Exhibit 10.4
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INDENTURE OF TRUST
BETWEEN
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
CITIBANK, N.A.,
as Trustee
Dated as of November 1, 2005
-relating to-
$55,000,000 Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project),
2005 Series B
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions of Specific Terms................................................................5
Section 1.02. Definitions of General Terms................................................................25
ARTICLE II
AUTHORIZATION OF BONDS
Section 2.01. Limitation on Issuance of Bonds.............................................................26
Section 2.02. Authorization of Bonds......................................................................26
Section 2.03. Global Form; Securities Depository..........................................................27
Section 2.04. [Reserved]..................................................................................29
Section 2.05. Application of Bond Proceeds................................................................29
Section 2.06. Delivery of the Bonds.......................................................................29
ARTICLE III
INTEREST ON BONDS
Section 3.01. Interest on Bonds-General...................................................................31
Section 3.02. Commercial Paper Rate.......................................................................34
Section 3.03. Auction Rate Period - Auction Period Rate: General..........................................35
ARTICLE IV
CHANGES IN THE INTEREST RATE MODE
Section 4.01. Optional Conversion to an Adjustable Rate by Authority......................................37
Section 4.02. Optional Conversion to a Fixed Rate.........................................................40
Section 4.03. Conversion Generally........................................................................42
ARTICLE V
REDEMPTION AND PURCHASE OF BONDS
Section 5.01. Optional Redemption.........................................................................44
Section 5.02. [Reserved]..................................................................................45
Section 5.03. Tender for and Purchase upon Election of Holder.............................................45
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Section 5.04. Mandatory Tender for Purchase upon Change in the Interest Rate Mode
or on Business Day Following Certain Calculation Periods....................................46
Section 5.05. Special Tax Redemption Provisions...........................................................47
Section 5.06. Redemption at Demand of the State...........................................................48
Section 5.07. Mandatory Tender for Purchase Upon Expiration of any Support
Facility or Upon Delivery of an Alternate Support Facility.................................49
Section 5.08. Mandatory Tender Upon Occurrence of any Terminating Event...................................49
Section 5.09. General Provisions Applicable to Mandatory and Optional Tenders for
Purchase of Bonds...........................................................................50
Section 5.10. Selection of Bonds to be Redeemed...........................................................51
Section 5.11. Notice of Redemption........................................................................51
Section 5.12. Bonds purchased for account of Liquidity Facility Issuer....................................52
Section 5.13. Effect of Redemption........................................................................53
Section 5.14. Cancellation of Redeemed Bonds..............................................................53
ARTICLE VI
SUPPORT FACILITY
Section 6.01. Support Facility - General..................................................................54
Section 6.02. Support Facility - Delivery of an initial Liquidity Facility and Alternate
Support Facility............................................................................54
Section 6.04. Provisions with respect to the Bond Insurer.................................................55
Section 6.04. Rights of Credit Facility Issuer............................................................57
ARTICLE VII
GENERAL TERMS AND PROVISIONS OF BONDS
Section 7.01. Execution and Authentication of Bonds.......................................................59
Section 7.02. Books of Registry...........................................................................59
Section 7.03. Transfer, Registration and Exchange of Bonds................................................59
Section 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds.................................................60
Section 7.05. Temporary Bonds.............................................................................61
Section 7.06. Disposition of Bonds........................................................................62
ARTICLE VIII
CORPORATION OBLIGATION PAYMENTS
Section 8.01 Company Obligation Payments.................................................................62
Section 8.02 Credits on the Company Obligation...........................................................62
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ARTICLE IX
THE PRIOR BOND FUND
SECTION 9.01. Prior Bond Fundt..............................................................................
ARTICLE X
CREATION OF SPECIAL FUNDS AND ACCOUNTS;
APPLICATION AND INVESTMENT OF REVENUES
Section 10.01. Creation of Funds and Accounts..............................................................65
Section 10.02. Deposit of Company Obligation Payments......................................................65
Section 10.03. Application of Monies in the Bond Fund......................................................66
Section 10.04. Investment of Funds.........................................................................68
ARTICLE XI
PARTICULAR COVENANTS OF THE AUTHORITY
Section 11.01. Payment of Principal of and Interest and Redemption Premium on Bonds........................69
Section 11.02. Performance of Covenants....................................................................69
Section 11.03. Further Instruments.........................................................................69
Section 11.04. Inspection of Project Books.................................................................69
Section 11.05. No Extension of Time of Payment of Interest.................................................69
Section 11.06. Trustee's, Remarketing Agent's, Registrar and Paying Agent's and
Indexing Agent's Fees, Charges and Expenses.................................................69
Section 11.07. Agreement of the State of New York..........................................................70
Section 11.08. Recording and Filing........................................................................70
Section 11.09. Rights Under the Participation Agreement....................................................70
ARTICLE XII
CONCERNING THE TRUSTEE; APPOINTMENT OF REGISTRAR AND PAYING AGENT,
REMARKETING AGENT, BROKER-DEALERS AND INDEXING AGENT
Section 12.01. Appointment of Trustee......................................................................71
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Section 12.02. Indemnification of Trustee as Condition for Remedial Action.................................71
Section 12.03. Trustee Not Liable for Failure of the Authority or Company to Act...........................71
Section 12.04. Certain Duties and Responsibilities of the Trustee..........................................72
Section 12.05. Limitations on Obligations and Responsibilities of Trustee and
Registrar and Paying Agent..................................................................74
Section 12.06. Compensation and Indemnification of Trustee.................................................75
Section 12.07. Statements from Trustee.....................................................................75
Section 12.08. Notice of Default...........................................................................76
Section 12.09. Trustee and Registrar and Paying Agent May Deal in Bonds....................................76
Section 12.10. Trustee and Registrar and Paying Agent Not Responsible For Recitals.........................76
Section 12.11. Qualification of the Trustee................................................................77
Section 12.12. Resignation and Removal of Trustee..........................................................77
Section 12.13. Successor Trustee...........................................................................78
Section 12.14. Appointment of Remarketing Agent............................................................79
Section 12.15. Appointment of Registrar and Paying Agent...................................................79
Section 12.16. General Provisions Regarding Registrar and Paying Agent.....................................80
Section 12.17. Payment of Registrar and Paying Agent; Indemnification......................................80
Section 12.18. Registrar and Paying Agent's Performance; Duty of Care......................................81
Section 12.19. Qualifications of Registrar and Paying Agent................................................81
Section 12.20. Resignation or Removal of Registrar and Paying Agent and Successor
to Registrar and Paying Agent; Termination of Registrar and Paying Agent's Obligations......81
Section 12.21 Appointment of Auction Agent; Qualification of Auction Agent;
Resignation; Removal.....................................................................XI-11
Section 12.22. Appointment of Broker-Dealers...............................................................83
Section 12.23. Appointment of Additional Paying Agents; Each Paying Agent to Hold
Money in Trust..............................................................................83
Section 12.24. Appointment and Duties of Indexing Agents...................................................83
Section 12.25. Qualifications of Indexing Agents...........................................................84
ARTICLE XIII
EVENTS OF DEFAULT; REMEDIES UPON OCCURRENCE THEREOF
Section 13.01. Events of Default...........................................................................85
Section 13.02. Notice to Holders and Others Upon Occurrence of an Event of Default
or a Payment Default........................................................................85
Section 13.03. Declaration of Principal and Interest As Due................................................86
Section 13.04. Action by Trustee Upon Occurrence of Event of Default.......................................87
Section 13.05. Powers of Trustee With Respect to Participation Agreement and Other
Agreements..................................................................................88
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Section 13.06. Disposition of Monies in Event of Insufficiencies in Funds and Accounts.....................89
Section 13.07. Effect of Delay or Omission; Waiver of Default; Direction of Remedial
Proceedings by the Holders..................................................................91
Section 13.08. Suits or Actions by Holders; Any Holder May Enforce Overdue
Payment of His or Her Bond or Interest Thereon..............................................92
Section 13.09. Remedies Not Exclusive......................................................................93
Section 13.10. Effect of Abandonment of Proceedings on Default.............................................93
Section 13.11. Interest on Overdue Amounts.................................................................93
ARTICLE XIV
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
OWNERSHIP OF BONDS; EXCLUSION OF BONDS
OWNED BY THE AUTHORITY OR THE CORPORATION
Section 14.01. Execution of Requests, Directions and Consents and Other Instruments
and Proof of Same; Ownership of Bonds and Proof of Same.....................................94
Section 14.02. Meetings of Holders.........................................................................95
Section 14.03. Exclusion of Bonds Held by or for the Authority, the Company and of
Bonds No Longer Deemed Outstanding Hereunder................................................96
ARTICLE XV
AMENDING AND SUPPLEMENTING THE INDENTURE,
THE PARTICIPATION AGREEMENT, THE REMARKETING AGREEMENT, AUCTION
AGREEMENT, BROKER-DEALER AGREEMENTS,
BOND PURCHASE TRUST AGREEMENT
Section 15.01. Amending and Supplementing Indenture Without Consent of Holders.............................97
Section 15.02. Amending and Supplementing Indenture with Consent of Holders................................98
Section 15.03. Notation upon Bonds; New Bonds Issued upon Amendments.......................................99
Section 15.04. Effectiveness of Supplemental Indentures...................................................100
Section 15.05. Supplemental Indenture Affecting Support Facility Provider.................................100
Section 15.06. Supplemental Agreements Not Requiring the Consent of the Holders...........................100
Section 15.07. Notice and Consent for Supplemental Agreements Requiring the
Consent of the Holders.....................................................................101
Section 15.08. Effectiveness of Supplemental Agreement....................................................101
Section 15.09. Supplemental Agreement Affecting Support Facility Provider.................................102
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ARTICLE XVI
DEFEASANCE; MONEYS HELD FOR PAYMENT OF
DEFEASED BONDS
Section 16.01. Discharge of Liens and Pledges; Bonds No Longer Deemed to be
Outstanding Hereunder......................................................................103
Section 16.02. Release of Indenture, Termination of Right, Title and Interest of Trustee..................104
Section 16.03. Bonds Not Presented for Payment When Due; Monies Held for the
Bonds after Due Date of Bonds..............................................................104
ARTICLE XVII
FORM OF BONDS AND ENDORSEMENT AND ASSIGNMENT PROVISIONS
Section 17.01. Form of Bonds and Endorsement and Assignment Provisions....................................106
ARTICLE XVIII
MISCELLANEOUS
Section 18.01. Benefits of Indenture Limited to Authority, Company, Trustee,
Registrar and Paying Agent, Support Facility Issuer, Remarketing
Agent, Auction Agent and Holders of the Bonds..............................................107
Section 18.02. Indenture a Contract; Indenture Binding Upon Successors or Assigns
of the Authority...........................................................................107
Section 18.03. Notice to Holders of Bonds.................................................................107
Section 18.04. Waiver of Notice...........................................................................108
Section 18.05. Effect of Saturdays, Sundays and Non-Business Days.........................................108
Section 18.06. Partial Invalidity.........................................................................108
Section 18.07. Law and Place of Enforcement of Indenture..................................................108
Section 18.08. Requests, Approvals and Directions of Authority............................................108
Section 18.09. Notices, Demands; Requests.................................................................108
Section 18.10. Effect of Article and Section Headings and Table of Contents...............................110
Section 18.11. Liability of Authority Limited to Revenues.................................................110
Section 18.12. Waiver of Personal Liability...............................................................110
Section 18.13. Indenture May be Executed in Counterparts; Effectiveness of Indenture......................110
Appendix A Form of Bonds..............................................................................A-1
Appendix B Auction Rate Provisions....................................................................B-1
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THIS INDENTURE OF TRUST, made and dated as of November 1, 2005 (the
"Indenture"), by and between New York State Energy Research and Development
Authority (the "Authority"), a body corporate and politic, constituting a public
benefit corporation, and Citibank, N.A., as trustee (the "Trustee"), a national
association organized and existing under the laws of the United States of
America with its principal corporate trust office located in The City of New
York.
W I T N E S S E T H T H A T:
WHEREAS, pursuant to special act of the Legislature of the State of New
York (Title 9 of Article 8 of the Public Authorities Law of New York, as from
time to time amended and supplemented, herein called the "Act"), the Authority
has been established as a body corporate and politic, constituting a public
benefit corporation; and
WHEREAS, pursuant to the Act, the Authority is empowered to contract with
any power company to participate in the incorporation of features in power
plants and the construction of associated facilities to the extent required by
the public interest in development, health, recreation, safety, conservation of
natural resources and aesthetics; and
WHEREAS, pursuant to the Act, the Authority has also been empowered to
extend credit and make loans from bond and note proceeds to any person for the
construction, acquisition and installation of, or for the reimbursement to any
person for costs in connection with, any special energy project (as defined in
the Act), including, but not limited to, any land, works, system, building or
other improvement, and all real and personal properties of any nature or any
interest in any of them which are suitable for or related to the furnishing,
generation or production of energy; and
WHEREAS, the Authority is also authorized under the Act to borrow money and
issue its negotiable bonds and notes to provide sufficient monies for achieving
its corporate purposes; and
WHEREAS, the Authority is also authorized under the Act to enter into any
contracts and to execute all instruments necessary or convenient for the
exercise of its corporate powers and the fulfillment of its corporate purposes,
including the refunding of outstanding bonds and notes of the Authority; and
WHEREAS, The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New
York (the "Company") is a public utility corporation doing business in the State
of New York; and
WHEREAS, the Company has requested that the Authority issue bonds for the
purpose of refunding the Authority's Gas Facilities Revenue Bonds, Series C (The
Brooklyn Union Gas Company Project) in the aggregate principal amount of
$55,000,000 (the "Prior Bonds") which were issued to provide funds for the
acquisition, construction, and installation of certain facilities for the local
furnishing of gas within The City of New York; and
WHEREAS, pursuant to Resolution No. 1094 adopted September 19, 2005, the
Authority has determined to issue its Gas Facilities Revenue Bonds (The Brooklyn
Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005 Series B
(the "Bonds") in an aggregate principal amount not to exceed $55,000,000, for
the purpose of refunding the outstanding principal amount of the Prior Bonds, to
be issued under and secured by this Indenture; and
WHEREAS, contemporaneously with the execution hereof, the Company and the
Authority have entered into a Participation Agreement of even date herewith
(herein referred to as the "Participation Agreement"); and
WHEREAS, the bonds to be issued will be in the aggregate principal amount
of $55,000,000 and will be designated as Gas Facilities Revenue Bonds (The
Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005
Series B (the "Bonds"), which, along with other funds to be provided by the
Company, will be used to refund the Prior Bonds, such Bonds to be issued under
and secured by this Indenture; and
WHEREAS, simultaneously with the issuance and delivery of such Bonds, the
Company will execute and deliver a promissory note dated the date of issuance of
such Bonds (the "Company Obligation") as evidence of its obligation to make
payments required by the Participation Agreement; and
WHEREAS, all acts, conditions and things necessary or required by the
Constitution and statutes of the State of New York, or otherwise, to exist,
happen, and be performed as prerequisites to the passage of this Indenture, do
exist, have happened, and have been performed; and
WHEREAS, the Trustee has accepted the trusts created by this Indenture and
in evidence thereof has joined in the execution hereof; and
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Authority hereby agrees with
the Trustee and with the respective owners, from time to time, of the Bonds or
any part thereof as follows:
That in order to declare the terms and conditions upon which the Bonds are
authenticated, issued and delivered, and in consideration of the premises and
the acceptance by the Trustee of the trusts hereby created and of the purchase
and acceptance of the Bonds by the Holders thereof, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, and in
order to secure payment of the principal of and premium, if any, and interest on
the Bonds according to their tenor and effect and the performance and observance
by the Authority of all covenants, agreements and conditions herein and in the
Bonds contained, the Authority has acknowledged, executed, signed and delivered
this Indenture, has caused or will cause the Company to deliver to the Trustee
the Company Obligation pursuant to the Participation Agreement, and hereby
assigns, confirms, pledges with and sets over and entrusts to the Trustee
hereunder, its successors in trust and assigns, subject to the provisions of
this Indenture (the following being called the "Trust Estate"): (a) the
Revenues, (b) the Participation Agreement dated as of November 1, 2005 (the
"Participation Agreement"), and all rights, remedies and interest of the
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Authority under the Participation Agreement and any other agreement relating to
the Project (exclusive of the Authority's rights, but in no way in any
derogation of the Trustee's rights, with respect to (i) administrative
compensation, attorney's fees and indemnification, (ii) the receipt of notices,
opinions, reports, copies of instruments and other items of a similar nature
required to be delivered to the Authority under the Participation Agreement,
(iii) granting approvals and consents and making determinations when required
under the Participation Agreement, (iv) making requests for information and
inspections in accordance with the Participation Agreement, (v) Article III and
Sections 4.04, 4.08, 4.09 and 4.10 of the Participation Agreement and, insofar
as the obligations of the Company under Section 4.07 relate to taxes and
assessments imposed upon the Authority and not the Trustee, Section 4.07
thereof, and (vi) the right to amend the Participation Agreement), (c) the Tax
Regulatory Agreement dated November 1, 2005 (the "Tax Regulatory Agreement"),
and all rights, remedies and interest of the Authority thereunder, subject to
the provisions of the Tax Regulatory Agreement relating to the amendment thereof
and to a reservation by the Authority of the right to enforce the obligations of
the Company thereunder independently of the Trustee, (d) all other monies,
rights and properties held by the Trustee or other depositary under the
Indenture, including, but only for the benefit of the persons specified herein,
the proceeds of any draw, borrowing or payment under any Support Facility (other
than the Policy), and the securities (and the interest, income and profits
therefrom) in which such monies may from time to time be invested (exclusive of
the proceeds of a Support Facility (as hereinafter defined)), and (e) any and
all other real or personal property of every nature from time to time hereafter
by delivery or by writing of any kind specially mortgaged, pledged, or
hypothecated, as and for additional security hereunder, by the Company in favor
of the Trustee or the Authority which are hereby authorized to receive any and
all such property at any and all times and to hold and apply the same subject to
the terms hereof.
TO HAVE AND TO HOLD, all and singular of said Trust Estate unto the
Trustee, its successors in trust and assigns, forever, in trust, nevertheless,
to inure to the use and benefit of the Holders of all the Bonds, for the
securing of the observance or performance of all the terms, provisions and
conditions therein and herein contained and for the equal and proportionate
benefit and security of all and singular the present and future Holders of the
Bonds, without preference, priority, prejudice or distinction as to lien or
otherwise of any Bond over any other Bond, to the end that each Holder of a Bond
shall have the same rights, privileges and lien under and by virtue of this
Indenture, except as hereinafter otherwise specifically provided;
AND UPON THE CONDITION THAT, if the Authority shall cause to be paid fully
and promptly and indefeasibly when due all of its indebtedness, liabilities,
obligations and sums at any time secured hereby, including interest, its
Trustee's fees, reasonable expenses (including its reasonable attorneys' fees
and expenses) and indemnity amounts, and shall promptly, faithfully and strictly
keep, perform and observe, or cause to be kept, performed and observed, all of
its covenants, obligations, warranties and agreements contained herein, then and
in such event, this Indenture shall be and become void and of no further force
and effect, otherwise the same shall remain in full force and effect.
THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all
Bonds issued and secured hereunder are to be issued, authenticated and delivered
and all said income and Revenues hereby pledged are to be dealt with and
disposed of under, upon and subject to the terms, conditions, stipulations,
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covenants, agreements, trusts, uses and purposes as hereinafter expressed, and
the Authority has agreed and covenanted, and does hereby agree and covenant,
with the Trustee and with the respective Holders, from time to time, of the said
Bonds, or any part thereof, as follows (provided that in the performance of the
agreements of the Authority herein contained any obligation it may thereby incur
for the payment of money shall never constitute a general or moral obligation of
the State of New York or any political subdivision thereof within the meaning of
any state constitutional provision or statutory limitation, and shall not be
secured directly or indirectly by the full faith and credit, the general credit
or any revenue or taxes of the State of New York or any political subdivision
thereof, but shall be payable solely out of the income and Revenues derived
under the Participation Agreement and the Company Obligation and from drawings
under the Credit Facility (other than the Policy), if any, and other monies,
rights and properties of the Trust Estate), that is to say:
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions of Specific Terms. Unless the context shall
clearly indicate some other meaning or may otherwise require, the terms defined
in this Section shall, for all purposes of this Indenture and of any indenture,
resolution or other instrument amendatory hereof or supplemental hereto and of
any certificate, opinion, instrument or document herein or therein mentioned,
have the meanings herein specified, with the following definitions to be equally
applicable to both the singular and plural forms of any terms herein defined and
vice versa.
"Act" shall mean the New York State Energy Research and Development
Authority Act, Title 9 of Article 8 of the Public Authorities Law of the State
of New York, as from time to time amended and supplemented.
"Additional Payments" shall mean the fees and expenses payable pursuant to
Sections 4.04 and 4.05 of the Participation Agreement.
"Adjustable Rate" shall mean any of the following types of interest rates:
a Commercial Paper Rate, an Auction Period Rate, a Daily Rate, a Weekly Rate, a
Monthly Rate, a Semi-annual Rate and a Term Rate.
"Administration Fees" shall mean the amounts payable by the Company to the
Authority pursuant to Section 4.04 of the Participation Agreement to defray a
portion of the expenses incurred by the Authority in conducting and
administering its financing programs and the amount payable as state bond
issuance charge pursuant to Section 4.04 of the Participation Agreement.
"Agent Member" shall have the meaning given to such term in Appendix B
hereto.
"Alternate Support Facility" shall mean any Liquidity Facility obtained
pursuant to the provisions of Section 6.02 in replacement of an existing
Liquidity Facility.
"Auction Agent" shall have the meaning given to such term in Appendix B
hereto.
"Auction Agreement" shall have the meaning given to such term in Appendix B
hereto.
"Auction Period" shall have the meaning given to such term in Appendix B
hereto.
"Auction Period Rate" shall have the meaning given to such term in Appendix
B hereto.
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"Auction Procedures" shall have the meaning given to such term in Appendix
B hereto.
"Auction Rate Bonds" shall mean with respect to an Auction Rate Period, any
Bonds or series of Bonds which bear interest at the Auction Period Rate.
"Auction Rate Bonds Period Record Date" shall mean, with respect to each
Interest Payment Date during an Auction Rate Period, the Business Day
immediately preceding such Interest Payment Date.
"Auction Rate Period" shall mean any period during which the Bonds bear
interest at an Auction Period Rate, which period shall commence on the effective
date of a Change in the Interest Rate Mode to an Auction Period Rate and shall
extend through the day immediately preceding the earlier of (a) the effective
date of another Change in the Interest Rate Mode or (b) the Stated Maturity.
"Authority" shall mean New York State Energy Research and Development
Authority, the public benefit corporation created by the Act, and its successors
and assigns.
"Authorized Company Representative" shall mean any officer or other
employee of the Company at the time designated to act on behalf of the Company
by written certificate furnished to the Authority and the Trustee containing the
specimen signature of such person and signed on behalf of the Company by its
Chairman, President or a Vice President and its Secretary or an Assistant
Secretary.
"Authorized Officer" shall mean the Chair, Vice-Chair, President, Vice
President, Treasurer, Assistant Treasurer or Secretary of the Authority.
"Bond or Bonds" shall mean $55,000,000 aggregate principal amount of the
"Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York Project), 2005 Series B" issued as authorized in
Article II at any time Outstanding.
"Bond Counsel" shall mean an attorney or firm or firms of attorneys,
satisfactory to the Authority and the Trustee, nationally recognized and
experienced in matters relating to tax exemption of interest on bonds issued by
states and their political subdivisions.
"Bond Fund" shall mean the Bond Fund created in Section 10.01.
"Bond Insurer" shall mean Financial Guaranty Insurance Company, or any
successor thereto.
"Bond Purchase Agreement" shall mean the Bond Purchase Agreement, dated
October 26, 2005, among the Authority, the Company and the underwriters named
therein.
"Bond Purchase Fund" shall mean the Bond Purchase Fund established pursuant
to the Bond Purchase Trust Agreement.
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"Bond Purchase Trust Agreement" shall mean the Bond Purchase Trust
Agreement dated as of the date hereof between the Authority and the Registrar
and Paying Agent, as from time to time amended or supplemented.
"Bond Year" shall have the meaning set forth in the Tax Regulatory
Agreement.
"Bondholder," "Holder of a Bond" or "Holder" shall mean any registered
owner of a Bond.
"Broker-Dealer" shall have the meaning given to such term in Appendix B
hereto.
"Broker-Dealer Agreement" shall mean an agreement among the Auction Agent,
the Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures described in Appendix B, as such agreement may from time
to time be amended or supplemented with the consent of the Bond Insurer.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which the New York Stock Exchange or banks are authorized or obligated by
law or executive order to close in New York, New York, or any city in which is
located the principal corporate trust office of the Trustee, the Registrar and
Paying Agent, the Bond Insurer, the Auction Agent, the Broker-Dealers, the
Remarketing Agents or the office of an issuer of a Support Facility at which
demands for a draw on, or borrowing or payment under, the Support Facility will
be made.
"Calculation Period" shall mean (a) during any Commercial Paper Rate
Period, any Calculation Period established by the Remarketing Agent pursuant to
Section 3.02 which shall end on a day not later than 270 days from the
commencement thereof; (b) during any Daily Rate Period, the period from and
including a Business Day to but not including the next succeeding Business Day;
(c) during any Weekly Rate Period, the period from and including Wednesday of
each week to and including the following Tuesday; (d) during any Monthly Rate
Period, each period from and including the first Business Day of the month to
but excluding the first Business Day of the following month; (e) during any
Semi-annual Rate Period, each period from and including the day following the
end of the last Calculation Period to but excluding the next succeeding Interest
Payment Date; (f) during any Term Rate Period, any period of not less than 365
days from and including a Business Day to and including any day (established by
the Authority, at the direction of the Company, pursuant to Section 4.01.1) not
later than the day prior to the Stated Maturity; and (g) during any Fixed Rate
Period following a Change in the Interest Rate Mode to a Fixed Rate, the period
from and including the effective date of the Change in the Interest Rate Mode
through the day immediately preceding the earlier of (x) the effective date of
another Change in the Interest Rate Mode, or (y) the Stated Maturity.
"Change in the Interest Rate Mode" shall mean any change in the type of
interest rate borne by the Bonds pursuant to Section 4.01 or Section 4.02.
"Change of Preference Law" shall mean any amendment to the Code or other
statute enacted by the Congress of the United States or any temporary, proposed
or final regulation promulgated by the United States Treasury, after the date
hereof which (a) changes or would change any deduction, credit or other
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allowance allowable in computing liability for any federal tax with respect to,
or (b) imposes, or would impose, or increases or would increase any federal tax
(including, but not limited to, preference or excise taxes) upon, any interest
earned by any holder of bonds the interest on which is excluded from federal
gross income under Section 103 of the Code.
