds
received by the Issuer from the sale of the Bonds in the amount of $37,100,000
shall be deposited with the Trustee, and the Trustee shall transfer such
proceeds to JPMorgan Chase Bank, as trustee for the Prior Bonds, to be applied
to the redemption of the Prior Bonds.
Section 3.03 Payment of Principal and Interest. For the
payment of interest on the Bonds, the Issuer shall cause to be deposited in the
Bond Fund established under Section 5.01 hereof, on or prior to each Interest
Payment Date, solely out of the Receipts and Revenues, an amount sufficient to
pay the interest to become due on such Interest Payment Date. The obligation of
the Issuer to cause any such deposit to be made hereunder shall be reduced by
the amount of moneys in the Bond Fund available on such Interest Payment Date
for the payment of interest on the Bonds.
29
For the payment of the principal of the Bonds upon maturity or earlier
redemption, the Issuer shall cause to be deposited in the Bond Fund, on or prior
to the maturity or redemption date of the Bonds, solely out of the Receipts and
Revenues, an amount sufficient to pay the principal of the Bonds then due. The
obligation of the Issuer to cause any such deposit to be made hereunder shall be
reduced by the amount of moneys in the Bond Fund available on the maturity or
redemption date for the payment of the principal of the Bonds.
ARTICLE IV
REDEMPTION AND PURCHASE OF BONDS
Section 4.01 Redemption of Bonds. The Bonds are subject to redemption
if and to the extent the Borrower is entitled or required to make and makes a
prepayment pursuant to Article IX of the Agreement. The Trustee shall not give
notice of any optional redemption under Section 4.01(a) hereof unless the
Borrower has so directed in accordance with Section 9.02 of the Agreement. In
the event of a failure by the Borrower to give a notice of mandatory prepayment
under Section 9.03 of the Agreement, such notice may be given by the Issuer, the
Trustee or any holder or holders of ten percent (10%) or more in aggregate
principal amount of the Outstanding Bonds. No Bond shall be subject to optional
redemption pursuant to Section 4.01(a)(ii) during the Initial Long-Term Interest
Rate Period.
The Bonds shall be redeemed upon the following terms:
(a) Redemption Upon Optional Prepayment.
(i) Extraordinary Events. During any Long-Term Interest Rate
Period, the Bonds shall be redeemed prior to maturity in whole or in
part, and if in part by lot, at any time at a redemption price equal
to the principal amount thereof plus accrued interest to the
redemption date, upon receipt by the Trustee of a written notice of
the Borrower and signed by an Authorized Borrower Representative
stating that any of the following events has occurred (which
determination shall be in the sole discretion of the Borrower) and
that the Borrower therefore intends to exercise its option to prepay
all payments due under the Agreement, including Repayment
Installments, in whole or in part pursuant to Section 9.01 of the
Agreement and thereby effect the redemption of Bonds in whole or in
part to the extent of such prepayments:
(A) All or part of the Project or the Plant shall have been
damaged or destroyed to such an extent that, in the opinion of
the Borrower, (i) the Project or the Plant or such affected
portion could not reasonably be restored within a period of four
(4) months to the condition thereof immediately preceding such
damage or destruction, and the Borrower or the operator of the
Project or the Plant will be prevented, or is likely to be
prevented for a period of four (4) consecutive months or more,
from carrying on all or substantially all of its normal operation
of the Project or the Plant, or (ii) the cost of restoration of
the Project or the Plant
30
or such affected portion will be substantially in excess of the
net proceeds of insurance thereon.
(B) Title to, or the temporary use of, all or a part of the
Project or the Plant shall have been taken under the exercise of
the power of eminent domain.
(C) Changes in economic availability of raw materials,
operating supplies or facilities necessary to operate all or a
part of the Project or the Plant, or technological or other
changes which make the continued operation of the Project or the
Plant or such affected portion uneconomical, in the opinion of
the Borrower, shall have occurred and shall have resulted in a
cessation of all or substantially all of the Borrower's normal
operations of either the Project or the Plant.
(D) Unreasonable burdens or excessive liabilities shall
have been imposed upon the Issuer or the Borrower in respect of
all or a part of the Project or the Plant including, without
limitation, federal, state or other ad valorem, property, income
or other taxes not being imposed on the date of the Agreement, as
well as any statute or regulation enacted or promulgated after
the date of the Agreement that prevents the Borrower from
deducting interest in respect of the Agreement for federal income
tax purposes.
(E) All or substantially all of the property of the
Borrower shall be transferred or sold to any entity other than an
affiliate of the Borrower or the Borrower shall be consolidated
with or merged into an entity other than an affiliate of the
Borrower in such manner that the Borrower is not the surviving
entity and the surviving, resulting or transferee entity does not
agree to perform the obligations of the Borrower.
(ii) Borrower Option. The Bonds shall be subject to redemption
prior to maturity by the exercise by the Borrower of any of its
options to prepay all or part of the unpaid balance of the Repayment
Installments and cause the Bonds to be redeemed, in whole, or in part
by lot, prior to their maturity dates, as follows:
(A) During any Short-Term Interest Rate Period, each Bond
shall be subject to such redemption on the day next succeeding
the last day of each Bond Interest Term for such Bond at a
redemption price equal to 100% of the principal amount thereof.
(B) During any Daily Interest Rate Period or Weekly Interest
Rate Period, the Bonds shall be subject to such redemption on any
Interest Payment Date at a redemption price equal to 100% of the
principal amount thereof.
(C) On the day next succeeding the last scheduled day of any
Long-Term Interest Rate Period, the Bonds shall be subject to
such
31
redemption at a redemption price of 100% of the principal amount
thereof. During any Long-Term Interest Rate Period, the Bonds
shall be subject to redemption during the periods specified
below, in whole or in part, at the redemption prices (expressed
as percentages of principal amount) hereinafter indicated (unless
different redemption terms shall be specified by the Borrower
pursuant to Section 2.01(c)(iv)(B)):
Length of Redemption Prices
Long-Term Interest Rate Period
(expressed in years)
Greater than 17 After 10 years at 102% declining by 1%
every 12 months to 100%
Less than or equal to 17 and After 8 years at 102%, declining by 1%
greater than 10 every 12 months to 100%
Less than or equal to 10 and After 6 years at 101%, declining by 1/2
greater than 7 of 1% every 6 months to 100%
Less than or equal to 7 and After 3 years at 101%, declining by 1/2
greater than 4 of 1% every 6 months to 100%
Less than or equal to 4 and After 2 years at 100 1/2%, declining by
greater than 3 1/2 of 1% after 6 months to 100%
Less than or equal to 3 and After 1 year at 100 1/2%, declining by
greater than 2 1/2 of 1% after 6 months to 100%
Less than or equal to 2 and After 1 year at 100%
greater than 1
1 year or less Not redeemable.
(iii) Change of Use. During any Long-Term Interest Rate
Period, the Bonds shall be subject to redemption prior to maturity
upon prepayment of the Repayment Installments attributable to the
Bonds at the option of the Borrower in whole or in part by lot on any
Interest Payment Date, at a redemption price equal to 100% of the
principal amount thereof, if the Borrower delivers to the Trustee a
written or Electronic notice to the effect that either:
(A) the Borrower has determined that some or all of the
interest payable under the Agreement for any sixty (60) days
(which need not be consecutive) within any consecutive
twenty-four (24) month period is not or will not be deductible,
in whole or in part, for federal income tax purposes by reason of
Section 150(b) of the Code (or would not be
32
deductible unless some or all of the Bonds are redeemed) due to a
change in use of the Project or any portion thereof, and the
Borrower will not claim deductions for such interest on its
federal income tax returns; or
(B) the Borrower after reasonable effort has been unable to
obtain an opinion of Bond Counsel that it is more likely than not
that Section 150 of the Code will not prevent interest payable
under the Agreement for any sixty (60) days (which need not be
consecutive) within any consecutive twenty-four (24) month period
from being deductible, in whole or in part, for federal income
tax purposes.
In either such case, the Borrower shall only cause the Trustee to redeem
Bonds pursuant to this Section 4.01(a) (iii) on or after the Interest Payment
Date immediately preceding the date on which, due to a change in use in the
Project or any portion thereof, the period of potential interest expense
disallowance described above commences, and the Borrower may only cause the
Trustee to redeem such principal amount of Bonds as the Borrower determines is
necessary to assure that the Borrower retains its right to all such deductions
otherwise allowable or, if a partial redemption will not enable the Borrower to
retain the right to deduct such interest, the Borrower may cause the Trustee to
redeem all the Outstanding Bonds.
Notwithstanding any term or provision of Section 4.01(a) of this Indenture
to the contrary, the Bonds shall not be subject to optional redemption unless
(i) the Bank, if any, shall consent thereto in writing and deliver such consent
to the Borrower and the Trustee, (ii) in connection with such redemption, the
proceeds of a refunding shall be sufficient to pay, and shall be used to pay,
the redemption price of the Bonds so redeemed or (iii) sufficient Available
Moneys (other than proceeds of any drawing under the Letter of Credit) shall
have been deposited by the Borrower with the Trustee for the payment of all
amounts due in respect of all Bonds called for redemption pursuant to Section
4.01(a) of this Indenture. This paragraph shall be inapplicable if at the time
of such optional redemption there is no Letter of Credit or other Credit
Facility with respect to the Bonds.
(b) Redemption Upon Mandatory Prepayment. The Bonds shall be subject
to redemption prior to maturity from amounts which are required to be
prepaid by the Borrower under Section 9.03 of the Agreement, as set forth
below.
(i) The Bonds shall be redeemed in whole on any date at a
redemption price equal to the principal amount thereof plus interest
accrued to the redemption date upon the occurrence of a Determination
of Taxability; provided, however, that if, in the opinion of Bond
Counsel delivered to the Trustee, the redemption of a specified
portion of such Bonds Outstanding would have the result that interest
payable on such Bonds remaining Outstanding after such redemption
would remain Tax-Exempt, then such Bonds shall be redeemed in part by
lot (in Authorized Denominations), in such amount as Bond Counsel in
such opinion shall have determined is necessary to accomplish that
result.
(ii) The Bonds shall be redeemed in whole at a redemption price
equal to the principal amount thereof plus accrued interest to the
redemption date in the
33
event that as a result of any changes in the Constitution of the
United States of America or the Constitution of the State of Arizona
or as a result of any legislative, judicial or administrative action,
the Agreement shall have become void or unenforceable or impossible to
perform in accordance with the intention and purposes of the parties
thereto, or shall have been declared unlawful.
(iii) The Bonds shall be redeemed in whole at a redemption
price equal to the principal amount thereof plus accrued interest to
the redemption date in the event that at least thirty-five (35) days
prior to the expiration of any Credit Facility, if any, then in effect
with respect to the Bonds the Trustee shall not have received (a) a
renewal or extension of the existing Credit Facility, for a period of
at least one (1) year (or, if shorter, the period to maturity of the
Bonds) or (b) a substitute Credit Facility meeting the requirements of
Section 6.08 of the Agreement. Such redemption shall occur on the last
Business Day which is not less than five (5) calendar days preceding
the expiration date of a Credit Facility, if any, then in effect.
Section 4.02 Selection of Bonds to be Redeemed. If less than all the
Bonds shall be called for redemption, the Trustee shall select the Bonds or any
given portion thereof to be redeemed, from Outstanding Bonds or any given
portion thereof not previously called for redemption, by lot. For the purpose of
any such selection the Trustee shall assign a separate number for each minimum
Authorized Denomination of each Bond of a denomination of more than such
minimum; provided that following any such selection, both the portion of such
Bond to be redeemed and the portion remaining shall be in Authorized
Denominations. The Trustee shall promptly notify the Issuer and the Borrower in
writing of the numbers of the Bonds or portions thereof so selected for
redemption. Notwithstanding the foregoing, if less than all of the Bonds are to
be redeemed at any time while the Bonds are Book-Entry Bonds, selection of the
Bonds to be redeemed shall be made in accordance with customary practices of DTC
or the applicable successor depository, as the case may be.
Section 4.03 Notice for Redemption. The Trustee shall give notice,
Electronically or by first class mail, in the name of the Issuer, of the
redemption of the Bonds, not less than thirty (30) nor more than sixty (60) days
prior to the redemption date for Bonds bearing interest fixed to maturity or at
Daily, Weekly or Long-Term Interest Rates, and at any time not more than sixty
(60) days prior to the redemption date for Bonds bearing interest at Bond
Interest Term Rates. Each notice of redemption shall (i) specify the Bonds to be
redeemed, the redemption date, the redemption price, the place where amounts due
upon such redemption will be payable (which shall be the Principal Office of the
Paying Agent) and the source of the funds to be used for such redemption, the
principal amount, the CUSIP numbers (if any) of the Bonds to be redeemed and, if
less than all, the distinctive certificate numbers of the Bonds to be redeemed
and, in the case of Bonds to be redeemed in part only, the respective portions
of the principal amount thereof to be redeemed. Each such notice shall also
state that the interest on the Bonds designated for redemption shall cease to
accrue from and after such redemption date and that on said date there will
become due and payable on each of said Bonds the principal amount thereof to be
redeemed, interest accrued thereon, if any, to the redemption date and the
premium, if any, thereon (such premium to be specified) and shall require that
such Bonds be then surrendered at the address or addresses of the Paying Agent
specified in the redemption notice;
34
provided, however, the failure to duly give such notice, or any defect therein,
shall not affect the validity of any proceedings for the redemption of Bonds
with respect to which no such failure or defect occurred. In the event that any
Bond selected for redemption shall be tendered for purchase pursuant to Section
4.08 hereof, the Tender Agent shall note on each Bond delivered to an Owner
pursuant to Section 14.05 hereof upon the purchase of such tendered Bond that
such Bond has been called for redemption and the date of such redemption. Upon
presentation and surrender of Bonds so called for redemption at the place or
places of payment, such Bonds shall be redeemed and cancelled. Notice of any
redemption hereunder shall also be given to the Tender Agent and the Bank.
With respect to any notice of optional redemption of Bonds pursuant to
Section 4.01(a), unless upon the giving of such notice such Bonds shall be
deemed to have been paid within the meaning of Article IX hereof, such notice
shall state that such redemption shall be conditional upon the receipt by the
Trustee on or prior to the date fixed for such redemption of Available Moneys
sufficient to pay the principal of, premium, if any, and interest on, such Bonds
to be redeemed, and that if such Available Moneys shall not have been so
received said notice shall be of no force and effect and the Issuer shall not be
required to redeem such Bonds. In the event that such notice of redemption
contains such a condition and such Available Moneys are not so received, the
redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, to the persons and in the manner in which the notice of
redemption was given, that such Available Moneys were not so received.
Any notice for the redemption of any Bond mailed as provided herein shall
be conclusively deemed to have been duly given whether or not such notice is
received. Failure to mail the notices required by this paragraph to any holder
of a Bond, or any defect in any notice so mailed, shall not affect the validity
of the proceedings for redemption of any Bonds nor impose any liability on the
Trustee.
Section 4.04 Partial Redemption of Bonds. Upon surrender of any Bond
redeemed in part only, the Registrar shall exchange the Bond redeemed for a new
Bond of like tenor and in an Authorized Denomination without charge to the
holder in the principal amount of the portion of the Bond not redeemed. In the
event of any partial redemption of a Bond which is registered in the name of the
Nominee, DTC may elect to make a notation on the Bond certificate which reflects
the date and amount of the reduction in principal amount of said Bond in lieu of
surrendering the Bond certificate to the Registrar for exchange. The Issuer, the
Trustee and the Registrar shall be fully released and discharged from all
liability upon, and to the extent of, payment of the redemption price for any
partial redemption and upon the taking of all other actions required hereunder
in connection with such redemption.
Section 4.05 Effect of Redemption. Notice of redemption having been
duly given as aforesaid, and moneys for payment of the redemption price being
held by the Trustee, the Bonds so called for redemption shall, on the redemption
date designated in such notice, become due and payable at the redemption price
specified in such notice, interest on the Bonds so called for redemption shall
cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or
security under this Indenture, and the holders of said Bonds shall have no
rights in respect thereof except to receive payment of the redemption price
thereof (including interest, if
35
any, accrued to the redemption date), without interest accrued on any funds held
after the redemption date to pay such redemption price.
All Bonds fully redeemed pursuant to the provisions of this Article IV
shall upon surrender thereof be cancelled by the Trustee, who shall deliver a
certificate evidencing such cancellation to the Issuer and the Borrower. The
Trustee shall treat such cancelled Bonds in accordance with its document
retention policies and shall not be required to destroy such Bonds.
Section 4.06 Payment of Redemption Price.
(i) For the redemption of any of the Bonds, the Issuer shall
cause to be deposited in the Bond Fund, on or prior to the date fixed
for redemption, solely out of the Receipts and Revenues, an amount
sufficient to pay the principal of and interest and any premium to
become due on the date fixed for such redemption on the Bonds;
provided that so long as a Credit Facility is in effect with respect
to the Bonds and such Credit Facility does not cover some or all of
the optional or mandatory redemption price, any amount payable as the
optional or mandatory redemption price upon redemption of Bonds and
not covered by such Credit Facility shall be on deposit in the Bond
Fund and constitute Available Moneys prior to the Trustee giving any
notice of redemption hereunder.
(ii) Moneys for payment of the principal of and interest and
any premium to the date fixed for redemption on Bonds called for
redemption and not presented for payment on the date fixed for
redemption shall be set aside by the Trustee in trust for the Owners
of such Bonds and shall be held uninvested. Interest on such Bonds
shall cease to accrue on the date fixed for redemption.
Section 4.07 Bank Purchase Option.
(i) Notwithstanding any term or provision of this Indenture
to the contrary, if a Credit Facility is in effect, (i) if an Event of
Default shall occur and the Bonds are accelerated or (ii) if any Bonds
shall be subject to redemption pursuant to Section 4.01 of this
Indenture, or (iii) if the Remarketing Agent shall be unable to
remarket Bonds as provided in Article XIV of this Indenture, then in
any of such cases the Bank may from time to time in its discretion (in
the manner provided in this Section 4.07) purchase all of the Bonds or
the portion thereof that is subject to redemption, acceleration or
which the Remarketing Agent has been unable to remarket, on the terms
provided herein.
(ii) The Bank shall notify the Trustee in writing of its
exercise of its purchase option pursuant hereto at or before the time
by which payment of any drawing of a Credit Facility is required in
respect of the relevant acceleration, redemption or failure to
remarket Bonds which gives rise to such purchase option. Such notice
may be given after presentation by the Trustee of any document or
draft under such Credit Facility with respect to such acceleration,
redemption or failure to remarket, in which case purchase of the
relevant Bonds by the Bank shall take precedence over such drawing;
provided, that if the Bank has not
36
exercised its purchase option and paid the purchase price of the Bonds
being purchased by the time by which payment is due under such Credit
Facility in respect of such drawing, the Bank shall pay such drawing
pursuant to such Credit Facility. If the Trustee shall have presented
drafts or documents under such Credit Facility, the Bank's notice of
exercise of its purchase option may accompany payment of the purchase
price of Bonds being acquired. The purchase price of Bonds purchased
by the Bank pursuant hereto shall be paid to the Trustee at such
account as it shall specify and shall be distributed by the Trustee to
the former owners from which such Bonds shall have been purchased;
provided, that in the case of any Bonds purchased upon a failed
remarketing pursuant to paragraph (vi) of this Section 4.07, the
purchase price shall be paid to the Remarketing Agent for distribution
to the former Owners of such Bonds which tendered them to the Tender
Agent.
(iii) No purchase of any Bonds by the Bank in accordance
herewith shall cause such Bonds to be extinguished or deemed paid, and
upon payment of the purchase price of Bonds by the Bank, the Trustee
shall authenticate and deliver to the Bank (or its nominee) as Owner a
Bond or Bonds in an aggregate principal amount equal to the aggregate
principal amount of Bonds so purchased (which shall be deemed to be in
an "Authorized Denomination" for all purposes of this Indenture), and
such Bonds so delivered shall be Outstanding Bonds that are entitled
to the benefits of this Indenture equally and proportionately with all
other Bonds; provided that the Trustee shall not make any drawing on a
Credit Facility in respect of Bonds known by the Trustee to be held by
the Bank (or its nominee) except as provided in paragraph (viii) of
this Section 4.07. Bonds purchased by the Bank which are not delivered
to the Trustee by the date upon which such Bonds were to have been
purchased nonetheless will be deemed to have been purchased by the
Bank, and the former Owner or Owners of such Bonds shall have no claim
thereon, under this Indenture or otherwise, for any amount other than
the purchase price thereof. Interest accruing after the purchase date
of such Bonds shall no longer be payable to the former Owners thereof.
(iv) Bonds called for and subject to redemption pursuant to
Section 4.01 of this Indenture may, at the option of the Bank, be
purchased by the Bank pursuant to this Section 4.07 in lieu of such
redemption on the date upon which such Bonds were to have been
redeemed at a purchase price equal to the amount that would have been
payable on such Bonds if such Bonds had been so redeemed, except as
provided in paragraph (vii) of this Section 4.07; provided, that no
Bond called for redemption shall be subject to purchase by the Bank
pursuant to this Section 4.07 if (i) in connection with such
redemption, the proceeds of a refunding shall be sufficient to pay,
and shall be used to pay, the redemption price of the Bonds so
redeemed or (ii) sufficient Available Moneys (other than proceeds of
any drawing under a Credit Facility) shall have been deposited by the
Borrower with the Trustee for the payment of all amounts due in
respect of all Bonds called for redemption pursuant to Section 4.01 of
this Indenture. The Bank shall pay the purchase price for Bonds
purchased by the Bank on such redemption date.
37
(v) If an Event of Default occurs and the Bonds are
accelerated, the Bank may purchase all Bonds, pursuant to this Section
4.07, for a purchase price equal to the principal amount of such Bonds
plus interest accrued thereon to the date of purchase, except as
otherwise provided in paragraph (vii) of this Section 4.07.
(vi) In the event that the Remarketing Agent shall be unable to
remarket any Bonds as provided in Article XIV hereof, the Bank may, at
its option, purchase all such unremarketed Bonds pursuant to this
Section 4.07, at a purchase price equal to 100% of the principal
amount thereof plus accrued interest, if any, on the date on which
such Bonds would otherwise be purchased by the Remarketing Agent
pursuant to Section 14.03(b), except as otherwise provided in
paragraph (vii) of this Section 4.07.
(vii) Upon a purchase of Bonds by the Bank pursuant to this
Section 4.07, the Bank may, in its discretion, purchase all Bonds, if
any, then held by the Trustee which have been purchased by or on
behalf of the Borrower with moneys drawn under a Credit Facility as to
which drawing the Borrower has not reimbursed the Bank in accordance
with the Reimbursement Agreement without the payment of any cash
purchase price therefor, but the Borrower's reimbursement obligations
under the Reimbursement Agreement shall be reduced by an amount equal
to the principal amount of such Bonds so deemed purchased. The Bank
may exercise its option pursuant to the preceding sentence by a notice
to the Trustee given with or included in the relevant notice to the
Trustee under paragraph (ii) of this Section 4.07, together with a
notice which shall confirm that a Credit Facility has been reinstated
in an equal amount.