"Closing Date" shall mean the date on which the Bonds are paid for by and
delivered to the original purchasers thereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time. Each reference to a section of the Code herein shall be deemed to
include the United States Treasury Regulations proposed or in effect thereunder
and applied to the Bonds or the use of proceeds thereof, and also includes all
amendments and successor provisions unless the context clearly requires
otherwise.
"Commercial Paper Dealers" means Xxxxxxx, Xxxxx & Co., BNY Capital Markets,
Inc., Sovereign Securities Corporation, LLC and The Xxxxxxxx Capital Group, L.P.
or, in lieu thereof, their respective affiliates or successors, provided that
any such entity is a commercial paper dealer, or any additional commercial paper
dealers named by the Company with the consent of the Authority.
"Commercial Paper Period Record Date" shall mean, with respect to each
Interest Payment Date during a Commercial Paper Rate Period, the Business Day
next preceding such Interest Payment Date.
"Commercial Paper Rate" shall mean with respect to each Calculation Period
during a Commercial Paper Rate Period, a rate or rates of interest equal to the
rate or rates of interest per annum established and certified to the Trustee in
writing (with a copy to the Authority, the Registrar and Paying Agent and the
Company) by the Remarketing Agent no later than 12:30 noon (New York City time)
on and as of the Determination Date as the minimum rate or rates of interest per
annum which, in the opinion of the Remarketing Agent, would be necessary on and
as of such day to remarket Bonds in a secondary market transaction at a price
equal to the principal amount thereof; provided that such rate or rates of
interest shall not exceed the lesser of 110% of the Commercial Paper Rate Index
on and as of such date and the Maximum Allowed Rate.
"Commercial Paper Rate Index" shall mean with respect to the Determination
Date of each Calculation Period during a Commercial Paper Rate Period, the
average of yield evaluations at par, determined by the Indexing Agent, of
securities (whether or not actually issued) all of which shall have a term as
near as practicable to such Calculation Period or which are subject to optional
or mandatory tender by the owner thereof at the end of a term as near as
practicable to such Calculation Period, the interest on which is not included in
gross income for federal income tax purposes, of no fewer than ten Component
Issuers selected by the Indexing Agent, including issuers of commercial paper,
project notes, bond anticipation notes and tax anticipation notes, computed by
the Indexing Agent on and as of such day. If the Bonds are rated by a Rating
Agency in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
8
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Commercial Paper Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place.
"Commercial Paper Rate Period" shall mean any period during which the Bonds
bear interest at a Commercial Paper Rate or Rates, which period shall commence
on the effective date of a Change in the Interest Rate Mode to a Commercial
Paper Rate or Rates, as the case may be, and extend through the day immediately
preceding the earlier of (a) the effective date of another Change in the
Interest Rate Mode, (b) the Stated Maturity or (c) the expiration of 270 days.
"Component Issuers" shall mean issuers of securities, the interest on which
is excluded from gross income for federal income tax purposes, selected by the
Indexing Agent.
"Computation Date" shall mean each date which is one (1) Business Day prior
to any Determination Date.
"Computation Period" shall have the meaning set forth in the Tax Regulatory
Agreement.
"Company" shall mean The Brooklyn Union Gas Company d/b/a KeySpan Energy
Delivery New York, and any surviving, resulting or transferee corporation in any
merger, consolidation or transfer of assets permitted under Section 5.10 of the
Participation Agreement.
"Company Obligation" shall mean the promissory note of the Company executed
by the Company and delivered to the Trustee, to evidence the obligations of the
Company to repay the loan to be made by the Authority pursuant to the
Participation Agreement.
"Company Obligation Payments" shall mean the portion of the Payments
required to be made by the Company pursuant to Article IV of the Participation
9
Agreement and the Company Obligation to be applied to the payment of principal
of, premium, if any, and interest on the Bonds.
"Credit Facility" shall mean any Support Facility which provides for or
insures the payments referred to in clause (ii) of the definition thereof.
"Credit Facility Issuer" shall mean any bank or banks or other financial
institution or institutions, having issued any Credit Facility.
"Current Adjustable Rate" shall mean the interest rate borne by Bonds
immediately prior to a Change in the Interest Rate Mode or the establishment of
a Fixed Rate.
"Daily Period Record Date" shall mean, with respect to each Interest
Payment Date during a Daily Rate Period, the Business Day next preceding such
Interest Payment Date.
"Daily Rate" shall mean with respect to each Calculation Period during a
Daily Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent and the Company) by the Remarketing Agent no later
than 10:00 a.m. (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of the Remarketing
Agent, would be necessary on and as of such day to remarket Bonds in a secondary
market transaction at a price equal to the principal amount thereof plus accrued
interest thereon; provided that such rate of interest shall not exceed the
lesser of 110% of the Daily Rate Index on and as of such day and the Maximum
Allowed Rate.
"Daily Rate Index" shall mean with respect to the Determination Date of
each Calculation Period during a Daily Rate Period, the average of one-day yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), the interest on which is not included in gross income for
federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent and which have redemption or tender provisions comparable to
the then applicable provisions of the Bonds, computed by the Indexing Agent on
and as of the Determination Date. If the Bonds are rated by a Rating Agency,
each Component Issuer must have outstanding securities rated by a Rating Agency
in a short-term debt rating category which is the same as the short-term debt
rating category in which the Bonds are rated. The specific issuers included in
the Component Issuers may be changed from time to time by the Indexing Agent in
its discretion and shall be issuers whose securities, in the judgment of the
Indexing Agent, have characteristics similar to the Bonds. In addition, at the
request of the Company and upon delivery to the Trustee of an Opinion of Bond
Counsel that such action will not adversely affect the exclusion of interest on
the Bonds from gross income of the owners thereof for federal income tax
purposes, the Authority, with the consent of the Company, may designate a new
method of setting the Daily Rate Index in the event any of the above-described
methods are determined by the Authority to be unavailable, impracticable or
unrealistic in the market place.
10
"Daily Rate Period" shall mean any period during which Bonds bear interest
at a Daily Rate which period shall commence on the effective date of the Change
in the Interest Rate Mode to a Daily Rate and shall extend through the day
immediately preceding the earlier of (a) the effective date of another Change in
the Interest Rate Mode or (b) the Stated Maturity.
"Default Rate" shall have the meaning given to such term in Appendix B
hereto.
"Determination Date" shall mean, for any Calculation Period, the first
Business Day occurring during such Calculation Period; provided, however, with
respect to Bonds which bear interest at the Weekly Rate, each Wednesday or, if
such Wednesday is not a Business Day, the Business Day next preceding such
Wednesday.
"DTC" shall mean The Depository Trust Company, New York, New York, a
limited purpose trust company organized under the laws of the State of New York.
"Effective Date" shall mean November 1, 2005.
"Event of Bankruptcy" shall mean the filing of a petition commencing a case
by or against the Company under the United States Bankruptcy Code, Xxxxx 00,
Xxxxxx Xxxxxx Code, as the same may be amended from time to time, or any
successor law, or the filing of a petition or the seeking relief by or against
the Company under any state bankruptcy or insolvency law.
"Event of Default" shall mean Event of Default as defined in Section 13.01.
"Existing Owner" shall have the meaning given to such term in Appendix B
hereto.
"Fiscal Year" shall mean the fiscal year of the Company as established from
time to time by the Company which as of the Effective Date is the twelve-month
period commencing on January 1 of each calendar year and ending on December 31
of such calendar year.
"Fitch" shall mean Fitch Ratings and its successor or successors, and if
such corporation shall for any reason no longer perform the functions of a
securities rating agency or shall be replaced by some other nationally
recognized rating agency by the Authority at the request of the Company, "Fitch"
shall be deemed to refer to such other nationally recognized rating agency
designated by the Authority at the request of the Company.
"Fixed Rate" shall mean, with respect to a Fixed Rate Period, the rate of
interest per annum established and certified to the Trustee (with a copy to the
Authority, the Registrar and Paying Agent and the Company) by the Remarketing
Agent no later than 12:00 noon (New York City time) on and as of such date as
the minimum rate of interest per annum which, in the opinion of the Remarketing
Agent, would be necessary on and as of such date to remarket the Bonds in a
secondary market transaction at a price equal to 100% of the Outstanding
principal amount thereof; provided that such rate of interest shall not exceed
the lesser of 110% of the Fixed Rate Index on and as of such date and the
Maximum Allowed Rate.
"Fixed Rate Conversion Date" shall have the meaning set forth in Section
4.02.
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"Fixed Rate Index" shall mean with respect to a Fixed Rate Conversion Date,
the average of the yield evaluations (on the basis of full coupon securities
trading at par with a term approximately equal to the Fixed Rate Period) of
securities (whether or not actually issued), the interest on which is not
included in gross income for federal income tax purposes, of no fewer than ten
Component Issuers selected by the Indexing Agent and which have a long-term
rating by a Rating Agency in the same rating category as the Bonds are rated at
the time by such Rating Agency or, if no such bonds are so rated, shall be debt
which, in the judgment of the Indexing Agent, is of credit quality comparable to
that of the Bonds, computed by the Indexing Agent on and as of the Fixed Rate
Conversion Date. In the event that the Indexing Agent fails to compute the Fixed
Rate Index and no other qualified municipal securities evaluation service can be
appointed Indexing Agent by the Authority, the Fixed Rate Index shall be
determined by the Remarketing Agent and shall be 90% of the average yield shown
for the most recent calendar month for United States Treasury notes or bonds
having the same number of years to maturity as the number of 12-month periods
(or months if the Fixed Rate Period is less than one year) in the Fixed Rate
Period, as published in the Federal Reserve Bulletin in the last issue before
the Fixed Rate Conversion Date. If that issue does not contain such a yield, the
Fixed Rate Index will be determined by linear interpolation between the yields
shown in that issue for United States Treasury notes and bonds having the next
shorter and next longer number of years (or months) to maturity. In addition, at
the request of the Company and upon delivery to the Trustee of an Opinion of
Bond Counsel that such action will not adversely affect the exclusion of
interest on the Bonds from gross income of the owners thereof for federal income
tax purposes, the Authority, with the consent of the Company, may designate a
new method of setting the Fixed Rate Index in the event any of the
above-described methods are determined by the Authority to be unavailable,
impracticable or unrealistic in the market place.
"Fixed Rate Period" shall mean any period during which Bonds bear interest
at a Fixed Rate, which period shall commence on the effective date of a Change
in the Interest Rate Mode to a Fixed Rate, and shall extend through the day
immediately preceding the Stated Maturity.
"Fixed Rate Record Date" shall mean, with respect to each Interest Payment
Date during a Fixed Rate Period, the fifteenth day of the month next preceding
such Interest Payment Date, or, if such day shall not be a Business Day, the
next preceding Business Day.
"Governmental Obligations" shall mean any of the following which are
non-callable:
(a) U.S. Treasury Certificates, Notes and Bonds (including State and
Local Government Series);
(b) direct general obligations of the U.S. Treasury which have been
stripped by the Treasury itself, CATS, TIGRS and similar securities;
(c) the interest component of Resolution Funding Corp. (REFCORP)
strips which have been stripped by request to the Federal Reserve Bank of
New York in book-entry form;
(d) pre-refunded municipal bonds rated "Aaa" by Xxxxx'x and "AAA" by
S&P. If, however, the issue is only rated by S&P (i.e., there is no Xxxxx'x
rating), then the pre-refunded bonds must have been pre-refunded with cash,
direct U.S. or U.S. guaranteed obligations, or AAA rated pre-refunded
municipals to satisfy this condition;
12
(e) obligations issued by the following agencies which are backed by
the full faith and credit of the U.S.: direct obligations or fully
guaranteed certificates of beneficial ownership issued by the U.S.
Export-Import Bank; certificates of beneficial ownership issued by the
Farmers Home Administration; obligations issued by the Federal Financing
Bank; participation certificates issued by the General Services
Administration; guaranteed Title XI financing by the U.S. Maritime
Administration; and Project Notes, Local Authority Bonds, New Communities
Debentures - U.S. government guaranteed debentures and U.S. Public Housing
Notes and Bonds - U.S. government guaranteed public housing notes and bonds
issued by the U.S. Department of Housing and Urban Development.
"Indenture" shall mean this Indenture of Trust, dated as of November 1,
2005, between the Authority and the Trustee, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"Indexing Agent" shall mean the Indexing Agent appointed in accordance with
Section 12.24.
"Insurance Agreement" shall mean the Insurance Agreement dated November 1,
2005, by and among the Company, the Trustee and the Bond Insurer.
"Interest Payment Date" shall mean:
(a) during a Commercial Paper Rate Period, the Business Day
immediately succeeding the last day of any Calculation Period;
(b) during an Auction Rate Period, each date that is specified as an
"Interest Payment Date" in Appendix B hereto;
(c) during a Daily Rate Period, the first Business Day of each month
thereof;
(d) during a Weekly Rate Period, the first Business Day of each month
thereof;
(e) during a Monthly Rate Period, the first Business Day of each month
thereof;
(f) during a Semi-annual Rate Period, (i) the first Business Day of
the sixth calendar month following the month in which the first day of such
Semi-annual Rate Period occurred, (ii) each anniversary of the date so
determined, and (iii) each anniversary of the first day of the first month
of such Semi-annual Rate Period;
(g) during a Term Rate Period, the January 1 or July 1 next succeeding
the first day of a Calculation Period and each January 1 or July 1
thereafter; provided, however, that if the January 1 or July 1 next
succeeding the first day of a Calculation Period occurs less than
13
twenty-one (21) days after the first day of such Calculation Period, the
first Interest Payment Date shall be the second such date following the
first day of such Calculation Period;
(h) the January 1 or July 1 next succeeding a Fixed Rate Conversion
Date and each January 1 or July 1 thereafter; provided, however, that if
the January 1 or July 1 next succeeding a Fixed Rate Conversion Date occurs
less than twenty-one (21) days after such Fixed Rate Conversion Date, the
first Interest Payment Date shall be the second such date following such
Fixed Rate Conversion Date;
(i) a Fixed Rate Conversion Date;
(j) any day on which Bonds are subject to mandatory tender for
purchase pursuant to Section 5.04, 5.07 or 5.08 or redemption as a whole or
in part pursuant to Section 5.01, 5.05 or 5.06; and
(k) the Stated Maturity;
provided, however, that if any such date determined in any of the foregoing
clauses is not a Business Day, the Interest Payment Date shall be the next
succeeding day which is a Business Day.
"Investment Securities" shall mean any of the following which at the time
are legal investments under the laws of the State of New York for the monies
held hereunder:
1. Direct obligations of the United States of America and securities
fully and unconditionally guaranteed as to the timely payment of
principal and interest by the United States of America ("U.S.
Government Securities").
2. Direct obligations (excluding all derivative obligations, including
without limitation inverse floaters, residuals, interest-only,
principal-only and range notes; obligations that have a possibility of
returning a zero or negative yield if held to maturity; obligations
that do not have a fixed par value or those whose terms do not promise
a fixed dollar amount at maturity or call date; and Collateralized
Mortgage-Backed Obligations (collectively, "Excluded Securities")) of
the following federal agencies which are fully guaranteed by the full
faith and credit of the United States of America:
(a) Export-Import Bank of the United States - Direct obligations and
fully guaranteed certificates of beneficial interest
(b) Federal Housing Administration - debentures (c) General Services
Administration - participation certificates
(d) Government National Mortgage Association ("GNMAs") - guaranteed
mortgage-backed securities and guaranteed participation
certificates
(e) Small Business Administration - guaranteed participation
certificates and guaranteed pool certificates
14
(f) U.S. Department of Housing & Urban Development - local authority
bonds
(g) U.S. Maritime Administration - guaranteed Title XI financings
(h) Washington Metropolitan Area Transit Authority - guaranteed
transit bonds
3. Direct obligations (excluding all Excluded Securities) of the
following federal agencies which are not fully guaranteed by the faith
and credit of the United States of America:
(a) Federal National Mortgage Association ("FNMAs") - senior debt
obligations rated Aaa by Xxxxx'x Investors Service ("Moody's")
and AAA by Standard & Poor's Ratings Services ("S&P")
(b) Federal Home Loan Mortgage Corporation ("FHLMCs") - participation
certificates and senior debt obligations rated Aaa by Moody's and
AAA by S&P
(c) Federal Home Loan Banks - consolidated debt obligations
(d) Student Loan Marketing Association - debt obligations
(e) Resolution Funding Corporation - debt obligations
4. Direct, general obligations of any state of the United States of
America or any subdivision or agency thereof whose uninsured and
unguaranteed general obligation debt is rated, at the time of
purchase, A2 or better by Moody's and A or better by S&P, or any
obligation fully and unconditionally guaranteed by any state,
subdivision or agency whose uninsured and unguaranteed general
obligation debt is rated, at the time of purchase, A2 or better by
Moody's and A or better by S&P.
5. Commercial paper (having original maturities of not more than 270
days) rated, at the time of purchase, P-1 by Moody's and A-1 or better
by S&P.
6. Certificates of deposit, savings accounts, deposit accounts or money
market deposits in amounts that are continuously and fully insured by
the Federal Deposit Insurance Corporation ("FDIC"), including the Bank
Insurance Fund and the Savings Association Insurance Fund.
7. Certificates of deposit, deposit accounts, federal funds or bankers'
acceptances (in each case having maturities of not more than 365 days
following the date of purchase) of any domestic commercial bank or
United States branch office of a foreign bank, provided that such
bank's short-term certificates of deposit are rated P-1 by Moody's and
A-1 or better by S&P (not considering holding company ratings).
8. Investments in money-market funds rated AAAm or AAAm-G by S&P.
15
9. Money market funds having a rating in the highest investment category
given to money market funds by recognized credit rating agencies at
the time of acquisition, including any fund for which the Trustee or
an affiliate of the Trustee serves as an investment advisor,
administrator, shareholder servicing agent, custodian or
sub-custodian, notwithstanding that (i) the Trustee or an affiliate of
the Trustee charges and collects fees and expenses from such funds for
services rendered (provided that such charges, fees and expenses are
on terms consistent with terms negotiated at arm's length) and (ii)
the Trustee charges and collects fees and expenses for services
rendered, pursuant to this Indenture.
"Liquidity Facility" shall mean a Support Facility which provides for the
payments referred to in clause (i) of the definition thereof, and which has been
consented to by the Bond Insurer.
"Liquidity Facility Issuer" shall mean any bank or banks or other financial
institution or institutions acceptable to the Bond Insurer, having issued any
Liquidity Facility.
"Maximum Allowed Rate" shall mean as of any date (i) during any Commercial
Paper Rate Period, Daily Rate Period, Weekly Rate Period, Monthly Rate Period,
Semi-annual Rate Period or Term Rate Period, 15% per annum, or if lower, the
rate specified as such in any Support Facility then in effect, and (ii) during
any Auction Rate Period, Fixed Rate Period or during a bank bond rate period
during which the Bonds are owned by a Liquidity Facility Issuer, 18% per annum,
provided, however, that such Maximum Allowed Rate shall not exceed the maximum
rate, if any, permitted by applicable law.
"Maximum Auction Rate" shall have the meaning given to such term in
Appendix B hereto.
"Monthly Period Record Date" shall mean, with respect to each Interest
Payment Date during a Monthly Rate Period, the Business Day next preceding such
Interest Payment Date.
"Monthly Rate" shall mean with respect to each Calculation Period during a
Monthly Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent, and the Company) by the Remarketing Agent no later
than 12:00 noon (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of the Remarketing
Agent, would be necessary on and as of such day to remarket Bonds in a secondary
market transaction at a price equal to the principal amount thereof; provided
that such rate of interest shall not exceed the lesser of 110% of the Monthly
Rate Index on and as of such date and the Maximum Allowed Rate.
"Monthly Rate Index" shall mean with respect to the Determination Date of
each Calculation Period during a Monthly Rate Period, the average of 30-day
yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
selected by the Indexing Agent, including issuers of commercial paper, project
16
notes, bond anticipation notes and tax anticipation notes, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or (b) have outstanding securities rated by a Rating Agency in the same
long-term debt rating category as the Bonds are rated by that Rating Agency and
not have any outstanding notes or commercial paper rated by such Rating Agency.
The Indexing Agent may change the Component Issuers from time to time in its
discretion, subject to the foregoing requirements. In addition, at the request
of the Company and upon delivery to the Trustee of an Opinion of Bond Counsel
that such action will not adversely affect the exclusion of interest on the
Bonds from gross income of the owners thereof for federal income tax purposes,
the Authority, with the consent of the Company, may designate a new method of
setting the Monthly Rate Index in the event any of the above-described methods
are determined by the Authority to be unavailable, impracticable or unrealistic
in the market place.
"Monthly Rate Period" shall mean any period during which Bonds bear
interest at a Monthly Rate which period shall commence with the effective date
of the Change in the Interest Rate Mode to a Monthly Rate and shall extend
through the day immediately preceding the earlier of (a) the effective date of
another Change in the Interest Rate Mode or (b) the Stated Maturity.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware and its successor
or successors, and if such corporation shall for any reason no longer perform
the functions of a securities rating agency or if Moody's shall be replaced,
subject to the definition of "prevailing rating" in the definition of Applicable
Percentage, by some other nationally recognized rating agency by the Authority
at the request of the Company, "Moody's" shall be deemed to refer to such other
nationally recognized rating agency designated by the Authority at the request
of the Company.
"Notice of Election to Tender" shall mean the written notice given by a
Holder of Bonds pursuant to Section 5.03.
"Opinion of Bond Counsel" shall mean a written opinion of Bond Counsel.
"Option to Convert" shall mean the Authority's right and option to convert
the rate of interest payable on the Bonds from an Adjustable Rate to a Fixed
Rate as provided in Section 4.02.
17
"Outstanding", whether appearing in upper or lower case, when used with
respect to any Bond shall mean, as of any date, any Bond theretofore or
thereupon being authenticated and delivered pursuant to this Indenture
(including Bonds considered to be "Outstanding" in accordance with Section
6.03.1(b) hereof), except:
1. a Bond cancelled by the Trustee or accepted by the Trustee for
cancellation at or prior to such date;
2. a Bond in lieu of or in substitution for which other Bonds shall have
been authenticated and delivered under Section 5.09, 5.10, 7.03 , 7.04 or 7.05;
and
3. a Bond or portion thereof deemed to have been paid in accordance with
Section 16.01;
provided, however, that with respect to Auction Rate Bonds for the purposes of
the Auction Procedures on any Auction Date, Auction Rate Bonds as to which the
Company or any person known to the Auction Agent to be an Affiliate of the
Company is the Existing Owner thereof shall be disregarded and deemed not to be
Outstanding.
"Participation Agreement" shall mean the Participation Agreement, dated as
of November 1, 2005, between the Authority and the Company, as the same may be
amended and supplemented by Supplemental Agreements from time to time.
"Paying Agent" shall mean Citibank, N.A. in its capacity as Paying Agent
for the Bonds, or its successors or assigns.
"Payments" shall mean collectively the Company Obligation Payments and the
Additional Payments.
"Payment Default" shall mean the occurrence of (i) an Event of Default
pursuant to paragraph (a) or (b) of Section 13.01 hereof and (ii) a default by
the Bond Insurer under the Policy.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint stock company, a trust, any unincorporated organization or
a government or political subdivision thereof.
"Policy" shall mean a Credit Facility issued by the Bond Insurer on the
Effective Date in the form of a municipal bond new issue insurance policy
insuring the regularly scheduled payments of principal of and interest on the
Bonds as provided therein.
"Principal Corporate Trust Office" shall mean, for Bond transfer purposes
and for purposes of presentment and surrender of the Bonds for the final
distributions thereon, Citibank, N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, Attention: 15th Floor Window, and for all other purposes, Citibank, N.A.,
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Agency and
Trust - Keyspan, or any other address that the Trustee may designate from time
to time by notice to the Holders, the Authority and the Company.
18
"Principal Office" means, with respect to the Auction Agent, the office
thereof designated in the Auction Agreement as the office of the Auction Agent
to which notices, requests or communications should be sent.
"Prior Bonds" shall mean the Authority's Gas Facilities Revenue Bonds,
Series C (The Brooklyn Union Gas Company Project), dated June 1, 1990.
"Prior Trustee" shall mean JPMorgan Chase Bank, N.A. (formerly known as
Chemical Bank, as successor to Manufacturers Hanover Trust Company).
"Project" shall mean the facilities which were financed or refinanced with
proceeds of the Prior Bonds and which are so identified and described in Exhibit
A to the Participation Agreement.
"Purchase Price" shall mean the purchase price of Bonds tendered or deemed
tendered for purchase pursuant to Section 5.03, 5.04, 5.07 or 5.08, consisting
of the principal amount of such Bonds together with any accrued and unpaid
interest plus, in the event Bonds bearing interest at a Term Rate are subject to
tender for purchase pursuant to Section 5.04, any premium which would have been
required to be paid as part of redemption price on any date on which such Bonds
are subject to tender for purchase if such Bonds were subject to optional
redemption pursuant to Section 5.01 on such date. With respect to Bonds tendered
for purchase on an Interest Payment Date, Purchase Price shall include any
accrued interest on such Bonds which is not otherwise being paid pursuant to
Section 10.03(a).
"Rate Index" means the Daily Rate Index, the Fixed Rate Index, the
Commercial Paper Rate Index, the Monthly Rate Index, the Semi-annual Rate Index,
the Term Rate Index, or the Weekly Rate Index.
"Rating Agency" means Moody's, if the Bonds are then rated by Moody's, S&P,
if the Bonds are then rated by S&P, and Fitch, if the Bonds are then rated by
Fitch.
"Rating category" shall mean one of the generic rating categories of a
Rating Agency, without regard to any refinement or gradation of such rating
category by a numerical modifier, plus or minus sign, or otherwise.
"Record Date", at any time, shall mean each Commercial Paper Period Record
Date during a Commercial Paper Rate Period, each Auction Rate Bonds Period
Record Date during an Auction Rate Period, each Daily Period Record Date during
a Daily Rate Period, each Weekly Period Record Date during a Weekly Rate Period,
each Monthly Period Record Date during a Monthly Rate Period, each Semi-annual
Period Record Date during a Semi-annual Rate Period, each Term Period Record
Date during a Term Rate Period and each Fixed Rate Record Date during a Fixed
Rate Period.
"Registrar and Paying Agent" shall mean Citibank, N.A. in its separate
capacity as Registrar and Paying Agent for the Bonds, or its successors or
assigns.
"Remarketing Agent" shall mean the Remarketing Agent or Remarketing Agents
appointed pursuant to Section 12.14, its or their successors or assigns.
19
"Remarketing Agreement" shall mean any agreement or agreements entered into
between the Company and one or more Remarketing Agents, as from time to time
amended, pursuant to which the applicable Remarketing Agent undertakes to
perform its duties and obligations hereunder during a period of time specified
in such agreement.