(viii) Notwithstanding any term or provision of this Indenture to
the contrary, the Trustee shall not without the prior written consent
of the Bank make any drawing under a Credit Facility with respect to
the principal amount of any Bonds known by the Trustee to be held by
the Bank or its nominee; provided, that the Trustee shall make
drawings of interest under a Credit Facility with respect to the Bonds
held by the Bank or its nominee, as provided in this Indenture.
(ix) The purchase price of any Bonds to be purchased by the
Bank in accordance with this Section 4.07 shall be paid by the Bank
with its general funds and not directly or indirectly from funds or
collateral on deposit with or pledged to the Bank for the account of
the Issuer or the Borrower or any affiliate thereof, and such payment
by the Bank shall not be deemed to be a draw under a Credit Facility.
(x) Notwithstanding any term or provision of this Indenture or
the Bonds to the contrary, if at any time all of the Outstanding Bonds
are in aggregate held by the Bank or its nominee (whether pursuant to
the provisions hereof or otherwise), the Bank shall not be entitled to
exercise its rights under Section 4.08 of this Indenture or under the
Bonds to require that the Bonds be purchased unless either (i) the
Bank shall have given the Borrower, the Trustee and the
38
Remarketing Agent at least 30 days prior written notice of its
intention to exercise such rights or (ii) the Remarketing Agent shall
have received from the Borrower offering materials relating to the
Bonds which are, in the opinion of the counsel to the Borrower and the
counsel to the Issuer, correct and complete in all material respects.
Section 4.08 Purchase of Bonds.
(a) Holder's Option to Tender for Purchase.
(i) During any Daily Interest Rate Period, any Bond or
portion thereof in an Authorized Denomination shall be purchased on
any Business Day at a purchase price equal to 100% of the principal
amount thereof plus accrued interest from the Interest Accrual Date
immediately prior to the date of purchase to the date of purchase
(unless the date of purchase shall be an Interest Accrual Date, in
which case at a purchase price equal to the principal amount thereof),
payable in immediately available funds, upon (A) delivery to the
Tender Agent at its Principal Office, by no later than 11:00 a.m. (New
York City time) on such Business Day, of an irrevocable written,
telephonic or Electronic notice which states the principal amount of
such Bond to be tendered for purchase and the date of purchase, and
(B) delivery of such Bond tendered for purchase to the Tender Agent at
its Principal Office on the date of purchase in accordance with
Section 4.09 hereof. The Tender Agent shall keep a written record of
the notice described in Clause (A).
(ii) During any Weekly Interest Rate Period, any Bond or
portion thereof in an Authorized Denomination shall be purchased on
any Business Day at a purchase price equal to 100% of the principal
amount thereof plus accrued interest, if any, from the Interest
Accrual Date immediately prior to the date of purchase to the date of
purchase (unless the date of purchase shall be an Interest Accrual
Date, in which case at a purchase price equal to the principal amount
thereof), payable in immediately available funds, upon (A) delivery to
the Tender Agent at its Principal Office by no later than 5:00 p.m.
(New York City time), on such Business Day at least seven (7) days
prior to the date of purchase of an irrevocable written, telephonic or
Electronic notice, which states the principal amount of such Bond to
be tendered for purchase and the date of purchase, and (B) delivery of
such Bond tendered for purchase to the Tender Agent at its Principal
Office on the date of purchase in accordance with Section 4.09 hereof.
The Tender Agent shall keep a written record of the notice described
in Clause (A).
(iii) If any Bond is to be purchased in part pursuant to (i) or
(ii) above, the amount so purchased and the amount not so purchased
must each be an Authorized Denomination.
(iv) Any instrument delivered to the Tender Agent in
accordance with this Section 4.08 shall be irrevocable with respect to
the purchase for which such
39
instrument was delivered and shall be binding upon any subsequent
Owner of the Bond to which it relates, including any Bond issued in
exchange therefor or upon the registration of transfer thereof, and as
of the date of such instrument, the Owner of the Bonds specified
therein shall not have any right to optionally tender for purchase
such Bonds prior to the date of purchase specified in such notice. The
Tender Agent and the Trustee may conclusively assume that any person
(other than a holder) providing notice of optional tender pursuant to
(i) or (ii) above is the Owner of the Bond to which such notice
relates, and neither the Tender Agent nor the Trustee shall assume any
liability in accepting such notice from any person whom it reasonably
believes to be an Owner of Bonds.
(b) Mandatory Tender for Purchase.
(i) The Bonds shall be subject to mandatory tender for purchase
at a purchase price, except as provided in paragraph (ii) below, equal
to 100% of the principal amount thereof, plus accrued interest to the
date of purchase described below, upon the occurrence of any of the
events stated below:
(A) as to any Bond, on the effective date of any change in
an Interest Rate Period for such Bond, other than the effective
date of any change from a Daily Interest Rate Period to a Weekly
Interest Rate Period or from a Weekly Interest Rate Period to a
Daily Interest Rate Period; or
(B) as to each Bond in a Short-Term Interest Rate Period,
on the day next succeeding the last day of each Bond Interest
Term with respect to such Bond; or
(C) as to all Bonds, on the effective date of any Credit
Facility which may be provided with respect to the Bonds pursuant
to Section 6.08 of the Agreement or of any substitute Credit
Facility provided with respect to the Bonds pursuant to Section
6.08 of the Agreement.
(ii) In the event that on a date the Bonds are subject to
optional redemption pursuant to Section 4.01(a)(ii), the Borrower
elects to change the Interest Rate Period with respect to the Bonds
during a Long-Term Interest Rate Period to a different Interest Rate
Period or to provide, substitute or terminate a Credit Facility, if
any, during a Long-Term Interest Rate Period and thereby causes a
mandatory tender of such Bonds as provided in Section 4.08(b)(i)(A) or
(C), as the case may be, the Bonds shall be purchased on the
applicable mandatory tender date at a purchase price equal to the
principal amount thereof plus an amount equal to any premium which
would have been payable on such day had the Borrower directed
redemption of the Bonds pursuant to Section 4.01(a)(ii) hereof.
(iii) The Trustee shall give notice Electronically or by first
class mail of the provision of any Credit Facility with respect to the
Bonds or the provision of any substitute Credit Facility with respect
to the Bonds to the holders of the
40
Bonds at their addresses shown on the registration books kept by the
Registrar, not later than the fifteenth day (thirtieth day if the then
current Interest Rate Period is a Long-Term Interest Rate Period)
prior to the date on which the Bonds are subject to mandatory tender
pursuant to Section 4.08(b)(i)(C), which notice shall (i) state the
date of such provision or substitution; and (ii) state that such Bonds
shall be subject to mandatory tender for purchase on the effective
date of such provision or substitution in accordance with Section
4.08(b)(i)(C) hereof.
(c) Mandatory Tender for Purchase on Termination or Expiration of
Credit Facility. In the event that any Credit Facility either is to
terminate or is to expire in accordance with its terms (other than because
a final drawing thereunder shall have been made in accordance with its
terms), unless the term of the Credit Facility shall be extended or unless
the Borrower shall provide the Trustee, no later than the 35th day
preceding the mandatory purchase date set forth herein with a substitute
Credit Facility and with written evidence from Xxxxx'x, if the Bonds shall
be rated and the time by Xxxxx'x, and from S&P, if the Bonds shall be rated
at the time by S&P, to the effect that such substitute Credit Facility will
not, by itself, result in a reduction or withdrawal of the rating on the
Bonds by Xxxxx'x or S&P, as the case may be (and the Trustee shall have
received written notice of such extension or such substitution and evidence
thereof prior to giving the notice required in paragraph (b) above), the
Bonds shall be subject to mandatory tender for purchase at a purchase
price, payable in immediately available funds, of 100% of their principal
amount, plus accrued interest, if any, to the mandatory purchase date, on
the second Business Day prior to the date of such termination or
expiration.
Section 4.09 Delivery of Tendered Bonds. With respect to any
Book-Entry Bond, delivery of such Bond to the Tender Agent in connection with
any optional or mandatory tender pursuant to Section 4.08 hereof shall be
effected by the making of, or the irrevocable authorization to make, appropriate
entries on the books of DTC or any DTC Participant to reflect the transfer of
the beneficial ownership interest in such Bond to the account of the Tender
Agent, or to the account of a DTC Participant acting on behalf of the Tender
Agent. With respect to any Bond which is not a Book-Entry Bond, delivery of such
Bond to the Tender Agent in connection with any optional or mandatory tender
pursuant to Section 4.08 hereof shall be effected by physical delivery of such
Bond to the Tender Agent at its Principal Office, by 1:00 p.m. (New York City
time) on the purchase date, accompanied by a proper instrument of transfer
thereof, in a form satisfactory to the Tender Agent, executed in blank by the
holder thereof with the signature of such holder guaranteed in accordance with
the guidelines set forth by one of the nationally recognized medallion signature
programs.
Section 4.10 Bonds Deemed Purchased.
(a) If moneys sufficient to pay the purchase price of Bonds to be
purchased pursuant to Section 4.08 shall be held by the Tender Agent on the date
such Bonds are to be purchased, such Bonds shall be deemed to have been
purchased for all purposes of this Indenture, irrespective of whether or not
such Bonds shall have been delivered to the Tender Agent, and neither the former
holder of such Bonds nor any other person shall
41
have any claim thereon, under this Indenture or otherwise, for any amount
other than the purchase price thereof.
(b) In the event of non-delivery of any Bond to be purchased pursuant
to Section 4.08 hereof, the Tender Agent shall segregate and hold
uninvested the moneys for the purchase price of such Bonds in trust,
without liability for interest thereon, for the benefit of the former
holders of such Bonds, who shall, except as provided in the following
sentence, thereafter be restricted exclusively to such moneys for the
satisfaction of any claim for the purchase price of such Bonds. Any moneys
which the Tender Agent shall segregate and hold in trust for the payment of
the purchase price of any Bond and remaining unclaimed for two (2) years
after the date of purchase shall be paid, upon the Borrower's written
request, to the Borrower. After the payment of such unclaimed moneys to the
Borrower, the former holder of such Bond shall look only to the Borrower
for the payment thereof.
ARTICLE V
THE BOND FUND
Section 5.01 Creation of Bond Fund. There is hereby created by the
Issuer and ordered established with the Trustee a trust fund in the name of the
Issuer to be designated "Maricopa County, Arizona Pollution Control Corporation
Pollution Control Refunding Revenue Bonds 2002 Series A (El Paso Electric
Company, Palo Verde Project) Bond Fund," (the "Bond Fund"). The Trustee shall
establish one or more accounts within the Bond Fund for the purpose of
segregating moneys drawn under a Credit Facility, if any, and Available Moneys
therein, and may establish one or more accounts within the Bond Fund for other
purposes.
Section 5.02 Deposits into Bond Fund.
There shall be deposited in the Bond Fund:
(i) The accrued interest and purchase premium, if any, paid by
the initial purchasers of the Bonds;
(ii) All Repayment Installments and moneys drawn by the Trustee
under a Credit Facility for the payment of principal of and interest
and any premium on the Bonds, other than moneys paid by the Bank
pursuant to Section 4.07 hereof or drawn under a Credit Facility
pursuant to subsection (b) of Section 14.03 hereof or Section 4.07
hereof;
(iii) All other moneys received by the Trustee under and pursuant
to any provision of the Agreement, other than Sections 5.04, 5.08 and
8.05 thereof, or from any other source when accompanied by directions
by the Borrower that such moneys are to be paid into the Bond Fund;
and
(iv) All moneys required to be deposited therein under any other
provision of this Indenture.
42
Section 5.03 Use of Moneys in Bond Fund. Except as otherwise provided
in Sections 5.05, 5.06, 5.08, 9.01, 10.10 and 11.04 hereof, moneys in the Bond
Fund shall be used solely for the payment of the principal of and interest and
any premium on the Bonds as the same shall become due and payable on an Interest
Payment Date or at maturity, upon redemption or acceleration or otherwise. Funds
for such payments of the principal of and interest and any premium on the Bonds
shall be derived from the following sources in the order of priority indicated:
(i) moneys paid into the Bond Fund pursuant to Section 5.02(i)
hereof, which shall be applied to the payment of interest on the
Bonds;
(ii) proceeds of the sale of refunding obligations and proceeds
from the investment thereof, deposited into the Bond Fund which
constitute Available Moneys;
(iii) moneys furnished by the Borrower to the Trustee pursuant to
the Agreement which have been deposited into the Bond Fund and
constitute Available Moneys (other than funds under a Credit Facility)
and proceeds from the investment thereof;
(iv) moneys drawn by the Trustee under a Credit Facility for the
payment of the principal of or interest or any premium on the Bonds
and deposited into the Bond Fund;
(v) moneys furnished by the Borrower to the Trustee pursuant to
the Agreement and any other moneys available therefor and proceeds
from the investment thereof;
(vi) In addition to amounts required to be paid into the Bond
Fund, the Trustee shall (i) in the case of Bonds to be purchased by
the Tender Agent on behalf of the Borrower pursuant to Article IV
hereof, draw moneys under a Credit Facility in accordance with the
terms thereof to the extent necessary to make timely payments of the
purchase price of the Bonds pursuant to such Article IV, but only to
the extent moneys are not available from the sources set forth in
clauses (i) and (ii) of Section 14.03(b) hereof, and furnish said
moneys to the Tender Agent and (ii) in connection with the purchase of
Bonds by the Trustee on behalf of or for the account of the Bank
pursuant to Section 4.07, draw moneys under such Credit Facility in
accordance with the terms hereof and of such Credit Facility in
amounts sufficient to pay the purchase price of the Bonds so purchased
to the extent sufficient funds are not otherwise timely furnished by
the Bank to the Trustee; provided, however, that the principal of,
premium, if any, and interest on Bonds held by the Borrower, the
Tender Agent or the Trustee on behalf of the Borrower (or any
affiliate thereof), shall not be paid from moneys drawn under such
Credit Facility.
Section 5.04 Credit Facility.
43
(a) No Credit Facility relating to the Bonds will be delivered as of
the date of issuance and delivery of the Bonds.
(b) A Credit Facility shall be the obligation of a Bank to pay to the
Trustee, in accordance with the terms thereof, such amounts as shall be
specified therein and available to be drawn thereunder for the timely
payment of the principal of and interest and, if permitted by a Credit
Facility, any premium on the Bonds (whether at their stated maturity, or
upon acceleration or redemption or otherwise), and portions of the purchase
price of Bonds corresponding to principal and interest thereon, and, if
permitted by a Credit Facility, portions of the purchase price
corresponding to premium on the Bonds, required to be made pursuant to, and
in accordance with the provisions of this Indenture. Such Credit Facility
shall be reduced to the extent of any drawings thereunder and reinstated in
accordance with the terms thereof.
(c) The Trustee shall draw moneys under a Credit Facility in
accordance with the terms thereof and the terms of the Tender Agreement to
the extent necessary to make timely payments of principal of and interest
and any premium, if drawings thereunder shall be available to pay premium,
on the Bonds required to be made from the Bond Fund or to enable the Tender
Agent to pay the purchase price of Bonds purchased pursuant to Section
14.03(b) hereof; provided, however, that, anything herein to the contrary
notwithstanding, in no event shall the Trustee draw moneys under such
Credit Facility in order to make payments of principal of or interest or
any premium on, or to enable the Tender Agent to pay the purchase price of,
Bonds held of record by the Borrower (or any affiliate thereof) or held by
the Tender Agent or the Trustee for the account of the Borrower or
delivered to and held of record by, or held for the account of, the Bank
pursuant to Section 14.05(c) hereof if such Credit Facility prohibits by
its terms a drawing thereunder for such purpose; provided, further,
however, that the Trustee may draw moneys under such Credit Facility in
order to make payment of interest on Bonds held of record by the Borrower
(or any affiliate thereof), the Bank or by the Tender Agent or the Trustee
for the account of the Borrower or the Bank pursuant to Section 14.05(c)
hereof if such Bond was not so held by or for the account of the Borrower
or the Bank on the immediately preceding Record Date. Upon any reduction in
the aggregate principal amount of Bonds Outstanding, the Trustee shall
request the Bank to permanently reduce the amounts that may be drawn under
the applicable Credit Facility to those amounts which are then required
pursuant to Section 6.08 of the Agreement. For extensions of the term of a
Credit Facility, the Trustee shall surrender the applicable Credit Facility
to the Bank (if so directed by the Bank) in exchange for a Credit Facility
of the Bank conforming in all material respects to the applicable Credit
Facility except that the expiration date shall be extended. If at any time
there shall cease to be any Bonds Outstanding hereunder, the Trustee shall
promptly surrender the applicable Credit Facility to the Bank, in
accordance with the terms of the applicable Credit Facility, for
cancellation.
(d) If at any time there shall have been delivered to the Trustee, all
as described in and in accordance with Section 6.08 the Agreement, (i) a
notice of the Borrower, (ii) the required opinion of Bond Counsel and (iii)
a Credit Facility, if any, described in such notice, then the Trustee shall
accept such Credit Facility, if any, and
44
comply with the direction of the Borrower, if any, contained in such
notice. If the delivery of such Credit Facility does not result in a
mandatory tender for purchase of all Bonds pursuant to Section 4.08(b)
hereof, the Trustee shall give notice by first-class mail of the delivery
of such Credit Facility to the Owners of the Bonds not less than 20 days
prior to the date of the expiration or termination of a Credit Facility
then in effect. Such notice shall state that the Borrower has caused to be
provided the new Credit Facility, shall describe the new Credit Facility
(including. its effective date and scheduled expiration date) and shall
state that the Borrower has delivered written evidence from Xxxxx'x, if the
Bonds are then rated by Xxxxx'x and from S&P, if the Bonds are then rated
by S&P, that neither Xxxxx'x nor S&P will reduce or withdraw its rating
then in effect with respect to the Bonds as a result of the proposed
delivery of the new Credit Facility.
Section 5.05 Custody of Bond Fund; Withdrawal of Moneys. The Bond Fund
shall be in the custody of the Trustee but in the name of the Issuer and the
Issuer hereby irrevocably authorizes and directs the Trustee to withdraw from
the Bond Fund and furnish to the Paying Agent funds sufficient to pay the
principal of and interest and any premium on the Bonds as the same shall become
due and payable, and to withdraw from the Bond Fund funds sufficient to pay any
other amounts payable therefrom as the same shall become due and payable. If and
to the extent that moneys remain in the Bond Fund after payment of such
principal, interest and premium, if any, and are not required to be held therein
pursuant to Section 5.06, such moneys shall be paid to the Bank, to the extent
that there shall then be amounts due and payable to the Bank pursuant to the
Reimbursement Agreement and the Bank has notified the Trustee thereof.
Section 5.06 Bonds Not Presented for Payment. In the event any Bond
shall not be presented for payment when the principal thereof (or any portion of
such principal) becomes due, either at maturity or at the date fixed for
redemption thereof or otherwise or in the event that any interest payment
remains unclaimed, if moneys sufficient to pay such Bonds or portions thereof or
such interest are held by the Paying Agent for the benefit of the Owners
thereof, the Paying Agent shall segregate and hold such moneys in trust
uninvested without liability for interest thereon, for the benefit of Owners of
such Bonds, who shall, except as provided in the following paragraph, thereafter
be restricted exclusively to such fund or funds for the satisfaction of any
claim of whatever nature on their part under this Indenture or relating to said
Bonds.
Any moneys which the Paying Agent shall segregate and hold in trust for the
payment of the principal of or interest or any premium on any Bond and remaining
unclaimed for three years after such principal, interest or any premium shall
have become due and payable shall be paid to the extent legally permissible (i)
if, at the time, there shall be amounts due and payable to the Bank pursuant to
the Reimbursement Agreement, to the Bank, or (ii) if no such amounts shall be
due and payable, to the Borrower, with notice to the Trustee of such action. For
purposes of this Indenture, the Paying Agent may conclusively assume that no
such indebtedness, liability or obligation is owing to the Bank unless the Bank
shall otherwise give written notice to the Paying Agent. After the payment of
such unclaimed moneys to the Bank or the Borrower, the Owner of such Bond shall
look only to the Borrower for the payment thereof.
Section 5.07 Moneys Held in Trust. All moneys required to be deposited
with or paid to the Trustee for deposit into the Bond Fund under any provision
hereof and all moneys
45
withdrawn from the Bond Fund and held by the Trustee or the Paying Agent shall
be held by the Trustee or the Paying Agent, as the case may be, in trust, and
such moneys (other than moneys held pursuant to Section 5.06 hereof) shall,
while so held, constitute part of the Trust Estate and be subject to the lien
hereof for the benefit of the Owners.
Section 5.08 Payment to the Bank and to the Borrower. Any moneys
remaining in the Bond Fund after the right, title and interest of the Trustee in
and to the Trust Estate and all covenants, agreements and other obligations of
the Issuer under this Indenture shall have ceased, terminated and become void
and shall have been satisfied and discharged in accordance with Article IX
hereof, shall be paid (a) if, at that time, there shall be amounts due and
payable to the Bank pursuant to the Reimbursement Agreement, if any, and the
Bank has notified the Trustee thereof, to the Bank, or (b) if no such amounts
shall be so due and payable, to the Borrower.
ARTICLE VI
[RESERVED]
ARTICLE VII
INVESTMENTS
Section 7.01 Investments. The moneys in the Bond Fund (other than the
moneys described in Sections 4.06(ii), 5.04(c) and 5.06 hereof, which may not be
invested) shall, but only at the direction of the Borrower, be invested and
reinvested in Investment Securities to the extent not prohibited by applicable
law as determined by the Borrower. The income from, and any gain or loss from,
any investment shall be credited or charged to the Fund from which such
investment was made. Investment Securities will be registered in the name of the
Trustee or its nominee and held by or under the control of the Trustee. Subject
to the further provisions of this Section 7.01, such investment shall be made,
and such agreements entered into, by the Trustee as directed and designated by
the Borrower in a certificate of, or telephonic advice promptly confirmed by a
certificate of, an Authorized Borrower Representative. As and when any amounts
thus invested (including investments of Available Moneys) may be needed for
disbursements from the Bond Fund; the Trustee shall cause a sufficient amount of
such investments to be sold or otherwise converted into cash to the credit of
such Fund. As long as no Event of Default (as defined in Section 10.01 hereof)
shall have occurred and be continuing, the Borrower shall have the right to
designate the investments to be sold and to otherwise direct the Trustee in the
sale or conversion to cash of the investments made with the moneys in the Bond
Fund; provided that, the Trustee shall be entitled to conclusively assume the
absence of any such Event of Default unless it has notice thereof within the
meaning of Section 11.05 hereof. The Trustee shall have no responsibility under
this Indenture with respect to the compliance by the Borrower or the Issuer with
any covenant herein or in the Agreement regarding the yield on, or tax-exempt
nature of investments made in accordance with this Section 7.01, other than to
use its best efforts to comply with instructions from the Borrower or the Issuer
regarding such investments and the Trustee shall bear no responsibility for
losses incurred from such investments or the sale thereof. Moneys held by the
Tender Agent in the Purchase Fund shall not be invested.