"Responsible Officer" shall mean, when used with respect to the Trustee,
any officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers, in each case having direct responsibility for the
administration of this Agreement.
"Revenues" shall mean and include all income, revenues and monies derived
by the Authority under the Participation Agreement and the Company Obligation
(except administrative compensation and indemnification payable under the
Participation Agreement), and, without limiting the generality of the foregoing,
shall include to the extent provided in this Indenture, earnings on the
investment of monies held under this Indenture and the proceeds of the sale of
any such investments. The term "Revenues" shall not include monies received as
proceeds from the sale of the Bonds or any other bonds, notes or evidences of
indebtedness or as grants or gifts.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and its successor or successors, and if such
corporation shall for any reason no longer perform the functions of a securities
rating agency or if S&P shall be replaced, subject to the definition of
"prevailing rating" in the definition of Applicable Percentage, by some other
nationally recognized rating agency by the Authority at the request of the
Company, "S&P" shall be deemed to refer to such other nationally recognized
rating agency designated by the Authority at the request of the Company.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Depository" shall mean The Depository Trust Company and its
successors and assigns or if (i) the then Securities Depository resigns from its
functions as depository of the Bonds or (ii) the Authority discontinues use of
the then Securities Depository pursuant to Section 2.03, any other securities
depository which agrees to follow the procedures required to be followed by a
Securities Depository in connection with the Bonds and which is selected by the
Authority, with the consent of the Company, the Trustee, the Auction Agent, the
Broker-Dealer and the Remarketing Agent pursuant to Section 2.03.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Semi-annual Period Record Date" shall mean, with respect to each Interest
Payment Date during a Semi-annual Rate Period, the fifteenth day, whether or not
a Business Day, of the calendar month next preceding such Interest Payment Date.
20
"Semi-annual Rate" shall mean with respect to each Calculation Period
during a Semi-annual Rate Period, a rate of interest equal to the rate of
interest per annum established and certified to the Trustee (with a copy to the
Authority, the Registrar and Paying Agent and the Company) by the Remarketing
Agent no later than 12:00 noon (New York City time) on and as of the
Determination Date as the minimum rate of interest per annum which, in the
opinion of the Remarketing Agent, would be necessary on and as of such day to
remarket Bonds in a secondary market transaction at a price equal to the
principal amount thereof; provided that such rate of interest shall not exceed
the lesser of 110% of the Semi-annual Rate Index on and as of such date and the
Maximum Allowed Rate.
"Semi-annual Rate Index" shall mean with respect to the Determination Date
of each Calculation Period during a Semi-annual Rate Period, the average of six
month yield evaluations at par, determined by the Indexing Agent, of securities
(whether or not actually issued), the interest on which is not included in gross
income for federal income tax purposes, of no fewer than ten Component Issuers
selected by the Indexing Agent, including issuers of commercial paper, project
notes, bond anticipation notes and tax anticipation notes, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in its highest note or commercial paper rating category or one of its two
highest long-term debt rating categories, each Component Issuer must (a) have
outstanding securities rated by a Rating Agency in its highest note or
commercial paper rating category or (b) not have outstanding notes or commercial
paper rated by a Rating Agency but have outstanding securities rated by a Rating
Agency in one of its two highest long-term debt rating categories. If the Bonds
are rated by a Rating Agency in a rating category that is lower than its highest
note or commercial paper rating category or its two highest long-term debt
rating categories (and the Bonds are not rated in one of such categories by the
other Rating Agency), each Component Issuer must (a) have outstanding securities
rated by a Rating Agency in its note or commercial paper rating category which
is the same or correlative, in the Indexing Agent's judgment, to the note or
commercial paper rating category or the long-term debt rating category of the
Bonds or the other debt obligations supported by support facilities issued by
the issuer of a Support Facility or (b) have outstanding securities rated by a
Rating Agency in the same long-term debt rating category as the Bonds are rated
by that Rating Agency and not have any outstanding notes or commercial paper
rated by such Rating Agency. The Indexing Agent may change the Component Issuers
from time to time in its discretion, subject to the foregoing requirements. In
addition, at the request of the Company and upon delivery to the Trustee of an
Opinion of Bond Counsel that such action will not adversely affect the exclusion
of interest on the Bonds from gross income of the owners thereof for federal
income tax purposes, the Authority, with the consent of the Company, may
designate a new method of setting the Semi-annual Rate Index in the event any of
the above-described methods are determined by the Authority to be unavailable,
impracticable or unrealistic in the market place.
"Semi-annual Rate Period" shall mean any period during which Bonds bear
interest at a Semi-annual Rate, which period shall commence on the effective
date of a Change in the Interest Rate Mode to a Semi-annual Rate, and shall
extend through the day immediately preceding the earlier of (a) the effective
date of another Change in the Interest Rate Mode, or (b) the Stated Maturity.
21
"Special Rate Period" shall have the meaning given to such term in Appendix
B hereto.
"Stated Maturity," shall mean June 1, 2025, provided that, subject to the
next sentence, in any case where the date of maturity of, or payment of premium
on, interest on, or principal of, the Bonds or the date fixed for redemption of
any Bonds shall be on a day other than a Business Day, then payment of interest,
principal and premium, if any, need not be made on such date but may be made
(without additional interest) on the next succeeding Business Day, with the same
force and effect as if made on the date of maturity or the date fixed for
redemption.
"Statutory Corporate Tax Rate" shall mean as of any date of determination
the highest tax rate bracket (expressed in decimals) now or hereafter applicable
in each taxable year on the taxable income of every corporation as set forth in
Section 11 of the Code or any successor section without regard to any minimum
additional tax provision or provisions regarding changes in rates during a
taxable year, which on the date hereof is .35. Any change in the Statutory
Corporate Tax Rate shall be evidenced by a certificate of the Company.
"Substitute Commercial Paper Dealer" shall mean the entity or entities
named by the Company with the consent of the Authority.
"Supplemental Indenture" shall mean any indenture supplementary to or
amendatory of the Indenture now or hereafter duly executed and delivered in
accordance with the provisions hereof.
"Supplemental Agreement" shall mean an agreement supplementing or amending
the Participation Agreement, as the same may be amended and supplemented from
time to time.
"Support Facility" shall mean any instrument satisfactory to the Authority
and the Bond Insurer entered into or obtained in connection with the Bonds, such
as a letter of credit, committed line of credit, insurance policy, surety bond
or standby bond purchase agreement, or any combination of the foregoing, and
issued by a bank or banks, other financial institution or institutions, or any
combination of the foregoing which provides for the payment of (i) the Purchase
Price on Bonds tendered for purchase pursuant to the provisions hereof and the
Bond Purchase Trust Agreement and/or (ii) principal of and interest on all Bonds
coming due and payable during the term thereof.
"Support Facility Issuer" shall mean any bank or banks, or other financial
institution or institutions which is the issuer of any Support Facility.
"Tax Regulatory Agreement" shall mean the Tax Regulatory Agreement, dated
the date of the original issuance of the Bonds, between the Authority and the
Company, and any and all modifications, alterations, amendments and supplements
thereto.
"Term Period Record Date" shall mean, with respect to each Interest Payment
Date during a Term Rate Period, the fifteenth day of the month next preceding
such Interest Payment Date, whether or not a Business Day.
22
"Term Rate" shall mean with respect to each Calculation Period during a
Term Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent and the Company) by the Remarketing Agent no later
than 4:00 p.m. (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of the Remarketing
Agent, would be necessary on and as of such day to remarket such Bonds in a
secondary market transaction at a price equal to the principal amount thereof;
provided that such rate of interest shall not exceed the lesser of 110% of the
Term Rate Index on and as of such date and the Maximum Allowed Rate.
"Term Rate Index" shall mean with respect to the Determination Date of each
Calculation Period during a Term Rate Period, the average of the yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), having a term approximately equal to the Term Rate Period
or which are subject to optional or mandatory tender by the owner thereof at the
end of a term approximately equal to the Term Rate Period, the interest on which
is not included in gross income for federal income tax purposes, of no fewer
than ten Component Issuers selected by the Indexing Agent, computed by the
Indexing Agent on and as of such day. If the Bonds are rated by a Rating Agency
in one of its two highest long-term debt rating categories, each Component
Issuer must have outstanding securities rated by a Rating Agency in one of its
two highest long-term debt rating categories. If the Bonds are rated by a Rating
Agency in a rating category that is lower than its two highest long-term debt
rating categories (and the Bonds are not rated in one of the two highest such
categories by the other Rating Agency), each Component Issuer must have
outstanding securities rated by a Rating Agency in the same long-term debt
rating category as the Bonds are rated by that Rating Agency. The Indexing Agent
may change the Component Issuers from time to time in its discretion, subject to
the foregoing requirements. In addition, at the request of the Company and upon
delivery to the Trustee of an Opinion of Bond Counsel that such action will not
adversely affect the exclusion of interest on the Bonds from gross income of the
owners thereof for federal income tax purposes, the Authority, with the consent
of the Company, may designate a new method of setting the Term Rate Index in the
event any of the above-described methods are determined by the Authority to be
unavailable, impracticable or unrealistic in the market place.
"Term Rate Period" shall mean any period during which Bonds bear interest
at a Term Rate which period shall commence with the effective date of the Change
in the Interest Rate Mode to a Term Rate and shall extend through the day
immediately preceding the earlier of (a) the effective date of another Change in
the Interest Rate Mode or (b) the Stated Maturity.
"Terminating Event" shall mean any event or events under the terms of a
Support Facility or any agreement providing for the issuance of such Support
Facility which would cause the termination of such Support Facility but would
specifically allow for the mandatory tender of Bonds pursuant to Section 5.08
with a draw on or borrowing or payment under such Support Facility prior to such
termination.
"Trust Estate" shall mean the meaning assigned to such term in the first
paragraph following the recitals herein.
23
"Trustee" shall mean the banking corporation having trust powers appointed
by the Authority as Trustee hereunder and serving as such hereunder, and any
surviving, resulting or transferee corporation as provided in Section 12.13.
References to principal office of the Trustee shall mean the applicable
Principal Corporate Trust Office of the Trustee.
"U.S. Government" shall mean the federal government of the United States of
America.
"Weekly Period Record Date" shall mean, with respect to each Interest
Payment Date during a Weekly Rate Period, the Business Day next preceding such
Interest Payment Date.
"Weekly Rate" shall mean with respect to each Calculation Period during a
Weekly Rate Period, a rate of interest equal to the rate of interest per annum
established and certified to the Trustee (with a copy to the Authority, the
Registrar and Paying Agent and the Company) by the Remarketing Agent no later
than 12:00 noon (New York City time) on and as of the Determination Date as the
minimum rate of interest per annum which, in the opinion of the Remarketing
Agent, would be necessary on and as of such day to remarket Bonds in a secondary
market transaction at a price equal to the principal amount thereof plus accrued
interest thereon; provided that such rate of interest shall not exceed the
lesser of 110% of the Weekly Rate Index on and as of such date and the Maximum
Allowed Rate.
"Weekly Rate Index" shall mean with respect to the Determination Date of
each Calculation Period during a Weekly Rate Period, the average of 30-day yield
evaluations at par, determined by the Indexing Agent, of securities (whether or
not actually issued), the interest on which is not included in gross income for
federal income tax purposes, of no fewer than ten Component Issuers selected by
the Indexing Agent, including issuers of commercial paper, project notes, bond
anticipation notes and tax anticipation notes, computed by the Indexing Agent on
and as of such day. If the Bonds are rated by a Rating Agency in its highest
note or commercial paper rating category or one of its two highest long-term
debt rating categories, each Component Issuer must (a) have outstanding
securities rated by a Rating Agency in its highest note or commercial paper
rating category or (b) not have outstanding notes or commercial paper rated by a
Rating Agency but have outstanding securities rated by a Rating Agency in one of
its two highest long-term debt rating categories. If the Bonds are rated by a
Rating Agency in a rating category that is lower than its highest note or
commercial paper rating category or its two highest long-term debt rating
categories (and the Bonds are not rated in one of such categories by the other
Rating Agency), each Component Issuer must (a) have outstanding securities rated
by a Rating Agency in its note or commercial paper rating category which is the
same or correlative, in the Indexing Agent's judgment, to the note or commercial
paper rating category or the long-term debt rating category of the Bonds or (b)
have outstanding securities rated by a Rating Agency in the same long-term debt
rating category as the Bonds are rated by that Rating Agency and not have any
outstanding notes or commercial paper rated by such Rating Agency. The Indexing
Agent may change the Component Issuers from time to time in its discretion,
subject to the foregoing requirements. In addition, at the request of the
Company and upon delivery to the Trustee of an Opinion of Bond Counsel that such
action will not adversely affect the exclusion of interest on the Bonds from
gross income of the owners thereof for federal income tax purposes, the
Authority, with the consent of the Company, may designate a new method of
setting the Weekly Rate Index in the event any of the above-described methods
are determined by the Authority to be unavailable, impracticable or unrealistic
in the market place.
24
"Weekly Rate Period" shall mean any period during which the Bonds bear
interest at a Weekly Rate; the first such period shall commence on the effective
date of a Change in the Interest Rate Mode to a Weekly Rate and shall extend
through the day immediately preceding the earlier of (a) the effective date of a
successive Change in the Interest Rate Mode or (b) the Stated Maturity.
"Winning Bid Rate" shall mean with respect to Auction Rate Bonds, Winning
Bid Rate as defined in Appendix B hereto.
Section 1.02. Definitions of General Terms. Whenever in this Indenture any
governmental unit including the Authority or any official, officer, director or
department of a governmental unit, is defined or referred to, such definition or
reference shall be deemed to include the governmental unit or official, officer,
board, agency, commission, body or department succeeding to or in whom or which
is vested, the functions, rights, powers, duties and obligations of such
governmental unit, official, officer, director or department, as the case may
be, encompassed by this Indenture.
Unless the context shall clearly indicate otherwise or may otherwise
require, in this Indenture words importing persons include firms, partnerships,
associations, corporations (public and private), public bodies and natural
persons, and also include executors, administrators, trustees, receivers or
other representatives.
Unless the context shall clearly indicate otherwise or may otherwise
require computation on other than an annual basis, in this Indenture whenever
any interest rate or rate of interest is defined or referred to, such rate shall
be a rate per annum.
Unless the context shall clearly indicate otherwise or may otherwise
require, in this Indenture: (i) references to articles, sections and other
subdivisions, whether by number or letter or otherwise, are to the respective or
corresponding articles, sections and subdivisions of this Indenture, as such
articles, sections or subdivisions may be amended from time to time; (ii) the
terms "herein," "hereunder," "hereby," "hereto," "hereof," and any similar
terms, refer to this Indenture and to this Indenture as a whole and not to any
particular article, section or subdivision hereof; and (iii) the word
"heretofore" means before the time of effectiveness of this Indenture; and the
word "hereafter" means after the time of effectiveness of this Indenture.
25
ARTICLE II
AUTHORIZATION OF BONDS
Section 2.01. Limitation on Issuance of Bonds. No Bonds may be issued under
the provisions of this Indenture except in accordance with the provisions of
this Article.
Section 2.02. Authorization of Bonds. 1. There is hereby created and
established under this Indenture one issue of revenue bonds of the Authority,
limited to $55,000,000 in aggregate principal amount, of "Gas Facilities Revenue
Bonds (The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York
Project), 2005 Series B." In order to distinguish between Bonds which are
subject to different interest rate determination methods and other features and
to distinguish the portion of the Bonds to be offered or remarketed by any
particular underwriter or Remarketing Agent, the Bonds may be designated and
redesignated from time to time by the Authority in such a way as to identify one
or more subseries of the Bonds. Such subseries may be designated as subSeries
B-1, subSeries B-2 or subSeries B-3, as the case may be, or may be further
redesignated as subSeries B-1-1, subSeries B-1-2 or subSeries B-1-3, as the case
may be, and so forth. Each Bond shall bear upon the face thereof such
designation or redesignation, if any. In the event the Bonds are designated or
redesignated as one or more subseries, all references to "Bonds" in this
Indenture shall refer to each such subseries unless the context otherwise
requires.
2. The Bonds shall be secured by the Trust Estate. The lien, pledge, charge
and assignment of the Trust Estate created hereby shall be valid and binding
from the Effective Date, and the Company Obligation Payments made under the
Company Obligation and the Participation Agreement shall be immediately subject
thereto upon receipt by the Trustee.
3. The Bonds are limited obligations of the Authority payable solely from
payments to be made by the Company pursuant to the Company Obligation and the
Participation Agreement and the other monies, rights and properties pledged
hereunder, hereafter obtained with respect thereto and secured by a pledge from
the Authority to the Trustee of the Participation Agreement and the Company
Obligation. The Bonds shall not be a debt of the State of New York, and the
State of New York shall not be liable thereon.
4. The covenants and agreements herein set forth to be performed by the
Authority shall be for the benefit, security and protection of any Holder of the
Bonds and the Bond Insurer.
5. Neither the Trustee nor any Holder of the Bonds shall be required to see
that the monies derived from such Bonds are applied to the purpose or purposes
for which such Bonds are issued.
6. The Bonds shall be issued under this Indenture for the purpose of paying
a portion of the redemption price of the Prior Bonds.
26
7. The Bonds bearing a Commercial Paper Rate, a Daily Rate, a Weekly Rate
or a Monthly Rate shall be fully registered Bonds in the denomination of
$100,000 or any integral multiple thereof. The Bonds bearing an Auction Period
Rate shall be fully registered Bonds in the denomination of $25,000 or any
integral multiple thereof. The Bonds bearing a Semi-annual Rate, a Term Rate or
a Fixed Rate shall be fully registered Bonds in the denomination of $5,000 or
any integral multiple thereof.
8. The Bonds shall be numbered consecutively from "2005B-1" upwards as
issued, or as otherwise provided by the Registrar and Paying Agent. If the Bonds
are redesignated to identify one or more additional subseries, the Bonds shall
be numbered in accordance with their subseries designation. The Bonds shall
mature on the Stated Maturity.
9. The Bonds shall be initially issued in fully registered form, without
coupons, and dated their date of first authentication and delivery.
Section 2.03. Global Form; Securities Depository. 1. Except as otherwise
provided in this Section 2.03, the Bonds in the form of one separate global bond
shall be registered in the name of the Securities Depository or its nominee and
ownership thereof shall be maintained in book entry form by the Securities
Depository for the account of the Agent Members thereof.
Except as provided in subsections (3) and (4) of this Section 2.03 and in
Section 6.03, the Bonds may, at the request of the Company, be transferred, in
whole but not in part, only to the Securities Depository or a nominee of the
Securities Depository, or to a successor Securities Depository selected or
approved by the Authority, with the consent of the Company, the Trustee, the
Auction Agent (if any) and the Remarketing Agent, or to a nominee of such
successor Securities Depository. Each global certificate for the Bonds shall
bear a legend substantially to the following effect: "Except as otherwise
provided in Sections 2.03 and 6.03 of the Indenture, this global bond may, at
the request of the Company, be transferred, in whole but not in part, only to
the Securities Depository as defined in the Indenture or a nominee of the
Securities Depository or to a successor Securities Depository or to a nominee of
a successor Securities Depository."
2. The Authority, the Company, the Trustee, the Registrar and Paying Agent,
the Auction Agent (if any) and the Remarketing Agent shall have no
responsibility or obligation with respect to:
(a) the accuracy of the records of the Securities Depository or any
Agent Member with respect to any beneficial ownership interest in the
Bonds;
(b) the delivery to any Agent Member, beneficial owner of the Bonds or
other person, other than the Securities Depository or its nominee as
registered owner, of any notice with respect to the Bonds;
(c) the payment to any Agent Member, beneficial owner of the Bonds or
other person, other than the Securities Depository or its nominee as
registered owner, of any amount with respect to the principal or premium,
if any, or interest on the Bonds;
27
(d) its acceptance of any consent given by the Securities Depository
or other action taken by the Securities Depository as registered owner; or
(e) the selection by the Securities Depository or any Agent Members of
any beneficial owners to receive payment in the event of a partial
redemption of Bonds, except for the Trustee's obligations under Section
5.11.
Except as otherwise provided in Sections 6.03 and 6.04 hereof, so long
as the certificates for the Bonds issued under the Indenture are not issued
pursuant to subsection (4) of this Section 2.03, the Authority, the
Company, the Trustee, the Auction Agent (if any), the Broker-Dealer (if
any), the Remarketing Agent (if any), the Registrar and Paying Agent may
treat the Securities Depository as, and deem the Securities Depository to
be, the absolute owner of the Bonds for all purposes whatsoever, including
without limitation:
(a) the payment of principal and premium, if any, and interest on the
Bonds;
(b) giving notices of redemption and other matters with respect to the
Bonds; and
(c) registering transfers with respect to the Bonds.
Payment by the Trustee of principal or redemption price, if any, of and
premium, if any, and interest on such Bonds to or upon the order of the
Securities Depository or its nominee during any period when it is the registered
owner of such Bonds shall be valid and effective to satisfy and discharge fully
the Authority's obligation with respect to the amounts so paid.
3. (a) The Authority may, and at the request of the Company may,
discontinue the use of a Securities Depository for the Bonds at the time of a
Change in the Interest Rate Mode.
(b) Registered ownership of the Bonds may be transferred on the
registration books of the Authority maintained by the Registrar and Paying
Agent and the Bonds may be delivered in physical form to the following: (i)
any successor Securities Depository or its nominee; (ii) any person, upon
(A) the resignation of the Securities Depository or (B) the termination by
the Authority of the use of the Securities Depository from its functions as
depository as set forth in this section, or (C) upon any Change in the
Interest Rate Mode to any Adjustable Rate other than an Auction Period
Rate, or (iii) the Bond Insurer, in the circumstances contemplated by
Section 6.03.
(c) Upon any Change in the Interest Rate Mode to an Auction Period
Rate, the Registrar and Paying Agent shall register the Auction Rate Bonds
in the name of the Securities Depository or its nominee and on the
effective date of such change provide the Company with a list of the
Existing Owners of the Auction Rate Bonds.
4. If at any time the Securities Depository notifies the Authority and the
Company that it is unwilling or unable to continue as Securities Depository with
respect to the Bonds or if at any time the Securities Depository shall no longer
be registered or in good standing under the Securities Exchange Act or other
28
applicable statute or regulation and a successor Securities Depository is not
appointed by the Authority with the consent of the Company, the Trustee, the
Auction Agent (if any) and the Remarketing Agent or Broker-Dealer, as the case
may be, within 90 days after the Authority and the Company receive notice or
become aware of such condition, as the case may be, this Section shall no longer
be applicable and the Authority shall execute and the Trustee shall authenticate
and deliver certificates representing the Bonds as provided below. In addition,
the Authority may determine at any time, at the request of the Broker-Dealer, if
any, Remarketing Agent, if any, or the Company, that the Bonds shall no longer
be represented by global bonds and that the provisions of subsections (1) and
(2) above shall no longer apply to such Bonds. In any such event the Authority
shall execute and the Trustee shall authenticate and deliver certificates
representing the Bonds as provided below. Certificates for the Bonds issued in
exchange for a global bond pursuant to this subsection shall be registered in
such names in authorized denominations as the Securities Depository, pursuant to
instructions from the Agent Members or otherwise, shall instruct the Authority
and the Trustee. The Authority shall have no responsibility to confirm any of
the information provided to it by the Securities Depository. Absent manifest
error, neither the Company nor the Trustee shall have responsibility to confirm
any of the information provided to it by the Securities Depository. The Trustee
shall deliver such certificates representing the Bonds of such series to the
Persons in whose names such Bonds are so registered on the Business Day
immediately preceding the first day of an Auction Period (with respect to
Auction Rate Bonds during any Auction Rate Period), or the effective date of a
Change in the Interest Rate Mode (with respect to any other Change in the
Interest Rate Mode), as the case may be.
5. The Authority and the Trustee are hereby authorized to enter into any
arrangements determined necessary or desirable with any Securities Depository in
order to effectuate this Section and both of them shall act in accordance with
this Indenture and any such agreement. Without limiting the generality of the
foregoing, any such arrangements may alter the manner of effecting delivery of
Bonds and the transfer of funds for the payment of Bonds to the Securities
Depository.
Section 2.04. [Reserved].
Section 2.05. Application of Bond Proceeds. The proceeds of sale of the
Bonds shall be deposited with the Prior Trustee for deposit in the Prior Bond
Fund pursuant to the Prior Indenture in accordance with Section 9.01.
Section 2.06. Delivery of the Bonds. The Bonds shall be executed by the
Authority substantially in the form prescribed by Section 17.01 and in the
manner herein set forth and shall be deposited with the Trustee for
authentication, but before the Bonds shall initially be delivered by the
Trustee, there shall be filed with the Trustee the following:
(a) an order executed by an Authorized Officer directing the
authentication and delivery of the Bonds to or upon the order of the
Securities Depository or its nominee, upon payment to the Trustee of the
Purchase Price therein set forth;
(b) a fully executed counterpart of this Indenture;
29
(c) a fully executed counterpart of the Participation Agreement;
(d) a fully executed counterpart of the Remarketing Agreement, if any,
and the Broker-Dealer Agreement, if any;
(e) the fully executed Policy;
(f) the fully executed Company Obligation;
(g) a fully executed counterpart of the Bond Purchase Trust Agreement;
(h) a fully executed counterpart of the Tax Regulatory Agreement;
(i) an opinion of counsel to the Company, addressed to the
Underwriters (as defined in the Bond Purchase Agreement), with reliance
letter addressed to the Authority, the Trustee and the Bond Insurer,
substantially to the effect, and dated as, required by Section 8(d)(9)(ii)
of the Bond Purchase Agreement;
(j) an opinion of counsel to the Bond Insurer, addressed to the
Authority, the Company, and the Trustee, substantially to the effect
required by Section 8(d)(9)(iv) of the Bond Purchase Agreement; and
(k) an Opinion of Bond Counsel to the Authority and the Trustee (i) as
to the validity of the Bonds and (ii) that all conditions precedent to the
issuance of the Bonds have been met.
When the documents mentioned in clauses (a) to (k), inclusive, of this
Section shall have been filed with the Trustee, and when the Bonds shall have
been executed and authenticated as required by this Indenture, the Trustee shall
deliver the Bonds to the Securities Depository, but only upon payment to the
Trustee of the Purchase Price of the Bonds specified in said order.
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ARTICLE III
INTEREST ON BONDS
Section 3.01. Interest on Bonds-General. 1. Interest accruing on Bonds
bearing interest at a Commercial Paper Rate, a Daily Rate, a Weekly Rate or a
Monthly Rate, shall be computed on the basis of a 365-day year, as applicable,
for the number of days actually elapsed. Interest accruing on Bonds bearing
interest at a Semi-Annual Rate, a Term Rate or a Fixed Rate shall be computed on
the basis of a 360-day year, consisting of twelve (12) thirty (30) day months.