46
ARTICLE VIII
GENERAL COVENANTS
Section 8.01 Limited Obligation; Payment of Principal and Interest.
Each and every covenant herein made, including all covenants made in the various
Sections of this Article VIII, is predicated upon the condition that any
obligation for the payment of money incurred by the Issuer shall not be the
general obligation of the Issuer within the meaning of the Constitution of
Arizona, and shall never constitute an indebtedness of the Issuer within the
meaning of any State of Arizona constitutional provision or statutory
limitation, and shall never constitute or give rise to any pecuniary liability
of the Issuer or a charge against its general credit or taxing powers, but shall
be payable by the Issuer solely from the Receipts and Revenues from the
Agreement, which are required to be set apart and transferred to the Bond Fund,
and which, along with the balance of the Trust Estate, are hereby specifically
pledged to the payment thereof in the manner and to the extent specified in this
Indenture, and nothing in the Bonds or in this Indenture shall be considered as
pledging or obligating any other funds or assets of the Issuer.
The Issuer will in the manner provided herein and in the Bonds, according
to the true intent and meaning thereof, promptly cause to be paid, solely from
the sources stated herein, at the place and on the dates provided herein, the
principal of and premium, if any, and interest on every Bond issued under this
Indenture.
Section 8.02 Performance of Agreements; Authority. The Issuer will
faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in this Indenture, in any and every Bond
executed, authenticated and delivered hereunder, and in all proceedings
pertaining thereto. The Issuer represents that it has the authority under the
Constitution and laws of the State of Arizona to issue the Bonds authorized
hereby, to enter into the Agreement, and to pledge to the Trustee the Receipts
and Revenues from the Agreement and to pledge and assign to the Trustee all or
any part of the Issuer's right, title and interest under the Agreement pledged
and assigned hereunder, and that the Bonds in the hands of the Owners thereof
are and will be valid and enforceable obligations of the Issuer according to the
import thereof.
Section 8.03 Maintenance of Corporate Existence; Compliance with Laws.
The Issuer will at all times maintain its corporate existence or assure the
assumption of its obligations under this Indenture by any public body succeeding
to its powers under the Act, and it will use its best efforts to maintain,
preserve and renew all the rights and powers provided to it by the Act; and it
will comply with all valid acts, rules, regulations, orders and directions of
any legislative, executive, administrative or judicial body applicable to the
Agreement.
Section 8.04 Enforcement of Borrower's Obligations under the
Agreement. So long as any of the Bonds are outstanding, upon receipt of written
notification from the Trustee, the Issuer will, in the manner provided herein
and giving due recognition to the role of the Trustee hereunder, enforce the
obligation of the Borrower to pay, or cause to be paid, all the payments and
other costs and charges payable by the Borrower under the Agreement, provided,
however, that the Issuer shall not be required to spend any of its own funds in
any such enforcement. The Issuer will not enter into any agreement with the
Borrower amending the
47
Agreement without the prior written consent of the Trustee and compliance with
Sections 13.06 and 13.07 hereof.
Section 8.05 Further Assurances. The Issuer will, upon the reasonable
request of the Trustee, from time to time execute and deliver such further
instruments and take such further action as may be reasonable and as may be
required to carry out the purpose of this Indenture; provided, however, that no
such instruments or actions shall give rise to any pecuniary liability of the
Issuer or pledge the credit or taxing power of the State of Arizona, the Issuer
or any other political subdivision of said State.
Section 8.06 No Disposition or Encumbrance of Issuer's Interests.
Except as permitted by this Indenture, the Issuer will not sell, lease, pledge,
assign or otherwise dispose of or encumber its interest in the Receipts and
Revenues from the Agreement or its rights and interest under the Agreement
pledged and assigned hereunder and will promptly pay or cause to be discharged
or make adequate provision to satisfy and discharge any lien or charge on any
part thereof not permitted by this Indenture.
Section 8.07 Trustee's Access to Books Relating to Facilities. All
books and documents in the possession of the Issuer relating to the Facilities
and the moneys, revenues and receipts derived from the Facilities shall at all
reasonable times be open to inspection by such accountants or other agencies as
the Trustee may from time to time designate. The Trustee shall permit the
Borrower or its designee reasonable access to records relating to the investment
of the proceeds of the Bonds or any other records relating to the Bonds
necessary to assure compliance with Section 148 of the Code.
Section 8.08 Filing of Financing Statements. Appropriate financing
statements, naming the Trustee as secured party with respect to the Receipts and
Revenues from the Agreement and the other moneys pledged by the Issuer under
this Indenture for the payment of the principal of and premium, if any, and
interest on the Bonds, and as pledgee and assignee of certain of the Issuer's
rights and interest under the Agreement, shall be duly filed and recorded in the
appropriate state and county offices as required by the provisions of the
Uniform Commercial Code or other similar law as adopted in the State of Arizona,
the state in which lies the Principal Office of the Trustee and any other
applicable jurisdiction, as from time to time amended. The Trustee will file and
record, with such assistance as necessary from the Issuer and the Borrower, such
necessary continuation statements from time to time as may be required pursuant
to the provisions of said Uniform Commercial Code or other similar law to
protect the interest of the Trustee.
Section 8.09 Tax Covenant. The Issuer covenants for the benefit of the
purchasers of the Bonds that it will not take any action or fail to take any
action reasonably within its control which would, under the Code, Regulations of
the Department of the Treasury of the United States of America (including
Temporary Regulations and Proposed Regulations) under the Code applicable to the
Bonds, rulings and court decisions, cause the interest payable on the Bonds to
be includable in the gross income of the holders thereof for Federal income tax
purposes (other than a "substantial user" of the Facilities or a "related
person" as those terms are used in Section 147(a) of the Code). Pursuant to such
covenant, the Issuer obligates itself to
48
comply throughout the term of the issue of the Bonds with the requirements of
Section 148 of the Code and any regulations promulgated thereunder.
The Borrower by its execution of the Agreement has covenanted to restrict
the investment of money in the funds created under this Indenture in such manner
and to such extent, if any, as may be necessary, so that the Bonds will not
constitute "arbitrage bonds" under Section 148 of the Code.
Section 8.10 Notices by Trustee. The Trustee shall give the same
notices to the Issuer that it is required to give to the Borrower, and to the
Borrower that it is required to give to the Issuer, pursuant to the terms of
this Indenture and, additionally, shall give written or Electronic notice to the
Issuer, the Borrower and the Remarketing Agent of any prior redemption pursuant
to Section 4.01 hereof.
Section 8.11 No Transfer of Credit Facility. Except as provided in
Section 5.04 hereof, the Trustee shall not sell, assign or transfer a Credit
Facility except to a successor trustee under this Indenture and as contemplated
by Section 11.16 hereof.
ARTICLE IX
DEFEASANCE
Section 9.01 Defeasance. If the Issuer shall pay or cause to be paid
with Available Moneys to the Owner of any Outstanding Bond secured hereby the
principal of and interest and any premium due and payable, and thereafter to
become due and payable, on such Bond, or any portion of such Bond in an
Authorized Denomination, such Bond or portion thereof shall cease to be entitled
to any lien, benefit or security under this Indenture (except as set forth in
Section 9.02 hereof). If the Issuer shall pay or cause to be paid with Available
Moneys to the owners of all the Bonds the principal thereof and interest and any
premium due and payable and thereafter to become due and payable thereon, and
shall pay or cause to be paid all other sums payable hereunder by the Issuer, or
payable under the Agreement by the Borrower, then the right, title and interest
of the Trustee in and to the Trust Estate shall thereupon cease, terminate and
become void. In such event, the Trustee shall assign, transfer and turn over the
Trust Estate, including, without limitation, any surplus in the Bond Fund and
any balance remaining in any other fund created under this Indenture, (i) if, at
that time, there shall be amounts due and payable to the Bank pursuant to the
Reimbursement Agreement and the Bank has notified the Trustee thereof, to the
Bank, or (ii) if no such amounts shall be so due and payable, to the Borrower.
All Outstanding Bonds shall, prior to the maturity or redemption date
thereof, be deemed to have been paid within the meaning and with the effect
expressed in this Article IX (except as set forth in Section 9.02 hereof) when
(a) in the event the Bonds are to be redeemed, the Trustee shall have
given, or the Borrower shall have given to the Trustee in form satisfactory
to the Trustee irrevocable instruction to give, on a date in accordance
with the provisions of Article IV hereof, notice of redemption of the
Bonds,
49
(b) all Outstanding Bonds then bear interest at a Long-Term Interest
Rate during a Long-Term Interest Rate Period ending on or after the
redemption date or on the day immediately preceding the Maturity Date, as
the case may be, or at Bond Interest Term Rates for Bond Interest Terms
which end on the redemption date or the day immediately preceding the
Maturity Date, as the case may be, and there shall have been deposited with
the Trustee either moneys in an amount which shall be sufficient, or fixed
rate Government Obligations (i) which shall not contain provisions
permitting the redemption or prepayment thereof at the option of the issuer
thereof, (ii) which mature no later than the earlier of (A) the date fixed
for the redemption of the Bonds and (B) the Maturity Date, and (iii) the
principal of and the interest on which, when due, and without any regard to
reinvestment thereof, will provide moneys which, together with the moneys,
if any, deposited with or held by the Trustee, shall be sufficient, based
on the written opinion of a firm of certified public accountants acceptable
to the Trustee, delivered to the Trustee, to pay when due the principal of
and interest and any premium due and to become due on the Bonds on and
prior to the redemption date or Maturity Date, as the case may be;
provided, however, that such moneys shall constitute Available Moneys and
that such Government Obligations shall have been purchased with Available
Moneys, and
(c) in the event the Bonds do not mature and are not to be redeemed
within the next succeeding 60 days, the Borrower shall have given the
Trustee, in form satisfactory to it, irrevocable instructions to give, as
soon as practicable in the same manner as a notice of redemption is given
pursuant to Section 4.03 hereof, a notice to the Owners that the deposit
required by clause (b) above has been made with the Trustee and that the
Bonds are deemed to have been paid in accordance with this Article IX and
stating the maturity or redemption date upon which moneys are to be
available for the payment of the principal of and interest and any premium
on the Bonds.
Neither the Government Obligations nor moneys deposited with the Trustee
pursuant to this Article IX nor principal or interest payments on any such
Government Obligations shall be withdrawn or used for any purpose other than,
and shall be held in trust for, the payment of the principal of and interest and
any premium on the Bonds; provided that any cash received from such principal or
interest payments on such Government Obligations deposited with the Trustee, if
not then needed for such purpose, shall be invested, to the extent practicable,
at the direction of the Borrower, in Government Obligations of the type and
tenor described in clause (b) of the immediately preceding paragraph, and
interest earned from such reinvestment shall be paid as received by the Trustee
(i) if, at that time, there shall be amounts due and payable to the Bank
pursuant to the Reimbursement Agreement and the Bank has notified the Trustee
thereof, to the Bank, or (ii) if no such amounts shall be so due and payable, to
the Borrower.
Section 9.02 Survival of Certain Provisions. Notwithstanding the
foregoing, any provisions of this Indenture which relate to the payment of the
principal of or any premium on Bonds at maturity or pursuant to redemption, as
the case may be, interest payments and dates thereof, exchange, transfer and
registration of Bonds, replacement of mutilated, destroyed, lost or stolen
Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, the
holding of moneys in trust and repayments to the Bank or the Borrower from the
Bond Fund or the Purchase Fund and the duties of the Trustee, the Registrar, the
Remarketing Agent and the
50
Paying Agent in connection with all of the foregoing, shall remain in effect and
be binding upon the Issuer, the Trustee, the Remarketing Agent, the Tender
Agent, the Registrar, the Paying Agent and Owners notwithstanding the release
and discharge of this Indenture. The provisions of this Section shall survive
the release, discharge and satisfaction of this Indenture provided, however,
that the provisions of Section 2.01 hereof, permitting adjustments in the
Interest Rate Period with respect to the Bonds, shall not be in effect after the
release and discharge of this Indenture.
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.01 Events of Default.
(a) Each of the following events shall constitute and is referred to
in this Indenture as an "Event of Default":
(i) a failure to pay the principal of or any premium on any of
the Bonds when the same shall become due and payable at maturity or
upon redemption;
(ii) a failure to pay an installment of interest on any of the
Bonds after such interest has become due and payable;
(iii) a failure to pay an amount due pursuant to Section 4.08
hereof after such payment has become due and payable;
(iv) an "Event of Default" as such term is defined in Section
8.01 of the Agreement;
(v) prior to termination or expiration of a Credit Facility,
receipt by the Trustee, prior to the date set forth in a Credit
Facility for automatic reinstatement of interest following a drawing
under a Credit Facility to pay accrued interest on the Bonds, of
notice from the Bank in accordance with a Credit Facility that a
Credit Facility will not be reinstated in respect of such interest;
(vi) prior to termination or expiration of a Credit Facility and
payment in full of all amounts due under the Reimbursement Agreement,
receipt by the Trustee of written notice from the Bank that an "Event
of Default" under the Reimbursement Agreement has occurred and is
continuing; or
(vii) a failure by the Issuer to observe and perform any
covenant, condition, agreement or provision (other than as specified
in clauses (i), (ii) and (iii) of paragraph (a) of this Section 10.01)
contained in the Bonds or in this Indenture on the part of the Issuer
to be observed or performed, which failure shall continue for a period
of 60 days after written notice, specifying such failure and
requesting that it be remedied, shall have been given to the Issuer
and the Borrower by the Trustee, which may give such notice in its
discretion and shall
51
give such notice at the written request of the Owners of a majority in
principal amount of the Bonds then Outstanding, unless the Trustee or the
Owners of Bonds then Outstanding in principal amount not less than the
principal amount of Bonds the Owners of which requested such notice, as the
case may be, shall agree in writing to an extension of such period prior to
its expiration; provided, however, that the Trustee, or the Trustee and the
Owners of such principal amount of Bonds, as the case may be, shall be
deemed to have agreed to an extension of such period if corrective action
is initiated by the Issuer, or the Borrower on behalf of the Issuer, within
such period and is being diligently pursued.
(b) If:
(i) (A) a Credit Facility is then in effect and (B) an Event of
Default described in clauses (i), (ii) or (iii) of paragraph (a) of this
Section 10.01 shall occur and be continuing, the Trustee may, and at the
written request of the owners of a majority in principal amount of Bonds
then Outstanding, the Trustee shall, or
(ii) (A) a Credit Facility is then in effect and (B) an Event of
Default described in clause (iv) of paragraph (a) of this Section 10.01
shall occur and be continuing, at the written request of the Bank, the
Trustee shall, or
(iii) (A) a Credit Facility is then in effect and (B) an Event of
Default described in clauses (v) or (vi) of paragraph (a) of this Section
10.01 shall occur and be continuing, the Trustee shall, or
(iv) (A) a Credit Facility is not then in effect or if the Bank shall
have wrongfully failed to honor a drawing under such Credit Facility then
in effect and (B) an Event of Default described in clauses (i), (ii),
(iii), (iv), (v), or (vi) of paragraph (a) of this Section 10.01 shall
occur and be continuing, the Trustee may, and at the written request of the
Owners of a majority in principal amount of Bonds then Outstanding, the
Trustee shall, subject to the Bank's right to purchase the Bonds pursuant
to Section 4.07 in the circumstances set forth therein, by written notice
to the Issuer, the Bank, and the Borrower, declare the Bonds to be
immediately due and payable, whereupon they shall, without further action,
become and be immediately due and payable, anything in this Indenture or in
the Bonds to the contrary notwithstanding, and the Trustee shall give
notice thereof to the Tender Agent, the Remarketing Agent and the Owners
and shall immediately (and in no event later than five (5) days thereafter)
draw under a Credit Facility to the extent provided in Section 5.04 hereof.
If the principal of all of the Bonds shall have been declared due and
payable while a Credit Facility shall be in effect, interest on such Bonds
shall cease to accrue on the date of the drawing on a Credit Facility with
respect to such declaration unless such drawing is pursuant to the Bank's
purchase of the Bonds in accordance with Section 4.07 hereof. The Trustee
shall not be entitled to accelerate the principal of the Bonds upon the
occurrence of an Event of Default described in clause (vii) of paragraph
(a) of this Section 10.01.
52
(c) The provisions of paragraph (b), however, are subject, when no
Credit Facility shall be in effect, to the condition that if, after the
principal of the Bonds shall have been so declared to be due and payable,
and before any judgment or decree-for the payment of the moneys due shall
have been obtained or entered as hereinafter provided, the Issuer shall
cause to be deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all Bonds, premium, if any, and the principal
of any and all Bonds which shall have become due otherwise than by reason
of such declaration (with interest upon such principal and, to the extent
permissible by law, on overdue installments of interest, at the rate per
annum borne by the Bonds on the date of such declaration) and such amounts
as shall be sufficient to cover reasonable compensation and reimbursement
of expenses payable to the Trustee, and all Events of Default hereunder
other than nonpayment of the principal of Bonds which shall have become due
by said declaration shall have been remedied or waived, then, in every such
case, such Event of Default shall be deemed waived and such declaration and
its consequences rescinded and annulled, and the Trustee shall promptly
give written or Electronic notice of such waiver, rescission and annulment
to the Issuer, the Borrower, the Remarketing Agent, and, if notice of the
acceleration of the Bonds shall have been given to the Owners, shall give
notice thereof to the Owners; but no such waiver, rescission and annulment
shall extend to or affect any subsequent Event of Default or impair any
right or remedy consequent thereon.
(d) The provisions of paragraph (b) are, further, subject to the
condition that (i) if an Event of Default described in clauses (v) or (vi)
of paragraph (a) shall have occurred and the Trustee shall thereafter have
received written notice from the Bank that the notice of the Bank which
caused the occurrence of such Event of Default shall have been withdrawn
and (ii) if any drawing under a Credit Facility shall have been made and a
Credit Facility shall have been reinstated as to principal to an amount
equal to the outstanding principal amount of the Bonds and as to interest
to an amount which at least equals, depending on the type of Interest Rate
Period then in effect, the coverage required by Section 2.01(c)(vi) hereof
to permit such Interest Rate Period to go into effect, and the Trustee
shall have received written notice from the Bank of such reinstatement,
then such Event of Default shall be waived, and the consequences of such
Event of Default rescinded and annulled and the Trustee shall promptly give
written notice of such waiver, rescission and annulment to the Issuer, the
Borrower, the Bank, the Tender Agent, the Remarketing Agent, and, if notice
of the acceleration of the Bonds shall have been given to the Owners, shall
give notice thereof to the Owners; but no such waiver, rescission and
annulment shall extend to or affect any subsequent Event of Default or
impair any right or remedy consequent thereon.
Section 10.02 Remedies. In addition to the rights conferred, or
obligation imposed, upon the Trustee under Section 10.01 hereof to accelerate
the principal of the Bonds upon the occurrence and continuance of any Event of
Default, then and in every such case the Trustee in its discretion may, and upon
the written request of the Bank or the Owners of a majority in principal amount
of the Bonds then Outstanding and receipt of indemnity to its satisfaction
shall, in its own name and as the Trustee of an express trust:
53
(i) by mandamus, or other suit, action or proceeding at law or
in equity, enforce all rights of the Owners of the Bonds, and require
the Issuer, the Bank, and the Borrower to carry out any agreements
with or for the benefit of the Owners and to perform their duties
under the Act, the Agreement, a Credit Facility and this Indenture;
(ii) bring suit upon the Bonds or a Credit Facility; or
(iii) by action or suit in equity enjoin any acts or things which
may be unlawful or in violation of the rights of the Owners of the
Bonds.
Section 10.03 Restoration to Former Position. In the event that any
proceeding taken by the Trustee to enforce any right under this Indenture shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every case the Issuer, the
Trustee and the Owners of the Bonds shall be restored to their former positions
and rights hereunder, respectively, and all rights, remedies and powers of the
Trustee shall continue as though no such proceeding had been taken.
Section 10.04 Owner's Right to Direct Proceedings. Subject to the
provisions of Section 4.07 hereof relating to the rights of the Bank in the
circumstances set forth as described therein, anything in this Indenture to the
contrary notwithstanding, the owners of a majority in principal amount of the
Bonds then Outstanding hereunder shall have the right, by an instrument in
writing executed and delivered to the Trustee, to direct the time, method and
place of conducting all remedial proceedings available to the Trustee under this
Indenture or exercising any trust or power conferred on the Trustee by this
Indenture.
Section 10.05 Limitation on Owners' Right to Institute Proceedings. No
owner shall have any right to institute any suit, action or proceedings in
equity or at law for the execution of any trust or power hereunder, or any other
remedy hereunder or on said Bonds, unless (i) such Owner previously shall have
given to the Trustee. written notice of an Event of Default as hereinabove
provided, (ii) the owners of a majority in principal amount of the Bonds then
Outstanding shall have made written request of the Trustee so to do, after the
right to institute said suit, action or proceeding shall have accrued, and shall
have afforded the Trustee a reasonable opportunity to proceed to institute the
same in either its or their name, (iii) there also shall have been offered to
the Trustee security and indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred therein or thereby, and (iv) the Trustee
shall not have complied with such request within a reasonable time after such
notice, request and offer of indemnity; and such notification, request and offer
of indemnity are hereby declared in every such case, at the option of the
Trustee, to be conditions precedent to the institution of said suit, action or
proceeding; it being understood and intended that no one or more of the Owners
shall have any right in any manner whatever by his or their action to affect,
disturb or prejudice the security of this Indenture, or to enforce any right
hereunder or under the Bonds, except in the manner herein provided, and that all
suits, actions and proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the equal benefit of all
Owners.
54
Section 10.06 No Impairment of Right to Enforce Payment.
Notwithstanding any other provision in this Indenture, the right of any Owner to
receive payment of the principal of and interest and any premium on such Bond,
on or after the respective due dates expressed therein or applicable redemption
dates, or to institute suit for the enforcement of any such payment on or after
such respective date, shall not be impaired or affected without the consent of
such Owner.
Section 10.07 Proceeding by Trustee Without Possession of Bonds. All
rights of action under this Indenture or under any of the Bonds secured hereby
which are enforceable by the Trustee may be enforced by it without the
possession of any of the Bonds or the production thereof at the trial or other
proceedings relative thereto. Any such suit, action or proceeding instituted by
the Trustee shall be brought in its name for the equal and ratable benefit of
the Owners subject to the provisions of this Indenture.
Section 10.08 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Trustee, the Bank or to the Owners of the Bonds is intended to
be exclusive of any other remedy or remedies, and each and every such remedy
shall be cumulative, and shall be in addition to every other remedy given
hereunder or under the Agreement, or now or hereafter existing at lay or in
equity or by statute.
Section 10.09 No Waiver of Remedies. No delay or omission of the
Trustee, the Bank or of any Owner of a Bond to exercise any right or power
accruing upon any default shall impair any such right or power accruing upon any
default or shall be construed to be a waiver of any such default, or an
acquiescence therein. Every power and remedy given by this Article X to the
Trustee, the Bank and to the Owners of the Bonds, respectively, may be exercised
from time to time as often as may be deemed expedient.
Section 10.10 Application of Moneys. Any moneys received by the
Trustee, by any receiver or by any Owner of a Bond pursuant to any right given
or action taken under the provisions of this Article X (other than moneys
received by the Trustee in consequence of the exercise by the Bank of its right
to purchase the Bonds pursuant to Section 4.07) or under the provisions of the
Agreement after payment of the costs and expenses of the proceedings resulting
in the collection of such moneys, including any amounts due to the Trustee
pursuant to Section 11.04 hereof and under the Agreement (except that proceeds
of a drawing under a Credit Facility and any moneys held pursuant to Section
5.06 hereof may not be so used), shall be deposited in the Bond Fund and all
moneys so deposited in the Bond Fund during the continuance of an Event of
Default (other than moneys for the payment of Bonds which had matured or
otherwise become payable prior to such Event of Default or for the payment of
interest due prior to such Event of Default) shall be applied as follows:
(a) Unless the principal of all the Bonds shall have been declared due
and payable, all such moneys shall be applied (i) first, to the payment to
the persons entitled thereto of all installments of interest then due on
the Bonds, with interest on overdue installments, if lawful, at the rate
per annum borne by the Bonds on the date of occurrence of such Event of
Default, in the 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 of interest, then to the payment ratably, according
to the amounts due on such
55
installment, and (ii) second, to the payment to the persons entitled
thereto of the unpaid principal of and any premium on any of the Bonds
which shall have become due (other than Bonds called for redemption for the
payment of which money is held pursuant to the provisions of this
Indenture) with interest on such Bonds at their rate on the date of
occurrence of such Event of Default from the respective dates upon which
they became due and, if the amount available shall not be sufficient to pay
in full Bonds due on any particular date, together with such interest, then
to the payment ratably, according to the amount of principal and interest
and any premium due on such date, in each case to the persons entitled
thereto, without any discrimination or privilege; provided, however, that
moneys derived from the exercise of rights by the Trustee under a Credit
Facility shall not be applied to the payment of the principal of or premium
or interest on Bonds held of record by the Borrower or any affiliate
thereof or by the Tender Agent for the account of the Borrower.
(b) If the principal of all the Bonds shall have been declared due and
payable and the Bank has not exercised its option to direct the Trustee to
purchase all Bonds on behalf of the Bank pursuant to Section 4.07 hereof,
all such moneys shall be applied to the payment of the principal and
interest then due and unpaid upon the Bonds, with interest on overdue
interest and principal, as aforesaid, without preference or priority of
principal over interest or of interest over principal, or of any
installment of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts due
respectively for principal and interest, to the persons entitled thereto
without any discrimination or privilege; provided, however, that moneys
derived from the exercise of rights by the Trustee under a Credit Facility
shall not be applied to the payment of the principal of or premium or
interest on Bonds held of record by the Borrower or any affiliate thereof
or by the Tender Agent for the account of the Borrower.
(c) If the principal of all the Bonds shall have been declared due and
payable, and if such declaration shall thereafter have been rescinded and
annulled under the provisions of this Article X, subject to the provisions
of clause (b) of this Section 10.10 which shall be applicable in the event
that the principal of all the Bonds shall later become due and payable, the
moneys shall be applied in accordance with the provisions of clause (a) of
this Section 10.10.
Whenever moneys are to be applied pursuant to the provisions of this
Section 10.10, such moneys shall be applied at such times, and from time to
time, as the Trustee shall determine, having due regard to 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, while a Credit Facility
shall be in effect, shall be within five days of any declaration of acceleration
and, if possible, an Interest Payment Date unless it shall deem another date
more suitable) upon which such application is to be made and, upon such
application, interest on the amounts of principal, premium and interest to be
paid on such dates shall cease to accrue, except that if the principal of all of
the Bonds shall have been declared due and payable when a Credit Facility shall
be in effect, interest on such amounts shall cease to accrue on the date of the
drawing on a Credit Facility with respect to such declaration unless such
drawing is pursuant to the Bank's purchase of the Bonds in accordance with
Section 4.07 hereof. The Trustee shall give notice of the deposit with it of any
such moneys and of
56
the fixing of any such date to all Owners of Outstanding Bonds, consistent with
the requirements of Section 2.01 hereof for the establishment of, and giving of
notice with respect to, a Special Record Date for the payment of overdue
interest. The Trustee shall not be required to make payment to any Owner of a
Bond until such Bond shall be presented to the Trustee for appropriate
endorsement or for cancellation if fully paid.
Notwithstanding anything in this Section 10.10 to the contrary, moneys
received by the Trustee pursuant to draws on a Credit Facility, and moneys held
by the Trustee pursuant to Section 4.10 for the payment of Bonds not presented
for payment, shall be applied only to the payment of principal, redemption
premium (if any) and interest due on the Bonds.
Section 10.11 Severability of Remedies. It is the purpose and
intention of this Article X to provide rights and remedies to the Trustee, the
Bank, and the Owners which may be lawfully granted under the provisions of the
Act, but should any right or remedy granted herein be held to be unlawful, the
Trustee, the Bank, and the Owners shall be entitled, as above set forth, to
every other right and remedy provided in this Indenture and by law.
Section 10.12 Waivers of Events of Default. The Trustee in its
discretion may waive any Event of Default hereunder (other than an Event of
Default described in clauses (v) and (vi) of paragraph (a) of Section 10.01 and
not waived in accordance with paragraph (d) of Section 10.01) and its
consequences and shall in any event do so upon the written request of the Owners
of a majority in principal amount of all Bonds then outstanding; provided,
however, that there shall not be waived
(i) any Event of Default pertaining to the payment of the
principal of any Bond at the Maturity Date or redemption date prior to
maturity, or
(ii) any Event of Default pertaining to the payment when due
of the interest on any Bond,
unless, prior to such waiver (A) all arrears of principal (due otherwise than by
declaration) and interest, with interest (to the extent permitted by law) at the
rate per annum borne by the Bonds in respect of which such Event of Default
shall have occurred on overdue installments of principal (due otherwise than by
declaration) and interest, shall have been paid or provided for, (B) all
expenses of the Trustee in connection with such Event of Default shall have been
paid or provided for to the satisfaction of the Trustee, and (C) if a Credit
Facility is in effect with respect to the Bonds, the coverage under a Credit
Facility shall have been reinstated as to principal to an amount equal to the
outstanding principal amount of the Bonds and as to interest to an amount which
at least equals, depending on the type of Interest Rate Period then in effect,
the coverage required by Section 2.01(c)(vi) hereof to permit such Interest Rate
Period to go into effect, and provided further that, in case of any such waiver,
or in case any proceeding taken by the Trustee on account of any such Event of
Default shall be discontinued or abandoned or determined adversely, then and in
every such case the Issuer, the Borrower, the Trustee, the Bank and the Owners
of the Bonds shall be restored to their former positions and rights hereunder,
respectively, but no such waiver shall extend to any subsequent or other Event
of Default, or impair any right consequent thereon. The Trustee shall not have
any discretion to waive any
57
Event of Default hereunder and its consequences except in the manner and subject
to the terms expressed above.
Section 10.13 No Obligation of Issuer to Act. Subject to Sections 8.04
and 8.05, the Issuer shall have no obligation to take any action or pursue any
right or remedy of the Trustee or any Owner under this Indenture or otherwise,
including, but not limited to, taking any action in a bankruptcy proceeding.
ARTICLE XI
TRUSTEE; PAYING AGENT; REGISTRAR
Section 11.01 Acceptance of Trusts. By executing the certificate of
authentication endorsed upon the Bonds, the Trustee shall signify its acceptance
and agree to execute the trusts hereby created but only upon the additional
terms set forth in this Article XI, to all of which the Issuer agrees and the
respective owners agree by their acceptance of delivery of any of the Bonds.
Section 11.02 Trustee Not Responsible for Recitals, Maintenance,
Insurance, etc. The recitals, findings and representations in this Indenture or
in the Bonds contained, save only the Trustee's authentication upon the Bonds,
shall be taken and construed as made by and on the part of the Issuer, and not
by the Trustee, and the Trustee does not assume, and shall not have, any
responsibility or obligation for the correctness of any thereof. In addition,
the Trustee shall not have any responsibility for monitoring the Borrower's
obligations under Sections 5.06 and 5.07 of the Agreement to maintain the
Facilities or to maintain or cause to be maintained the insurance required
thereunder.
Section 11.03 Limitations on Liability.
(a) The Trustee may execute any of the trusts or powers hereof and
perform the duties required of it hereunder by or through attorneys,
agents, receivers or employees, and shall be entitled to advice of counsel
concerning all matters of trust and its duty hereunder and shall not be
liable for any action taken or omitted to be taken in good faith on the
basis of such advice, and the Trustee shall not be answerable for the
default or misconduct of any such attorney, agent or employee selected by
it with reasonable care. The Trustee shall not be answerable for the
exercise of any discretion or power under this Indenture or for anything
whatsoever in connection with the trust created hereby, except only for its
own gross negligence or willful misconduct.
(b) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not
be liable for any action reasonably taken or omitted to be taken by it in
good faith and reasonably believed by it to be within its discretion or
power conferred upon it hereby.
(c) Whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any
58
action hereunder or under the Agreement, the Trustee may, in the absence of
bad faith on its part, rely upon a Certificate of the Borrower.
(d) Prior to taking any action under the Agreement or this Indenture,
the Trustee shall be entitled to a certificate of an Authorized Borrower
Representative and/or an opinion of counsel with respect to the proposed
action, which certificate and/or opinion shall confirm that all conditions
precedent, if any, have been satisfied.
(e) The Trustee shall not be required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers
under this Indenture.
(f) The Trustee shall not be bound to ascertain or inquire as to
performance or observance of any covenants, conditions or other agreements
on the part of the Borrower or the Issuer under the Agreement or this
Indenture, as the case may be, except as specifically provided for herein.
The Trustee shall have no obligation to perform any of the duties of the
Issuer or the Borrower under the Agreement or this Indenture.
Section 11.04 Compensation, Expenses and Advances. The Trustee, the
Paying Agent, the Registrar and the Tender Agent under this Indenture shall be
entitled to reasonable compensation for their services rendered hereunder
including extraordinary services such as default administration (not limited by
any provision of law in regard to the compensation of the trustee of an express
trust) and to reimbursement for their actual out-of-pocket expenses (including
counsel fees and expenses) reasonably incurred in connection therewith except as
a result of their gross negligence or willful misconduct. If the Issuer shall
fail to perform any of the covenants or agreements contained in this Indenture,
other than the covenants or agreements in respect of the payment of the
principal of, premium, if any, and interest on the Bonds, the Trustee may, in
its uncontrolled discretion and without notice to the Owners of the Bonds, at
any time and from time to time, make advances to effect performance of the same
on behalf of the Issuer, but the Trustee shall be under no obligation to do so;
but no such advance shall operate to relieve the Issuer from any default
hereunder. In Section 5.04 of the Agreement, the Borrower has agreed that it
will pay to the Trustee, the Paying Agent, the Registrar, the Remarketing Agent
and the Tender Agent such compensation and reimbursement of expenses and
advances, but the Borrower may, without creating a default hereunder, contest in
good faith the reasonableness of any such services, expenses and advances. In
Section 5.08 of the Agreement, the Borrower has agreed to indemnify the Trustee
and the Registrar to the extent stated therein. If the Borrower shall have
failed to make any payment to the Trustee under Sections 5.04 or 5.08 of the
Agreement and such failure shall have resulted in an Event of Default under the
Agreement, the Trustee shall have, in addition to any other rights hereunder, a
claim, prior to the claim of the Owners of the Bonds, for the payment of its
compensation and the reimbursement of its expenses and any advances made by it,
as provided in this Section 11.04, upon the moneys and obligations in the Bond
Fund, except for proceeds of drawings under a Credit Facility and except for
moneys or obligations deposited with or paid to the Trustee for the purchase of
Bonds by the Bank in accordance with Section 4.07 hereof or which are deemed to
have been paid in accordance with Article IX hereof and funds held pursuant to
Section 5.06 hereof.
Section 11.05 Notice of Events of Default. The Trustee shall not be
required to take notice, or be deemed to have notice, of any default or Event of
Default under this Indenture
59
or the Agreement other than an Event of Default under clauses (i), (ii), (iii)
(but only if the Trustee and the Tender Agent are the same entity), (v) or (vi)
of paragraph (a) of Section 10.01 hereof, unless specifically notified in
writing of such default or Event of Default by Owners of at least a majority in
principal amount of the Bonds then Outstanding or by the Bank. The Trustee may,
however, at any time, in its discretion, require of the Issuer full information
and advice as to the performance of any of the covenants, conditions and
agreements contained herein.
Section 11.06 Action by Trustee. The Trustee shall be under no
obligation to take any action in respect of any default or Event of Default
hereunder other than pursuant to Section 10.01(b) hereof, or toward the
execution or enforcement of any of the trusts hereby created, or to institute,
appear in or defend any suit or other proceeding in connection therewith, unless
requested in writing to do so by Owners of at least a majority in principal
amount of the Bonds then Outstanding or the Bank, and, if in its opinion such
action may tend to involve it in expense or liability, unless furnished, from
time to time as often as it may require, with security and indemnity
satisfactory to it. The foregoing provisions are intended only for the
protection of the Trustee, and shall not affect any discretion or power given by
any provisions of this Indenture to the Trustee to take action in respect of any
default or Event of Default without such notice or request from Owners or the
Bank, or without such security or indemnity. Notwithstanding the foregoing, the
Trustee shall submit draw requests under a Credit Facility as provided therein,
make payments on the Bonds in accordance with this Indenture and give notice of
acceleration in accordance with Section 10.01(b) hereof, without as a
precondition to such action, demanding security and indemnity as hereinbefore
provided.
Section 11.07 Good Faith Reliance. The Trustee shall be protected and
shall incur no liability in acting or proceeding in good faith upon any
resolution, notice, telegram, request, consent, waiver, certificate, statement,
affidavit, voucher, bond, requisition or other paper or document, or upon
telephonic instructions to the extent the giving of telephonic instructions is
specifically authorized by this Indenture or the Agreement, in any case which
the Trustee shall in good faith believe to be genuine and to have been passed,
signed or given by the proper board, body or person or to have been prepared and
furnished pursuant to any of the provisions of this Indenture or the Agreement,
or upon the written opinion of any attorney, engineer, accountant or other
expert believed by the Trustee to be qualified in relation to the subject
matter, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such
instrument, but may accept and rely upon the same as conclusive evidence of the
truth and accuracy of such statements. Neither the Trustee, the Paying Agent,
the Registrar nor the Tender Agent shall be bound to recognize any person as an
Owner or to take any action at his request unless his Bond shall be deposited
with such entity or satisfactory evidence of the ownership of such Bond shall be
furnished to such entity.
Section 11.08 Dealings in Bonds and with the Issuer and the Borrower.
The Trustee, the Paying Agent, the Registrar, the Bank, the Tender Agent or the
Remarketing Agent and each of their officers and directors, may in good faith
buy, sell, own, hold and deal in any of the Bonds, and may join in any action
which any Owner may be entitled to take with like effect as if it did not act in
any capacity hereunder. The Trustee, the Paying Agent, the Registrar, the Bank,
the Tender Agent or the Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or be interested in any financial or
other transaction with the Issuer
60
or the Borrower, and may act as depositary, trustee or agent for any committee
or body of Owners or other obligations of the Issuer as freely as if it did not
act in any capacity hereunder.
Section 11.09 Several Capacities. Anything in this Indenture to the
contrary notwithstanding, the same entity may serve hereunder as the Trustee,
the Paying Agent, the Registrar, the Tender Agent and the Remarketing Agent and
in any other combination of such capacities, to the extent permitted by law.
Section 11.10 Construction of Indenture. The Trustee may construe any
of the provisions of this Indenture or the Agreement insofar as the same may
appear to be ambiguous or inconsistent with any other provision hereof or
thereof, and any construction of any such provisions hereof by the Trustee in
good faith shall be binding upon the Owners, the Issuer and the Borrower.
Section 11.11 Resignation of Trustee. The Trustee may resign and be
discharged of the trusts created by this Indenture by executing an instrument in
writing resigning such trust and specifying the date when such resignation shall
take effect, and the Trustee shall provide such notice to the Issuer, the
Borrower and the Bank, if any, and the Trustee shall give such notice of such
resignation to all Owners. Such notice shall specify the date when such
resignation shall take effect. Such resignation shall only take effect on the
day a successor Trustee shall have been appointed as hereinafter provided and
shall have accepted such appointment and agreed to assume all of the obligations
as Trustee hereunder.
Section 11.12 Removal of Trustee. The Trustee may be removed by the
Issuer at any time, at the written request of the Borrower (other than during
the continuation of an Event of Default) or the Owners of not less than a
majority in principal amount of the Bonds then outstanding, by filing with the
Trustee so removed, the Issuer, the Borrower, the Tender Agent, the Remarketing
Agent, and the Bank an instrument or instruments in writing appointing a
successor in accordance with Section 11.13 hereof. Promptly upon delivery of
such instrument or instruments to the Trustee, the successor Trustee upon its
acceptance of the trusts created hereby shall give notice thereof to all Owners.
Section 11.13 Appointment of Successor Trustee. If at any time the
Trustee shall be removed, be dissolved or its property or affairs shall be taken
under the control of any state or federal court or administrative body because
of insolvency, bankruptcy or any other reason, a vacancy shall ipso facto be
deemed to exist in the office of Trustee and a successor may be appointed, and
in case at any time the Trustee shall resign, then a successor may be appointed,
by giving written notice to the Issuer, the Borrower, the Tender Agent, the
Remarketing Agent, and the Bank an instrument of appointment in writing,
executed by Owners of not less than a majority in principal amount of Bonds then
Outstanding with the consent of the Bank unless the Bank has wrongfully
dishonored a draw on a Credit Facility. Copies of such instrument shall be
promptly delivered by the Issuer to the predecessor Trustee and to the Trustee
so appointed.
Until a successor Trustee shall be appointed by the Owners of the Bonds as
herein authorized with the consent of the Bank unless the Bank has wrongfully
dishonored a draw on a Credit Facility, the Issuer, by an instrument authorized
by resolution of the Issuer, may, but shall have no obligation to, appoint a
successor Trustee acceptable to the Borrower and the Bank.
61
After any appointment by the Issuer, it shall cause notice of such appointment
to be given to the Remarketing Agent and to all Owners of the Bonds. Any new
Trustee so appointed by the Issuer shall immediately and without further act be
superseded by a Trustee appointed by the Owners of the Bonds in the manner above
provided. Notwithstanding anything herein to the contrary, no resignation or
removal of the Trustee shall be effective until (i) a successor Trustee shall be
appointed in accordance with the terms hereof and has accepted such appointment
and (ii) each then existing Letter of Credit or other Credit Facility shall have
been transferred to such successor in accordance with the terms thereof.
Section 11.14 Qualifications of Successor Trustee. Every successor
Trustee (a) shall be a bank or trust company (other than the Bank) duly
organized under the laws of the United States or any state or territory thereof
and authorized by law to perform all the duties imposed upon it by this
Indenture, (b) shall have a combined capital stock, surplus and undivided
profits of at least $50,000,000 if there can be located, with reasonable effort,
such an institution willing and able to accept the trust on reasonable and
customary terms and (c) shall have its obligations rated or be a wholly-owned
subsidiary of an entity whose obligations are rated, so long as the Bonds shall
be rated by Moody's, at least Baa3/P-3 by Moody's or otherwise qualified by
Moody's.
Section 11.15 Judicial Appointment of Successor Trustee. If at any
time the Trustee shall resign and no appointment of a successor Trustee shall be
made pursuant to the foregoing provisions of this Article XI prior to the date
specified in the notice of resignation as the date when such resignation is to
take effect, the retiring Trustee may forthwith apply to a court of competent
jurisdiction for the appointment of a successor Trustee. If no appointment of a
successor Trustee shall be made pursuant to the foregoing provisions of this
Article XI within six months after a vacancy shall have occurred in the office
of Trustee, any Owner of a Bond or the Bank may apply to any court of competent
jurisdiction to appoint a successor Trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.
Section 11.16 Acceptance of Trusts by Successor Trustee. Any successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Issuer, the Borrower, the Bank, if any, and to its predecessor Trustee an
instrument accepting such appointment hereunder, and thereupon such successor
Trustee, without any further act, deed or conveyance, shall become duly vested
with all the estates, property, rights, powers, trusts, duties and obligations
of its predecessor in the trust hereunder, with like effect as if originally
named Trustee herein. Upon request of such successor Trustee, such predecessor
Trustee and the Issuer shall execute and deliver an instrument transferring to
such successor Trustee all the estates, property, rights, powers and trusts
hereunder of such predecessor Trustee and, subject to the provisions of Section
11.04 hereof and upon payment of its charges, such predecessor Trustee shall (i)
pay over to the successor Trustee all moneys and other assets at the time held
by it hereunder and (ii) transfer over to the successor Trustee its interest in
any Credit Facility.
Section 11.17 Successor by Merger or Consolidation. Any corporation
into which any Trustee hereunder may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which any Trustee hereunder shall be a party or any corporation to which the
corporate trust business of the Trustee shall be
62
sold or transferred, shall be the successor Trustee under this Indenture,
without the execution or filing of any paper or any further act on the part of
the parties hereto, anything in this Indenture to the contrary notwithstanding.
Section 11.18 Standard of Care. Notwithstanding any other provisions
of this Article XI, the Trustee shall, during the existence of an Event of
Default of which the Trustee is required to take notice or is deemed to have
notice under Section 11.05 hereof, exercise such of the rights and powers vested
in it by this Indenture and use the same degree of skill and care in their
exercise as a prudent person would use and exercise under the circumstances in
the conduct of his own affairs. Prior to the existence and after the curing or
waiving of any such Event of Default, the duties of the Trustee hereunder shall
be only such duties as are specifically set forth herein and no implied
covenants shall be read into this Indenture or the Agreement against the
Trustee.
Section 11.19 Notice of Event of Default. If an Event of Default
occurs of which the Trustee is required by Section 11.05 hereof to take notice
or has notice, or any other Event of Default occurs of which the Trustee has
been specifically notified in accordance with Section 11.05 hereof, and any such
Event of Default shall continue for at least five Business Days after the
Trustee is required to take, or has received, notice thereof, the Trustee shall
give notice thereof to the Issuer, the Remarketing Agent, the Tender Agent, the
Bank and the Owners of the Bonds.
Section 11.20 Intervention in Litigation. In any judicial proceeding
to which the Issuer is a party and which in the opinion of the Trustee and its
counsel has a substantial bearing on the interests of the Owners of the Bonds,
the Trustee may intervene on behalf of the Owners of the Bonds and shall, upon
receipt of indemnity satisfactory to it, do so if requested in writing by Owners
of at least a majority in principal amount of the Bonds then Outstanding if
permitted by the court having jurisdiction in the premises.