Interest accruing on Bonds bearing interest at an Auction Period Rate during an
Auction Period of 180 days or less shall be computed on the basis of a 360-day
year for the number of days actually elapsed. Interest accruing on Bonds bearing
interest at an Auction Period Rate during an Auction Period of over 180 days
shall be computed on the basis of a 360-day year, consisting of twelve (12)
thirty (30) day months. Bonds shall bear interest from the date of issuance
thereof payable in arrears on each Interest Payment Date. The Bonds issued upon
registration of transfers or exchanges of Bonds shall bear interest from the
Interest Payment Date next preceding their date of authentication, unless the
date of authentication is an Interest Payment Date in which case such Bonds
shall bear interest from such date, or unless the date of authentication is
after the Record Date next preceding the next succeeding Interest Payment Date,
in which case such Bonds shall bear interest from such next succeeding Interest
Payment Date.
2. The Bonds shall initially bear interest at an Auction Period Rate in
accordance with Section 3.03 and Appendix B hereto from and including such
Effective Date to and including the day immediately preceding the effective date
of a Change in the Interest Rate Mode pursuant to Section 4.01 or 4.02. From and
after any Change in the Interest Rate Mode pursuant to Section 4.01 or 4.02, the
Bonds with respect to which such change is effective shall bear interest
determined in accordance with the provisions of this Indenture pertaining to the
new Adjustable Rate or the Fixed Rate, as the case may be. Bonds shall bear
interest for each Calculation Period, Auction Period or Fixed Rate Period, as
the case may be, at the rate of interest per annum for such Calculation Period,
Auction Period or Fixed Rate Period established in accordance with this
Indenture. Interest shall be payable on each Interest Payment Date by check
mailed to the registered owner at his or her address as it appears on the
registration books kept by the Registrar and Paying Agent pursuant to the
Indenture at the close of business on the applicable Record Date; provided, that
(i) while the Securities Depository is the registered owner of the Bonds, all
payments of principal of, premium, if any, and interest on the Bonds shall be
paid to the Securities Depository or its nominee by wire transfer, (ii) prior to
and including a Fixed Rate Conversion Date, interest on the Bonds shall be
payable to any registered owner of at least one million dollars ($1,000,000) in
aggregate principal amount of Bonds by wire transfer, upon written notice
received by the Registrar and Paying Agent at least five days prior to the
applicable Record Date, from such registered owner containing the wire transfer
address (which shall be in the continental United States) to which such
registered owner wishes to have such wire directed and (iii) during a Commercial
Paper Rate Period, interest shall be payable on the Bonds only upon presentation
and surrender thereof to the Registrar and Paying Agent upon purchase thereof
pursuant to Section 5.03 and if such presentation and surrender is made by 2:00
p.m. (New York City time) such payment shall be by wire transfer. If and to the
31
extent that there shall be a default in the payment of the interest due on any
Interest Payment Date, such interest shall cease to be payable to the person in
whose name each Bond of such series was registered on such applicable Record
Date and shall be payable, when and if paid to the person in whose name each
Bond of such series is registered at the close of business on the record date
fixed therefor by the Trustee, which shall be the fifth Business Day next
preceding the date of the proposed payment. Except as provided above, payment of
the principal of and premium, if any, on all Bonds shall be made upon the
presentation and surrender of such Bonds at the principal office of the
Registrar and Paying Agent as the same shall become due and payable. The
principal of and premium, if any, and interest on the Bonds shall be payable in
lawful money of the United States of America.
3. Not less than one Business Day prior to each Computation Date and two
Business Days prior to a Fixed Rate Conversion Date, the Indexing Agent shall
establish and provide to the Remarketing Agent the related rate index as set
forth in the definition of such rate index in Section 1.01; provided that, for
each Calculation Period during a Daily Rate Period, the Indexing Agent shall
establish and provide the related rate index to the Remarketing Agent on each
Determination Date; and provided further that, for each Calculation Period
during a Monthly Rate Period, the Indexing Agent shall establish and provide the
related rate index to the Remarketing Agent not later than each Computation
Date. Notwithstanding the foregoing, in the event that the Remarketing Agent, in
its sole judgment, shall determine on a Determination Date that any Daily Rate
Index, Weekly Rate Index or any Commercial Paper Rate Index so established is
sufficiently non-representative of current market conditions that the Bonds may
not be remarketed at par if such rate is set at a rate not greater than 110% of
the applicable rate index, the Remarketing Agent, with the approval of the
Company and the Authority, may establish a new rate index on a Determination
Date in accordance with the procedures and standards described in the definition
of such rate index and for purposes of such rate index so established, all
references to Indexing Agent in this Indenture shall be deemed to refer to the
Remarketing Agent. On any date when any Weekly Rate Index or any Commercial
Paper Rate Index is established by the Remarketing Agent pursuant to this
paragraph, such rate index shall have the respective meaning set forth in
Section 1.01 (except as otherwise provided in the preceding sentence); provided
that for any Commercial Paper Rate Index, the Remarketing Agent shall select
securities (whether or not actually issued) having a term approximately equal to
the applicable Commercial Paper Rate Period or which are subject to optional or
mandatory tender by the owner thereof at the end of a term approximately equal
to (or as close thereto as is practicably available) the applicable Commercial
Paper Rate Period.
4. By 12:00 noon (New York City time) on each Determination Date (but by
12:30 p.m. with respect to a Commercial Paper Rate, by 10:00 a.m. with respect
to a Daily Rate and by 4:00 p.m. with respect to a Term Rate) or by 1:00 p.m.
(New York City time) on each Auction Date (but by 11:00 a.m. with respect to a
daily Auction Rate Period), as the case may be, the Remarketing Agent or the
Auction Agent, as the case may be, shall make available, by electronic or
telephonic means, promptly confirmed in writing, to the Authority, the Trustee,
the Registrar and Paying Agent, any issuer of a Support Facility, the Company,
any Broker-Dealer or any registered owner of a Bond the interest rate or rates
determined on such Determination Date or Auction Date.
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5. If for any reason on any Determination Date (A) any rate of interest for
a Calculation Period is not determined by the Remarketing Agent, (B) no
Remarketing Agent is serving as such hereunder or (C) the rate so determined is
held to be invalid or unenforceable by a final judgment of a court of competent
jurisdiction, (i) during any Daily Rate Period, the interest rate for the next
succeeding Calculation Period shall be the last interest rate in effect, or, if
a Daily Rate is not determined by the Remarketing Agent hereunder for five or
more consecutive Business Days on the next and each succeeding Determination
Date, the Daily Rate shall be a rate per annum equal to 80% of the latest 30-day
dealer taxable commercial paper rate published by the Federal Reserve Bank of
New York on or immediately before such Determination Date, (ii) during any
Weekly Rate Period, the interest rate for the next succeeding Calculation Period
shall be the last interest rate in effect, or, if a Weekly Rate is not
determined by the Remarketing Agent for two or more consecutive Calculation
Periods, the Weekly Rate shall be equal to 85% of the latest 30-day dealer
taxable commercial paper rate published by the Federal Reserve Bank of New York
on or before the day next preceding such Determination Date, (iii) during any
Monthly Rate, Semi-annual Rate or Term Rate Period, the interest rate per annum
for the next succeeding Calculation Period shall be equal to 85% of the rate
listed in the table most recently circulated by the United States Treasury
Department known as "Table [applicable dates shown on the most recent Table],
Maximum Interest Rate Payable on United States Treasury Certificates of
Indebtedness, Notes and Bonds-State and Local Government Series Subscribed for
During Period [applicable dates shown on the most recent Table]" or any
substantially equivalent table circulated by the United States Treasury
Department for the maturity most closely approximating the Calculation Period,
and (iv) during any Commercial Paper Rate Period, the next succeeding
Calculation Period shall be a Calculation Period which shall consist of the
period from and including the prior Interest Payment Date to but excluding the
first Business Day of the following calendar month and the Commercial Paper Rate
shall be equal to 85% of the interest rate applicable to 90-day United States
Treasury Bills determined on the basis of the average per annum discount rate at
which such 90-day Treasury Bills shall have been sold at the most recent
Treasury auction within the 30 days next preceding such Calculation Period, or
if there shall have been no such auction within the 30 days next preceding such
Calculation Period, the Commercial Paper Rate shall be equal to the rate of
interest borne by such Bond during the next preceding Calculation Period for
such Bond. The rate of interest or Calculation Period and related Commercial
Paper Rate shall be established pursuant to this subsection 5 until the
Remarketing Agent again determines the rates of interest or Calculation Periods
and related Commercial Paper Rates in accordance with this Indenture. The
Authority shall select any person otherwise meeting the qualifications of
Section 12.14 to obtain, calculate and prepare any of the information required
by this subsection 5.
6. The determination of any rate of interest by the Remarketing Agent, or
any person appointed by the Authority pursuant to the last sentence in
subsection 5 of this Section 3.01, in accordance with this Indenture or by the
Auction Agent in accordance with the Auction Procedures applicable to Auction
Rate Bonds, or the establishment of Calculation Periods or Auction Periods by
the Remarketing Agent or the Authority as provided in this Indenture shall be
conclusive and binding upon the Authority, the Company, the Trustee, the
Registrar and Paying Agent, the Remarketing Agent, the Auction Agent, any issuer
of a Support Facility, all Broker-Dealers and the registered or beneficial
33
owners of the Bonds. Failure of the Remarketing Agent, the Trustee, the
Registrar and Paying Agent, the Auction Agent or the Securities Depository or
any Securities Depository participant to give any of the notices described in
this Indenture, or any defect therein, shall not affect the interest rate to be
borne by any of the Bonds nor the applicable Calculation Period or Auction
Period nor in any way change the rights of the registered owners of the Bonds to
tender their Bonds for purchase or to have them redeemed in accordance with this
Indenture.
7. Except as otherwise provided in this subsection 8, the Trustee shall
calculate and notify the Registrar and Paying Agent of the amount of interest
due and payable on each Interest Payment Date by 10:00 a.m. on the Business Day
next preceding such Interest Payment Date, unless such date is a date on which
the interest rate is determined or a date on which a Bond is subject to
purchase, in which case the amount of interest due and payable shall be
calculated by 12:15 p.m. on such date. In preparing such calculation the Trustee
may conclusively rely on calculations or other services provided by the Auction
Agent, the Remarketing Agent, the Company or any person or persons selected by
the Trustee in its discretion. During a Commercial Paper Rate Period, the
Remarketing Agent shall notify the Trustee, the Registrar and Paying Agent and
the Company of the amount of interest due and payable on each Interest Payment
Date by 10:00 a.m. on the Business Day next preceding such Interest Payment
Date.
8. Anything herein to the contrary notwithstanding, in no event shall the
interest rate borne by any Bond exceed the Maximum Allowed Rate.
9. Notwithstanding anything in the Indenture to the contrary, if Bonds have
been in a Term Rate Period and there has been a failure to pay the Purchase
Price of such Bonds on the Business Day immediately following a Calculation
Period, such Bonds shall continue to bear interest at the then-existing Term
Rate until such Purchase Price has been paid.
Section 3.02. Commercial Paper Rate. 1. During any Commercial Paper Rate
Period, at or prior to 12:30 p.m. (New York City time) on each Determination
Date, the Remarketing Agent shall establish Calculation Periods and related
Commercial Paper Rates. In determining Calculation Periods, the Remarketing
Agent shall take the following factors into account: (i) existing short-term
taxable and tax-exempt market rates and indices of such short-term rates, (ii)
the existing market supply and demand for short-term tax-exempt securities,
(iii) existing yield curves for short-term and long-term tax-exempt securities
or obligations having a credit rating that is comparable to the Bonds, (iv)
general economic conditions, (v) economic and financial factors present or
anticipated in the securities industry that may affect or that may be relevant
to the Bonds and (vi) any information available to the Remarketing Agent
pertaining to the Company regarding any events or anticipated events which could
have a direct impact on the marketability of or interest rates on the Bonds. Any
Calculation Period established hereunder may not extend beyond the second
Business Day next preceding the expiration date of the Support Facility or the
day prior to the Stated Maturity.
2. The Authority, at the request of the Company, may place such limitations
upon the establishment of Calculation Periods pursuant to subsection 1 hereof as
may be set forth in a written direction from the Authority, which direction must
be received by the Remarketing Agent prior to 10:00 a.m. (New York City time) on
the day prior to any Determination Date (with a copy to the Trustee) to be
effective on such date, but only if the Trustee receives an Opinion of Bond
Counsel to the effect that such action is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the exclusion of
interest on the Bonds from gross income for federal income tax purposes.
34
Section 3.03. Auction Rate Period - Auction Period Rate: General. During
any Auction Rate Period, the Bonds shall bear interest at the Auction Period
Rate for each Auction Period determined as set forth in this Section 3.03 and
Appendix B hereto. The provisions of such Appendix B constitute an integral part
of this Indenture and have the same force and effect as if set forth in this
Indenture.
The initial Auction Period for the Bonds shall commence from and include
the Effective Date and shall expire on and include November 3, 2005 (which will
be the day of the week on which Auctions will generally be conducted) and the
Auction Period Rate for the initial Auction Period for such Bonds shall be the
rate of interest determined and certified to the Authority and Trustee as the
minimum rate of interest which, in the opinion of the Broker-Dealer designated
by the Company, would be necessary as of such date to market Bonds in an Auction
Rate Period at a price equal to the principal amount thereof; provided that such
interest rate shall not exceed the Maximum Allowed Rate. After the initial
Auction Period, each Auction Period shall be a 7-day Auction Period, unless such
Auction Period is adjusted or changed to a daily, 14-day, 28-day, 35-day,
three-month, six-month or a Special Rate Period in accordance with Appendix B
hereto. For any other Auction Period that is not an initial Auction Period, the
Auction Period Rate shall be the rate of interest determined in accordance with
Appendix B.
To the extent that the Interest Rate Mode that is applicable to the Bonds
is changed to an Auction Rate Period, the initial Auction Period immediately
after such Change in the Interest Rate Mode shall commence from and include the
effective date of such Change in the Interest Rate Mode and shall expire on and
include the initial Auction Date. The initial Auction Date (which will be the
day of the week on which Auctions will generally be conducted) immediately after
any Change in the Interest Rate Mode to an Auction Rate Period, shall be the
date determined and certified to the Trustee (with a copy to the Authority, the
Remarketing Agent, the Broker-Dealer(s), the Auction Agent and the Support
Facility Issuer (if any)) by the Company on or before the effective date of such
Change in the Interest Rate Mode. The Auction Period Rate for any initial
Auction Period immediately after any Change in the Interest Rate Mode to an
Auction Rate Period, shall be the rate of interest per annum determined and
certified to the Trustee (with a copy to the Authority, the Remarketing Agent,
the Auction Agent, the other Broker-Dealers, if any, and the Support Facility
Issuer (if any)) by the Broker-Dealer designated by the Company on a date not
later than the effective date of such Change in the Interest Rate Mode as the
minimum rate of interest which, in the opinion of such Broker-Dealer, would be
necessary as of such date to market Bonds in an Auction Rate Period at a price
equal to the principal amount thereof; provided that such interest rate shall
not exceed the Maximum Allowed Rate. After the initial Auction Period, each
Auction Period shall be an Auction Period certified to the Trustee (with a copy
to the Authority, the Remarketing Agent, the Broker-Dealer(s), the Auction Agent
and the Support Facility Issuer (if any)) by the Company on or before the
effective date of the Change in the Interest Rate Period to an Auction Rate
Period, unless such Auction Period is adjusted or changed to a daily, 7-day,
14-day, 28-day, 35-day, three-month, six-month or a Special Rate Period in
accordance with Appendix B hereto. For any other Auction Period that is not an
initial Auction Period, the Auction Period Rate shall be the rate of interest
determined in accordance with Appendix B.
35
If the Auction Rate on the Bonds shall be the Maximum Allowed Rate for a
period (A) in excess of forty-five (45) days, the Company agrees to take all
steps necessary to ensure that the Auction Rate does not exceed the interest
rate payable on similar securities (taking into account the interest period and
enhanced/insured rating of the Bonds) or (B) in excess of seventy (70) days, the
Bond Insurer may in its discretion direct the Company to direct the Authority to
cause a Change in the Interest Rate Mode to a Fixed Rate or to an Adjustable
Rate, in each case at the lowest interest rate that will permit the Remarketing
Agent to sell all the Bonds on the effective date of such Change in the Interest
Rate Mode at a price equal to 100% of the principal amount thereof, plus accrued
interest thereon. If an Event of Default shall have occurred and be continuing
under the Indenture or the Company fails to cause a Change in the Interest Rate
Mode applicable to the Bonds to another interest rate mode as required by the
foregoing sentence, the Bond Insurer may, in its discretion, direct a Change in
the Interest Rate Mode to a Fixed Rate or any other interest rate mode.
36
ARTICLE IV
CHANGES IN THE INTEREST RATE MODE
Section 4.01. Optional Conversion to an Adjustable Rate by Authority. 1. At
the times specified below, the Bonds, in whole, shall cease to bear interest at
the Adjustable Rate then borne by the Bonds and shall bear interest at such
Adjustable Rate as shall be specified by the Authority, at the request of the
Company, in a written notice delivered at least 30 days prior to the proposed
effective date of the Change in the Interest Rate Mode to the Trustee, the
Remarketing Agent, the Broker-Dealer, the Registrar and Paying Agent and the
Company (and to the Auction Agent and the Securities Depository if such Change
in the Interest Rate Mode is to or from an Auction Period Rate) in substantially
the form attached hereto as, or containing substantially the information
contained in Exhibit A hereto. A Change in the Interest Rate Mode may only be
effected on a day on which the affected Bonds may be redeemed at the option of
the Authority. A notice of Change in the Interest Rate Mode shall be effective
only if it is accompanied by the consent of the Bond Insurer and the form of
opinion that Bond Counsel expects to be able to give to the Authority on the
proposed effective date of such Change in the Interest Rate Mode to the effect
that such Change in the Interest Rate Mode is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the exclusion of
interest on such Bonds from gross income for federal income tax purposes.
In the case of any Change in the Interest Rate Mode to a Term Rate, the
notice required by this Section 4.01 shall specify the length of the Calculation
Period and, unless otherwise specified, such Calculation Period shall thereafter
apply to the Bonds until a Change in the Interest Rate Mode effected pursuant to
this Section 4.01 or Section 4.02. Notwithstanding the foregoing, no Calculation
Period shall be established during a Term Rate Period unless the Trustee shall
receive by 2:00 p.m., New York City time, on the first day of such Calculation
Period, evidence satisfactory to it that on such date any nationally recognized
rating agency has determined that the ratings on the Bonds shall be at least
equal to the ratings assigned to the Bonds before the Change in the Interest
Rate Mode, or, in the event the Policy is no longer in effect, that the Bonds
shall be rated at least "A" by S&P or "A2" by Moody's or "A" by Fitch or an
equivalent rating agency. Any change in the Calculation Period during a Term
Rate Period shall be deemed an optional conversion pursuant to this Section 4.01
and may not be made unless all the requirements of a conversion pursuant to this
Section 4.01 are met.
2. The Trustee shall mail, or cause the Registrar and Paying Agent to mail,
the notice received pursuant to subsection 1 of this Section 4.01 within three
(3) Business Days after receipt thereof to the Bondholders.
3. A Change in the Interest Rate Mode to an Adjustable Rate shall be
effective pursuant to Subsection 1 of this Section 4.01 only if
(A) with respect to any Change in the Interest Rate Mode from an
Auction Period Rate to an Adjustable Rate, the Trustee, the Broker-Dealer,
if any, and the Auction Agent (if any) shall receive:
37
(i) a certificate of an Authorized Company Representative in
substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit B hereto, by no later than the
tenth day prior to the effective date of such Change in the Interest
Rate Mode stating that a written agreement between the Company and the
Remarketing Agent to remarket the Bonds on such effective date at a
price of 100% of the principal amount thereof has been entered into,
which agreement (x) may be subject to such reasonable terms and
conditions agreed to by the Remarketing Agent which in the judgment of
the Remarketing Agent reflects the current market standards regarding
investment banking risk and (y) must include a provision requiring
payment by the Remarketing Agent in same-day funds provided from the
remarketing of such Bonds in accordance with the Remarketing
Agreement, from the proceeds of a Liquidity Facility, or from funds
deposited with the Trustee or the Registrar and Paying Agent, for any
Bond tendered or deemed tendered; and that a Liquidity Facility is in
effect or has been obtained by the Company with respect to the Bonds
if the Bonds are to bear interest at an Adjustable Rate other than an
Auction Rate, and shall be in effect prior to such Change in the
Interest Rate Mode and thereafter for a period of at least 364 days;
(ii) by 11:00 a.m. (New York City time) on the second Business
Day prior to the effective date of such Change in the Interest Rate
Mode by telecopy or other similar means, a certificate in
substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit C hereto, from the Authority on
behalf of the Company (y) authorizing the establishment of the new
Adjustable Rate and (z) confirming that Bond Counsel has advised the
Authority that it expects to be able to give an opinion on the
effective date of such Change in the Interest Rate Mode to the effect
that such Change in the Interest Rate Mode is authorized by this
Indenture, is permitted under the Act and will not have an adverse
effect on the exclusion of interest on the affected Bonds from gross
income for federal income tax purposes; and
(B) with respect to any Change in the Interest Rate Mode, the Trustee
(and the Auction Agent in the case of any Change in the Interest Rate Mode
to or from an Auction Period Rate), shall receive by 4:00 p.m., New York
City time, on the effective date of such Change in the Interest Rate Mode,
a certificate in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit D hereto, from an
Authorized Company Representative that all of the Bonds tendered or deemed
tendered have been purchased at a price equal to the principal amount
thereof plus premium, if any, plus any accrued and unpaid interest with
funds provided from the remarketing of such Bonds in accordance with the
Remarketing Agreement or the Broker-Dealer, as the case may be, from the
proceeds of a Liquidity Facility, or from funds deposited with the Trustee
or the Registrar and Paying Agent, as the case may be;
(C) with respect to any Change in the Interest Rate Mode, the Trustee
(and the Auction Agent in the case of any Change in the Interest Rate Mode
to or from an Auction Period Rate) shall receive, by telephonic or
electronic means, promptly confirmed in writing, by 9:30 a.m. (New York
City time) on the effective date of such Change in the Interest Rate Mode,
38
an Opinion of Bond Counsel addressed to the Authority and the Trustee to
the effect that such Change in the Interest Rate Mode is authorized by this
Indenture, is permitted under the Act and will not have an adverse effect
on the exclusion of interest on such Bonds from gross income for federal
income tax purposes;
(D) with respect to any Change in the Interest Rate Mode to an
Adjustable Rate (other than to an Auction Period Rate (subject to Section
6.03.1(e) hereof)), the Trustee shall receive a Liquidity Facility meeting
the requirements of this Indenture and the Participation Agreement on or
prior to the effective date of such Change in the Interest Rate Mode which
is, by its terms, in effect on or prior to such effective date; and
(E) with respect to any Change in the Interest Rate Mode to an
Adjustable Rate, during the time that the Bonds are insured by the Bond
Insurer, the Bond Insurer and the Trustee shall receive by 2:00 p.m., New
York City time, on the effective date of such Change in the Interest Rate
Mode, evidence satisfactory to them that the Bonds shall receive an
uninsured rating of at least "A" by S&P or "A2" by Moody's or "A" by Fitch
or an equivalent rating by any nationally recognized rating agency on the
effective date of such Change in the Interest Rate Mode and if the Bonds
are not then insured by the Bond Insurer, the Trustee shall receive by 2:00
p.m., New York City time, on the effective date of such Change in the
Interest Rate Mode, evidence satisfactory to it that the Bonds shall be
rated at least "A" by S&P or "A2" by Moody's or "A" by Fitch or an
equivalent rating by any nationally recognized rating agency on the
effective date of such Change in the Interest Rate Mode.
If any of the conditions referred to in (A) above are not met with respect
to any Change in the Interest Rate Mode from an Auction Period Rate, the Auction
Rate Bonds shall not be subject to mandatory tender for purchase, Existing
Owners shall continue to hold their Auction Rate Bonds and the Auction Period
Rate for the next succeeding Auction Period shall be determined pursuant to the
Auction Procedures applicable to the Auction Rate Bonds. If any of the
conditions referred to in (B),(C),(D) or (E) above is not met with respect to
any Change in the Interest Rate Mode from an Auction Period Rate, the Auction
Rate Bonds shall not be subject to mandatory tender for purchase, Existing
Owners shall continue to hold their Bonds and the Auction Period Rate for the
next succeeding Auction Period shall equal the Maximum Auction Rate as
determined by the Auction Agent on the Auction Date for such Auction Period and
the next succeeding Auction Period shall be a 7-day Auction Period. Thereafter,
the Auction Period Rate for each succeeding Auction Period shall be determined
pursuant to the Auction Procedures applicable to Auction Rate Bonds and each
Auction Period shall continue to be a 7-day Auction Period until the length of
an Auction Period is changed pursuant to Section 2.08(a) of Appendix B. If any
of the conditions referred to in (B), (C), (D) or (E) above is not met with
respect to any Change in the Interest Rate Mode from a Term Rate, the Bonds
shall continue to bear interest at the current Term Rate, as the case may be,
and be subject to the provisions of this Indenture applicable thereto while the
Bonds bear interest at such current Term Rate, as the case may be. If any of the
conditions referred to in (B), (C), (D) or (E) above is not met with respect to
any Change in the Interest Rate Mode from an Adjustable Rate (other than an
Auction Period Rate or a Term Rate), the Bonds shall continue to bear interest
at the Current Adjustable Rate and be subject to the provisions of this
Indenture applicable thereto while the Bonds bear interest at such Current
Adjustable Rate; provided, however, that notwithstanding the failure to meet
39
such conditions, the Bonds shall remain subject to mandatory tender for purchase
on the date that would have been the effective date of the new interest rate
mode if all of such conditions were met on such date. If any of the foregoing
conditions for a Change in the Interest Rate Mode from a Term Rate is not met,
the Trustee shall mail, or cause the Registrar and Paying Agent to mail to the
Authority, the Company and the Holders notice thereof in substantially the form
attached hereto as, or containing substantially the information contained in,
Exhibit E hereto within 3 Business Days after the failure to meet any of such
conditions.
Section 4.02. Optional Conversion to a Fixed Rate. 1. The Authority
reserves the right, at the request of the Company, to fix the rate of interest
per annum which Bonds will bear, in whole, for the balance of the term thereof;
provided however, that the Authority shall not exercise such right and the
Company shall not request the Authority to exercise such right without the
consent of the Bond Insurer, and except on a day on which the affected Bonds may
be redeemed at the option of the Authority. In the event the Authority, at the
request of the Company, as herein provided, exercises its Option to Convert, the
Bonds so converted shall cease to bear interest at the Adjustable Rate then
borne by the Bonds and shall bear interest at a Fixed Rate until maturity,
subject to the terms and conditions hereof (the date on which a Fixed Rate shall
take effect being herein called a "Fixed Rate Conversion Date"). The Option to
Convert may be exercised at any time through a written notice given by the
Authority, at the direction of the Company, not less than 30 nor more than 45
days prior to the proposed Fixed Rate Conversion Date to the Trustee, the
Registrar and Paying Agent, the Remarketing Agent (and the Auction Agent and the
Securities Depository in the case of any change to a Fixed Rate from an Auction
Period Rate), in substantially the form attached hereto as, or containing
substantially the information contained in, Exhibit A hereto. A notice of
conversion to a Fixed Rate shall be effective only if it is accompanied by the
form of opinion that Bond Counsel expects to give to the Authority on a Fixed
Rate Conversion Date to the effect that the establishment of a Fixed Rate is
authorized by this Indenture, is permitted under the Act and will not have an
adverse effect on the exclusion of interest on such Bonds from gross income for
federal income tax purposes.
2. The Trustee shall mail, or cause the Registrar and Paying Agent to mail,
the notice received pursuant to subsection 1 of this Section 4.02 within three
(3) Business Days after receipt thereof to the Holders.
3. A Fixed Rate shall take effect only if
(A) with respect to a change to a Fixed Rate from an Auction Period
Rate, the Trustee and the Auction Agent shall receive:
(i) a certificate of an Authorized Company Representative in
substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit B hereto, by no later than the
tenth day prior to a Fixed Rate Conversion Date stating that a written
agreement has been entered into by the Company and the Remarketing
Agent to remarket the Bonds affected on a Fixed Rate Conversion Date
at a price of not less than 100% of the principal amount thereof,
which written agreement (i) may be subject to reasonable terms and
conditions imposed by the Remarketing Agent which in the judgment of
40
the Remarketing Agent reflect current market standards regarding
investment banking risk and (ii) must include a provision requiring
payment by the Remarketing Agent in same-day funds provided from the
remarketing of such Bonds in accordance with the Remarketing
Agreement, from the proceeds of a Liquidity Facility, or from funds
deposited with the Trustee or the Registrar and Paying Agent, for any
Auction Rate Bonds tendered or deemed tendered; and
(ii) by 11:00 a.m. (New York City time) on the second Business
Day prior to a Fixed Rate Conversion Date, by telecopy or other
similar means, a certificate in substantially the form attached hereto
as, or containing substantially the information contained in, Exhibit
C hereto, from the Authority (y) authorizing the establishment of a
Fixed Rate and (z) confirming that Bond Counsel expects to be able to
give an opinion on a Fixed Rate Conversion Date to the effect that the
change to a Fixed Rate is authorized by this Indenture, is permitted
under the Act and will not have an adverse effect on the exclusion of
interest on the Bonds from gross income for federal income tax
purposes; and
(B) with respect to any change to a Fixed Rate the Trustee (and the
Auction Agent in the case of any change to a Fixed Rate from an Auction
Period Rate) receives on a Fixed Rate Conversion Date:
(i) by 9:30 a.m. (New York City time) an Opinion of Bond Counsel
addressed to the Authority and the Trustee to the effect that the
conversion to a Fixed Rate is authorized by this Indenture, is
permitted under the Act and will not have an adverse effect on the
exclusion of interest on such Bonds from gross income for federal
income tax purposes;
(ii) by 4:00 p.m. (New York City time) a certificate in
substantially the form attached hereto as, or containing substantially
the information contained in, Exhibit D hereto, from an Authorized
Company Representative that all of the Bonds tendered or deemed
tendered have been purchased at a price equal to the principal amount
thereof plus premium, if any, plus any accrued and unpaid interest
with funds provided from the remarketing of such Bonds in accordance
with the Remarketing Agreement, from the proceeds of a Liquidity
Facility, or from funds deposited with the Trustee or the Registrar
and Paying Agent; and
(iii) during the time that the Bonds are insured by the Bond
Insurer, the Bond Insurer and the Trustee shall receive by 2:00 p.m.,
New York City time, on the Fixed Rate Conversion Date, evidence
satisfactory to them that the Bonds shall receive an uninsured rating
of at least "A" by S&P or "A2" by Moody's or "A" by Fitch or an
equivalent rating by any nationally recognized rating agency on the
Fixed Rate Conversion Date, and if the Bonds are not then insured by
the Bond Insurer, the Trustee shall receive by 2:00 p.m., New York
City time, on the Fixed Rate Conversion Date, evidence satisfactory to
it that the Bonds shall be rated at least "A" by S&P or "A2" by
Moody's or "A" by Fitch or an equivalent rating by any nationally
recognized rating agency on the Fixed Rate Conversion Date.
41
In addition, by 2:00 p.m. (New York City time) the Bond Insurer shall
receive evidence satisfactory to it that the Bonds shall be rated at least "A"
by S&P or "A2" by Moody's or "A" by Fitch or an equivalent rating by any
nationally recognized rating agency on the Fixed Rate Conversion Date. If any of
the conditions referred to in (A) above is not met with respect to any Change in
the Interest Rate Mode from an Auction Period Rate, the Auction Rate Bonds shall
not be subject to mandatory tender for purchase, Existing Owners shall continue
to hold their Auction Rate Bonds and the Auction Period Rate for the next
succeeding Auction Period shall be determined pursuant to the Auction Procedures
applicable to the Auction Rate Bonds. If any of the conditions referred to in
(B) above is not met with respect to any Change in the Interest Rate Mode from
an Auction Period Rate, the Auction Rate Bonds shall not be subject to mandatory
tender for purchase, Existing Owners shall continue to hold their Bonds and the
Auction Period Rate for the next succeeding Auction Period shall equal the
Maximum Auction Rate as determined on the Auction Date for such Auction Period
and the next succeeding Auction Period shall be a 7-day Auction Period.
Thereafter, the Auction Period Rate for each succeeding Auction Period shall be
determined pursuant to the Auction Procedures applicable to Auction Rate Bonds
and each Auction Period shall continue to be a 7-day Auction Period until the
length of an Auction Period is changed pursuant to Section 2.08(a) of Appendix
B. If any of the conditions referred to in (B) above is not met with respect to
any Change in the Interest Rate Mode from a Term Rate to a Fixed Rate, the Bonds
shall continue to bear interest at the current Term Rate and be subject to the
provisions of this Indenture applicable thereto while the Bonds bear interest at
such current Term Rate. If any of the conditions referred to in (B) above is not
met with respect to any other Change in the Interest Rate Mode from an
Adjustable Rate (other than an Auction Period Rate or a Term Rate) to a Fixed
Rate, the Bonds shall continue to bear interest at the Current Adjustable Rate
and be subject to the provisions of this Indenture applicable thereto while the
Bonds bear interest at such Current Adjustable Rate; provided, however, that
notwithstanding the failure to meet such conditions, the Bonds shall remain
subject to mandatory tender for purchase on the date that would have been the
effective date of the Fixed Rate if all of such conditions were met on such
date. If any of the foregoing conditions for a Change in the Interest Rate Mode
from a Term Rate to a Fixed Rate is not met, the Trustee shall mail, or cause
the Registrar and Paying Agent to mail to the Authority, the Company and the
Holders notice thereof in substantially the form attached hereto as, or
containing substantially the information contained in, Exhibit E hereto within 3
Business Days after the failure to meet any of such conditions.
Section 4.03. Conversion Generally. 1. Upon any Change in the Interest Rate
Mode to an Auction Period Rate, the Authority and the Trustee, shall take all
steps necessary to comply with any agreement entered into with a Securities
Depository or its nominee pursuant to Section 2.03(5) with respect to such
Change in the Interest Rate Mode, including, without limitation, the purchase
and designation of sufficient CUSIP numbers to comply with the requirements of
such Securities Depository following any such Change in the Interest Rate Mode.
2. The interest rate on less than all Bonds may be converted to a new
Adjustable Rate pursuant to Section 4.01 or to a Fixed Rate pursuant to Section
4.02; provided that the Bond Insurer consents to such partial conversion, and
that the particular Bonds to be converted shall be chosen by the Trustee by lot,
or the Trustee shall direct the Registrar and Paying Agent to so choose by lot;
provided further, however, that the portion of any Bond to be converted shall be
42
in the principal amount of $100,000 or any integral multiple of such amount
during a Commercial Paper Rate Period, a Daily Rate Period, a Weekly Rate Period
or a Monthly Rate Period, $25,000 or any integral multiple thereof during an
Auction Rate Period, or $5,000 or any integral multiple thereof at any other
time and that, in selecting Bonds for conversion, the Trustee or Registrar and
Paying Agent shall treat each Bond as representing that number of Bonds which is
obtained by dividing the principal amount of such registered Bond in excess of
$100,000 by $100,000 during a Commercial Paper Rate Period, a Daily Rate Period,
a Weekly Rate Period or a Monthly Rate Period, $25,000 during an Auction Rate
Period, and $5,000 at any other time (such amounts being hereinafter referred to
as the "applicable units of principal amount"). If it is determined that one or
more, but not all of the $100,000, $25,000 or $5,000 units of principal amount
represented by any such Bond is to be converted, then upon notice of intention
to convert such $100,000, $25,000 or $5,000 unit or units pursuant to Sections
4.01 or 4.02, as the case may be, the Holders of such Bonds shall forthwith
surrender such Bonds to the Registrar and Paying Agent for (1) payment of the
Purchase Price (including the premium, if any, and accrued and unpaid interest
to the date fixed for conversion) of the $100,000, $25,000 or $5,000 unit or
units of principal amount called for conversion and (2) exchange for a new Bond
or Bonds in the aggregate principal amount of the balance of the principal of
such Bonds not subject to conversion. If the Holders of any such Bond of a
denomination greater than $100,000, $25,000 or $5,000 shall fail to present such
Bond to the Registrar and Paying Agent, for payment and exchange as aforesaid,
such Bond shall, nevertheless, become due and payable on the date fixed for
conversion to the extent of the $100,000, $25,000 or $5,000 unit or units of
principal amount subject to such conversion (and to that extent only).
3. Notwithstanding anything in this Article IV to the contrary, the
Authority may not effect a Change in the Interest Rate Mode pursuant to Section
4.01 and the Authority may not exercise its option to convert to a Fixed Rate
pursuant to Section 4.02: (i) if such action would require the payment of a
premium upon purchase of Bonds pursuant to Section 5.04 unless there shall have
been deposited the full amount of such premium in trust with the Trustee prior
to any notification of a change pursuant to Section 4.01 or 4.02; and (ii) if
the request of the Company to convert the Bonds is not accompanied by the
consent of the Bond Insurer.
43
ARTICLE V
REDEMPTION AND PURCHASE OF BONDS
Section 5.01. Optional Redemption. The Bonds shall be subject to
redemption, in whole or in part, at the option of the Authority upon the
direction of the Company, from related payments made by the Company pursuant to
Section 4.02 of the Participation Agreement and the Company Obligation and any
other monies held by the Trustee in the Bond Fund and specifically available to
be applied to the redemption of Bonds as provided in this Section 5.01 and
Section 10.03 hereof:
(a) During any Commercial Paper Rate Period, such Bonds shall be
subject to redemption on each Interest Payment Date, as a whole or in part,
at the principal amount thereof, at a redemption price equal to 100% of the
principal amount.
(b) During any Auction Rate Period, Auction Rate Bonds shall be
subject to redemption on the Business Day immediately succeeding each
Auction Date, as a whole or in part, at a redemption price equal to 100% of
the principal amount thereof plus accrued and unpaid interest to the date
fixed for redemption; provided, however, that not less than $10,000,000 in
aggregate principal amount of the Bonds be outstanding unless otherwise
consented to by the Broker-Dealers.
(c) During any Daily Rate Period, such Bonds shall be subject to
redemption on any Business Day, as a whole or in part, at the principal
amount thereof, plus accrued and unpaid interest to the date fixed for
redemption, if any.
(d) During any Weekly Rate Period, such Bonds shall be subject to
redemption on any Business Day, as a whole or in part, at the principal
amount thereof, plus accrued and unpaid interest to the date fixed for
redemption, if any.
(e) During any Monthly Rate Period, such Bonds shall be subject to
redemption on each Interest Payment Date, as a whole or in part, at the
principal amount thereof.
(f) During any Semi-annual Rate Period, such Bonds shall be subject to
redemption on each Interest Payment Date, as a whole or in part, at the
principal amount thereof.
(g) During any Term Rate or Fixed Rate Period, such Bonds shall be
subject to redemption in whole at any time on any Business Day or in part
on any Interest Payment Date as follows: after the No-Call Period, which
shall begin on the first day of the Calculation Period applicable to such
Bonds or on a Fixed Rate Conversion Date, as the case may be, at a
redemption price equal, initially, to the principal amount thereof, plus a
premium equal to the percentage of the principal amount to be redeemed (the
"Initial Premium"), plus accrued and unpaid interest if paid on a Business
Day other than an Interest Payment Date. The premium percentage, if any,
shall decline by the percentage shown in the Reduction in Premium column on
each anniversary of the date on which such Bonds are first redeemable until
the Bonds shall be redeemable without premium.
44
Calculation Period or Period to Maturity
Applicable to Subject Bonds
Equal to or But Less No-Call Initial Reduction
Greater Than Than Period Premium in Premium
------------ ---- ------ ------- ----------
18 years N/A 8 Years 1 1/2% 1/2%
12 years 18 Years 6 Years 1 1/2
7 Years 12 Years 3 Years 0 0
5 Years 7 Years 2 Years 0 0
4 Years 5 Years 2 Years 0 0
3 Years 4 Years 2 Years 0 0
0 Years 3 Years Not callable
If upon establishment of a Term Rate Period or a Fixed Rate Period, as the case
may be, the Remarketing Agent certifies to the Trustee, Bond Counsel and the
Authority in writing that the schedule is not consistent with then-prevailing
market conditions, the Authority at the request of the Company may revise the
Initial Premium, Reductions in Premium and No-Call Periods without the approval
of the Holders to reflect then-prevailing market conditions, upon receipt of an
opinion of Bond Counsel to the effect that any revisions pursuant to this
paragraph, either by itself or in conjunction with the establishment of a
Calculation Period or a Fixed Rate, as the case may be, are made in accordance
with this Indenture, is permitted under the Act and will not adversely affect
the exclusion of interest on the Bonds from gross income for federal income tax
purposes.
Section 5.02. [Reserved]
Section 5.03. Tender for and Purchase upon Election of Holder. 1. During
any Daily Rate Period or Weekly Rate Period, any Bond or portion thereof in a
principal amount equal to an authorized denomination (so long as the principal
amount not purchased is an authorized denomination) shall be purchased on the
demand of the Holder thereof on any Business Day at a price equal to the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase, upon delivery to the Registrar and Paying Agent and the Remarketing
Agent at the Principal Corporate Trust Office, by the close of business on any
Business Day of a Notice of Election to Tender in substantially the form
attached hereto as, or containing substantially the information contained in,
Exhibit F hereto; provided, however, that the substance of such Notice of
Election to Tender must also be given in writing to the Remarketing Agent prior
to or simultaneously with delivery of such written Notice of Election to Tender
to the Remarketing Agent. The date on which such Bond shall be purchased shall,
at the request of the Holder thereof (i) if the Bond then bears interest at a
Daily Rate, be the date of delivery of such Notice of Election to Tender if such
Notice of Election to Tender is delivered to the Registrar and Paying Agent and
the Remarketing Agent by 10:00 a.m. (New York City time) on such date or may be
any Business Day thereafter, and (ii) if the Bond then bears interest at a
Weekly Rate, shall be a Business Day not prior to the 7th day next succeeding
the date of the delivery of such Notice of Election to Tender to the Registrar
and Paying Agent and the Remarketing Agent.
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2. During any Monthly Rate Period or Semi-annual Rate Period, any Bond or
portion thereof in a principal amount equal to an authorized denomination (so
long as the principal amount not purchased is an authorized denomination) shall
be purchased on the demand of the Holder thereof on the first Business Day
following each Calculation Period at a price equal to the principal amount
thereof, upon delivery to the Registrar and Paying Agent and the Remarketing
Agent, at the Principal Corporate Trust Office of a Notice of Election to Tender
in substantially the form attached hereto as or containing substantially the
information contained in Exhibit F on or prior to a Business Day which is not
less than 10 days, in the case of Bonds bearing interest at a Semi-annual Rate,
or 7-days, in the case of Bonds bearing interest at a Monthly Rate, prior to the
proposed date of purchase; provided, however, that the substance of such Notice
of Election to Tender must also be given in writing to the Remarketing Agent
prior to or simultaneously with delivery of such written Notice of Election to
Tender to the Remarketing Agent.
3. Immediately upon receipt of a Notice of Election to Tender delivered
pursuant to the provisions of this Section 5.03, the Registrar and Paying Agent
shall notify, or cause to be notified, the Trustee, the Company, the Authority
and the Remarketing Agent, by telephone, promptly confirmed in writing, of such
receipt, specifying the contents thereof.
4. Any Notice of Election to Tender shall be irrevocable. If a Holder fails
to deliver the Bonds referred to in such notice to the Registrar and Paying
Agent, such Bonds shall nevertheless be deemed to have been purchased on the
date established for the purchase thereof, no interest shall accrue on such
Bonds from and after the date of purchase and such Holder shall have no rights,
benefit or security hereunder thereafter as the owner of such Bonds except the
right to receive the Purchase Price of such Bonds.
5. A Holder may not tender a Bond to the Registrar and Paying Agent
pursuant to this Section while such Bond bears interest at an Auction Period
Rate, Commercial Paper Rate, Term Rate or Fixed Rate.
6. In the event there is a failure to pay pursuant to the Liquidity
Facility by the Liquidity Facility Provider, the Company may purchase the Bonds
with the consent of the Bond Insurer and the Authority.
Section 5.04. Mandatory Tender for Purchase upon Change in the Interest
Rate Mode or on Business Day Following Certain Calculation Periods. 1. Upon a
Change in the Interest Rate Mode, the Bonds shall be subject to mandatory tender
for purchase in accordance with the terms hereof, on the effective date of such
Change in the Interest Rate Mode at the Purchase Price.
2. During any Term Rate Period or Commercial Paper Rate Period, the Bonds
shall be subject to mandatory tender for purchase in accordance with the terms
hereof on the Business Day immediately following each Calculation Period, each
at a price equal to the Purchase Price.
46
3. Notice of mandatory tender for purchase upon a Change in the Interest
Rate Mode shall be in substantially the form attached hereto as, or contain
substantially the information contained in, Exhibit A hereto.
4. Any such notice of mandatory tender for purchase required by this
Section 5.04 shall be given by the Trustee, in the name of the Authority, or the
Trustee shall cause the Registrar and Paying Agent to give such notice (with
copies thereof to be given to the Remarketing Agent, the Registrar and Paying
Agent, the Company, and in the case of Auction Rate Bonds, the Auction Agent,
the Broker-Dealer and the Authority) by first-class mail to the Holders of the
Bonds subject to purchase at their addresses shown on the books of registry.
5. Bonds held by or for the account of the Company or the issuer of a
Support Facility are not subject to mandatory tender for purchase pursuant to
this Section 5.04.
Section 5.05. Special Tax Redemption Provisions. 1. The Bonds shall be
subject to mandatory redemption as a whole (provided, however, that the Bonds
shall be redeemed in part if the Company obtains an opinion of Bond Counsel to
the effect that, by redeeming such portion of the Bonds, the interest on the
remaining Bonds will not be included for Federal income tax purposes in the
gross income of any owner of the Bonds (other than an owner who is a
"substantial user" of the Project or a "related person" within the meaning of
Section 147(a)(1) of the Code)) at any time at a redemption price equal to 100%
of the principal amount thereof, together with unpaid interest accrued thereon
to the redemption date, if, in a published or private ruling of the Internal
Revenue Service or in a final, nonappealable judicial decision by a court of
competent jurisdiction (provided that the Company has been afforded the
opportunity to participate at its own expense in the proceeding resulting in
such ruling or in the litigation resulting in such decision, as the case may
be), it is determined that, as a result of a failure by the Company to observe
any covenant, agreement or representation in the Participation Agreement or the
Tax Regulatory Agreement, interest on the Bonds is included for Federal income
tax purposes in the gross income (as defined in Section 61 of the Code) of any
owner of a Bond (other than a "substantial user" of the Project or a "related
person" within the meaning of Section 147(a)(1) of the Code), and, in such
event, the Bonds shall be subject to such mandatory redemption not more than one
hundred eighty (180) days after receipt by the Trustee of notice of such
published or private ruling or judicial decision and a demand for redemption of
the Bonds. The occurrence of an event requiring the redemption of the Bonds
under this paragraph does not constitute an event of default under the Company
Obligation or under the Indenture and the sole obligation in such event shall be
for the Company to prepay the Company Obligation in an amount sufficient to
redeem the Bonds to the extent required by this paragraph.
2. The Bonds may be redeemed in whole or in part at any time at a
redemption price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest thereon to the redemption date, if the Company has
determined, on the basis of the advice of Bond Counsel that, as a result of any
action taken or expected to be taken, or failure to take action, a reasonable
risk exists that interest on the bonds will not be excludable from gross income
for federal tax purposes. Such conclusion and certification shall be evidenced
by delivery to the Trustee of a written certificate of an Authorized Company
Representative to the effect that the Company has reached such conclusion,
together with a copy of such advice of Bond Counsel. While the Bonds bear
interest at an Auction Period Rate, in any Auction Period other than a daily
47
Auction Period, the redemption shall occur on the Interest Payment Date
immediately preceding such redemption date. When in a Special Rate Period, the
Bonds may be redeemed prior to the end of the Special Rate Period. The
occurrence of an event permitting the redemption of the Bonds under this
paragraph does not constitute an event of default under the Company Obligation
or under the Indenture and the sole option in such event shall be for the
Company to prepay the Company Obligation in an amount sufficient to redeem the
Bonds to the extent required by this paragraph.
3. The Bonds will also be subject to mandatory redemption at a redemption
price equal to one hundred three percent (103%) of the principal amount thereof
plus unpaid interest accrued thereon to the redemption date if the Company
reasonably concludes and certifies to the Trustee in writing that the business,
properties, condition (financial or otherwise), operations or business prospects
of the Company will be materially and adversely affected unless the Company
takes or omits to take a specified action and that the Company has been advised
in writing by Bond Counsel that the specified action or omission would cause the
use of the Project to be such that, pursuant to Section 150 of the Code, the
Company would not be entitled to deduct the interest on the Bonds for purposes
of determining the Company's Federal taxable income, for a period of not less
than ninety (90) consecutive or nonconsecutive days during a twelve-month
period. Such conclusion and certification shall be evidenced by delivery to the
Trustee of a written certificate of an Authorized Company Representative to the
effect that the Company has reached such conclusion, together with a certified
copy of a resolution of the Board of Trustees of the Company authorizing such
certificate and a copy of such advice of Bond Counsel. In the event that the
Bonds become subject to redemption as provided in this paragraph, the Bonds will
be redeemed in whole unless redemption of a portion of the Bonds outstanding
would, in the opinion of Bond Counsel, have the result that interest payable on
the Bonds remaining outstanding after such redemption would be deductible for
purposes of determining the Federal taxable income of the Company, and, in such
event, the Bonds to be redeemed shall be selected (in the principal amount of
$5,000 or any integral multiple thereof) by lot, in such amount as is necessary
to accomplish that result. The occurrence of an event requiring the redemption
of the Bonds under this paragraph does not constitute an event of default under
the Company Obligation or under the Indenture and the sole option in such event
shall be for the Company to prepay the Company Obligation in an amount
sufficient to redeem the Bonds to the extent required by this paragraph.
Section 5.06. Redemption at Demand of the State. In accordance with the
provisions of Section 1864 of the Act, the State of New York may, upon
furnishing sufficient funds therefor, require the Authority to redeem prior to
maturity, as a whole, the Bonds on any Interest Payment Date not less than
twenty years after the Closing Date. Any such redemption shall be at a
redemption price equal to the optional redemption price, if any, applicable on
such date set forth in Section 5.01 or if no such optional redemption price is
applicable at a redemption price of 105% of the principal amount thereof, in
either case, together with accrued and unpaid interest, if any, to the date
fixed for redemption, all in the manner provided in this Article V. The
Authority shall deposit any such funds received by it with the Trustee. Upon
such redemption and notwithstanding anything to the contrary in this Indenture,
the Trustee shall assign the Company Obligation relating to the Bonds to or as
directed by the Authority.
48
Section 5.07. Mandatory Tender for Purchase Upon Expiration of any Support
Facility or Upon Delivery of an Alternate Support Facility. 1. Except as
otherwise set forth in the last sentence of this subsection 1, on the third
Business Day next preceding the date of expiration of any Support Facility, the
Bonds shall be subject to mandatory purchase at the Purchase Price, unless on or
prior to the 35th day prior to such date of expiration the Company on behalf of
the Authority has furnished to the Trustee an extension of such Support
Facility. The Bonds shall also be subject to mandatory purchase at the Purchase
Price, on the date there is delivered an Alternate Support Facility meeting the
requirements of Section 6.02. No tender for purchase of any Bonds shall be
required pursuant to this Section 5.07 during any Auction Rate Period or a Fixed
Rate Period.
2. Notice of the mandatory tender for purchase pursuant to this Section
5.07 shall be given on or prior to the 30th day before the expiration date of
the expiring Liquidity Facility or on or prior to the 30th day before the
delivery of any Alternate Support Facility meeting the requirements of Section
6.02, as the case may be, by the Trustee in the name of the Authority (with
copies thereof given to the Authority, the Remarketing Agent, the issuer of a
Liquidity Facility, the Company and the Registrar and Paying Agent) by
first-class mail to the Holders of the Bonds subject to mandatory tender for
purchase at their addresses shown on the books of registry. Such notice shall be
in substantially the form attached hereto as, or contain substantially the
information contained in, Exhibit G hereto.
3. Bonds held by or for the account of the Company or the issuer of a
Liquidity Facility are not subject to mandatory tender for purchase pursuant to
this Section 5.07.
Section 5.08. Mandatory Tender Upon Occurrence of any Terminating Event. 1.
Except as otherwise set forth in the last sentence of this subsection 1, upon
the occurrence of any Terminating Event, the Bonds shall be subject to mandatory
tender for purchase at the Purchase Price on a Business Day selected by the
Trustee; provided, however, that (i) such mandatory tender shall not occur later
than the 5th day after receipt of notice of the Terminating Event by the Trustee
and (ii) such mandatory tender date shall be a Business Day. The Bonds will not
be subject to mandatory tender for purchase pursuant to this Section 5.08 during
any Auction Rate Period or a Fixed Rate Period.