Section 11.21 Paying Agent. The Issuer may at any time or from time to
time by resolution, with the approval of the Trustee and the Borrower, appoint
the Paying Agent for the Bonds, subject to the conditions set forth in Section
11.22 hereof. The Trustee is hereby appointed as the initial Paying Agent. Each
Paying Agent (if not also the Trustee) shall designate to the Trustee and the
Bank its Principal Office and signify its acceptance of the duties and
obligations imposed upon it hereunder by a written instrument of acceptance
delivered to the Issuer, the Borrower and the Trustee under which such Paying
Agent will agree, particularly:
(i) to hold all sums held by it for the payment of the principal
of and interest and any premium on Bonds in trust for the benefit of
the Owners until such sums shall be paid to the Owners or otherwise
disposed of as herein provided; and
(ii) to keep such books and records as shall be consistent with
prudent industry practice and to make such books and records available
for inspection by the Issuer, the Trustee and the Borrower at all
reasonable times.
63
The Issuer shall cooperate with the Trustee and the Borrower to cause the
necessary arrangements to be made and to be thereafter continued whereby funds
will be made available for the payment when due of the Bonds as presented at the
Principal Office of the Paying Agent.
Section 11.22 Qualifications of Paying Agent; Resignation; Removal.
The Paying Agent shall (i) be a bank, a trust company, national banking
association or another corporation duly organized under the laws of the United
States of America or any state or territory thereof, (ii) have its obligations
rated or be a wholly-owned subsidiary of an entity whose obligations are rated,
so long as the Bonds are rated by Moody's, at least Baa3/P-3 by Moody's or
otherwise qualified by Moody's, and (iii) be authorized by law to perform all
the duties imposed upon it by this Indenture. The Paying Agent may at any time
resign and be discharged of the duties and obligations created by this Indenture
by giving at least 60 days' notice to the Issuer, the Borrower and the Trustee
(if no longer the Paying Agent). The Paying Agent shall be removed at any time,
other than during the continuance of an Event of Default, at the direction of
the Borrower, by an instrument, signed by the Issuer, filed with the Paying
Agent and with the Trustee.
In the event of the resignation or removal of the Paying Agent, the Paying
Agent shall pay over, assign and deliver any moneys held by it in such capacity
to its successor or, if there be no successor, to the Trustee.
In the event that the Paying Agent shall resign, be removed or be
dissolved, or if the property or affairs of the Paying Agent shall be taken
under the control of any state or federal court or administrative body because
of bankruptcy, insolvency or any other reason, and the Issuer shall not have
appointed its successor as Paying Agent, the Trustee shall de facto be deemed to
be the Paying Agent for all purposes of this Indenture until the appointment by
the Issuer of the Paying Agent or successor Paying Agent, as the case may be.
Section 11.23 Registrar. The Trustee hereby is appointed as the
initial Registrar. In the event of the resignation or removal of the Registrar,
the Issuer shall, at the direction of the Borrower, appoint the Registrar for
the Bonds, subject to the conditions set forth in Section 11.24 hereof. Each
Registrar (if not also the Trustee) shall designate to the Trustee its Principal
Office and signify its acceptance of the duties imposed upon it hereunder by a
written instrument of acceptance delivered to the Issuer, the Borrower and the
Trustee under which such Registrar will agree, particularly, to keep such books
and records as shall be consistent with prudent industry practice and to make
such books and records available for inspection by the Issuer, the Trustee and
the Borrower at all reasonable times.
The Issuer shall cooperate with the efforts of the Trustee and the Borrower
intended to cause the necessary arrangements to be made and to be thereafter
continued whereby Bonds, executed by the Issuer and authenticated by the
Trustee, shall be made available for exchange and registration of transfer at
the Principal Office of the Registrar. The Issuer shall cooperate with the
efforts of the Trustee, the Registrar and the Borrower to cause the necessary
arrangements to be made and thereafter continued whereby the Paying Agent and
the Remarketing Agent shall be furnished such records and other information, at
such times, as shall be required to enable the Paying Agent and the Remarketing
Agent to perform the duties and obligations imposed upon them hereunder.
64
Section 11.24 Qualifications of Registrar; Resignation; Removal. The
Registrar shall be a corporation duly organized under the laws of the United
States of America or any state or territory thereof, authorized by law to
perform all the duties imposed upon it by this Indenture. The Registrar may at
any time resign and be discharged of the duties and obligations created by this
Indenture by giving at least 60 days' notice to the Issuer, the Trustee and the
Borrower. The Registrar may be removed at any time, at the direction of the
Borrower (other than during the continuance of an Event of Default), by an
instrument, signed by the Issuer, filed with the Registrar and the Trustee.
In the event of the resignation or removal of the Registrar, the Registrar
shall deliver any Bonds held by it in such capacity to its successor or, if
there be no successor, to the Trustee.
In the event that the Registrar shall resign, be removed or be dissolved,
or if the property or affairs of the Registrar shall be taken under the control
of any state or federal court or administrative body because of bankruptcy,
insolvency or any other reason, and the Issuer shall not have appointed its
successor as Registrar, the Trustee shall de facto be deemed to be the Registrar
for all purposes of this Indenture until the appointment by the Issuer of the
Registrar or successor Registrar, as the case may be.
Section 11.25 Appointment of Co-Trustee. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including particularly the law of the State of Arizona) denying or restricting
the right of banking corporations or associations to transact business as
trustee in such jurisdiction. It is recognized that in case of litigation under
this Indenture or the Agreement, and in particular in the case of the
enforcement thereof on default, or in the case the Trustee deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee or hold title to the
properties, in trust, as herein granted, or take any action which may be
desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an additional individual or institution as a separate or
co-trustee.
In the event that the Trustee shall appoint an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or co-trustee, but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate or
co-trustee shall run to and be enforceable by either of them.
Should any reasonable instrument in writing from the Issuer be required by
the separate or co-trustee so appointed by the Trustee for more fully and
certainly vesting in and confirming to him or it such estates, property, rights,
powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Issuer. In
case any separate or co-trustee or a successor to either shall die, become
incapable of acting, resign or be removed, all the estates, properties, rights,
powers, trusts, duties and obligations of such separate or co-trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a successor to such separate or co-trustee or a new separate or
65
co-trustee. No trustee hereunder shall be liable by reason of any act or
omission of any other trustee hereunder
Section 11.26 Notices to Rating Agencies. The Trustee shall provide
Moody's, if the Bonds are then rated by Moody's, or S&P, if the Bonds are then
rated by S&P, as appropriate, with prompt written notice of (i) the appointment
of any successor Trustee, Paying Agent, Remarketing Agent or Tender Agent (ii)
any amendments to this Indenture or the Agreement, (iii) the payment (or
provision for payment) in whole of the Bonds, (iv) the adjustment of any Bonds
to a Short-Term or Long-Term Interest Rate Period, (v) the extension, expiration
or termination of a Credit Facility or (vi) any amendment to the Reimbursement
Agreement or a Credit Facility of which the Trustee has actual knowledge.
ARTICLE XII
EXECUTION OF INSTRUMENTS BY
OWNERS AND PROOF OF OWNERSHIP OF BONDS
Section 12.01 Execution of Instruments; Proof of Ownership. Any
request, direction, consent or other instrument in writing, whether or not
required or permitted by this Indenture to be signed or executed by Owners of
the Bonds, may be in any number of concurrent instruments of similar tenor and
may be signed or executed by Owners of the Bonds in person or by agent appointed
by an instrument in writing. Proof of the execution of any such instrument and
of the ownership or former ownership of Bonds shall be sufficient for any
purpose of this Indenture and shall be conclusive in favor of the Trustee with
regard to any action taken by it under such instrument if made in the following
manner:
(i) The fact and date of the execution by any person of any
such instrument may be proved by the certificate of any officer in any
jurisdiction who, by the laws thereof, has power to take
acknowledgments within such jurisdiction, to the effect that the
person signing such instrument acknowledged before him the execution
thereof, or by an affidavit of a witness to such execution, or in any
other manner reasonably acceptable to the Trustee.
(ii) The ownership or former ownership of Bonds shall be proved
by the registration books kept under the provisions of Section 2.04
hereof and the records kept by the Trustee pursuant to Section
14.03(c) hereof.
(iii) While the Bonds are in book-entry only form, the beneficial
ownership or former ownership of Bonds shall be proved by an
instrument in writing signed by such beneficial owner and acceptable
to the Trustee.
Nothing contained in this Article XII shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept any other
evidence of matters herein stated which it may deem to be sufficient. Any
request or consent of any Owner of a Bond shall bind every future Owner of any
Bond or Bonds issued in lieu thereof or upon registration of transfer
66
or in exchange thereof in respect of anything done by the Trustee or the Issuer
in pursuance of such request or consent.
ARTICLE XIII
MODIFICATION OF INDENTURE, DOCUMENTS
Section 13.01 Limitations. This Indenture and the Agreement shall
not be modified or amended in any respect subsequent to the initial issuance of
the Bonds, except as provided in and in accordance with and subject to the
provisions of this Article XIII.
Section 13.02 Modification without Consent of Owners. The Issuer
and the Trustee may, from time to time and at any time without the consent of or
notice to the Owners of the Bonds but subject to Section 13.05 hereof, enter
into Supplemental Indentures as follows:
(i) to cure any formal defect, omission, inconsistency or
ambiguity in this Indenture;
(ii) to grant to or confer upon the Trustee for the benefit
of the Owners of the Bonds any additional rights, remedies,
powers, authority or security which may lawfully be granted or
conferred and which are not contrary to or inconsistent with this
Indenture as theretofore in effect;
(iii) to add to the covenants and agreements of, and
limitations and restrictions upon, the Issuer in this Indenture
other covenants, agreements, limitations and restrictions to be
observed by the Issuer which are not contrary to or inconsistent
with this Indenture as theretofore in effect;
(iv) to confirm, as further assurance, any pledge or
assignment under, and the subjection to any claim, lien, pledge
or assignment created or to be created by this Indenture, of the
Receipts and Revenues or of any other moneys, securities or
funds;
(v) to authorize different Authorized Denominations of the
Bonds and to make correlative amendments and modifications to
this Indenture regarding exchangeability of Bonds of different
Authorized Denominations, redemptions of portions of Bonds of
particular Authorized Denominations and similar amendments and
modifications of a technical nature;
(vi) to modify, alter, supplement or amend this Indenture
in such manner as shall permit the qualification hereof under the
Trust Indenture Act of 1939, as from time to time amended;
(vii) to increase or decrease the number of days specified
in Section 2.01(c) hereof and to make corresponding changes to
Section 4.03 hereof; provided that no decreases in any such
number of days shall become effective except during a Daily
Interest Rate Period or a Weekly Interest Rate Period and until
30 days after the Trustee shall have given notice to the Owners;
67
(viii) to provide for the procedures required to permit or
implement an uncertificated system of registration of the Bonds;
(ix) to modify, alter, amend or supplement this Indenture in
any other respect which is not materially adverse to the Owners and
which does not involve a change described in the provisions of Section
13.03(i) hereof; and
(x) to modify, alter, supplement or amend this Indenture to
comply with changes in the Code affecting the status of interest on
the Bonds as excluded from gross income for federal income tax
purposes or the obligations of the Issuer or the Borrower in respect
of Section 148 of the Code.
Before the Issuer shall adopt any Supplemental Indenture pursuant to this
Section 13.02, there shall have been provided to the Issuer and the Trustee a
Favorable Opinion of Bond Counsel.
Section 13.03 Modification with Consent of Owners.
(i) Except for any Supplemental Indenture entered into
pursuant to Section 13.02 hereof, subject to the terms and provisions
contained in this Section 13.03, the Owners of not less than a
majority in aggregate principal amount of the Bonds shall have the
right from time to time to consent to and approve the adoption by the
Issuer of any Supplemental Indenture deemed necessary or desirable by
the Issuer for the purposes of modifying, altering, amending,
supplementing or rescinding, in any particular, any of the terms or
provisions contained in this Indenture; provided, however, that,
unless approved in writing by the Owners of all the Bonds, nothing
herein contained shall permit, or be construed as permitting, (i) a
change in the times, amounts or currency of payment of the principal
of or interest or any premium on any Bond, a change in the terms of
the purchase of Bonds pursuant to Section 4.08 hereof (other than as
permitted by Section 13.02(vii) hereof), or a reduction in the
principal amount or redemption price of any Bond or a change in the
method of determining the rate of interest thereon, or (ii) the
creation of a claim or lien upon, or a pledge or assignment of, the
Receipts and Revenues ranking prior to or on a parity with the claim,
lien, pledge or assignment created by this Indenture, or (iii) a
preference or priority of any Bond or Bonds over any other Bond or
Bonds, or (iv) a reduction in the aggregate principal amount of Bonds
the consent of the Owners of which is required for any such
Supplemental Indenture or under Section 13.07 hereof, for any
modification, alteration, amendment or supplement to the Agreement.
(ii) If at any time the Issuer shall determine to adopt any
Supplemental Indenture for any of the purposes of this Section 13.03,
the Trustee shall cause notice of the proposed Supplemental Indenture
to be given to all Owners of the Bonds. Such notice shall briefly set
forth the nature of the proposed Supplemental Indenture and shall
state that a copy thereof is on file at the Principal Office of the
Trustee for inspection by all Owners of the Bonds.
68
(iii) Within two years after the date of the giving of such
notice, the Issuer may adopt (the date of adoption shall be the date
of passage and not the effective date) such Supplemental Indenture in
substantially the form described in such notice, but only if there
shall have first been filed with the Trustee (i) the required
consents, in writing, of the Owners of the Bonds and (ii) a Favorable
Opinion of Bond Counsel stating that such Supplemental Indenture is
authorized or permitted by this Indenture and the Act, complies with
their respective terms, and, upon the adoption thereof, will be valid
and binding upon the Issuer in accordance with its terms and will not
adversely affect the exclusion from gross income for federal income
tax purposes of interest on the Bonds.
(iv) If Owners of not less than the percentage of Bonds required
by this Section 13.03 shall have consented to and approved the
adoption thereof as herein provided, no Owner shall have any right to
object to the adoption of such Supplemental Indenture, or to object to
any of the terms and provisions contained therein or the operation
thereof, or in any manner to question the propriety of the execution
and delivery thereof, or to enjoin or restrain the Issuer from
enacting the same or from taking any action pursuant to the provisions
thereof.
Section 13.04 Effect of Supplemental Indenture. Upon the adoption of
any Supplemental Indenture pursuant to the provisions of this Article XIII, this
Indenture shall be, and be deemed to be, modified and amended in accordance
therewith, and the respective rights, duties and obligations under this
Indenture of the Issuer, the Trustee and all Owners of Bonds then outstanding
shall thereafter be determined, exercised and enforced under this Indenture
subject in all respects to such modifications and amendments.
Section 13.05 Consent of the Borrower and the Bank. Anything herein to
the contrary notwithstanding, the Trustee (i) shall not execute any Supplemental
Indenture under this Article XIII which affects any rights, powers and authority
of the Borrower under the Agreement, the Tender Agreement or the applicable
Credit Facility or requires a revision of the Agreement, the Tender Agreement or
the applicable Credit Facility unless and until the Borrower and the Bank shall
have consented to such Supplemental Indenture and (ii) need not accept any
Supplemental Indenture which affects its rights, duties and responsibilities
hereunder or under the Agreement.
Section 13.06 Amendment of Agreement without Consent of Owners.
Without the consent of or notice to the Owners of the Bonds but with the consent
of the Borrower and the Bank, the Issuer may modify, alter, amend or supplement
the Agreement, and the Trustee may consent thereto, (a) as may be required by
the provisions of the Agreement and this Indenture, (b) for the purpose of
curing any formal defect, omission, inconsistency or ambiguity therein, or (c)
in connection with any other change therein which is not materially adverse to
the Owners. No extension, termination or provision of any substitute Credit
Facility in accordance with the provisions of the Agreement shall be deemed a
modification, alteration, amendment or supplement to the Agreement, or to this
Indenture, for any purpose of this Indenture.
69
Before the Issuer shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Agreement, pursuant to
this Section 13.06, there shall have been delivered to the Issuer and the
Trustee, a Favorable Opinion of Bond Counsel.
Section 13.07 Amendment of Agreement with Consent of Owners. Except in
the cases of modifications, alterations, amendments or supplements referred to
in Sections 13.02 and 13.06 hereof, the Issuer shall not enter into, and the
Trustee shall not consent to, any modification, alteration, amendment or
supplement of the Agreement, without the written approval or consent of the
Owners of not less than a majority in aggregate principal amount of the Bonds
then Outstanding but with the consent of the Borrower and the Bank, given and
procured as provided in Sections 13.03 and 13.05 hereof; provided, however,
that, unless approved in writing by the Owners of all Bonds then Outstanding,
nothing in this Section 13.07 shall permit, or be construed as permitting, a
change in the obligations of the Borrower under Section 5.02 or 10.01 of the
Agreement. If at any time the Issuer or the Borrower shall request the consent
of the Trustee to any such proposed modification, alteration, amendment or
supplement, the Trustee shall cause notice thereof to be given in the same
manner as provided by Section 13.03 hereof with respect to Supplemental
Indentures. Such notice shall briefly set forth the nature of such proposed
modification, alteration, amendment or supplement and shall state that copies of
the instrument embodying the same are on file at the Corporate Trust office of
the Trustee for inspection by all Owners of Bonds Outstanding. The Issuer may
enter into, and the Trustee may consent to, any such proposed modification,
alteration, amendment or supplement of the Agreement, subject to the same
conditions and with the same effect as provided in Section 13.03 hereof with
respect to Supplemental Indentures.
Section 13.08 Issuance of Bonds Under Other Indentures; Recognition of
Prior Pledges. The Issuer hereby expressly reserves the right to issue, to the
extent permitted by law, bonds in accordance with other ordinances for one or
more purposes permitted by the Act. The Issuer hereby recognizes and protects
any prior pledge or mortgage made to secure any prior issue of bonds.
ARTICLE XIV
REMARKETING AGENT; TENDER AGENT; PURCHASE AND REMARKETING OF
BONDS
Section 14.01 Remarketing Agent and Tender Agent.
(a) The Borrower shall appoint a Remarketing Agent for the Bonds,
subject to the conditions set forth in Section 14.02(a) hereof. The
Remarketing Agent shall designate its Principal Office and signify its
acceptance of the duties and obligations imposed upon it hereunder by a
written instrument of acceptance delivered to the Issuer, the Trustee, the
Tender Agent and the Borrower under which the Remarketing Agent will agree,
particularly, to keep such books and records with respect to the Bonds as
shall be consistent with prudent industry practice and to make such books
and records available for inspection by the Issuer, the Trustee, the Tender
Agent and the Borrower at all reasonable times.
70
(b) The Borrower shall appoint a Tender Agent for the Bonds;
subject to the conditions set forth in Section 14.02(b) hereof. The
Tender Agent shall designate its Principal Office and signify its
acceptance of the duties and obligations imposed upon it hereunder by a
written instrument of acceptance delivered to the Issuer, the Trustee,
the Borrower, the Bank, and the Remarketing Agent. By acceptance of its
appointment hereunder, the Tender Agent agrees:
(A) to hold all Bonds delivered to it pursuant
to Section 4.09 hereof, as agent and bailee of, and in
escrow for the benefit of, the respective Owners which
shall have so delivered such Bonds until moneys
representing the purchase price of such Bonds shall have
been delivered to or for the account of or to the order
of such Owners;
(B) to establish and maintain, and there is
hereby established with the Tender Agent, a separate
segregated trust fund designated as the "Maricopa
County, Arizona Pollution Control Corporation Pollution
Control Refunding Revenue Bonds 2002 Series A (El Paso
Electric Company, Palo Verde Project) Purchase Fund"
(the "Purchase Fund") until such time as it has been
discharged from its duties as Tender Agent hereunder;
(C) to hold all moneys (without investment
thereof) delivered to it hereunder in the Purchase Fund
for the purchase of Bonds pursuant to Section 4.08
hereof, other than moneys delivered to it by the
Borrower during the term of a Credit Facility, as agent
and bailee of, and in escrow for the benefit of, the
person or entity which shall have so delivered such
moneys until the Bonds purchased with such moneys shall
have been delivered to or for the account of such person
or entity;
(D) to hold all moneys delivered to it by the
Borrower for the purchase of Bonds pursuant to Section
4.08 hereof, as agent and bailee of, and in escrow for
the benefit of, the Owners or former Owners who shall
deliver Bonds to it for purchase until the Bonds
purchased with such moneys shall have been delivered to
or for the account of the Borrower; provided, however,
that if the Bonds shall at any time become due and
payable, the Tender Agent shall cause such moneys (other
than moneys held pursuant to Section 14.03(d) hereof) to
be deposited into the Bond Fund;
(E) to hold all Bonds registered in the name
of the new Owners thereof which have been delivered to
it by the Trustee for delivery to the Remarketing Agent
in accordance with the Tender Agreement;
(F) to hold Bonds for the account of the
Borrower as contemplated by Section 14.05(c) hereof,
such Bonds to be released to or upon the order of the
Borrower upon receipt by the Tender Agent from the Bank
of a notice to the effect that the Trustee is entitled
to draw under a
71
Credit Facility to pay principal of the Bonds and to pay
the purchase price of Bonds tendered under Section 4.08
hereof and not remarketed in an amount equal to the
amount that could be drawn under a Credit Facility if
the drawing made to purchase such Bonds were
disregarded;
(G) to hold Bonds for the account of the Bank
(or its nominee), or to deliver Bonds to the Bank, as
contemplated by Section 14.05(c) hereof; and
(H) to keep such books and records with
respect to the Bonds as shall be consistent with prudent
industry practice and to make such books and records
available for inspection by the Issuer, the Trustee, the
Borrower and the Remarketing Agent at all reasonable
times.
The Issuer shall cooperate with the Borrower and the Trustee to cause
the necessary arrangements to be made and to be thereafter continued to enable
the Tender Agent to perform its duties and obligations described above.
Section 14.02 Qualifications of Remarketing Agent and Tender
Agent; Resignation; Removal.
(a) The Remarketing Agent shall be a member of the National
Association of Securities Dealers, Inc., having a combined capital
stock, surplus and undivided profits of at least $15,000,000 and
authorized by law to perform all the duties imposed upon it by this
Indenture and the Remarketing Agreement. Any successor Remarketing
Agent shall have its obligations rated or be a wholly-owned subsidiary
of an entity whose obligations are rated, so long as the Bonds shall be
rated by Moody's, at least Baa3/P-3 by Moody's or otherwise qualified
by Moody's. The Remarketing Agent may at any time resign and be
discharged of the duties and obligations created by this Indenture by
giving notice to the Issuer, the Trustee, the Bank, if any, the Tender
Agent and the Borrower. Such resignation shall take effect on the
earlier of: (i) the day a successor Remarketing Agent shall have been
appointed by the Borrower and shall have accepted such appointment or
(ii) the 45th day after the receipt by the Issuer and the Borrower of
the notice of resignation. The Remarketing Agent may be removed at any
time, pursuant to the Remarketing Agreement.