2. Notice of the mandatory tender for purchase required by this Section
5.08 shall be in substantially the form attached hereto as, or contain
substantially the information contained in, Exhibit G hereto and shall be given
to the Holders of the Bonds subject to mandatory tender for purchase at their
addresses shown on the books of registry on or before the first Business Day
after receipt of notice of a Terminating Event from the issuer of the Liquidity
Facility by the Trustee, in the name of the Authority, or the Trustee shall
cause the Registrar and Paying Agent to give such notice, by first-class mail to
the Holders of the Bonds subject to purchase at their address shown on the books
of registry (with copies thereof given to the Authority, the Remarketing Agent,
the Company and the Registrar and Paying Agent).
3. Bonds held by or for the account of the Company or the issuer of a
Liquidity Facility are not subject to mandatory tender for purchase pursuant to
this Section 5.08.
49
Section 5.09. General Provisions Applicable to Mandatory and Optional
Tenders for Purchase of Bonds. 1. If interest has been paid on the Bonds, or an
amount sufficient to pay interest thereon has been deposited in the Bond Fund,
or an amount sufficient to pay accrued interest thereon, if any, has been set
aside in the Bond Purchase Fund held under the Bond Purchase Trust Agreement,
and the Purchase Price shall be available in the Bond Purchase Fund for payment
of Bonds subject to tender for purchase pursuant to Section 5.03, 5.04, 5.07 or
5.08, and if any Holder fails to deliver or does not properly deliver the Bonds
to the Registrar and Paying Agent for which a Notice of Election to Tender has
been properly filed or which are subject to mandatory tender for purchase on the
purchase date therefor, such Bonds shall nevertheless be deemed tendered and
purchased on the date established for the purchase thereof, no interest shall
accrue on such Bonds from and after the date of purchase and such former Holders
shall have no rights, benefits or security hereunder as the registered owners of
such Bonds, except the right to receive the Purchase Price of and interest to
the purchase date, if any, on such Bonds upon delivery thereof to the Registrar
and Paying Agent in accordance with the provisions hereof. The purchaser of any
such Bonds remarketed by the Remarketing Agent, or the issuer of any Support
Facility, to the extent Bonds are purchased with the proceeds of a draw on, or
borrowing or payment under, the Support Facility, shall be treated as the
registered owner thereof for all purposes of the Indenture. The payment of Bonds
pursuant to Section 5.03 shall be subject to delivery of such Bonds duly
endorsed in blank for transfer or accompanied by an instrument of transfer
thereof in form satisfactory to the Registrar and Paying Agent executed in blank
for transfer at the Principal Corporate Trust Office of the Registrar and Paying
Agent at or prior to 10:00 a.m. (11:30 a.m. for Bonds bearing interest at the
Weekly Rate and 12:00 noon for Bonds bearing interest at the Daily Rate) (New
York City time), on a specified purchase date. The Registrar and Paying Agent
may refuse to make payment with respect to any Bonds tendered for purchase
pursuant to Section 5.03, 5.04, 5.07 or 5.08 not endorsed in blank or for which
an instrument of transfer satisfactory to the Registrar and Paying Agent has not
been provided.
2. The Purchase Price of Bonds subject to tender for purchase pursuant to
Section 5.03, 5.04, 5.07 or 5.08 in an aggregate principal amount of at least
one million dollars ($1,000,000) shall be payable in immediately available funds
or by wire transfer upon written notice from the Holder thereof containing the
wire transfer address (which shall be in the continental United States) to which
such Holder wishes to have such wire directed, if such written notice is
received by the Registrar and Paying Agent not less than five days prior to the
related purchase date.
3. Bonds subject to mandatory tender for purchase pursuant to Section 5.07
or 5.08 shall not be remarketed unless and until an Alternate Support Facility
meeting the requirements of Section 6.02 of the Indenture is in full force and
effect; provided, however, that Bonds may be remarketed and no such Alternate
Support Facility is required to be in effect if, at the time the Bonds are
sought to be remarketed, the Bonds bear interest at an Auction Period Rate or a
Fixed Rate.
4. In the event Bonds tendered for purchase pursuant to Section 5.03 or
5.04 shall be paid from a drawing under a Liquidity Facility, such Bonds shall
not be remarketed unless and until the Trustee or the Registrar and Paying Agent
has been notified by the Liquidity Facility Issuer and, upon receipt of such
notice, the Trustee or the Registrar and Paying Agent has notified the
Remarketing Agent that the amount available for a drawing under such Liquidity
Facility has been restored.
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Section 5.10. Selection of Bonds to be Redeemed. A redemption of Bonds
shall be a redemption of the whole or of any part of the Bonds from any funds
available for that purpose in a principal amount equal to an authorized
denomination (so long as the principal amount not redeemed is an authorized
denomination). If less than all Bonds shall be redeemed, the particular Bonds to
be redeemed shall be chosen by the Trustee, or the Trustee shall direct the
Registrar and Paying Agent to so choose, as hereinafter provided. If less than
all the Bonds shall be called for redemption under any provision of this
Indenture permitting such partial redemption, the particular Bonds or portions
of Bonds to be redeemed shall be selected (a) first, from Bonds held or owned by
or for the issuer of a Support Facility pursuant to any Support Facility, (b)
second, from Bonds for which the Registrar and Paying Agent has received, prior
to such selection, a Notice of Election to Tender requiring the Registrar and
Paying Agent to purchase such Bonds on the date on which the Bonds being
selected are to be redeemed and (c) third, from all other Bonds then
Outstanding, by lot by the Trustee or, upon direction of the Trustee, by lot by
the Registrar and Paying Agent; provided, however, that the portion of any Bond
to be redeemed shall be in the principal amount of $100,000 or any integral
multiple thereof during a Commercial Paper Rate Period, a Daily Rate Period, a
Weekly Rate Period or a Monthly Rate Period, $25,000 or any integral multiple
thereof during an Auction Rate Period, or $5,000 or any integral multiple
thereof at any other time and that, in selecting Bonds for redemption, the
Trustee or Registrar and Paying Agent shall treat each Bond as representing that
number of Bonds which is obtained by dividing the principal amount of such
registered Bond in excess of $100,000 by $100,000 during a Commercial Paper Rate
Period, a Daily Rate Period, a Weekly Rate Period or a Monthly Rate Period,
$25,000 during an Auction Rate Period, and $5,000 at any other time (such
amounts being hereinafter referred to as the "applicable units of principal
amount"). If it is determined that one or more, but not all of the $100,000,
$25,000 or $5,000 units of principal amount represented by any such Bond is to
be called for redemption, then upon notice of intention to redeem such $100,000,
$25,000 or $5,000 unit or units, the Holders of such Bonds shall forthwith
surrender such Bonds to the Registrar and Paying Agent for (1) payment of the
redemption price (including the redemption premium, if any, and accrued interest
to the date fixed for redemption) of the $100,000, $25,000 or $5,000 unit or
units of principal amount called for redemption and (2) exchange for a new Bond
or Bonds of the aggregate principal amount of the unredeemed balance of the
principal of such Bonds. If the Holders of any such Bond of a denomination
greater than $100,000, $25,000 or $5,000 shall fail to present such Bond to the
Registrar and Paying Agent, for payment and exchange as aforesaid, such Bond
shall, nevertheless, become due and payable on the date fixed for redemption to
the extent of the $100,000, $25,000 or $5,000 unit or units of principal amount
called for redemption (and to that extent only).
Section 5.11. Notice of Redemption. 1. Notice of redemption pursuant to
this Article V shall be given by the Trustee by mailing a copy of the redemption
notice by first-class mail at least 30 days prior to the date fixed for
redemption to the Holders of the Bonds to be redeemed at the addresses shown on
the registration books maintained by the Registrar and Paying Agent. A copy of
such notice of redemption shall be given by the Trustee to the Auction Agent at
least 30 days prior to the date fixed for redemption. Any redemption may be
conditioned on the receipt of moneys by the Registrar and Paying Agent
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sufficient to pay the redemption price on the redemption date of Bonds called
for redemption, if the notice of redemption so states. The Trustee shall receive
notice of a redemption from the Authority at least 40 days prior to the date
fixed for redemption.
2. Each notice of redemption shall state: (i) the full title of the Bonds,
the redemption date, the place of redemption and the redemption price payable
upon such redemption; (ii) that the interest on the Bonds, or on the principal
amount thereof to be redeemed, shall cease to accrue from and after such
redemption date and (iii) that on said date there will become due and payable on
the Bonds the principal amount thereof to be redeemed and the interest accrued
on such principal amount to the redemption date, if any, and the premium, if
any, thereon. Each notice of redemption mailed to the Holder of the Bonds shall,
if less than the entire principal sum thereof is to be redeemed, also state the
principal amount thereof and the distinctive numbers of the Bonds to be redeemed
and that such Bonds must be surrendered to the Trustee in exchange for the
payment of the principal amount thereof to be redeemed and the issuance of a new
Bond equaling in principal amount that portion of the principal sum not to be
redeemed of the Bonds to be surrendered. The failure to give notice to any
Holder of a Bond or any defects in such notice shall not affect the proceedings
for the redemption of the Bonds for which notice has been properly given.
3. If less than all of the Auction Rate Bonds of a Series are to be
redeemed and such Auction Rate Bonds are held by the Securities Depository, the
Trustee shall include in the notice of redemption delivered to the Securities
Depository: (i) under an item entitled "Publication Date for Security Depository
Purposes," a date that is three Business Days after the Auction Date immediately
preceding such redemption date; and (ii) an instruction to the Securities
Depository to (x) determine on such Publication Date after the Auction held on
the immediately preceding Auction Date has settled, the Securities Depository
participants whose Security Depository positions will be redeemed and the
principal amount of such Auction Rate Bonds to be redeemed from each such
position (the "Securities Depository Redemption Information"), and (y) notify
the Trustee immediately after such determination of the positions of the
Securities Depository participants in such Auction Rate Bonds immediately
following such Auction settlement, and the Securities Depository Redemption
Information. Immediately upon receipt of the notice referred to in (x) of the
preceding sentence, the Trustee shall send a copy of such notice to the Auction
Agent.
Section 5.12. Bonds purchased for account of Liquidity Facility Issuer.
Bonds subject to mandatory purchase pursuant to Section 5.03, 5.04, 5.07 or 5.08
shall be deemed to be purchased by the Company except to the extent the
Liquidity Facility expressly provides that the Bonds are to be purchased by the
issuer of the Liquidity Facility in which event such Bonds shall be deemed to be
purchased by the issuer of the Liquidity Facility in a principal amount equal to
the amount of a draw on, or borrowing or payment under, the Liquidity Facility
for the payment of Bonds subject to purchase, upon the deposit with the
Registrar and Paying Agent of the proceeds of such draw on, or borrowing or
payment under, the Liquidity Facility in an amount equal to the principal of
such Bonds plus accrued interest thereon to the purchase date, and such Bonds
shall not be deemed paid and shall remain outstanding hereunder until the issuer
of the Liquidity Facility has been reimbursed for such draws on, or borrowings
or payments under, the Liquidity Facility to pay such principal and interest.
Unless the issuer of any Liquidity Facility shall otherwise direct, any Bonds
52
purchased by the issuer of the Liquidity Facility shall be immediately
registered in the name of the Company except to the extent the Liquidity
Facility expressly provides that the Bonds are to be purchased by the issuer of
the Liquidity Facility in which event such Bonds shall be registered in the name
of the issuer of the Liquidity Facility as a Holder and the issuer of the
Liquidity Facility shall have all rights of a Holder of Bonds under this
Indenture.
Section 5.13. Effect of Redemption. If the Bonds have been duly called for
redemption and notice of the redemption thereof has been duly given or provided
for as hereinbefore provided and if monies for the payment of the Bonds (or of
the principal amount thereof to be redeemed) and the interest to accrue to the
redemption date on the Bonds (or of the principal amount thereof to be
redeemed), if any, and the premium, if any, thereon are held for the purpose of
such payment by the Trustee, then the Bonds (or the principal amount thereof to
be redeemed) shall on the redemption date designated in such notice, become due
and payable and interest on the Bonds (or the principal amount thereof to be
redeemed) so called for redemption shall cease to accrue from such date and the
Holder thereof shall thereafter have no rights hereunder as the Holder of such
Bonds (or the principal amount thereof to be redeemed) except to receive the
principal amount thereof and premium (if any) thereon and interest to the
redemption date.
Section 5.14. Cancellation of Redeemed Bonds. Any Bonds surrendered or
redeemed pursuant to the provisions of this Article shall be cancelled by the
Registrar and Paying Agent.
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ARTICLE VI
SUPPORT FACILITY
Section 6.01. Support Facility - General. Pursuant to the Participation
Agreement, as long as the Policy is in effect, the Company has agreed not to
request that the interest rate mode applicable to the Bonds be adjusted to an
Adjustable Rate or a Fixed Rate unless on the effective date of the applicable
Change in the Interest Rate Mode the Bonds shall receive a long-term rating of
at least "AAA" by S&P and "AAA" by Moody's, and a short-term rating of at least
"A-1+" by S&P and "VMIG 1" by Moody's, or an equivalent rating by any nationally
recognized rating agency, as applicable. If the Policy is not in effect, the
Company may request that the interest rate mode applicable to the Bonds be
adjusted to an Adjustable Rate or a Fixed Rate unless on the effective date of
the applicable Change in the Interest Rate Mode the Bonds shall receive a
long-term rating of at least "A" by S&P and "A2" by Moody's or "A" by Fitch or
an equivalent rating by any nationally recognized rating agency, as applicable.
Such rating of the Bonds may, but is not required to, be achieved by obtaining a
Support Facility which meets the requirements of this Article VI. The Company
has further agreed to maintain a Liquidity Facility meeting the requirements of
the Participation Agreement with respect to the Bonds at all times, except with
respect to Bonds bearing interest at an Auction Period Rate or a Fixed Rate. A
Liquidity Facility also must be in effect on or prior to the effective date of
any Change in the Interest Rate Mode to an Adjustable Rate (other than a Change
in the Interest Rate Mode to an Auction Rate Period). Bond Insurer consent shall
be required for the selection of the issuer of any Liquidity Facility and the
terms thereof. The Trustee shall be furnished with a certified copy of any
Support Facility obtained pursuant to this Section 6.01.
Any Support Facility Issuer not located in New York State shall provide the
Trustee with a list of holidays on which it is closed through the next
succeeding January 1 at the beginning of the term of such Support Facility and
by January 1 of each year thereafter.
Section 6.02. Support Facility - Delivery of an initial Liquidity Facility
and Alternate Support Facility. 1. At any time, the Authority may, at the
request of the Company, provide for the delivery to the Trustee of an initial
Liquidity Facility or an Alternate Support Facility. The termination date of
such initial Liquidity Facility or such Alternate Support Facility, as the case
may be, shall be a date not earlier than 364 days from its date of issuance,
subject to earlier termination upon the occurrence of (i) a Terminating Event or
another event of default under the related reimbursement agreement or other
corresponding agreement relating to such initial Liquidity Facility or Alternate
Support Facility, as the case may be, (ii) the issuance of an alternate
Liquidity Facility or a subsequent Alternate Support Facility, as the case may
be, (iii) payment in full of the Outstanding Bonds or (iv) in the case of an
alternate Liquidity Facility, a Change in the Interest Rate Mode to an Auction
Rate Period or to a Fixed Rate. Any Liquidity Facility shall specifically allow,
in the case of occurrence of any event or events which under the terms of such
Liquidity Facility or any agreement providing for the issuance thereof would
cause the termination or expiration of such Liquidity Facility, for the
mandatory tender of Bonds pursuant to Section 5.08 with a draw on or borrowing
or payment under such Liquidity Facility prior to such termination or
expiration. At least 15 days prior to the date of the delivery of an initial
Liquidity Facility or an Alternate Support Facility to the Trustee, the Company
shall furnish to the Trustee on behalf of the Authority (a) an opinion of Bond
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Counsel addressed to the Trustee stating that the delivery of such initial
Liquidity Facility or Alternate Support Facility, as the case may be, to the
Trustee is authorized under this Indenture and complies with the terms hereof
and (b) in the case of an Alternate Support Facility, confirmation from S&P, if
the Bonds are then rated by S&P, from Moody's, if the Bonds are then rated by
Moody's, or another rating agency, if the Bonds are then rated by such rating
agency, to the effect that such rating agency has reviewed the proposed
Alternate Support Facility and that the substitution of the proposed Alternate
Support Facility for the Support Facility will not, by itself, result in a
reduction or withdrawal of its long or short-term rating of the Bonds below the
rating category of S&P or Moody's or such other rating agency, as the case may
be, then in effect with respect to the Bonds.
2. The Authority may obtain an additional Credit Facility Issuer if the
Bond Insurer receives a long-term rating of less than "AA" by S&P and "AA" by
Moody's.
3. Nothing contained herein shall prevent the Authority, at the request of
the Company and with the consent of the Bond Insurer, from delivering an
Alternate Support Facility in substitution for a Support Facility which will
result in a decline in the short-term assigned to such Bonds by Moody's or S&P
or such other rating agency as a result of the Alternate Support Facility;
provided, that (i) the opinion of Bond Counsel referred to in the preceding
paragraph is obtained; provided that such opinion shall also be to the effect
that delivery of such Alternate Support Facility will not adversely affect the
exclusion from gross income of interest on the Bonds for federal income tax
purposes and (ii) all Outstanding Bonds are subject to mandatory tender for
purchase pursuant to Section 5.07 (unless the Bonds bear interest at an Auction
Period Rate or a Fixed Rate). The Authority, or the Company on behalf of the
Authority, shall deliver notice to the Trustee of the substitution of an
Alternate Support Facility which will result in a decline in the short-term or
long-term ratings assigned to the Bonds pursuant to this subsection 2 of Section
6.02 at least forty-five (45) days before the date of substitution.
Section 6.03. Provisions with respect to the Bond Insurer. 1.
Notwithstanding anything else to the contrary herein and so long as the
conditions set forth in Section 6.04 hereof are met, the Trustee and the
Authority (and, in the case of subsection (c), the Registrar and Paying Agent)
agree:
(a) If, on the interest payment date for the Bonds there is not on
deposit with the Trustee sufficient moneys available to pay all principal
of and interest on the Bonds due on such date, the Trustee shall
immediately notify the Bond Insurer and U.S. Bank Trust National
Association, New York, New York or its successor as its Fiscal Agent (the
"Fiscal Agent") of the amount of such deficiency. If, by said interest
payment date, such deficiency has not been provided to the Trustee, the
Trustee shall simultaneously make available to the Bond Insurer and to the
Fiscal Agent the registration books for the Bonds maintained by the
Registrar and Paying Agent. In addition:
(i) The Trustee shall provide the Bond Insurer with a list of the
Bondholders entitled to receive principal or interest payments from
the Bond Insurer under the terms of the Municipal Policy and shall
make arrangements for the Bond Insurer and its Fiscal Agent (1) to
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mail checks or drafts to Bondholders entitled to receive full or
partial interest payments from the Bond Insurer and (2) to pay
principal of the Bonds surrendered to the Fiscal Agent by the
Bondholders entitled to receive full or partial principal payments
from the Bond Insurer; and
(ii) The Trustee shall, at the time it makes the registration
books available to the Bond Insurer pursuant to (i) above, notify
Bondholders entitled to receive the payment of principal of or
interest on the Bonds from the Bond Insurer (1) as to the fact of such
entitlement, (2) that the Bond Insurer will remit to them all or part
of the interest payments coming due subject to the terms of the
Municipal Policy, (3) that, except as provided in paragraph (b) below,
in the event that any Bondholder is entitled to receive full payment
of principal from the Bond Insurer, such Bondholder must tender his
Bond with the instrument of transfer in the form provided on the Bond
executed in the name of the Bond Insurer, and (4) that, except as
provided in paragraph (b) below, in the event that such Bondholder is
entitled to receive partial payment of principal from the Bond
Insurer, such Bondholder must tender his Bond for payment first to the
Trustee, which shall note on such Bond the portion of principal paid
by the Trustee, and then, with an acceptable form of assignment
executed in the name of the Bond Insurer, to the Fiscal Agent, which
will then pay the unpaid portion of principal to the Bondholder
subject to the terms of the Policy.
(b) In the event that a Responsible Officer of the Trustee receives
written notice that any payment of principal of or interest on a Bond has
been recovered from a Bondholder pursuant to the United States Bankruptcy
Code by a trustee in bankruptcy in accordance with the final, nonappealable
order of a court having competent jurisdiction, the Trustee shall, at the
time it provides notice to the Bond Insurer pursuant to the Policy, notify
all Bondholders that in the event that any Bondholder's payment is so
recovered, such Bondholder will be entitled to payment from the Bond
Insurer to the extent of such recovery, and the Trustee shall furnish to
the Bond Insurer its records evidencing the payments of principal of and
interest on the Bonds which have been made by the Trustee and subsequently
recovered from Bondholders, and the dates on which such payments were made.
(c) The Bond Insurer shall, to the extent it makes payment of
principal of or interest on the Bonds, become subrogated to the rights of
the recipients of such payments in accordance with the terms of the
Municipal Policy and, to evidence such subrogation, (i) in the case of
subrogation as to claims for past due interest, the Trustee shall note the
Bond Insurer's rights as subrogee on the registration books maintained by
the Trustee upon receipt from the Bond Insurer of proof of the payment of
interest thereon to the Bondholders of such Bonds and (ii) in the case of
subrogation as to claims for past due principal, the Trustee shall note the
Bond Insurer's rights as subrogee on the registration books for the Bonds
maintained by the Registrar and Paying Agent upon receipt of proof of the
payment of principal thereof to the Bondholders of such Bonds.
Notwithstanding anything in Indenture or the Bonds to the contrary, the
Trustee shall make payment of such past due interest and past due principal
directly to the Bond Insurer to the extent that the Bond Insurer is a
subrogee with respect thereto.
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(d) The Trustee will accordingly pay to the Bond Insurer the amount of
such principal and interest (including principal and interest recovered
under subparagraph (ii) of the first paragraph of the Policy, which
principal and interest shall be deemed past due and not to have been paid),
with interest thereon as provided in this Indenture, the Participation
Agreement and the Bonds, but only from the sources and in the manner
provided herein for the payment of principal of and interest on the Bonds
to Bondholders, and will otherwise treat the Bond Insurer as the owner of
such rights to the amount of such principal and interest.
(e) The Bond Insurer shall receive notice of the resignation or
removal of the Trustee and the appointment of a successor thereto from the
Company.
(f) The Bond Insurer shall receive copies of all notices required to
be delivered to Bondholders and, on an annual basis, copies of the
Company's audited financial statements and Annual Budget from the Company.
2. Any notice that is required to be given to a holder of the Bond or to
the Trustee pursuant to the Indenture shall also be provided to the Bond
Insurer, and all notices required to be given to the Bond Insurer under the
Indenture shall be delivered pursuant to Section 18.09.
Section 6.04. Rights of Credit Facility Issuer. Notwithstanding any other
provision of this Indenture to the contrary, the Credit Facility Issuer shall be
deemed to be the sole Holder of the Bonds when the approval, consent (except
with respect to the consent that pursuant to Section 15.02 is required to be
obtained from the Holders of all Bonds Outstanding which would be affected by an
amendment or modification to this Indenture described in clauses (a), (b) or (e)
of Section 15.02), direction or any other action of the Holders of such Bonds is
required or may be exercised under this Indenture, and shall have the right to
give notice of, and to control and direct the enforcement of all rights and
remedies granted to the Holders of the Bonds or the Trustee for the benefit of
the Holders upon, default hereunder or under the Company Obligation, including,
without limitation: (x) the right to accelerate the principal of the Bonds as
provided in the Indenture, and (y) the right to annul any declaration of
acceleration, and the Credit Facility Issuer shall also be entitled to approve
all waivers of Events of Default, so long as (i) the Credit Facility Issuer is
and remains solvent and not party to any proceeding for the rehabilitation,
liquidation, conservation or dissolution of the Credit Facility Issuer; (ii) the
Credit Facility is in full force and effect; and (iii) the Credit Facility
Issuer shall have made and be continuing to make all payments required to be
made and meet all of its obligations required to be met under the Credit
Facility. So long as those conditions are met the Credit Facility Issuer shall
also be treated as a third party beneficiary hereunder and as a party entitled
to (i) notify the Trustee of the occurrence of an Event of Default and (ii)
request the Trustee to intervene in judicial proceedings that affect Bonds, the
payment of which is supported by such Credit Facility Issuer, and the security
therefor; provided that the Trustee shall be entitled to indemnity satisfactory
to it prior to such intervention; and the Trustee shall accept notice of an
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Event of Default from the Credit Facility Issuer. So long as the conditions
specified in clauses (i), (ii) and (iii) of the first sentence of this Section
are being met with respect to the Bond Insurer and the Municipal Policy, the
Bond Insurer shall be the sole Credit Facility Issuer and neither the Authority
nor the Trustee shall appoint, or consent to or accept the appointment of, an
additional Credit Facility Issuer.
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ARTICLE VII
GENERAL TERMS AND PROVISIONS OF BONDS
Section 7.01. Execution and Authentication of Bonds. The Bonds shall be
executed on behalf of the Authority by the manual or facsimile signature of its
Chair, Vice-Chair, President, Treasurer or any Vice President and shall be
sealed with the seal of the Authority, or in lieu thereof shall bear a
lithographed, engraved or otherwise reproduced facsimile of such seal attested
by the manual or facsimile signature of its Vice President, Treasurer, Secretary
or an Assistant Secretary.
Bonds bearing the manual signature of an officer of the Authority
authorized to execute such Bonds in office on the date of such manual signing
thereof and Bonds bearing the facsimile signature of an officer of the Authority
authorized to execute such Bonds in office on the date of the reproducing of
such facsimile signature on such Bonds, shall be valid and binding obligations
in accordance with their terms, notwithstanding that before the delivery thereof
and payment therefor the person whose signature appears thereon shall have
ceased to be such officer.
Only Bonds having endorsed thereon a certificate of authentication
substantially in the form set forth in Article XVII, duly executed by the
Trustee shall be entitled to any right or benefit under this Indenture. No Bonds
shall be valid or obligatory for any purpose unless and until such certificate
of authentication shall have been duly executed by the Trustee, and such
certificate of the Trustee upon a Bond shall be conclusive evidence that such
Bond has been duly authenticated and delivered under this Indenture and that the
Holder thereof is entitled to the benefits of this Indenture. The Trustee's
certificate of authentication on any Bond shall be deemed to have been duly
executed if signed by an authorized officer of the Trustee.