(b) The Tender Agent shall be a corporation duly organized
under the laws of the United States of America or any state or
territory thereof, and, if not a bank or trust company, for so long as
the Bonds shall be rated by Moody's, shall have its obligations rated
at least Baa3/P-3 by Moody's or otherwise qualified by Moody's, and in
any case having a combined capital stock, surplus and undivided profits
of at least $25,000,000 and authorized by law to perform all the duties
imposed upon it by this Indenture and the Tender Agreement. The Tender
Agent may at any time resign and be discharged of the duties and
obligations created by this Indenture by giving at least 30 days'
notice to the Issuer, the Trustee, the Borrower, the Remarketing Agent
and the Bank. Such resignation shall take effect on the day a successor
Tender Agent shall have been appointed by the Borrower and shall have
accepted such appointment. The Tender Agent may be removed
72
at any time by an instrument signed by the Borrower, filed with the
Tender Agent, the Issuer, the Trustee, the Remarketing Agent and the
Bank.
In the event of the resignation or removal of the Tender Agent, the
Tender Agent shall deliver any Bonds and moneys held by it in such capacity to
its successor, or if there is no successor, to the Trustee.
Section 14.03 Notice of Bonds Delivered for Purchase; Purchase
of Bonds.
(a) The Tender Agent shall determine timely and proper
delivery of Bonds pursuant to this Indenture and the proper endorsement
of such Bonds. Such determination shall be binding on the Owners of
such Bonds, the Issuer, the Borrower, the Remarketing Agent, the
Trustee and the Bank absent manifest error. As promptly as practicable,
the Tender Agent shall give telephonic or Electronic notice, promptly
confirmed by a written notice, to the Bank, if any, the Trustee, the
Remarketing Agent, the Registrar and the Borrower specifying the
principal amount of Bonds, if any, for which it has received notice of
tender for purchase in accordance with Section 4.08(a)(i) or
4.08(a)(ii) hereof.
(b) Bonds required to be purchased in accordance with
Section 4.08 hereof shall be purchased from the Owners thereof by the
Tender Agent, on the date and at the purchase price at which such Bonds
are required to be purchased if the Bank shall not have exercised its
option to purchase such Bonds pursuant to Section 4.07 hereof. Funds
for the payment of such purchase price by the Tender Agent from the
Owners of Bonds shall be derived from the following sources in the
order of priority indicated:
(i) moneys furnished to the Tender Agent for deposit
into the Purchase Fund representing moneys provided by the
Borrower pursuant to Section 10.02 of the Agreement, which
constitute Available Moneys;
(ii) proceeds of the sale of such Bonds remarketed to
any person, other than the Issuer, the Borrower or an affiliate
thereof, pursuant to Section 14.04 hereof and furnished to the
Tender Agent by the Remarketing Agent for deposit into the
Purchase Fund;
(iii) moneys furnished to the Tender Agent by the
Trustee for deposit into the Purchase Fund representing the
proceeds of a drawing under a Credit Facility; and
(iv) moneys furnished to the Tender Agent representing
moneys provided by the Borrower (or any affiliate thereof)
pursuant to Section 10.01 or 10.02 of the Agreement or otherwise
available for such purpose.
Moneys described in clause (iii) may not be used to purchase Bonds held
of record by the Borrower (or any affiliate thereof) or by the Tender Agent for
the account of the Borrower.
The Tender Agent shall establish separate accounts or subaccounts
within the Purchase Fund for each deposit made into the Purchase Fund so that
(1) the Tender Agent may at all times
73
ascertain the date of deposit of the funds in each account or subaccount, and
(2) the amounts derived from the source described in clause (iii) may be
segregated from other sources and such amounts shall not be commingled with any
funds from the sources described in clause (D).
(c) The Trustee shall authenticate a new Bond or Bonds in an
aggregate principal amount equal to the principal amount of Bonds
purchased in accordance with Section 14.03(b), whether or not the Bonds
so purchased are presented by the Owners thereof, bearing a number or
numbers not contemporaneously outstanding. Every Bond authenticated and
delivered as provided in this Section 14.03(c) shall be entitled to all
the benefits of this Indenture equally and proportionately with any and
all other Bonds duly issued hereunder, except as provided in Section
5.04(c) hereof. The Tender Agent shall maintain a record of the Bonds
purchased as provided in this Section 14.03, together with the names
and addresses of the former Owners thereof.
(d) In the event any Bonds purchased as provided in this
Section 14.03 shall not be presented to the Tender Agent, the Tender
Agent shall segregate and hold the moneys for the purchase price of
such Bonds in trust for the benefit of the former Owners of such Bonds,
who shall, except as provided in the following sentence, thereafter be
restricted exclusively to such moneys for the satisfaction of any claim
for the purchase price of such Bonds. Any moneys which the Tender Agent
shall segregate and hold in trust for the payment of the purchase price
of any Bond and remaining unclaimed for two years after the date of
purchase shall, to the extent legally permissible, upon the Borrower's
written request to the Tender Agent, be paid to the Bank, if the
Borrower then owes funds under the Reimbursement Agreement or otherwise
to the Borrower. After the payment of such unclaimed moneys to the
Borrower, the former Owner of such Bond shall look only to the Borrower
for the payment thereof.
Section 14.04 Remarketing of Bonds; Notice of Interest Rates.
(a) Upon notice of the tender for purchase of Bonds in
accordance with Section 4.08 hereof, the Remarketing Agent shall offer
for sale and use its best efforts to sell such Bonds (other than Bonds
purchased with moneys derived from the source described in clause (i)
of Section 14.03(b) hereof, if so directed by the Borrower), any such
sale to be made on the date of such purchase in accordance with Section
4.08 at the best price available in the marketplace; provided, however,
that, if a Credit Facility shall be in effect, the Remarketing Agent
shall not sell any of such Bonds at a price below the principal amount
thereof plus accrued interest thereon, if any. Any Bond which is
tendered for purchase, pursuant to Section 4.08 hereof, and any Bond
that has become subject to mandatory tender for purchase pursuant to
Section 4.08 hereof, shall be sold only to a purchaser who agrees to
refrain from selling that Bond other than under the terms of this
Indenture and hold that Bond only to the date of mandatory purchase.
(b) The Remarketing Agent shall determine the rate of
interest to be borne by the Bonds during each Interest Rate Period and
by each Bond during each Bond Interest Term for such Bond and the Bond
Interest Terms for each Bond during each Short-Term Interest Rate
Period as provided in Section 2.01 hereof and shall furnish to the
Trustee,
74
the Tender Agent, the Borrower and the Bank on the Business Day of
determination each rate of interest and Bond Interest Term so
determined.
(c) The Remarketing Agent shall give telephonic or
telegraphic notice, promptly confirmed by a written notice, to the
Trustee and the Tender Agent on each date on which Bonds shall have
been purchased pursuant to Section 14.03(b) hereof, specifying the
principal amount of Bonds, if any, sold by it pursuant to Section
14.04(a) hereof.
Section 14.05 Delivery of Bonds.
(a) Bonds purchased with moneys described in clause (i) of
Section 14.03(b) hereof shall be delivered to the Borrower and shall be
registered in accordance with instructions from the Borrower.
(b) Bonds purchased with moneys described in clause (ii) of
Section 14.03(b) hereof shall be delivered by the Trustee to the Tender
Agent or the Remarketing Agent for delivery to the purchasers thereof
against payment therefor in accordance with the Tender Agreement.
(c) Bonds purchased with moneys described in clause (iii) of
Section 14.03(b) hereof shall be:
(i) except as otherwise provided in Section 14.05(c)
(ii) or (iii) hereof, held by the Tender Agent for the account
of the Borrower, if a Credit Facility provides for reinstatement
in respect of the drawings for the purchase of Bonds tendered
pursuant to Section 4.08 hereof and not remarketed by
reimbursement to the Bank of the amount of such drawing together
with interest thereon;
(ii) delivered to the Bank, as applicable, if a Credit
Facility provides for immediate reinstatement in respect of
drawings for the purchase of Bonds tendered pursuant to Section
4.08 hereof and not remarketed by the delivery to the Bank of
such Bonds or otherwise requires that Bonds be delivered to the
Bank;
(iii) held by the Tender Agent. for the account of the
Bank, if a Credit Facility provides for immediate reinstatement
in respect of drawings for the purchase of Bonds tendered
pursuant to Section 4.08 hereof and not remarketed by the
holding for the account of the Bank of such Bonds or otherwise
requires that Bonds be held for the account of the Bank; or
(iv) delivered to the Trustee for cancellation, if a
Credit Facility does not provide for reinstatement in respect of
drawings for the purchase of Bonds tendered pursuant to Section
4.08 hereof and not remarketed.
Upon delivery to the Bank, or to the Tender Agent for the account of the Bank,
of the Bonds in accordance with clause (ii) or (iii) above, the Trustee shall
deliver any certificate evidencing such reimbursement or delivery of Bonds to or
for the account of the Bank, as applicable, required for reinstatement, in whole
or in part, of any Credit Facility. Bonds held pursuant to
75
clauses (i), (ii) and (iii) above shall be released for the purpose of
remarketing or released to or upon the order of the Borrower only upon receipt
by the Tender Agent from the Bank of a written notice to the effect that the
Trustee is entitled to draw under a Credit Facility to pay principal of and
interest on the Bonds and to pay the purchase price of Bonds purchased pursuant
to Section 4.08 hereof and not remarketed in an amount equal to the amount that
could be drawn under a Credit Facility if the drawing made to purchase such
Bonds were disregarded.
(d) Bonds purchased with moneys described in clause (iv) of
Section 14.03(b) hereof shall, at the direction of the Borrower, be (i)
held by the Tender Agent for the account of the Borrower, (ii)
delivered to the Trustee for cancellation or (iii) delivered to the
Borrower; provided, however, that any Bonds so purchased after the
selection thereof by the Trustee for redemption shall be delivered to
the Trustee for cancellation.
(e) Bonds delivered as provided in this Section 14.05 shall
be registered in the manner directed by the recipient thereof.
(f) Bonds purchased by the Trustee on behalf of or for the
account of the Bank (or its nominee) pursuant to Section 4.07 shall be
delivered promptly to the Bank (or its nominee, as the case may be), or
as the Bank shall otherwise direct and thereafter, if requested by the
Bank, remarketed in accordance with the provisions of Section 14.04
hereof and the Remarketing Agreement.
Section 14.06 Drawings on Credit Facility. In accordance with
the provisions of the Tender Agreement, on each day on which Bonds are to be
purchased pursuant to Section 4.08 hereof, except to the extent that (i) moneys
described in Section 14.03(b)(i) hereof shall be available for the purchase of
such Bonds, or (ii) the Trustee shall have received telephonic or Electronic
notification from the Remarketing Agent or the Tender Agent that such Bonds
shall have been remarketed pursuant to Section 14.04 hereof and that the moneys
described in Section 14.03(b)(ii) hereof will be sufficient to pay the purchase
price of such Bonds or (iii) the Bank shall have purchased the Bonds pursuant to
Section 4.07 hereof, the Trustee promptly shall draw under a Credit Facility, in
accordance with its terms, an amount sufficient to make timely payment of the
purchase price of such Bonds and furnish the proceeds of such drawing to the
Tender Agent. Following payment of all amounts payable in respect of the
purchase of Bonds pursuant to Section 4.08 hereof, the Trustee shall remit to
the Bank any amount drawn under a Credit Facility in excess of the amount
sufficient to make timely payment of the purchase price of such Bonds.
Section 14.07 Delivery of Proceeds of Sale. The proceeds of the
sale by the Remarketing Agent of any Bonds delivered to it by, or held by it for
the account of, the Borrower or the Bank, or delivered to it by the Bank or any
other Owner, shall be turned over to the Borrower, the Bank or such other Owner,
as the case may be. If the applicable Credit Facility provides for reinstatement
in respect of the drawings for the purchase of Bonds tendered pursuant to
Section 4.08 hereof by reimbursement to the Bank of the amount of such drawing,
the Remarketing Agent shall deliver the proceeds of such remarketing to the Bank
to the extent the Bank has not been reimbursed, and in connection therewith, the
Trustee shall deliver any certificate required for reinstatement, in whole or in
part, of any Credit Facility.
76
ARTICLE XV
MISCELLANEOUS
Section 15.01 Indenture to Bind and Inure to Benefit of Successors to
Issuer. In the event of the dissolution of the Issuer, all the covenants,
stipulations, promises and agreements in this Indenture contained, by or on
behalf of, or for the benefit of, the Issuer, shall bind or inure to the benefit
of the successors of the Issuer from time to time and any entity, officer,
board, commission, agency or instrumentality to whom or to which any power or
duty of the Issuer shall be transferred.
Section 15.02 Parties in Interest. Except as herein otherwise
specifically provided, nothing in this Indenture expressed or implied is
intended or shall be construed to confer upon any person, firm or corporation,
other than the Issuer, the Borrower, the Trustee, the Bank and the Owners, any
right, remedy or claim under or by reason of this Indenture, this Indenture
being intended to be for the sole and exclusive benefit of the Issuer, the
Borrower, the Trustee, the Bank and the Owners of the Bonds. Nothing in this
Indenture is intended to create in the Borrower any interest in the Bond Fund or
the moneys or Investment Securities therein.
Section 15.03 Severability. In case any one or more of the provisions
of this Indenture or of the Bonds issued hereunder shall, for any reason, be
held to be illegal or invalid, such illegality or invalidity shall not affect
any other provisions of this Indenture, the Agreement, the Remarketing
Agreement, the Tender Agreement or said Bonds, and this Indenture, the
Agreement, the Remarketing Agreement, the Tender Agreement and the Bonds shall
be construed and enforced as if such illegal or invalid provisions had not been
contained herein or therein.
Section 15.04 No Personal Liability of Issuer Under Indenture. No
covenant or agreement contained in the Bonds or in this Indenture shall be
deemed to be the covenant or agreement of any official, officer, agent, or
employee of the Issuer in his individual capacity, and neither the members of
the Issuer's Board of Directors nor any official 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.
Section 15.05 Bonds Owned by the Issuer or the Borrower. In
determining whether Owners of the requisite aggregate principal amount of the
Bonds have concurred in any direction, consent or waiver under this Indenture,
Bonds which are owned by the Issuer or the Borrower or by any affiliate of the
Borrower (unless the Issuer, the Borrower and such persons own all Bonds which
are then Outstanding, determined without regard to this Section 15.05) shall be
disregarded and deemed not to be Outstanding for purpose of any such
determination, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Bonds which the Trustee knows are so owned shall be so disregarded. Bonds so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Bonds and that the pledgee is not the Issuer or
the Borrower or any affiliate of the Borrower. Bonds delivered to the Bank or
held by the Tender Agent for the account of the Bank pursuant to Section
14.05(c) hereof shall be regarded as Outstanding for
77
purposes of this Section 15.05 and shall be owned by the Bank for purposes of
this Section 15.05.
Section 15.06 Governing Law. This Indenture and the Bonds shall be
construed in accordance with and governed by the Constitution and laws of the
State of Arizona; provided however, that the rights, protections and immunities
of the Trustee shall be governed by the laws of the State of New York.
Section 15.07 Notices. Except as otherwise provided in this Indenture,
all notices, certificates, requests, requisitions or other communications by the
Issuer, the Borrower, the Trustee, the Tender Agent, the Paying Agent, the
Registrar, the Remarketing Agent, Moody's, S&P and the Bank pursuant to this
Indenture shall be in writing and shall be sufficiently given and shall be
deemed given when mailed by first-class mail, postage prepaid, addressed as
follows:
If to the Issuer:
Maricopa County, Arizona
Pollution Control Corporation
c/o Xxxxx Xxxxxxx & Xxxxxxxxxx
Xxx Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: President
If to the Borrower:
El Paso Electric Company
000 Xxxxx Xxxxxxx
Xx Xxxx, Xxxxx 00000
Attention: Treasurer
If to the Trustee:
JPMorgan Chase Bank
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Institutional Trust Services
If to the Remarketing Agent:
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
If to the Tender Agent:
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
78
If to Moody's, at Xxxxx'x Investors Service, Structured Transactions Croup,
00 Xxxxxx Xx., Xxx Xxxx, Xxx Xxxx 00000; if to S&P, at Standard & Poor's
Corporation, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and if to the Registrar, the
Paying Agent and the Bank, at the address designated herein or designated to the
Issuer, the Borrower and the Trustee. Any of the foregoing may, by notice given
hereunder to each of the others, designate any further or different addresses to
which subsequent notices, certificates, requests or other communications shall
be sent hereunder.
Section 15.08 Non-Business Days. If the last day of any period of
grace, or the date for making any payment or the last date for performance of
any act or the exercising of any right, as provided in this Indenture, is not a
Business Day, the last day of such period of grace shall be deemed to be, any
such payment may be made or act performed or right exercised, with the same
force and effect as if done on the nominal date provided in this Indenture, on
the next succeeding Business Day, and no interest shall accrue for the period
after such nominal date.
Section 15.09 Opinions. Each opinion with respect to the validity of
documents or Bonds may be qualified to the extent of the application of
bankruptcy, insolvency, moratorium or reorganization laws or laws affecting the
remedies for the enforcement of the rights and security provided therein and
need not pass on the availability of the remedy of specific enforcement,
injunctive relief or any other equitable remedy.
Section 15.10 Headlines; Table of Contents. The division of this
Indenture into sections, the provision of a table of contents and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation hereof.
Section 15.11 Execution in Several Counterparts. This Indenture may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original; and all such counterparts, or as many
of them as the Issuer and the Trustee shall preserve undestroyed, shall together
constitute but one and the same instrument.
Section 15.12 Statutory Notice. In accordance with the terms thereof,
notice is hereby given of Title 38, Chapter 3, Section 38-511, Arizona Revised
Statutes, which provides, among other things, that the State of Arizona, its
political subdivisions or any department or agency of either may, within three
years after its execution, cancel any contract, without penalty or further
obligation, made by said State, its political subdivisions, or any of the
departments or agencies of either if any person significantly involved in
initiating, negotiating, securing, drafting or creating the contract on behalf
of said State, its political subdivisions or any of the departments or agencies
of either is, at any time while the contract or any extension of the contract is
in effect, an employee or agent of any other party to the contract in any
capacity or a consultant to any other party of the contract with respect to the
subject matter of the contract.
79
IN WITNESS WHEREOF, the Issuer has caused this Indenture to be signed
in its name by its duly authorized officer, and the Trustee, in token of its
acceptance of the trust created hereunder, has caused this Indenture to be
signed in its name by its duly authorized signatory, all as of the day and year
first above written.
MARICOPA COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
By: /s/ Xxxxxx X. Xxxx
------------------------
President
JPMorgan Chase Bank, as Trustee
By: /s/ Xxxx X. Xxxxxxx
-------------------
Authorized Officer
EXHIBIT A
[FORM OF BOND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE, BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
AS PROVIDED IN THE INDENTURE REFERRED TO HEREIN, UNTIL THE TERMINATION
OF THE SYSTEM OF BOOK-ENTRY ONLY TRANSFERS THROUGH DTC, AND
NOTWITHSTANDING ANY OTHER PROVISION OF THE INDENTURE TO THE CONTRARY, A
PORTION OF THE PRINCIPAL AMOUNT OF THIS BOND MAY BE PAID OR REDEEMED
WITHOUT SURRENDER HEREOF TO THE PAYING AGENT. DTC OR A NOMINEE,
TRANSFEREE OR ASSIGNEE OF DTC AS OWNER OF THIS BOND MAY NOT RELY UPON
THE PRINCIPAL AMOUNT INDICATED HEREON AS THE PRINCIPAL AMOUNT HEREOF
OUTSTANDING AND UNPAID. THE PRINCIPAL AMOUNT HEREOF OUTSTANDING AND
UNPAID SHALL FOR ALL PURPOSES BE THE AMOUNT DETERMINED IN THE MANNER
PROVIDED IN THE INDENTURE AND INDICATED ON THE BOOKS OF THE TRUSTEE.
No. $
MARICOPA COUNTY, ARIZONA POLLUTION CONTROL CORPORATION
Pollution Control Refunding
Revenue Bond, 2002 Series A
(El Paso Electric Company, Palo Verde Project)
Maturity Date Original Issue Date CUSIP
May 1, 2037 August 1, 2002 000000XX0
Registered Owner: Cede & Co.
Principal Sum: $37,100,000
Maricopa County, Arizona Pollution Control Corporation, a political
subdivision of the State of Arizona (the "Issuer"), for value received, hereby
promises to pay (but only from the source and in the manner provided herein) to
the registered owner named above, or registered assigns, on the Maturity Date
specified above upon the presentation and surrender hereof, the Principal Sum
specified above and to pay (but only out of the Receipts and Revenues from the
Agreement and other moneys pledged therefor) interest on said Principal Sum,
from and including the date of authentication hereof until payment of said
Principal Sum has been made or duly provided for, at the rates and on the dates
determined as described herein and in the Indenture (as hereinafter defined).
The principal of and any premium on this Bond are payable at the principal
corporate trust office of JPMorgan Chase Bank, as Trustee and Paying Agent.
Interest on this Bond is payable to the person appearing on the bond
registration books of the Registrar as the registered holder thereof as of the
close of business on the Record Date, such interest to be paid by the Paying
Agent to such registered holder (i) in the event such Bond is a Book-Entry Bond,
in immediately available funds on the Interest Payment Date in accordance with
the Representation Letter, and (ii) in the event such Bond is not a Book-Entry
Bond (A) in immediately available funds (by wire transfer or by deposit to the
account of the holder of at least $1,000,000 of Bonds if such account is
maintained with the Paying Agent), according to the written instructions given
by such holder to the Registrar prior to the Record Date or (B) in all other
cases, by check mailed by first class mail to the holder at such holder's
address as it appears as of the Record Date on the registration books of the
Registrar; except, in each case, that, if and to the extent that there shall be
a default in the payment of the interest due on such Interest Payment Date, such
defaulted interest shall be paid to the holders in whose name any such Bonds are
registered as of a special record date to be fixed by the Trustee, notice of
which shall be given to such holders not less than ten (10) days prior thereto.
Notwithstanding the foregoing, interest on any Bond bearing a Bond Interest Term
Rate (except any such Bond which is a Book-Entry Bond) shall be paid only upon
presentation to the Tender Agent of the Bond on which such payment is due.
Payment of the principal of and interest and any premium on this Bond shall be
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.
Unless otherwise defined herein, all terms herein shall have the same
meanings, respectively, as such terms are given in the Indenture.
THE BONDS AND INTEREST THEREON ARE LIMITED OBLIGATIONS OF THE ISSUER
ISSUED UNDER AND SECURED AND ENTITLED EQUALLY AND RATABLY TO THE PROTECTION
GIVEN BY THE INDENTURE. NEITHER THE GENERAL CREDIT OF MARICOPA COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION NOR THE GENERAL CREDIT OR THE TAXING POWER OF THE
STATE OF ARIZONA OR OF ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE
PAYMENT OF THE BONDS, THE BONDS SHALL NEVER CONSTITUTE AN INDEBTEDNESS OF THE
MARICOPA COUNTY, ARIZONA POLLUTION CONTROL CORPORATION WITHIN THE MEANING OF ANY
STATE CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND SHALL NEVER GIVE RISE
TO A PECUNIARY LIABILITY OF THE MARICOPA COUNTY, ARIZONA POLLUTION CONTROL
CORPORATION OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWER; NOR SHALL
THE BONDS AND INTEREST THEREON BE DEEMED A GENERAL OBLIGATION OF
3
MARICOPA COUNTY, ARIZONA POLLUTION CONTROL CORPORATION OR OF THE STATE OF
ARIZONA OR OF ANY POLITICAL SUBDIVISION THEREOF.
This Bond is one of the duly authorized issue of bonds designated as
Maricopa County, Arizona Pollution Control Refunding Revenue Bonds, 2002 Series
A (El Paso Electric Company, Palo Verde Project), of the Issuer, aggregating
thirty-seven million one hundred thousand Dollars ($37,100,000) in principal
amount (the "Bonds"), as provided in, and issued under and secured by, an
Indenture of Trust, dated as of August 1, 2002 (the "Indenture"), between the
Issuer and JPMorgan Chase Bank, or its successors and assigns, as trustee (the
"Trustee"). The Bond are authorized to be issued pursuant to a resolution duly
adopted by the Issuer on June 25, 2002 and the provisions of the Constitution of
the State of Arizona and Title 35, Chapter 6, Arizona Revised Statutes (formerly
Title 9, Chapter 12, Arizona Revised Statutes, enacted by Chapter 69, Section 2,
Laws of Arizona of 1972), and all acts supplemental thereto or amendatory
thereof (the "Act").
The Bonds are equally and ratably secured, to the extent provided in
the Indenture by a pledge of and lien on, the "Receipts and Revenues,"
consisting primarily of loan repayments made be El Paso Electric Company (the
"Borrower") under the terms of a Loan Agreement dated as of August 1, 2002 (the
"Agreement"), between the Issuer and the Borrower. The Bonds are all issued
under and equally and ratably secured by and entitled to the benefits of the
Indenture, including the security of a pledge and assignment of certain revenues
and receipts derived by the Issuer pursuant to the Agreement and any Credit
Facility provided by the Borrower with respect to the Bonds (as described
herein) and all receipts of the Trustee credited under the provisions of the
Indenture against such payments and from any other moneys held by the Trustee
under the Indenture for such purpose, and there shall be no other recourse
against the Issuer or any property now or hereafter owned by it. This Bond and
all other Bonds of the series of which it forms a part are issued pursuant to
and in full compliance with the Constitution and laws of the State of Arizona,
particularly the Act, and pursuant to further proceedings adopted by the
governing body of the Issuer, which proceedings authorized the execution and
delivery of the Indenture and the Agreement. This Bond and the series of which
it forms a part are limited obligations of the Issuer payable solely from the
amounts derived under the Agreement and pledged under the Indenture, including
all amounts payable from time to time by the Borrower in respect of the
indebtedness under the Agreement and all receipts of the Trustee credited under
the provisions of the Indenture against said amounts payable. No owner of any
Bond issued under the Act has the right to compel any exercise of the taxing
power of the Issuer to pay the Bonds, or the interest or premium, if any,
thereon. The Project (as defined in the Agreement) is not security for the
Bonds.
In the manner hereinafter provided, the term of this Bond will be
divided into consecutive Interest Rate Periods during each of which this Bond
shall bear interest at a Daily Interest Rate (a "Daily Interest Rate Period"), a
Weekly Interest Rate (a "Weekly Interest Rate Period"), a Long-Term Interest
Rate or Rates (a "Long-Term Interest Rate Period"), or each Bond may bear
interest at a Bond Interest Term Rate during one or more consecutive Bond
Interest Terms (a "Short-Term Interest Rate Period"). The first Interest Rate
Period shall be the Interest Rate Period as specified in the Indenture.
4
This Bond shall bear interest from and including the Interest Accrual
Date (as hereinafter defined) to which interest has been paid in full or duly
provided for immediately preceding the date of authentication hereof, or, if
such date of authentication shall be an Interest Accrual Date to which interest
on this Bond has been paid in full or duly provided for, or the date of initial
authentication hereof, from its date of authentication; provided, however, that
if, as shown by the records of the Trustee, interest on this Bond shall be in
default, any Bond issued in exchange for this Bond if it is surrendered for
registration of transfer or exchange shall bear interest from the date to which
interest has been paid in full on this Bond or duly provided for or, if no
interest has been paid on this Bond or duly provided for, the date of the first
authentication of this Bond under the provisions of the Indenture. For any Daily
Interest Rate Period and any Weekly Interest Rate Period, interest on this Bond
shall be payable on each Interest Payment Date for the period commencing on the
preceding Interest Accrual Date (unless such Interest Payment Date does not fall
on an Interest Accrual Date, in which case on the second preceding Interest
Accrual Date) and ending on the day immediately preceding the Interest Accrual
Date on which such Interest Payment Date falls (unless such Interest Payment
Date does not fall on an Interest Accrual Date, in which case on the day
immediately preceding the immediately preceding Interest Accrual Date). For any
Short-Term Interest Rate Period or Long-Term Interest Rate Period, interest on
this Bond shall be payable on each Interest Payment Date for the period
commencing on the immediately preceding Interest Accrual Date and ending on the
day immediately preceding such Interest Payment Date. In any event, interest on
this Bond shall be payable for the final Interest Rate Period to the date on
which this Bond shall have been paid in full. Interest shall be computed, in the
case of a Long-Term Interest Rate Period, on the basis of a 360-day year
consisting of twelve 30-day months, and in the case of any other Interest Rate
Period, on the basis of a 365- or 366-day year, as appropriate, and the actual
number of days elapsed. The Bonds shall be issuable in the form of registered
Bonds without coupons in the denomination of (i) $5,000 and any integral
multiple thereof, during any Long-Term Interest Rate Period and (ii) $100,000
and any integral multiple of $5,000 in excess of $100,000 during any Daily
Interest Rate Period, Weekly Interest Rate Period or Short-Term Interest Rate
Period (such denominations referred to herein as "Authorized Denominations").
The term "Interest Accrual Date" shall mean (i) with respect to any
Daily Interest Rate Period, the first day thereof and, thereafter, the first day
of each calendar month during that Daily Interest Rate Period, (ii) with respect
to any Weekly Interest Rate Period, the first day thereof and, thereafter, the
first day of each calendar month during that Weekly Interest Rate Period, (iii)
with respect to any Long-Term Interest Rate Period, the first day thereof and,
thereafter, each Interest Payment Date in respect thereof, other than the last
such Interest Payment Date, and (iv) with respect to each Bond Interest Term
within a Short Term Interest Rate Period, the first day thereof. The Term
"Interest Payment Date" shall mean (i) with respect to any Daily or Weekly
Interest Rate Period, the first Business Day of each calendar month, (ii) with
respect to any Long-Term Interest Rate Period, each June 1 and December 1
occurring during such Long-Term Interest Rate Period, and the Business Day next
succeeding the last day thereof, (iii) with respect to any Short-Term Interest
Rate Period, the Business Day next succeeding the last day thereof, and (iv) in
all events, the redemption date or final maturity date of the Bonds. The term
"Business Day" shall mean a day on which banks located in the cities in which
the Principal Offices of the Trustee and the Tender Agent are located, and in
the city or cities in which drawings under a Credit Facility are required to be
made, are not required or authorized by law
5
or executive order to remain closed and on which the New York Stock Exchange,
Inc. is not closed.
(1) Daily Interest Rate
(i) Determination of Daily Interest Rate. During each Daily Interest
Rate Period, the Bonds shall bear interest at the Daily Interest
Rate determined by the Remarketing Agent on or before each
Business Day for such Business Day. The Daily Interest Rate
shall be the rate of interest per annum determined by the
Remarketing Agent to be the lowest interest rate which would
enable the Remarketing Agent to sell the Bonds for delivery on
the effective date of such interest rate at a price (without
regard to accrued interest) equal to 100% of the principal
amount thereof. The Remarketing Agent shall provide the Trustee
and the Borrower with telephonic or Electronic notice of the
Daily Interest Rate determined by 10:30 a.m. (New York City
time) on the date of determination. If the Remarketing Agent
shall not have determined a Daily Interest Rate for any day by
10:30 a.m. (New York City time) on such day, the Daily Interest
Rate shall be the same as the Daily Interest Rate for the
immediately preceding day. In no event shall the Daily Interest
Rate be greater than the Maximum Interest Rate.
(ii) Adjustment to Daily Interest Rate Period. At any time, the
Borrower, by written notice to the Issuer, the Trustee, the
Bank, the Tender Agent and the Remarketing Agent, may elect that
the Bonds shall bear interest at a Daily Interest Rate. Such
notice (1) shall specify the effective date of such adjustment
to a Daily Interest Rate and (2) if the adjustment is from a
Long-Term Interest Rate Period, shall be accompanied by a
Favorable Opinion of Bond Counsel to the effect that such
adjustment (a) is authorized or permitted by the Indenture and
the Act, and (b) will not adversely affect the Tax-Exempt status
of the interest on the Bonds.
(2) Weekly Interest Rate.
(i) Determination of Weekly Interest Rate. During each Weekly
Interest Rate Period, the Bonds shall bear interest at the
Weekly Interest Rate, which shall be determined by the
Remarketing Agent no later than the first day of such Weekly
Interest Rate Period and thereafter no later than 10:00 a.m.
(New York City time) on Wednesday of each week during such
Weekly Interest Rate Period, unless any such Wednesday shall not
be a Business Day, in which event the Weekly Interest Rate shall
be determined by the Remarketing Agent no later than the
Business Day immediately preceding such Wednesday. The Weekly
Interest Rate shall be the rate of interest per annum determined
by the Remarketing Agent to be the lowest interest rate which
would enable the Remarketing Agent to sell the Bonds for
delivery on the effective date of such interest rate at a price
(without regard to accrued interest) equal to 100% of the
principal amount thereof. If for any reason, a Weekly Interest
Rate is not so established for any period by the time specified
above by the Remarketing Agent, the Weekly Interest Rate shall
be the same as the Weekly Interest Rate in effect for the
immediately preceding week. In no event shall any Weekly
Interest Rate exceed the Maximum Interest Rate. The
6
first Weekly Interest Rate determined for each Weekly Interest
Rate Period shall apply to the period commencing on the first
day of such Weekly Interest Rate Period and ending on the next
succeeding Tuesday, unless such Weekly Interest Rate Period
shall end on a day other than Tuesday, in which event the last
Weekly Interest Rate for such Weekly Interest Rate Period shall
apply to the period commencing on the Wednesday preceding the
last day of such Weekly Interest Rate Period and ending on such
last day. The Remarketing Agent shall provide the Trustee and
the Borrower with written, telephonic or Electronic notice of
each Weekly Rate, as determined, by 12:00 noon (New York City
time) on the effective date of such Weekly Rate.
(ii) Adjustment to Weekly Interest Rate. At any time, the Borrower,
by written direction to the Issuer, the Trustee, the Bank, the
Tender Agent and the Remarketing Agent, may elect that the Bonds
shall bear interest at a Weekly Interest Rate. Such direction
(1) shall specify the effective date of such adjustment to a
Weekly Interest Rate; and (2) if the adjustment is from a
Long-Term Interest Rate Period, shall be accompanied by a
Favorable Opinion of Bond Counsel addressed to the Trustee to
the effect that such adjustment (a) is authorized or permitted
by the Indenture and the Act, and (b) will not adversely affect
the Tax-Exempt status of interest on the Bonds.
(3) Long-Term Interest Rate.
(i) Determination of Long-Term Interest Rate. During each Long-Term
Interest Rate Period, the Bonds shall bear interest - at the
Long-Term Interest Rate, which shall be determined by the
Remarketing Agent on a Business Day selected by the Remarketing
Agent but not more than forty (40) days prior to and not later
than the effective date of such Long-Term Interest Rate Period.
The Long Term Interest Rate shall be the rate of interest per
annum determined by the Remarketing Agent on such date, and
communicated by the close of business on such date to the
Trustee, the Paying Agent and the Borrower, by written,
telephonic or Electronic notice as being the lowest interest
rate which would enable the Remarketing Agent to sell the Bonds
for delivery on the effective date of such Long-Term Interest
Rate Period at a price (without regard to accrued interest)
equal to 100% of the principal amount thereof; provided,
however, that if, for any reason, a Long-Term Interest Rate for
any Long-Term Interest Rate Period shall not be determined or
effective or if an adjustment from a Long-Term Interest Rate
Period to another Interest Rate Period shall not be effective,
the Interest Rate Period for the Bonds shall automatically
convert to a Daily Interest Rate Period; provided, further,
however, that if the Favorable Opinion of Bond Counsel required
by Section 2.01(c)(ii)(B) of the Indenture in connection with an
adjustment to a Daily Interest Rate Period from a Long-Term
Interest Rate Period cannot be obtained, then the Interest Rate
Period for the Bonds shall automatically convert to a Long-Term
Interest Rate Period of one year and one day. If a Daily
Interest Rate for the first day of such Daily Interest Rate
Period is not determined as provided in Section 2.01(c)(ii)(A)
of the Indenture, the Daily Interest Rate for the first day of
such Daily Interest Rate Period shall be equal to the TBMA
7
Municipal Index. In no event shall any Long-Term Interest Rate
be greater than the Maximum Interest Rate.
(ii) Adjustment to or Continuation of Long-Term Interest Rate. At any
time, the Borrower, by written notice to the Issuer, the Bank,
the Trustee, the Tender Agent and the Remarketing Agent, may
elect that the Bonds shall bear or continue to bear interest at
a Long-Term Interest Rate and if it shall so elect, shall
determine the duration of the Long-Term Interest Rate Period
during which the Bonds shall bear interest at such Long-Term
Interest Rate. Each Long-Term Interest Rate Period shall have a
duration such that the last day of such Long-Term Interest Rate
Period is (1) a day which both immediately precedes a Business
Day and is at least one year after the effective date of such
Long-Term Interest Rate Period or (2) if earlier, the day
immediately preceding the final maturity date of the Bonds. At
the time the Borrower so elects an adjustment to or continuation
of a Long-Term Interest Rate Period, the Borrower may specify
two or more consecutive Long-Term Interest Rate Periods and, if
the Borrower so specifies, shall specify the duration of each
such Long-Term Interest Rate Period as provided in this
paragraph. Such notice shall specify the effective date of each
such Long-Term Interest Rate Period. In addition, such notice
(i) shall specify the last day of such Long-Term Interest Rate
Period, and (ii) if the adjustment is from a Daily, Weekly or
Short-Term Interest Rate Period, shall be accompanied by a
Favorable Opinion of Bond Counsel to the effect that such
adjustment (a) is authorized or permitted by the Indenture and
the Act, and (b) will not adversely affect the Tax-Exempt status
of interest on the Bonds.
If, by the thirty-fifth day prior to the last day of any
Long-Term Interest Rate Period, the Trustee shall not have
received notice of the Borrower's election that, during the next
succeeding Interest Rate Period, the Bonds shall bear interest
at a Daily Interest Rate, a Weekly Interest Rate, a Long-Term
Interest Rate, or a Bond Interest Term Rate accompanied by
appropriate opinions of Bond Counsel, if required by Section
2.01(c)(ii)(B), (iii)(B), (iv)(B) or (v)(B) of the Indenture,
the next succeeding Interest Rate Period for the Bonds shall be
a Daily Interest Rate Period; provided, however, that if the
opinion of Bond Counsel required by Section 2.01(c)(ii)(B) of
the Indenture in connection with an adjustment to a Daily
Interest Rate Period from a Long-Term Interest Rate Period
cannot be obtained, then the Interest Rate Period for the Bonds
shall automatically convert to a Long-Term Interest Rate Period
of one year and one day. If a Daily Interest Rate for the first
day of such Daily Interest Rate Period is not determined as
provided in Section 2.01(c)(ii) of the Indenture, the Daily
Interest Rate for the first day of such Daily Interest Rate
Period shall be equal to the TBMA Municipal Index.
At the same time that the Borrower elects to have the Bonds bear
interest at a Long-Term Interest Rate or continue to bear
interest at a Long-Term Interest Rate, the Borrower may also
specify to the Trustee optional redemption prices and periods
different from (including that there be no such optional
redemption) those set out in Section 4.01(a)(ii)(C) of the
Indenture during the Long-Term
8
Interest Rate Period(s) with respect to which such election is
made; provided, however, that such notice shall be accompanied
by a Favorable Opinion of Bond Counsel addressed to the Trustee
to the effect that such changes (i) are authorized or permitted
by the Act and the Indenture, and (ii) will not adversely affect
the Tax-Exempt status of interest on the Bonds.
(4) Bond Interest Term Rate.
(i) Determination of Bond Interest Terms and Bond Interest Term
Rates.
During each Short-Term Interest Rate Period, each Bond shall
bear interest during each Bond Interest Term for such Bond at
the Bond Interest Term Rate for such Bond. Each Bond Interest
Term and Bond Interest Term Rate for any Bond shall be a period
of at least one day but not more than the lesser of (x) 270 days
or (y) the number of days of interest coverage on the Bonds
provided for in any Credit Facility then in effect minus five
(5) days. When a Credit Facility, if any, other than a Letter of
Credit is in effect with respect to the Bonds or no Credit
Facility is in effect with respect to the Bonds, each Bond
Interest Term for any Bond shall be a period of at least one day
but not more than 270 days. Each Bond Interest Term for any Bond
shall be a period determined by the Remarketing Agent to be, in
its judgment, the period which, taking into account prevailing
market conditions and all other Bond Interest Terms and Bond
Interest Term Rates for all Bonds then Outstanding, is likely to
result in the lowest overall net interest expense on all such
Bonds; provided, however, that any such Bond purchased on behalf
of the Borrower and remaining unsold in the hands of the
Remarketing Agent as of 1:00 p.m. (New York City time) on the
effective date of the Bond Interest Term for such Bond shall
have a Bond Interest Term of one day or, if such Bond Interest
Term would not end on a day immediately preceding a Business
Day, a Bond Interest Term of more than one day ending on the day
immediately preceding the next Business Day; provided, further,
however, that (1) each Bond Interest Term shall end on a day
which immediately precedes a Business Day and no Bond Interest
Term shall extend beyond the day immediately preceding the final
maturity date of the Bonds or, if a Credit Facility, if any, is
then in effect with respect to the Bonds, the scheduled
expiration date of such Credit Facility, and (2) if for any
reason the Remarketing Agent fails or is unable to determine a
Bond Interest Term on any Bond, the Bond Interest Term for such
Bond shall be one day, unless such Bond Interest Term would end
on a day which does not precede a Business Day, in which case
such Bond Interest Term shall end on the day immediately
preceding the next succeeding Business Day.
The Bond Interest Term Rate for each Bond Interest
Term for each Bond shall be the rate of interest per annum
determined by the Remarketing Agent no later than 1:00 p.m. (New
York City time) on the first day of such Bond Interest Term to
be the lowest interest rate which would enable the Remarketing
Agent to sell such Bonds on the effective date of such interest
rate at a price (without regard to accrued interest) equal to
100% of the principal amount thereof. The
9
Remarketing Agent shall provide the Trustee and the Borrower
with telephonic or Electronic notice of each Bond Interest Term
Rate and Bond Interest Term by 1:00 p.m. (New York City time) on
the date of determination. If a Bond Interest Term Rate for a
Bond Interest Term of one day is not determined or effective by
1:00 p.m. (New York City time) on such day, the Bond Interest
Term Rate for such Bond Interest Term of one day shall be equal
to the TBMA Municipal Index. In no event shall any Bond Interest
Term Rate exceed the Maximum Interest Rate.
Notwithstanding the foregoing, in the event that
notice of redemption with respect to any Bond in a Short-Term
Interest Rate Period shall have been given to the holder of such
Bond by the Trustee pursuant to Section 4.03 of the Indenture,
no subsequent Bond Interest Terms or Bond Interest Term Rates
shall be determined with respect to such Bond.
(ii) Adjustment to or Continuation of Bond Interest Term Rates. At
any time, the Borrower, by written direction to the Issuer, the
Trustee, the Bank, if any, the Tender Agent and the Remarketing
Agent, may elect that the Bonds shall bear interest at Bond
Interest Term Rates. Such direction (1) shall specify the
effective date of the Short-Term Interest Rate Period during
which the Bonds shall bear interest at Bond Interest Term Rates;
and (2) shall be accompanied by a Favorable Opinion of Bond
Counsel addressed to the Trustee to the effect that such
adjustment (a) is authorized or permitted by the Indenture and
the Act and (b) will not adversely affect the Tax-Exempt status
of interest on the Bonds.
(iii) Adjustment from Short-Term Interest Rate Period. At any time
during a Short-Term Interest Rate Period, the Borrower may elect
that the Bonds shall no longer bear interest at Bond Interest
Term Rates and shall instead bear interest as otherwise
permitted under the Indenture. The Borrower shall give written
notice to the Issuer, the Trustee, the Paying Agent and the
Remarketing Agent, if any, of such election and shall specify
the Interest Rate Period to follow with respect to such Bonds
upon cessation of the Short-Term Interest Rate Period and
instruct the Remarketing Agent to (1) determine Bond Interest
Terms of such duration that, as soon as possible, all Bond
Interest Terms shall end on the same date, not earlier than
twenty-four (24) days (or such shorter period acceptable to the
Trustee) following the delivery by the Borrower of such written
notice, and upon the establishment of such Bond Interest Term
the day next succeeding the last day of all such Bond Interest
Terms shall be the effective date of the Interest Rate Period
elected by the Borrower; or (2) determine Bond Interest Terms
that will best promote an orderly transition to the next
succeeding Interest Rate Period to apply to the Bonds, beginning
not earlier than twenty-four (24) days (or such shorter period
acceptable to the Trustee) following the delivery by the
Borrower of such written notice. If the alternative in clause
(2) above is selected, the day next succeeding the last day of
the Bond Interest Term for each Bond shall be with respect to
such Bond the effective date of the Interest Rate Period elected
by the Borrower. The Remarketing Agent, promptly upon the
determination thereof, shall give written notice of such last
day and such effective dates to the Issuer, the Borrower, the
Trustee and the Tender Agent. During any transitional period
from
10
a Short-Term Interest Rate Period to the next succeeding
Interest Rate Period in accordance with clause (2) above, the
provisions of the Indenture shall be deemed to apply to the
Bonds as follows: the Bonds continuing to bear interest at Bond
Interest Term Rates shall have applicable to them the provisions
thereunder theretofore applicable to such Bonds as if all Bonds
were continuing to bear interest at Bond Interest Term Rates and
the Bonds bearing interest in the Interest Rate Period to which
the transition is being made will have applicable to them the
provisions thereunder as if all Bonds were bearing interest in
such Interest Rate Period.