Section 7.02. Books of Registry. The Registrar and Paying Agent shall keep
or cause to be kept at its principal office books (herein referred to as the
"books of registry" or "registration books") for the registration and transfer
of the Bonds. Upon presentation at its applicable Principal Corporate Trust
Office for such purpose the Registrar and Paying Agent, under such reasonable
regulations as it may prescribe, shall register or transfer, or cause to be
registered or transferred, on said books of registry, the Bonds as hereinafter
set forth. The books of registry shall at all times during business hours be
open for inspection by the Authority, the Company, the Bond Insurer and the
Trustee or their duly authorized agents or representatives upon reasonable prior
notice.
Section 7.03. Transfer, Registration and Exchange of Bonds. The transfer of
the Bonds may be registered only upon the books of registry required to be kept
pursuant to Section 7.02 upon surrender thereof to the Registrar and Paying
Agent, together with an assignment duly executed by the Holder thereof or his or
her duly authorized agent and accompanied by a guarantee of signature, each in
such form as shall be satisfactory to the Registrar and Paying Agent. Upon any
such registration of transfer the Authority shall execute and the Trustee shall
authenticate and deliver in exchange for such Bonds a new Bond or Bonds
registered in the name of the transferee or transferees for a like aggregate
principal amount, of any denomination or denominations authorized by this
Indenture. No transfer of any Bond shall be effective until entered on the books
of registry.
59
Any Bond surrendered in any such registration of transfer shall forthwith
be cancelled by the Trustee. Any Bonds registered and transferred to a new
Holder pursuant to this Section shall be delivered to the Holder at the
applicable Principal Corporate Trust Office of the Registrar and Paying Agent or
sent by first-class mail to the Holder at his or her request, risk and expense.
Bonds, upon surrender thereof at the applicable Principal Corporate Trust
Office of the Registrar and Paying Agent, together with an assignment duly
executed by the Holder or his or her authorized agent and accompanied by a
guarantee of signature, each in such form as shall be satisfactory to the
Registrar and Paying Agent, may, at the option of the Holder thereof, be
exchanged for an equal aggregate principal amount of Bonds of any denomination
or denominations authorized by this Indenture and in the same form as the Bonds
surrendered for exchange. All Bonds so surrendered pursuant to this Section
shall be cancelled by the Trustee.
Any Bonds to be delivered to the Holder upon any such exchange shall be
delivered to the Holder at the applicable Principal Corporate Trust Office of
the Registrar and Paying Agent or sent by first-class mail to the Holder thereof
at his or her request, risk and expense.
Any taxes or other governmental charges required to be paid with respect to
the registration of transfer or exchange of the Bonds shall be paid by the
Holder requesting registration of such transfer or exchange, as a condition
precedent to the exercise of such privilege. The Authority or the Registrar and
Paying Agent, or both, may charge the Company for every registration of transfer
or exchange sufficient to reimburse it for any and all costs required to be paid
in respect thereof.
Section 7.04. Mutilated, Lost, Stolen, or Destroyed Bonds. In the event any
Bond shall be lost, stolen, destroyed, wholly or in part, or so defaced as to
impair its value to the Holder, the Authority shall execute and the Trustee
shall, upon compliance with the terms provided by law, authenticate and deliver
a new Bond of like date and tenor in exchange or replacement therefor against
delivery for cancellation of such mutilated Bond, or in lieu of and in
replacement of a destroyed, stolen or lost Bond, and upon payment by the Holder
of the reasonable expenses of the Registrar and Paying Agent and the Authority
and the reasonable charges of the Trustee and Registrar and Paying Agent in
connection therewith and, in the event that the Bond is destroyed, stolen or
lost, the Holder's filing with the Registrar and Paying Agent of evidence
satisfactory to it that the Bond was destroyed, stolen or lost, of the Holder's
ownership thereof, and furnishing the Trustee and the Registrar and Paying Agent
such security and indemnity as is satisfactory to them which shall name the
Authority as an additional indemnified party. Any replacement Bond issued under
the provisions of this Section in exchange or substitution for the defaced,
mutilated or partly destroyed Bond or in substitution for the allegedly lost,
stolen or wholly destroyed Bond shall be entitled to the identical benefits
under this Indenture as was the original Bond in lieu of which such replacement
Bond is issued. Each such replacement Bond shall be prepared in substantially
the same manner as the original.
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Notwithstanding the foregoing provisions of this Section, if the lost,
stolen, destroyed, defaced or mutilated Bond has matured or been called for
redemption and the date fixed for redemption thereof has arrived, at the option
of the Authority, payment of the amount due thereon may be made without the
issuance of any replacement Bond upon receipt of like evidence, indemnity,
security and payment of expenses and the surrender for cancellation of the
defaced or mutilated or partly destroyed Bond and upon such other conditions as
the Trustee may prescribe.
Except as provided in this sentence and as permitted in the following
paragraph, any replacement Bond shall be in the form of the Bond being replaced,
and be dated the date of its issuance and bear such number as shall be assigned
thereto by the Registrar and Paying Agent, with such subseries designation, if
any, as may be deemed appropriate by the Registrar and Paying Agent. The
Registrar and Paying Agent shall make an appropriate notation in the books of
registry that a replacement Bond has been issued in exchange or substitution for
the defaced, mutilated, lost, stolen, or wholly or partly destroyed Bond.
There may be imprinted or affixed on the face and the panel portion of any
duplicate Bond a xxxx to identify such Bond as a replacement Bond.
Prior to arranging for the preparation or printing of a replacement Bond,
the Trustee and the Registrar and Paying Agent may require a deposit by the
Holder to secure the Trustee, the Registrar and Paying Agent and the Authority
for costs and expenses incurred by them in the preparation, printing, execution
and issuance of such replacement Bond.
Any amount of such deposit received by the Registrar and Paying Agent in
excess of the amount required to reimburse the Registrar and Paying Agent, the
Trustee or the Authority for costs and expenses shall be returned to the party
which made the deposit.
Any defaced, mutilated or partly destroyed Bond surrendered to the
Registrar and Paying Agent in substitution for a new Bond pursuant to this
Section shall be cancelled by the Trustee.
Section 7.05. Temporary Bonds. Pending the preparation of definitive Bonds,
interim receipts or certificates (herein referred to as "Temporary Bonds") may
initially be issued, exchangeable for definitive Bonds when the latter are ready
for delivery. Such Temporary Bonds may be printed, lithographed or typewritten,
shall be of such denomination or denominations as may be determined by the
Authority and may contain such references to any of the provisions of this
Indenture as may be appropriate. If Temporary Bonds are issued, the Authority
will cause to be furnished duly executed definitive Bonds without delay, and
thereupon the Temporary Bonds may be surrendered for cancellation at the
principal office of the Trustee in exchange for definitive Bonds and without
charge for such exchange, and the Registrar and Paying Agent shall deliver in
exchange for such Temporary Bonds so surrendered an equal aggregate principal
amount of definitive duly executed Bonds, of authorized denominations. Until so
exchanged, the Temporary Bonds shall be entitled to the same benefits under this
Indenture as definitive Bonds.
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Nothing in this Indenture shall prevent the Authority from delivering, and
the Authority is hereby expressly permitted to deliver, Auction Rate Bonds in
typewritten form to the Securities Depository as registered owner thereof.
Section 7.06. Disposition of Bonds. Any Bond surrendered to the Registrar
and Paying Agent for payment shall be cancelled upon such payment by the
Trustee. The Trustee shall dispose of any cancelled Bond which has been paid and
which bears any date two (2) years prior to the date of disposition in
accordance with the Trustee's procedures in effect for the disposition of
cancelled securities as of the date of such disposition. When the Trustee shall
dispose of any Bond, it shall deliver a certificate of such disposition to the
Authority and, at the written request of the Company, the Company.
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ARTICLE VIII
CORPORATION OBLIGATION PAYMENTS
Section 8.01. Company Obligation Payments. The Company will make Company
Obligation Payments pursuant to this Indenture and the Participation Agreement.
Section 8.02. Credits on the Company Obligation . The Company shall be
entitled to receive a credit against its obligation to pay the principal and
premium, if any, and interest on, as the case may be, the Company Obligation in
an amount equal to (1) the principal amount of any Bonds secured by such Company
Obligation surrendered to the Trustee by the Company or the Authority for
cancellation, (2) the amount of money, if any, other than Company Obligation
Payments, held by the Trustee and available and designated to make the interest
payment on the Bonds and (3) the principal amount of any Bonds secured by such
Company Obligation purchased or redeemed and canceled by the Trustee with moneys
other than Company Obligation Payments to the extent that the Trustee shall not
have received written notice from the Company that the Company shall not receive
such a credit; provided, however, that the Company shall not receive a credit
for any amounts furnished by the State of New York for the redemption of the
Bonds in accordance with Section 9.06 nor for any amounts furnished by any Bond
Insurer.
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ARTICLE IX
THE PRIOR BOND FUND
Section 9.01. Prior Bond Fund. 1. There is hereby created and established a
special trust fund to be designated "Gas Facilities Revenue Bonds (The Brooklyn
Union Gas Company d/b/a KeySpan Energy Delivery New York Project), 2005 Series B
Prior Bond Fund" (hereinafter referred to as the "Prior Bond Fund") to be held
by the Trustee. All income or gain on moneys deposited in the Prior Bond Fund
shall be retained therein.
2. There shall be deposited into the Prior Bond Fund the proceeds of the
Bonds issued hereunder.
3. The moneys on deposit from time to time in the Prior Bond Fund shall be
held under and subject to this Indenture, but shall not be subject to the liens,
pledges, charges, assignments and trusts created hereby for the security and
benefit of the Holders of the Bonds and shall not be available for the payment
of Bonds within the meaning of the Indenture, and shall be used and applied
solely for the purpose of refunding the Prior Bonds in accordance with the
remaining provisions of this Section.
4. The Trustee is authorized and directed to make payments from the Prior
Bond Fund to remit the redemption price of the Prior Bonds or costs incurred in
connection therewith to the Prior Trustee, upon receipt of a letter or letters
signed by an Authorized Company Representative so directing.
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ARTICLE X
CREATION OF SPECIAL FUNDS AND ACCOUNTS;
APPLICATION AND INVESTMENT OF REVENUES
Section 10.01. Creation of Funds and Accounts. 1. The following fund and
the following accounts therein, which shall be a special fund and accounts to be
held by the Trustee, are hereby created and designated as set forth below:
(a) Bond Fund
(b) Interest Account
(c) Principal Account
(d) Redemption Account
(e) Acceleration Account
The designation of each fund and account set forth above shall include the
term "The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York
Project 2005 Series B," which term shall precede the designation as set forth
above. Such fund and each such account is, however, sometimes referred to herein
as set forth above.
2. The Bond Fund and the accounts therein shall be held in the custody of
the Trustee. All monies required to be deposited with or paid to the Trustee
under any provision of this Indenture shall be held by the Trustee in trust and
applied only in accordance with the provisions of this Indenture and shall be
trust funds for the purposes specified in this Indenture.
Section 10.02. Deposit of Company Obligation Payments. Under the
Participation Agreement and the Company Obligation, the Company shall deposit,
or cause to be deposited, the following in immediately available funds with the
Trustee as the Company Obligation Payments become due or are declared to be
immediately due and payable under the Participation Agreement and the Company
Obligation unless sufficient amounts are then available in such Accounts to make
the required payments therefrom. The Trustee shall deposit the Company
Obligation Payments or other money set forth below in the Bond Fund and credit
the Accounts set forth below in the order set forth below:
(a)(i) During an Auction Rate Period, no later than 12:00 noon (New York
City time) on the Business Day next preceding each Interest Payment Date, into
the Bond Fund for credit to the Interest Account an aggregate amount of funds
available on the next Business Day in The City of New York equal to the
aggregate amount required for the payment of the interest payable on the Auction
Rate Bonds, on such Interest Payment Date.
(ii) No later than 12:00 noon (New York City time) on each Interest Payment
Date, other than during an Auction Rate Period, into the Bond Fund for credit to
the Interest Account the amount required for the payment of the interest payable
on the Outstanding Bonds on such Interest Payment Date.
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(b)(i) During an Auction Rate Period, no later than 12:00 noon (New York
City time) on the second Business Day next preceding each Auction Date, into the
Bond Fund for credit to the Redemption Account an aggregate amount of funds
available on the next Business Day in The City of New York equal to the
aggregate amount required to pay the principal of and premium, if any, and
accrued interest on any Auction Rate Bonds, called for redemption; provided,
however if the scheduled date of such deposit to the Redemption Account by the
Company is not a Business Day then the date for such deposit to the Redemption
Account by the Company shall be the first Business Day immediately preceding the
scheduled date of such deposit to the Redemption Account by the Company.
(ii) Other than during an Auction Rate Period, on the last Business Day
prior to the day on which any redemption is to occur or on the last Business Day
prior to the Stated Maturity, into the Bond Fund for credit to the Redemption
Account or the Principal Account, as directed by the Company, the amount
required to pay principal of and premium, if any, and accrued interest on any
Bonds called for redemption or at the Stated Maturity, the amount required to
pay the principal of the Bonds.
If other monies are received by the Trustee as advance payments of Company
Obligation Payments to be applied to the redemption of all or a portion of the
Bonds, such monies shall be deposited in the Bond Fund for credit to the
Redemption Account therein.
(c) Immediately following the declaration of principal of and accrued
interest on the Bonds then Outstanding to be immediately due and payable
pursuant to Section 13.03, into the Bond Fund for credit to the Acceleration
Account, the amount required to pay principal of and accrued interest on such
Bonds.
Section 10.03. Application of Monies in the Bond Fund . 1. The Bond Fund
shall be used for the purpose of making scheduled payments of principal of and
interest on the Bonds, of making payments of principal of and premium, if any,
and accrued interest on Bonds then subject to redemption in the manner herein
provided and of making payments of principal of and accrued interest on the
Bonds then Outstanding that have been declared to be immediately due and payable
pursuant to Section 13.03. The monies in the Bond Fund shall be applied as
follows:
(a) Interest Account. On each Interest Payment Date, the Trustee shall
apply the amount of monies then credited to the Interest Account equal to the
interest then payable on the Bonds to the payment of such interest on such
Interest Payment Date.
(b) Principal Account. On the Stated Maturity, the Trustee shall apply the
amount of monies then credited to the Principal Account equal to the principal
amount of Bonds then payable to the payment of such principal on such date.
(c) Redemption Account. The Trustee shall redeem on the date set for the
redemption thereof, as provided in Article V of this Indenture, a principal
amount of Bonds then subject to redemption. Subject to the following sentence,
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the Trustee shall apply an amount credited to the Redemption Account equal to
the principal amount and premium, if any, of Bonds then subject to redemption,
together with accrued interest thereon to the redemption date, to the payment of
such Bonds on the redemption date from funds described in Section 10.02(b).
Upon the retirement of any portion of the Bonds by redemption pursuant to
the provisions of this Section 10.03, the Trustee shall provide the Authority
and the Company with a notice stating the amounts of the Bonds so redeemed and
setting forth the date of their redemption and the amount paid as principal,
premium and interest thereon. The expenses in connection with the redemption of
the Bonds shall be paid by the Company as Additional Payments.
All monies in the Redemption Account on the last Business Day prior to the
Stated Maturity shall be transferred to the Principal Account.
(d) Acceleration Account. The Trustee shall promptly apply an amount
credited to the Acceleration Account equal to the principal amount of and
accrued interest on the Bonds then Outstanding that have been declared to be
immediately due and payable pursuant to Section 13.03 from funds described in
Section 10.02(c).
2. Bond Purchase Fund. Pursuant to Section 4.12 of the Participation
Agreement, the Company has agreed that the Company shall pay an amount to the
Trustee for payment to, or directly to, the Registrar and Paying Agent for
deposit in the Bond Purchase Fund and credit to the Company Account therein
established under the Bond Purchase Trust Agreement to be applied to the payment
of the Purchase Price of any Bond pursuant to the Bond Purchase Trust Agreement
to the extent not otherwise provided from the sources described in the Bond
Purchase Trust Agreement.
In the event sufficient funds are not available under Section 2.03(a)(i) of
the Bond Purchase Trust Agreement to pay such Purchase Price on the date of
purchase of any Bonds pursuant to Section 5.03, 5.04, 5.07 or 5.08 hereof, the
Registrar and Paying Agent on or prior to the time specified in the Bond
Purchase Trust Agreement shall direct the Trustee to request a draw or payment
under the Liquidity Facility in accordance with the terms thereof in the amount
required, together with amounts, if any, available under Section 2.03(a)(i) of
the Bond Purchase Trust Agreement, to pay the Purchase Price of such Bonds on
such date of purchase. The Trustee shall on or prior to the time specified in
the Bond Purchase Trust Agreement request such draw or payment under the
Liquidity Facility in accordance with the terms thereof and shall on or prior to
the time specified in the Bond Purchase Trust Agreement transfer the proceeds of
such draw or payment to the Registrar and Paying Agent, who shall cause the
proceeds of such draw or payment to be deposited in the Bond Purchase Fund under
the Bond Purchase Trust Agreement and credited to the Liquidity Facility
Proceeds Account therein. The Registrar and Paying Agent shall notify the
Company of the amount and date of such request.
The Remarketing Agent shall notify the Registrar and Paying Agent and the
Trustee, at or prior to 12:00 p.m. (New York City time) on a specified purchase
date, of the amount of the proceeds of the related remarketing, and shall
specify whether remarketing proceeds (excluding any such proceeds from the
Company, the Authority or an affiliate of either) equal to the full amount of
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the Purchase Price payable on such purchase date are held by the Remarketing
Agent and will be available on such purchase date for the payment of such
Purchase Price, and, if the amount of such remarketing proceeds that will be
available on such purchase date for the payment of such Purchase Price shall not
be equal to the full amount of the Purchase Price payable on such purchase date,
such notice shall specify the amount of the deficiency. By 12:15 a.m. (New York
City time) on such purchase date, the Remarketing Agent shall pay to the
Registrar and Paying Agent, for deposit in the Bond Purchase Fund and credit to
the Remarketing Proceeds Account, an aggregate amount of such remarketing
proceeds equal to the amount stated in such notice to be available on such
purchase date for the payment of such Purchase Price.
Section 10.04. Investment of Funds. Monies in the Bond Fund and the
accounts in such fund shall be invested and reinvested by the Trustee, at the
specific written direction of the Company, so long as the Company is not in
default hereunder or under the Participation Agreement, to the extent reasonable
and practicable in Investment Securities selected by the Company and maturing in
the amounts and at the times as determined by the Company so that the payments
required to be made from such funds and accounts may be made when due. In the
absence of such direction and subsequent to the occurrence of an Event of
Default hereunder or under the Participation Agreement, the Trustee shall hold
monies in the Bond Fund uninvested. Investment earnings shall be considered on
deposit in any Fund or Account as of the date they are actually received by the
Trustee.
The Trustee, with the consent of the Company, shall be authorized to sell
any investment when necessary to make the payments to be made from the funds and
accounts therein. All earnings on and income from monies in said funds and
accounts created hereby shall be considered to be Revenues and shall be held in
the respective account in the Bond Fund for use and application as are all other
monies deposited in such accounts. The Trustee shall, in the statement required
by Section 12.07, set forth the Investment Securities held separately in, and
the earnings realized on investment for, each fund and account hereunder. The
Trustee shall not be liable for any depreciation in the value of the Investment
Securities acquired hereunder or any loss suffered in connection with any
investment of funds made by it in accordance herewith, including, without
limitation, any loss suffered in connection with the sale of any investment
pursuant hereto.
The Trustee may make any such investments through its own investment
department upon written direction of the Company.
All Investment Securities shall constitute a part of the respective fund
and accounts therein from which the investment in Investment Securities was
made.
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ARTICLE XI
PARTICULAR COVENANTS OF THE AUTHORITY
Section 11.01. Payment of Principal of and Interest and Redemption Premium
on Bonds. The Trustee will promptly remit solely from the Company Obligation
Payments and other monies held by the Trustee and available therefor, the
principal of, and the interest on, every Bond issued under and secured by the
Indenture and any premium required to be paid for the retirement of said Bonds
by redemption, at the places, on the dates and in the manner specified in this
Indenture and in said Bonds according to the true intent and meaning thereof,
subject, however, to the provisions of Section 2.02.3.
Section 11.02. Performance of Covenants. The Authority will faithfully
perform at all times all covenants, undertakings, stipulations and provisions
contained in the Indenture, in any and every Bond and in all proceedings of the
Authority pertaining thereto.
Section 11.03. Further Instruments. The Authority will 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 the Indenture;
provided, however, that no such instruments or actions shall pledge the credit
of the Authority or the State of New York or the taxing power of the State of
New York or otherwise be inconsistent with the provisions of Section 2.02(3).
Section 11.04. Inspection of Project Books. All books and documents in the
possession of the Authority relating to the Project or the Participation
Agreement shall at all times be open to inspection by such accountants or other
agents as the Trustee or the Bond Insurer may from time to time designate.
Section 11.05. No Extension of Time of Payment of Interest. In order to
prevent any accumulation of claims for interest after maturity, the Authority
will not directly or indirectly extend or assent to the extension of the time of
payment of any claims for interest on, any of the Bonds and will not directly or
indirectly be a party to or approve any such arrangement by purchasing such
claims for interest or in any other manner. In case any such claim for interest
shall be extended in violation hereof, such claim for interest shall not be
entitled, in case of any default hereunder, to the benefit or security of the
Indenture except subject to the prior payment in full of the principal of, and
premium, if any, on, all Bonds issued and outstanding hereunder, and of all
claims for interest which shall not have been so extended or funded.
Section 11.06. Trustee's, Remarketing Agent's, Registrar and Paying Agent's
and Indexing Agent's Fees, Charges and Expenses. Pursuant to the provisions of
Section 4.05 of the Participation Agreement, the Company has agreed to pay the
fees and the expenses (including, in the case of the Trustee, the reasonable
fees and expenses of counsel and accountants) of the Trustee, the Registrar and
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Paying Agent, Indexing Agent and Remarketing Agent in the amounts set forth more
fully therein, and the Authority shall have no liability for the payment of any
fees or expenses of the Trustee, the Registrar and Paying Agent, the Indexing
Agent and the Remarketing Agent.
Section 11.07. Agreement of the State of New York. In accordance with the
provisions of subdivision 11 of Section 1860 of the Act, the Authority, on
behalf of the State of New York, does hereby pledge to and agree with the
Bondholders that the State of New York will not limit or alter the rights and
powers vested by the Act in the Authority to fulfill the terms of any contract
made with Bondholders, or in any way impair the rights and remedies of such
Bondholders, until the Bonds, together with the premium and interest thereon,
with (to the extent permitted by law) interest on any unpaid installments of
interest, and all costs and expenses in connection with any action or proceeding
by or on behalf of such Bondholders, are fully met and discharged.
Section 11.08. Recording and Filing. Pursuant to the Participation
Agreement, the Company covenants that it will cause all financing statements
related to this Indenture and all supplements thereto and the Participation
Agreement and all supplements thereto, as well as such other security
agreements, financing statements and all supplements thereto and other
instruments as may be required from time to time to be kept, recorded and filed
in such manner and in such places as may from time to time be required by law in
order to preserve and protect fully the security of Holders and the rights of
the Trustee hereunder, and to take or cause to be taken any and all other action
necessary to perfect the security interest created by this Indenture.
Section 11.09. Rights Under the Participation Agreement. The Participation
Agreement, a duly executed counterpart of which has been filed with the Trustee,
sets forth the covenants and obligations of the Authority and the Company and
reference is hereby made to the same for a detailed statement of said covenants
and obligations of the Company thereunder. Subsequent to the issuance of Bonds
and prior to their payment in full or provision for payment thereof in
accordance with the provisions hereof, the Participation Agreement may not be
effectively amended, changed, modified, altered or terminated except in
accordance with the provisions of Article XV hereof. The Authority agrees that
the Trustee, in its name or in the name of the Authority, may enforce all rights
of the Authority and all obligations of the Company under and pursuant to the
Participation Agreement for and on behalf of the Holders, whether or not the
Authority is in default hereunder. Nothing herein contained shall be construed
to prevent the Authority from enforcing directly any or all of its rights to
administrative compensation or indemnification under the Participation
Agreement.
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ARTICLE XII
CONCERNING THE TRUSTEE; APPOINTMENT OF
REGISTRAR AND PAYING AGENT, REMARKETING AGENT,
BROKER-DEALERS AND INDEXING AGENT
Section 12.01. Appointment of Trustee. Citibank, N.A. is hereby appointed
the Trustee hereunder and by the execution of this Indenture accepts such
appointment and without further act, deed or conveyance, shall be fully vested
with all the estate, properties, rights, powers, trusts, duties and obligations
of the Trustee hereunder.
The Trustee shall set up suitable accounts for the deposit of the Company
Obligation Payments and for the payment of the Bonds and the interest thereon
and for all other payments provided or required by this Indenture, including,
without limiting the generality of any of the foregoing, setting up of the Funds
created by Articles IX and X.
Section 12.02. Indemnification of Trustee as Condition for Remedial Action.
The Trustee shall be under no obligation to institute any suit, or to take any
remedial proceeding under this Indenture, or to enter any appearance or in any
way defend in any suit in which it may be made defendant, or to take any steps
in the execution of the trusts hereby created or in the enforcement of any
rights and powers hereunder, until it shall be indemnified to its satisfaction
against any and all costs and expenses, outlays and counsel fees and other
reasonable disbursements, and against all liability; the Trustee may,
nevertheless, begin suit, or appear in and defend suit, or do anything else in
its judgment proper to be done by it as such Trustee, without indemnity, and in
such case the Trustee shall be reimbursed from the Additional Payments required
to be made pursuant to the Participation Agreement for all reasonable costs and
expenses, outlays and counsel fees and other reasonable disbursements incurred
in connection therewith. If the Company shall fail to make such reimbursement,
the Trustee may reimburse itself from any monies in its possession under the
provisions of this Indenture and shall be entitled to a preference over the
Bonds; provided, however, that the proceeds of a Support Facility or of
remarketing of Bonds shall be applied solely as set forth elsewhere herein and
in such Support Facility and shall not be applied to the reimbursement set forth
in this Section 12.02. Notwithstanding the foregoing, to the extent funds are
available, the Trustee shall make payments of principal of and premium, if any,
and interest on the Bonds then Outstanding when due, when called for redemption
or when declared to be immediately due and payable pursuant to this Indenture
and of the Purchase Price of the Bonds in accordance with this Indenture.
Section 12.03. Trustee Not Liable for Failure of the Authority or Company
to Act. The Trustee shall not be liable or responsible because of the failure of
the Authority or the Company or any of their employees or agents to make any
collections or deposits or to perform any act herein required of the Authority
or the Company. The Trustee shall not be responsible for the application of any
of the proceeds of the Bonds or any other monies deposited with it and paid out,
withdrawn or transferred hereunder if such application, payment, withdrawal or
transfer shall be made in accordance with the provisions of this Indenture. The
immunities and exemptions from liability of the Trustee hereunder shall extend
to its directors, officers, employees and agents.