(5) Terms of Credit Facility, If Any. If a Credit Facility in the
form of a letter of credit, municipal bond insurance policy or surety
bond is to be held by the Trustee after the effective date of any
adjustment from one Interest Rate Period to another Interest Rate
Period, such Credit Facility, if any, shall be in an amount sufficient
to provide payment of (x) the principal amount of the Outstanding Bonds
plus (y) the amount of interest (computed on the basis of a 365-day
year in the case of an adjustment to a Daily Interest Rate Period,
Weekly Interest Rate Period or Short-Term Interest Rate Period, and on
the basis of a 360-day year consisting of twelve 30-day months in the
case of an adjustment to a Long-Term Interest Rate Period) which will
accrue on the Outstanding Bonds for a period equal to the maximum
number of days between Interest Payment Dates during the new Interest
Rate Period plus five (5) days. In the case of an adjustment to a
Long-Term Interest Rate Period, a Credit Facility, if any, to be in
effect after the effective date of such adjustment shall (i) extend for
a period ending on a date no earlier than five (5) days after the first
date on which the Bonds may be called for redemption pursuant to
Section 4.01(a)(ii) of the Indenture and (ii) cover the premium, if
any, which would be included in the purchase price upon mandatory
purchase of the Bonds pursuant to Section 4.08(b) of the Indenture if
the term of such Credit Facility was not extended beyond the expiration
date set forth therein.
(6) Notice of Adjustment to Daily, Weekly or Long-Term Interest
Rate or Bond Interest Terms Rates; Bonds Counsel Opinions; Remarketing
Agent; Tender Agent.
(i) Except as otherwise provided in the Indenture, the Trustee shall
give notice by first-class mail of an adjustment to a Daily,
Weekly, Short-Term or Long-Term Interest Rate Period, as the
case may be, to the Owners of the Bonds not less than fifteen
(15) days (thirty (30) days if the then current Interest Rate
Period is a Long-Term Interest Rate Period) prior to the
effective date of such Daily, Weekly, Short-Term or Long-Term
Interest Rate Period.
(ii) Adjustment to a Daily, Weekly, Short-Term or Long-Term Interest
Rate Period, except for successive Long-Term Interest Rate
Periods, requires a contemporaneous Favorable Opinion of Bond
Counsel. "Favorable Opinion of Bond Counsel" means an opinion of
Bond Counsel to the effect that the action proposed to be taken
is authorized by the laws of the State of Arizona and the
Indenture and will not adversely affect any exclusion from gross
income for federal income tax purposes of interest on the Bonds.
11
(iii) The initial Remarketing Agent appointed under the Indenture shall
be Xxxxxxx Xxxxx Xxxxxx Inc.
(iv) The initial Tender Agent appointed under the Indenture shall be
Xxxxxxx Xxxxx Barney Inc.
(7) (i) Purchase of Bonds During Daily Interest Rate Period. During
any Daily Interest Rate Period, any Bond or portion thereof in an
Authorized Denomination shall be purchased any Business Day at a
purchase price equal to 100% of the principal amount thereof plus
accrued interest from the Interest Accrual Date immediately prior
to the date of purchase to the date of purchase (unless the date
of purchase shall be an Interest Accrual Date, in which case at a
purchase price equal to the principal amount thereof), payable in
immediately available funds, upon (A) delivery to the Tender
Agent at its Principal Office, by no later than 11:00 a.m. (New
York City time), on such Business Day, of an irrevocable written,
telephonic or Electronic notice which states the principal amount
of such Bond to be tendered for purchase and the date of
purchase, and (B) delivery of such Bond tendered for purchase to
the Tender Agent at its Principal Office on the date of purchase
in accordance with Section 4.09 of the Indenture. The Tender
Agent shall keep a written record of the notice described in
Clause (A).
(ii) Purchase of Bonds During Weekly Interest Rate Period. During any
Weekly Interest Rate Period, any Bond or portion thereof in an
Authorized Denomination shall be purchased on any Business Day at
a purchase price equal to 100% of the principal amount thereof
plus accrued interest, if any, from the Interest Accrual Date
immediately prior to the date of purchase to the date of purchase
(unless the date of purchase shall be an Interest Accrual Date,
in which case at a purchase price equal to the principal amount
thereof), payable in immediately available funds, upon (A)
delivery to the Tender Agent at its Principal Office, by no later
than 5:00 p.m. (New York City time), on such Business Day at
least seven (7) days prior to the date of purchase of an
irrevocable written, telephonic or Electronic notice which states
the principal amount of such Bond to be tendered for purchase and
the date of purchase, and (B) delivery of such Bond tendered for
purchase to the Tender Agent at its Principal Office on the date
of purchase in accordance with Section 4.09 of the Indenture. The
Tender Agent shall keep a written record of the notice described
in Clause (A).
(iii) Mandatory Tender for Purchase On Day Next Succeeding the Last Day
of Each Bond Interest Term. Each Bond in a Short-Term Interest
Rate Period shall be subject to mandatory tender for purchase on
the day next succeeding the last day of each Bond Interest Term
with respect to such Bond, at a purchase price equal to 100% of
the principal amount thereof, plus accrued interest to the date
of purchase, except as provided in Section 4.08(b)(ii) of the
Indenture; or
(iv) Mandatory Tender for Purchase on First Day of Each Interest Rate
Period. The Bonds shall be subject to mandatory tender for
purchase on the effective date of any change in an Interest Rate
Period for such Bond, other than the effective date of any
12
change from a Daily Interest Rate Period to a Weekly Interest
Rate Period or from a Weekly Interest Rate Period to a Daily
Interest Rate Period, at a purchase price equal to 100% of the
principal amount thereof, plus accrued interest to the date of
purchase, except as provided in Section 4.08(b)(ii) of the
Indenture; or
(v) Mandatory Tender for Purchase on First Day of Long-Term Interest
Rate Period Following Prior Long-Term Interest Rate Period. This
Bond shall be subject to mandatory tender for purchase, at the
purchase price, payable in immediately available funds,
specified in the Indenture, on the first day of each Long-Term
Interest Rate Period which was preceded by a Long-Term Interest
Rate Period.
(vi) Mandatory Tender for Purchase on Effective Date of any Credit
Facility. This Bond shall be subject to mandatory tender for
purchase, at the purchase price, payable in immediately
available funds, specified in the Indenture, on the effective
date of any Credit Facility which may be provided with respect
to the Bonds pursuant to Section 6.08 of the Agreement or of any
substitute Credit Facility provided with respect to the Bonds
pursuant to Section 6.08 of the Agreement.
(vii) Mandatory Tender for Purchase on Termination or Expiration of
Credit Facility. In the event that any Credit Facility either is
to terminate or is to expire in accordance with its terms (other
than because a final drawing thereunder shall have been made in
accordance with its terms), unless the term of the Credit
Facility shall be extended or unless the Borrower shall provide
the Trustee, no later than the 35/th/ day preceding the
mandatory purchase date set forth herein with a substitute
Credit Facility and with written evidence from Xxxxx'x, if the
Bonds shall be rated at the time by Xxxxx'x, and from S&P, if
the Bonds shall be rated at the time by S&P, to the effect that
such substitute Credit Facility will not, by itself, result in a
reduction or withdrawal of the rating on the Bonds by Xxxxx'x or
S&P, as the case may be (and the Trustee shall have received
written notice of such extension or such substitution and
evidence thereof prior to giving the notice required in
paragraph (viii) below), the Bonds shall be subject to mandatory
tender for purchase at a purchase price, payable in immediately
available funds, of 100% of their principal amount, plus accrued
interest, if any, to the mandatory purchase date, on the second
Business Day prior to the date of such termination or
expiration.
(viii) Notice of Mandatory Tender for Purchase. In connection with any
mandatory tender for purchase of this Bond in accordance with
paragraph 7(iii), (iv), (v), (vi) or (vii) above, the Trustee
shall give notice by first-class mail to the Owner of this Bond
at the time and in the form specified in the Indenture.
(ix) Bonds Deemed Purchased. If moneys sufficient to pay the purchase
price of Bonds to be purchased pursuant to Section 4.08 of the
Indenture shall be held by the Tender Agent on the date such
Bonds are to be purchased, such Bonds shall be deemed to have
been purchased for all purposes of the Indenture, irrespective
of whether or not such Bonds shall have been delivered to the
Tender Agent, and neither the former holder of such Bonds nor
any other person shall have any claim
13
thereon, under the Indenture or otherwise, for any amount other
than the purchase price thereof.
In the event of non-delivery of any Bond to be purchased
pursuant to Section 4.08 of the Indenture, the Tender Agent
shall segregate and hold uninvested the moneys for the purchase
price of such Bonds in trust, without liability for interest
thereon, for the benefit of the former holders of such Bonds,
who shall, except as provided in the following sentence,
thereafter be restricted exclusively to such moneys for the
satisfaction of any claim for the purchase price of such Bonds.
Any moneys which the Tender Agent shall segregate and hold in
trust for the payment of the purchase price of any Bond and
remaining unclaimed for two (2) years after the date of purchase
shall be paid, upon the Borrower's written request, to the
Borrower. After the payment of such unclaimed moneys to the
Borrower, the former holder of such Bond shall look only to the
Borrower for the payment thereof.
(8) Redemption Provisions. The Bonds shall be subject to redemption
prior to maturity by the exercise by the Borrower of any of its
options to prepay all or a part of the unpaid balance of the
Repayment Installments and cause the Bonds to be redeemed, in
whole, or in part by lot, prior to their maturity dates, as
follows:
(i) During any Short-Term Interest Rate Period, each Bond
shall be subject to such redemption on the day next succeeding
the last day of each Bond Interest Term for such Bond at a
redemption price equal to 100% of the principal amount thereof.
(ii) During any Daily Interest Rate Period or Weekly Interest
Rate Period,the Bonds shall be subject to such redemption on any
Interest Payment Date at a redemption price equal to 100% of the
principal amount thereof.
(iii) On the day next succeeding the last scheduled day of any
Long-Term Interest Rate Period, the Bonds shall be subject to
such redemption at a redemption price of 100% of the principal
amount thereof. During any Long-Term Interest Rate Period, the
Bonds shall be subject to redemption during the periods
specified below, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) hereinafter
indicated (unless different redemption terms shall be specified
by the Borrower pursuant to Section 2.01(c)(iv)(B) of the
Indenture):
Length of
Long-Term Interest
Rate Period
(expressed in years) Redemption Prices
-------------------- -----------------
Greater than 17 After 10 years at 102%
declining by 1% every
12 months to 100%
Less than or equal to After 8 years at 102%,
14
to 17 and greater declining by 1% every 12
than 10 months to 100%
Less than or equal to After 6 years at 101%,
10 and greater than 7 declining by 1/2 of 1%
every 6 months to 100%
Less than or equal to 7 After 3 years at 101%,
and greater than 4 declining by 1/2 of 1%
every 6 months to 100%
Less than or equal to 4 After 2 years at 100 1/2%,
and greater than 3 declining by 1/2 of 1%
after 6 months to 100%
Less than or equal to 3 After 1 year at 100 1/2%,
and greater than 2 declining by 1/2 of 1%
after 6 months to 100%
Less than or equal to 2 After 1 year at 100%
and greater than 1
1 year or less Not redeemable
(iv) During any Long-Term Interest Rate Period, the Bonds
shall be subject to redemption prior to maturity at the option
of the Borrower in whole or in part by lot on any Interest
Payment Date, at a redemption price equal to 100% of the
principal amount thereof, if the Borrower delivers to the
Trustee a written or Electronic notice to the effect that
either:
(a) the Borrower has determined that some or all of the
interest payable under the Agreement for any sixty (60) days
(which need not be consecutive) within any consecutive
twenty-four (24) month period is not or will not be
deductible, in whole or in part, for federal income tax
purposes by reason of Section 150(b) of the Code (or would not
be deductible unless some or all of the Bonds are redeemed)
due to a change in use of the Project or any portion thereof,
and the Borrower will not claim deductions for such interest
on its federal income tax returns; or
(b) the Borrower after reasonable effort has been unable
to obtain an opinion of Bond Counsel that it is more likely
than not that Section 150 of the Code will not prevent
interest payable under the Agreement for any sixty (60) days
(which need not be consecutive) within any consecutive
twenty-four (24) month period from being deductible, in whole
or in part, for federal income tax purposes.
15
In either such case, the Borrower shall only cause the
Trustee to redeem Bonds as provided in this paragraph 8(iv) on or
after the Interest Payment Date immediately preceding the date on
which, due to a change in use in the Project or any portion
thereof, the period of potential interest expense disallowance
described above commences, and the Borrower may only cause the
Trustee to redeem such principal amount of Bonds as the Borrower
determines is necessary to assure that the Borrower retains its
right to all such deductions otherwise allowable or, if a partial
redemption will not enable the Borrower to retain the right to
deduct such interest, the Borrower may cause the Trustee to
redeem all the Outstanding Bonds.
(v) During any Long-Term Interest Rate Period, the Bonds
shall be redeemed prior to maturity in whole or in part, and
if in part by lot, at any time at a redemption price equal
to the principal amount thereof plus accrued interest to the
redemption date, upon receipt by the Trustee of a written
notice of the Borrower and signed by an Authorized Borrower
Representative stating that any of the following events has
occurred (which determination shall be in the sole
discretion of the Borrower) and that the Borrower therefore
intends to exercise its option to prepay all payments due
under the Agreement in whole or in part pursuant to Section
9.01 of the Agreement and thereby effect the redemption of
Bonds in whole or in part to the extent of such prepayments:
(a) All or part of the Project or the Plant shall have
been damaged or destroyed to such an extent that, in
the opinion of the Borrower, (i) the Project or the
Plant or such affected portion could not reasonably be
restored within a period of four (4) months to the
condition thereof immediately preceding such damage or
destruction, and the Borrower or the operator of the
Project or the Plant will be prevented, or is likely to
be prevented for a period of four (4) consecutive
months or more, from carrying on all or substantially
all of its normal operation of the Project or the
Plant, or (ii) the cost of restoration of the Project
or the Plant or such affected portion will be
substantially in excess of the net proceeds of
insurance thereon.
(b) Title to, or the temporary use of, all or a part
of the Project or the Plant shall have been taken under
the exercise of the power of eminent domain.
(c) Changes in economic availability of raw materials,
operating supplies or facilities necessary to operate
all or a part of the Project or the Plant, or
technological or other changes which make the continued
operation of the Project or the Plant or such affected
portion uneconomical, in the opinion of the Borrower,
shall have occurred and shall have resulted in a
cessation of all or substantially all of the Borrower's
normal operations of either the Project or the Plant.
(d) Unreasonable burdens or excessive liabilities
shall have been imposed upon the Issuer or the Borrower
in respect of all or a part of the
16
Project or the Plant including, without limitation,
federal, state or other ad valorem, property, income or
other taxes not being imposed on the date of the
Agreement, as well as any statute or regulation enacted
or promulgated after the date of the Agreement that
prevents the Borrower from deducting interest in
respect of the Agreement for federal income tax
purposes.
(e) All or substantially all of the property of the
Borrower shall be transferred or sold to any entity
other than an affiliate of the Borrower or the Borrower
shall be consolidated with or merged into an entity
other than an affiliate of the Borrower in such manner
that the Borrower is not the surviving entity and the
surviving, resulting or transferee entity does not
agree to perform the obligations of the Borrower.
Notwithstanding any term or provision of this paragraph 8(v)
to the contrary, the Bonds shall not be subject to optional
redemption unless (i) the Bank, if any, shall consent thereto in
writing and deliver such consent to the Borrower and the Trustee,
(ii) in connection with such redemption, the proceeds of such
refunding shall be sufficient to pay, and shall be used to pay,
the redemption price of the Bonds so redeemed or (iii) sufficient
Available Moneys (other than proceeds of any drawing under a
Letter of Credit, if any) shall have been deposited by the
Borrower with the Trustee for the payment of all amounts due in
respect of all Bonds called for redemption pursuant to this
paragraph 8(v). This paragraph shall be inapplicable if at the
time of such optional redemption there is no Letter of Credit or
other Credit Facility with respect to the Bonds.
(vi) The Bonds shall be subject to redemption prior to
maturity from amounts which are required to be prepaid by
the Borrower under Section 9.03 of the Agreement, as set
forth below:
(a) The Bonds shall be redeemed in whole on any date
at a redemption price equal to the principal amount
thereof plus interest accrued to the redemption date
upon the occurrence of a Determination of Taxability;
provided, however, that if, in the opinion of Bond
Counsel delivered to the Trustee, the redemption of a
specified portion of such Bonds Outstanding would have
the result that interest payable on such Bonds
remaining Outstanding after such redemption would
remain Tax-Exempt, then such Bonds shall be redeemed in
part by lot (in Authorized Denominations), in such
amount as Bond Counsel in such opinion shall have
determined is necessary to accomplish that result.
(b) The Bonds shall be redeemed in whole at a
redemption price equal to the principal amount thereof
plus accrued interest to the redemption date in the
event that as a result of any changes in the
Constitution of the United States of America or the
Constitution of the State or as a result of any
legislative, judicial or administrative action, the
Agreement shall have become void or unenforceable or
impossible to perform in accordance
17
with the intention and purposes of the parties thereto,
or shall have been declared unlawful.
(c) The Bonds shall be redeemed in whole at a
redemption price equal to the principal amount thereof
plus accrued interest to the redemption date in the
event that at least thirty-five (35) days prior to the
expiration of any Credit Facility, if any, then in
effect with respect to the Bonds the Trustee shall not
have received (a) a renewal or extension of the
existing Credit Facility for a period of at least one
(1) year (or, if shorter, the period to maturity of the
Bonds) or (b) a substitute Credit Facility meeting the
requirements of Section 6.08 of the Agreement. Such
redemption shall occur on the last Business Day which
is not less than five (5) calendar days preceding the
expiration date of a Credit Facility, if any, then in
effect.
(9) Selection of Bonds to be Redeemed. If less than all the Bonds shall be
called for redemption the Trustee shall select the Bonds or any given
portion thereof to be redeemed, from Outstanding Bonds or any given
portion thereof not previously called for redemption, by lot. For the
purpose of any such selection the Trustee shall assign a separate
number for each minimum Authorized Denomination of each Bond of a
denomination of more than such minimum; provided that following any
such selection, both the portion of such Bond to be redeemed and the
portion remaining shall be in Authorized Denominations. The Trustee
shall promptly notify the Issuer and the Borrower in writing of the
numbers of the Bonds or portions thereof so selected for redemption.
(10) Miscellaneous.
(i) The transfer of this Bond shall be registered upon the
registration books kept at the corporate trust office of the
Trustee, as Registrar, at the written request of the Owner
hereof or his attorney duly authorized in writing, upon
surrender of this Bond at said office, together with the
attached instrument of transfer duly executed by the Owner or
his duly authorized attorney.
(ii) The Owner of this Bond shall have no right to enforce the
provisions of the Indenture, or to institute action to enforce
the covenants therein, or to take any action with respect to
any default under the Indenture, or to institute, appear in or
defend any suit or other proceeding with respect thereto,
except as provided in the Indenture.
(iii) With certain exceptions as provided therein, the Indenture and
the Agreement may be modified or amended only with the consent
of the owners of not less than a majority in aggregate
principal amount of all Bonds outstanding under the Indenture.
(iv) Reference is hereby made to the Indenture and the Agreement,
copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent
of the rights, duties and obligations of the Issuer, the
Borrower, the Trustee, the Tender Agent and the Remarketing
Agent appointed pursuant to the Indenture and the
18
Owners of the Bonds. The owner of this Bond, by the acceptance hereof,
is deemed to have agreed and consented to the terms and provisions of
the Indenture and the Agreement.
(v) The Issuer, the Trustee, the Registrar, the Paying Agent, the Tender
Agent, the Remarketing Agent and the Bank may deem and treat the
person in whose name this Bond is registered on the registration books
of the Issuer maintained by the Registrar as the absolute owner hereof
for all purposes, whether or not this Bond is overdue, and neither the
Issuer, the Trustee, the Registrar, the Paying Agent, the Tender
Agent, the Remarketing Agent nor the Bank shall be affected by any
notice to the contrary.
(vi) No covenant or agreement contained in this Bond or the Indenture shall
be deemed to be the covenant or agreement of any elected or appointed
commissioner, official, officer, agent, servant or employee of the
Issuer in his individual capacity, and neither the members of the
Board of Directors of the Issuer, nor any official executing this
Bond, shall be liable personally on this Bond or be subject to any
personal liability or accountability by reason of the issuance of this
Bond.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required by the Constitution and the statutes of the State of Arizona,
the governing rules and procedures of the Issuer and the Indenture to exist, to
have happened and to have been performed precedent to and in the issuance of
this Bond, do exist, have happened and have been performed.
No officer or official of the Issuer shall be individually or personally
liable for payment of the Bonds or the interest thereon or be subject to any
personal liability or accountability by reason of the issuance thereof.
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 manual execution by the Trustee, or its
successor as Trustee, of the certificate of authentication inscribed hereon.
19
IN WITNESS WHEREOF, Maricopa County, Arizona Pollution Control Corporation
has caused this Bond to be executed by its President, Vice President, Secretary,
Treasurer, Assistant Secretary or Assistant Treasurer by his or her manual or
facsimile signature and has caused such execution to be attested by its
President, Vice President, Secretary, Treasurer, Assistant Secretary or
Assistant Treasurer with his or her manual or facsimile signature; provided,
however, that the officer so attesting this Bond shall not be the same officer
who executed this Bond.
Dated as of the Original
Issue Date set forth above.
MARICOPA COUNTY, ARIZONA
POLLUTION CONTROL CORPORATION
By: ____________________________
Authorized Officer
ATTEST:
By: ___________________________
Authorized Officer
(Form of Trustee's Certificate of Authentication).
CERTIFICATE OF AUTHENTICATION
This is to certify that this Bond is one of the Bonds described in the
within-mentioned Indenture.
JPMORGAN CHASE BANK,
as Trustee
By: __________________________
Authorized Signature
Date of Authentication:_______
(Form for Transfer)
COMPLETE AND SIGN THIS FORM FOR
REGISTRATION OF TRANSFER OR TRANSFER
For value received __________ hereby sells, assigns and transfers unto
__________ this Bond and hereby irrevocably constitutes and appoints
____________________ Attorney to register such transfer on the books of
registration in the office of the Registrar with full power of substitution in
the premises.
Dated:________________________ ____________________________________________
NOTE: The signatures on this assignment must correspond with the names as
written on the face of this Bond in every particular, without alteration,
enlargement or any change whatsoever.
________________________________
Signatures must be guaranteed in
accordance with the terms of one
of the nationally recognized
medallion signature guarantee
programs.
A-1