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Section 12.04. Certain Duties and Responsibilities of the Trustee. (a)
Except during the continuance of an Event of Default specified in Section 13.01
of which a Responsible Officer of the Trustee has actual knowledge,
(1) the Trustee shall undertake to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates, resolutions, statements,
reports, documents, orders, instruments or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations, the content thereof, or other
facts stated therein).
(b) In case an Event of Default specified in Section 13.01 has
occurred and is continuing of which a Responsible Officer of the Trustee
has actual knowledge, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in such exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) None of the provisions of this Indenture shall be construed to
relieve the Trustee from liability for negligent action, negligent failure
to act, or willful misconduct, except that
(1) this subsection (c) shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent;
(3) in the absence of bad faith on its part, the Trustee shall be
protected and shall incur no liability in acting or proceeding or in not
acting or not proceeding upon any resolution, order, notice, telegram,
request, consent, waiver, certificate, statement, affidavit, voucher
requisition, bond or other paper or document which the Trustee shall
believe to be genuine and to have been adopted or signed by the proper
board or person or to have been prepared and furnished pursuant to any of
the provisions of this Indenture, or upon the written opinion of any
attorney, engineer, accountant or other expert believed by the Trustee to
be qualified in relation to the subject matter, and the Trustee shall be
under no duty to make any investigation or inquiry as to any statements
contained or matters referred to in any such instrument but may accept and
rely upon the same as conclusive evidence of the truth and accuracy of such
statements; and
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(4) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of not less than a majority in aggregate principal amount of
the Outstanding Bonds relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under the provisions of this
Indenture.
(d) Notwithstanding anything contained elsewhere in this Indenture,
the Trustee shall have the right to reasonably require, in respect of the
payment or withdrawal of any monies or the taking of any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions,
appraisals or other information, or corporate action or evidence thereof,
in addition to that required by the terms hereof as a condition of such
action by the Trustee.
(e) The Trustee may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents or receivers, and
shall not be responsible for any negligence or misconduct on the part of
any such attorney, agent or receiver appointed by it if the Trustee shall
have exercised due care and diligence in appointing or selecting such
person, and shall be entitled to advice of counsel concerning all matters
of the trusts hereof and the duties hereunder, and may in all cases pay
such reasonable compensation to all such attorneys, agents and receivers as
may reasonably be employed in connection with the trusts hereof. The
Trustee may act upon the opinion or advice of any attorney or attorneys
(who may be the attorney or attorneys for the Authority or the Company),
approved by the Trustee in the exercise of reasonable care, and the Trustee
shall not be responsible for any loss or damage resulting from any action
or nonaction in good faith in reliance upon such opinion or advice.
(f) Whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon a certificate of an Authorized
Company Representative or an Authorized Officer.
(g) The Trustee shall not be accountable for the use by the Company of
any proceeds of the Bonds authenticated or delivered hereunder.
(h) The Trustee shall not be required to give any bonds or surety in
respect of the execution of its trusts and powers hereunder.
(i) The Trustee may treat and deem the Holder of any Bonds as set
forth in the books of the registry hereunder as the absolute owner thereof.
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(j) The Trustee shall not be held liable by reason of any
insufficiency in any account held by or on behalf of the Trustee resulting
from any investment loss on any Investment Securities included therein
(except to the extent that the Trustee is the obligor and has defaulted
thereon) nor will the Trustee be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company or the
Authority.
(k) The Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee shall have received written notice or
obtained actual knowledge thereof. In the absence of receipt of such notice
or actual knowledge, the Trustee may conclusively assume that there is no
default or Event of Default.
(l) The Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability for the performance of any of
its duties hereunder or the exercise of any of its rights or powers if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Indenture shall
in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Auction Agent or
Broker-Dealer under this Indenture except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Auction Agent or Broker-Dealer in accordance
with the terms of this Indenture.
(m) The Trustee shall have no duty (A) to see to any recording,
filing, or depositing of this Indenture or any agreement referred to herein
or any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof,
(B) to see to any insurance relating to the Project (but not including the
insurance on the Bonds provided by the Policy), or (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge
or any lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Bond Fund.
(n) The right of the Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
(o) Notwithstanding any other provision of this Indenture, the Trustee
shall notify the Authority, the Company, the Bond Insurer and the
Bondholders of (i) any Event of Default for which a Responsible Officer of
the Trustee has actual knowledge and (ii) the Trustee's failure to receive
any fees due and owing from the Company. The Trustee shall notify the
Authority and the Company if it does not receive its fees as required
hereunder.
Section 12.05. Limitations on Obligations and Responsibilities of Trustee
and Registrar and Paying Agent. The Trustee and the Registrar and Paying Agent
shall be under no obligation to effect or maintain insurance or to renew any
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policies of insurance or to inquire as to the sufficiency of any policies of
insurance carried by the Company, or to report, or make or file claims or proof
of loss for, any loss or damage insured against or which may occur, or to keep
itself informed or advised as to the payment of any taxes or assessments, or to
require any such payment to be made. The Trustee and the Registrar and Paying
Agent, except as to the acceptance of the trusts by the Trustee's execution of
this Indenture and the performance of their respective responsibilities
hereunder, shall have no responsibility in respect of the validity, sufficiency,
due execution or acknowledgment of this Indenture, or in respect of the validity
of the Bonds or the due execution or issuance thereof. The Trustee and the
Registrar and Paying Agent shall be under no obligation to see that any duties
herein or in the Participation Agreement, the Remarketing Agreement, the Auction
Agreement, the Broker-Dealer Agreement or any Support Facility imposed upon the
Authority, the Company, the issuer of any Support Facility, or any party other
than themselves in their capacity as Trustee and Registrar and Paying Agent,
respectively, or any covenants herein contained on the part of any party other
than themselves in their capacity as Trustee and Registrar and Paying Agent,
respectively, to be performed, shall be done or performed, and the Trustee and
the Registrar and Paying Agent shall be under no obligation for failure to see
that any such duties or covenants are so done or performed. Notwithstanding
anything in this Agreement to the contrary, the Trustee shall not be liable to
any Holder for special, indirect or consequential losses (including, but not
limited to, lost profits).
Section 12.06. Compensation and Indemnification of Trustee. The Company has
agreed in the Participation Agreement (1) to pay to the Trustee from time to
time such compensation for all services rendered by it hereunder or shall from
time to time be agreed in writing (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust); (2) except as otherwise expressly provided herein,
to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and (3) to indemnify the Trustee and any director, officer, employee or agent of
the Trustee, for, and to hold it harmless against, any loss, liability, claim,
or expense (including reasonable costs and expenses of litigation, and of
investigation, counsel fees, damages, judgments and amounts paid in settlement)
arising out of or incurred without negligence, willful misconduct or bad faith
on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section 12.07. Statements from Trustee. It shall be the duty of the
Trustee, on or about the fifteenth (15th) day of each month, and at such other
reasonable time or times as may be determined by the Authority or the Company,
to file with the Authority, upon the written request thereof, and the Company a
statement setting forth in respect of the preceding calendar month:
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(a) the amount withdrawn from or transferred to each Fund or Account
by the Trustee under the provisions of this Indenture, and the amount
received by the Trustee and held on account of each Fund or Account under
the provisions of this Indenture;
(b) the amount on deposit with it at the end of such calendar month to
the credit of each such Fund or Account;
(c) a monthly account of reconciliation and income which includes a
brief description of all obligations held by it as an investment of monies
in each such Fund or Account;
(d) the amount applied to the redemption of the Bonds under the
provisions of Article V and Section 10.03 and the amount of the Bonds
remaining Outstanding; and
(e) any other information which the Authority or the Company may
reasonably request.
All records and files pertaining to the Bonds and the Company in the
custody of the Trustee shall be open at all reasonable times upon prior notice
to the inspection of the Authority, the Company and their agents and
representatives.
Section 12.08. Notice of Default. Except upon the happening of any Event of
Default specified in clauses (a) through (c), inclusive, of Section 13.01, the
Trustee shall not be obliged to take notice or be deemed to have notice of any
Event of Default hereunder, unless a Responsible Officer of the Trustee has been
specifically notified in writing of such Event of Default by the issuer of any
Support Facility, the Authority, the Company, the Remarketing Agent, the Auction
Agent or the Holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Bonds Outstanding and such written notice shall state
that it is a "notice of default."
Section 12.09. Trustee and Registrar and Paying Agent May Deal in Bonds.
The bank or trust company acting as Trustee and Registrar and Paying Agent under
this Indenture, and its directors, officers, employees or agents, may in good
faith buy, sell, own, hold and deal in the Bonds issued under and secured by
this Indenture, and may join in the capacity of a Holder of a Bond in any action
which any Holder of a Bond may be entitled to take with like effect as if such
bank or trust company were not the Trustee or Registrar and Paying Agent under
this Indenture.
Section 12.10. Trustee and the Registrar and Paying Agent Not Responsible
For Recitals. The recitals, statements and representations contained herein and
in the Bonds shall be taken and construed as made by and on the part of the
Authority, and not by the Trustee or Registrar and Paying Agent, and the Trustee
and the Registrar and Paying Agent assumes, and shall be under, no
responsibility for the correctness of the same or for the recording or
re-recording or filing or refiling of the Indenture or any supplements thereto
or any instruments of further assurance (including financing statements) except
as otherwise provided herein. The Trustee and the Registrar and Paying Agent
make no representations as to the value of any property pledged hereunder to the
payment of Bonds or as to the title of the Authority or the Company thereto or
76
as to the validity, sufficiency or adequacy of the security afforded thereby or
hereby or as to the validity of this Indenture, the Company Obligation, the
Participation Agreement, any Support Facility or of the Bonds.
Section 12.11. Qualification of the Trustee. There shall at all times be a
Trustee hereunder which shall be a bank and/or trust company, having combined
capital and unimpaired surplus of at least $50,000,000, duly authorized to
exercise corporate trust powers and subject to examination by federal or state
authority. The Trustee hereunder shall not be required to maintain, and any
successor Trustee shall not be required to have, an office in the city in which
the applicable Principal Corporate Trust Office of the initial Trustee hereunder
is located, but shall be required to have an office in New York State.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 12.11, it shall resign immediately in the manner
and with the effect specified in Section 12.12.
Section 12.12. Resignation and Removal of Trustee. 1. No resignation or
removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 12.13.
(a) The Trustee may resign at any time by giving written notice
thereof to the Authority, the Company and the Bond Insurer. If an
instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within thirty (30) days after the giving of such
notice of resignation, the retiring Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(b) The Trustee may resign at any time by giving written notice
thereof to the Authority, the Company and the Bond Insurer. In addition,
the Trustee may be removed at any time by (i) demand of the registered
owners of at least a majority in principal amount of the Bonds of a series
then Outstanding (determined in accordance with this Indenture), (ii) the
Authority, at the written request of the Company, provided the Company is
not in default under this Indenture, (iii) the Authority other than during
the continuance of an Event of Default, or (iv) the Authority, at the
written request of the Bond Insurer or the Company (provided the Company is
not in default under this Indenture) for breach of trust under this
Indenture, and, in either case, by a written instrument delivered to the
Trustee and the Authority, the Bond Insurer or the Company, as applicable.
(c) If at any time:
(1) the Trustee shall cease to be eligible under Section 12.11 and
shall fail to resign after written request by the Authority, by the
Company, by the Bond Insurer or by a Holder who shall have been a bona fide
Holder for at least six months,
(2) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or
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(3) there is a breach of trust under the Indenture,
then, in any such case, (i) the Authority may remove, and the Company may
request the Authority to remove, the Trustee, or (ii) the Bond Insurer or any
Holder who has been a bona fide Holder for at least six months may, on behalf of
itself and all other similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor.
(d) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any
cause, the Authority shall promptly appoint a successor; the Company or the
issuer of any Support Facility or both of them, having the right to request
or consent to the appointment of a particular qualified institution as such
successor. Within one year after such resignation, removal or incapability,
or the occurrence of such vacancy, a successor Trustee may be appointed by
an instrument or concurrent instruments in writing executed by the Holders
of a majority in principal amount of the Bonds then Outstanding delivered
to the Authority and the retiring Trustee, and, upon such delivery, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Authority.
(e) The Authority shall give notice to the Trustee, the Company, the
Remarketing Agent, the Registrar and Paying Agent, the Auction Agent, the
Bond Insurer and the Bondholders of each resignation and each removal of a
Trustee and each appointment of a successor Trustee in the manner set forth
in Section 18.03 with respect to Bondholders, Section 6.03 with respect to
the Bond Insurer, and Section 18.09 with respect to the Company, the
Auction Agent and the Remarketing Agent. Each notice shall include the name
and address of the applicable Principal Corporate Trust Office of the
successor Trustee.
(f) The Trustee at any time other than during the continuance of an
Event of Default and for any reason may be removed by an instrument in
writing, executed by an Authorized Officer, appointing a successor, filed
with the Trustee so removed.
Section 12.13. Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor, and also to
the Authority and the Company, an instrument in writing accepting such
appointment hereunder, and thereupon such successor Trustee, without any further
act, shall become fully vested with all the rights, immunities, powers and
trusts and subject to all the duties and obligations, of its predecessor; but
such predecessor shall, nevertheless, on written request of its successor or of
the Authority and upon payment of expenses, charges and other disbursements of
such predecessor which are payable pursuant to the provisions of Sections 12.02
and 12.06, execute and deliver an instrument transferring to such successor
Trustee all the rights, immunities, powers and trusts of such predecessor
hereunder; and every predecessor Trustee shall deliver all property and monies
held by it hereunder to its successor, subject, nevertheless, to its first lien
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and preference provided for in Sections 12.02 and 12.06. Should any instrument
in writing from the Authority be required by any successor Trustee for more
fully vesting in such Trustee the rights, immunities, powers and trusts hereby
vested or intended to be vested in the predecessor Trustee, any such instrument
in writing shall and will, on request, be executed, acknowledged and delivered
by the Authority.
Notwithstanding any of the foregoing provisions of this Article, any bank
or trust company having power to perform the duties and execute the trusts of
this Indenture and otherwise qualified to act as Trustee hereunder with or into
which the bank or trust company acting as Trustee may be converted, merged or
consolidated, or to which the corporate trust business assets as a whole or
substantially as a whole of such bank or trust company may be sold, shall be
deemed the successor of the Trustee, upon written notice to the Authority.
Section 12.14. Appointment of Remarketing Agent. Xxxxxxx, Xxxxx & Co. is
hereby appointed by the Authority at the request of the Company as the initial
Remarketing Agent of the Bonds and to serve as such under the terms and
provisions hereof and of the Remarketing Agreement. The Remarketing Agent,
including any successor appointed pursuant hereto, shall be a member of the
National Association of Securities Dealers, Inc. having capitalization of at
least $25,000,000, and be authorized by law to perform all the duties imposed
upon it by this Indenture, the Bond Purchase Trust Agreement and the Remarketing
Agreement. The Remarketing Agent for any series of Bonds may be removed at any
time by the Authority, upon thirty (30) days' notice, acting at the written
direction of the Company, by an instrument signed by the Authority and filed
with the Trustee, the Registrar and Paying Agent, the Bond Insurer, the
Remarketing Agent and the Company. If there shall not be at least one
Remarketing Agent serving as such for the Bonds following the effective date of
a proposed removal of a Remarketing Agent, no such removal shall take effect
until the appointment of a successor Remarketing Agent. The Remarketing Agent
for any Bonds may resign upon 30 days written notice delivered to the Company,
the Authority, the Trustee, the Registrar and Paying Agent, the Bond Insurer and
the issuer of any Support Facility. The Company shall use its commercially
reasonable efforts to cause the Authority to appoint a successor Remarketing
Agent that is a qualified institution, effective as of the effectiveness of any
such resignation or removal. Each successor Remarketing Agent shall be a
qualified institution selected and appointed by the Authority, upon the written
request and with the approval of the Company. If there shall be more than one
Remarketing Agent serving as such for the Bonds, the Authority, at the request
of the Company, shall designate one such Remarketing Agent as "Remarketing
Representative" to act on behalf of all Remarketing Agents for the Bonds, and
each other Remarketing Agent shall agree in writing to accept the determinations
of such Remarketing Representative.
Section 12.15. Appointment of Registrar and Paying Agent. Citibank, N.A. is
hereby appointed by the Authority at the request of the Company to serve as the
Registrar and Paying Agent hereunder. The Company shall have the right to
request the appointment of an institution meeting the requirements of Section
12.19 to serve as successor thereto in the event of the removal or resignation
of such Registrar and Paying Agent.
The Trustee hereby appoints any Registrar and Paying Agent appointed
hereunder as authenticating agent.
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Section 12.16. General Provisions Regarding Registrar and Paying Agent.
(a) The Registrar and Paying Agent shall:
(i) hold all Bonds delivered to it for purchase hereunder in trust for
the benefit of the respective Bondholders which shall have so delivered
such Bonds until monies representing the Purchase Price of such Bonds shall
have been delivered to or for the account of or to the order of such
Holders and deliver said Bonds in accordance with the provisions of this
Indenture;
(ii) hold all monies delivered to it for the purchase of Bonds, in
trust for the benefit of the person or entity who has delivered such monies
until the Bonds purchased with such monies have been delivered to or for
the account of such person or entity as provided in this Indenture;
(iii) maintain the books of registry and keep such books and records
as shall be consistent with prudent industry practice and make such books
and records available for inspection by the Trustee, the Remarketing Agent,
the Authority and the Company at all reasonable times;
(iv) perform the duties and undertake the obligations assigned to them
in Sections 7.02 through 7.06;
(v) at the request of a beneficial owner, provide copies of all
notices received by it, directly to such beneficial owner.
(b) The Registrar and Paying Agent may deem and treat the Holder of any
Bonds as set forth in the books of registry hereunder as the absolute owner
thereof;
(c) The Registrar and Paying Agent may in good faith hold any other form of
indebtedness issued by the Authority or any security issued by the Company, or
any affiliate of the Company; own, accept or negotiate any drafts, bills of
exchange, acceptances or obligations thereof; and make disbursements therefor
and enter into any commercial or business arrangement therewith; all without any
liability on the part of such Registrar and Paying Agent for any real or
apparent conflict of interest by reason of any such actions; and
(d) The Registrar and Paying Agent agrees to cooperate with the Trustee and
the Company in preparing and conveying information necessary for drawings under
any Support Facility. To the extent that any other certificate to be submitted
by the Trustee to an issuer of a Support Facility in connection with a drawing
under the Support Facility requires the Trustee to state that the Registrar and
Paying Agent has certified certain information to the Trustee, the Registrar and
Paying Agent agrees to provide such certification to the Trustee to the extent
such information is known to it.
Section 12.17. Payment of Registrar and Paying Agent; Indemnification. The
Authority will cause the Company to agree in the Participation Agreement to pay
all reasonable fees, charges and expenses of the Registrar and Paying Agent,
including reasonable attorneys' fees and expenses, for acting under and pursuant
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to this Indenture. In addition, the Authority will cause the Company to agree in
the Participation Agreement to indemnify the Registrar and Paying Agent and its
directors, officers and employees against and save them harmless from any and
all losses, costs, charges, expenses, judgments and liabilities incurred while
carrying out the transactions contemplated by this Indenture, except that said
indemnity does not apply to the extent that they are caused by the negligent
action, negligent failure to act, bad faith or willful misconduct of the
Registrar and Paying Agent or its directors, officers, employees or agents.
Section 12.18. Registrar and Paying Agent's Performance; Duty of Care. The
duties and obligations of the Registrar and Paying Agent shall be determined
solely by the provisions of this Indenture. None of the provisions of this
Indenture shall be construed to relieve the Registrar and Paying Agent from
liability for negligent action, negligent failure to act or willful misconduct,
except that the Registrar and Paying Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Indenture, and, in the absence of bad faith on the part of the Registrar and
Paying Agent, the Registrar and Paying Agent may conclusively rely, as to the
truth of the statements expressed therein, upon any document furnished to the
Registrar and Paying Agent and conforming to the requirements of this Indenture
and the Registrar and Paying Agent may conclusively rely and shall be protected
in acting upon any document believed by it to be genuine and to have been signed
or presented by the proper party or parties, provided that, in the case of any
such document which by any provision of this Indenture is specifically required
to be furnished to the Registrar and Paying Agent, the Registrar and Paying
Agent shall be under a duty to examine the same to determine whether or not it
conforms to the requirements of this Indenture. The Registrar and Paying Agent
may act upon the opinion or advice of any attorney or attorneys (who may be the
attorney or attorneys for the Authority or the Company), approved by the Trustee
in the exercise of reasonable care, and the Registrar and Paying Agent shall not
be responsible for any loss or damage resulting from any action or nonaction in
good faith in reliance upon such opinion or advice.
Section 12.19. Qualifications of Registrar and Paying Agent. The Registrar
and Paying Agent, including any successor appointed pursuant to this Indenture,
shall be a corporation duly organized under the laws of the United States of
America or any state or territory thereof, having a combined capital and
unimpaired surplus of at least $50,000,000 and authorized by law to perform all
the duties imposed upon it by this Indenture. The Registrar and Paying Agent
shall have an office or agency in New York, New York capable of performing its
obligations hereunder.
Section 12.20. Resignation or Removal of Registrar and Paying Agent and
Successor to Registrar and Paying Agent; Termination of Registrar and Paying
Agent's Obligations. The Registrar and Paying Agent may at any time resign and
be discharged of the duties and obligations created hereunder and under the Bond
Purchase Trust Agreement by giving at least sixty days' notice to the Authority,
the Bond Insurer, the Company, the Trustee, the Bond Insurer and the Remarketing
Agent. The Registrar and Paying Agent may be removed at any time upon and
pursuant to the request of the Company or the Bond Insurer (for breach of its
obligations hereunder) by an instrument, signed by the Authority and filed with
the Trustee and the Registrar and Paying Agent, and the Company, provided that
such removal shall not take effect until the appointment of a successor
Registrar and Paying Agent. The Authority at the request of the Company shall
81
appoint a successor Registrar and Paying Agent effective as of the effectiveness
of any such resignation or removal. Each successor Registrar and Paying Agent
shall be a qualified institution selected by the Company and, so long as a
Support Facility is in effect, approved by the issuer of a Support Facility, and
approved and appointed by the Authority.
In the event of the resignation or removal of the Registrar and Paying
Agent, the Registrar and Paying Agent shall pay over and deliver any monies and
Bonds held by it in such capacity to its successor or, if there is no successor,
to the Trustee. In the event that there is no successor to the Registrar and
Paying Agent on the effective date of its resignation, the entity acting as
Trustee shall perform the functions of the Registrar and Paying Agent; provided
that monies held by the Trustee pursuant to this paragraph shall not be deemed
to be held by the Trustee in its capacity as Trustee.
Section 12.21. Appointment of Auction Agent; Qualification of Auction
Agent; Resignation; Removal. The Bank of New York is hereby appointed as the
Auction Agent for the Bonds. The Auction Agent shall designate its Principal
Office and signify its acceptance of the duties and obligations imposed upon it
hereunder by an Auction Agreement delivered to the Authority, the Company, the
Trustee and each Broker-Dealer which shall set forth such procedural and other
matters relating to the implementation of the Auction Procedures as shall be
satisfactory to the Company and the Trustee.
Subject to any applicable governmental restrictions, the Auction Agent may
be or become the owner of or trade in Bonds with the same rights as if such
entity were not the Auction Agent.
The Auction Agent shall be (a) a bank or trust company organized under the
laws of the United States or any state or territory thereof having a combined
capital stock, surplus and undivided profits of at least $50,000,000, or (b) a
member of National Association of Securities Dealers having a capitalization of
at least $50,000,000 and, in either case, authorized by law to perform all the
duties imposed upon it by the Indenture and a member of or a participant in, the
Securities Depository. The Auction Agent may at any time resign and be
discharged of the duties and obligations created by the Indenture by giving at
least ninety (90) days notice to the Authority, the Company, the Bond Insurer,
each Broker-Dealer and the Trustee. The Auction Agent may be removed at any time
by the Authority by written notice acting at the written request of the Company,
delivered to the Auction Agent, the Company, the Bond Insurer, each
Broker-Dealer and the Trustee at least thirty (30) days before the effectiveness
of such removal. Upon any such resignation or removal, the Trustee shall at the
written direction of the Authority acting at the written request of the Company
appoint a successor Auction Agent meeting the requirements of this Section. In
the event of the resignation or removal of the Auction Agent, the Auction Agent
shall pay over, assign and deliver any moneys and Bonds held by it in such
capacity to its successor. The Auction Agent shall continue to perform its
duties hereunder and under the Auction Agreement until its successor has been
appointed by the Trustee; provided, however, that if a successor Auction Agent
has not accepted its appointment within thirty (30) days of the effectiveness of
the resignation or removal of the Auction Agent, the Auction Agent shall be
entitled to petition a court of competent jurisdiction to appoint a successor.
In the event that the Auction Agent has not been compensated for its services,
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the Auction Agent may resign after giving forty-five (45) days notice to the
Authority, the Company, the Bond Insurer, each Broker-Dealer and the Trustee,
and if it has not been compensated within such forty-five (45) day period may
cease performing its duties hereunder and under the Auction Agreement, even if a
successor Auction Agent has not been appointed.
Section 12.22. Appointment of Broker-Dealers. Xxxxxxx, Xxxxx & Co. and BNY
Capital Markets, Inc. are hereby appointed as the initial Broker-Dealers for the
Bonds by the Authority at the request of the Company. The Company with the
consent of the Authority and the Bond Insurer shall appoint an initial
Broker-Dealer and may appoint any additional initial Broker-Dealers. After a
subsequent Change in the Interest Rate Mode to an Auction Rate Period, the
Company may select, with the consent of the Authority, from time to time, one or
more additional persons to serve as Broker-Dealers under Broker-Dealer
Agreements.
Section 12.23. Appointment of Additional Paying Agents; Each Paying Agent
to Hold Money in Trust. The Authority may at the request of the Company appoint
an additional Paying Agent or Paying Agents for the Bonds. Each such Paying
Agent shall hold in trust subject to the provisions of the Indenture for the
benefit of the Holders all sums held by such Paying Agent for the payment of the
principal of, premium, if any, and interest on the Bonds. Any such Paying Agent
may be any person or corporation authorized to perform such functions, including
to the extent permitted by law, the Company.
Section 12.24. Appointment and Duties of Indexing Agents. The Authority
hereby appoints Standard & Poor's Securities Evaluations, Inc. (as successor to
Xxxxxx Information Systems, Inc.) as Indexing Agent for the Bonds for the
purpose of calculating each rate index defined in Section 1.01. The Authority
may, with the approval of the Company, appoint additional or successor Indexing
Agents, subject to the conditions set forth in this Section. There may be
separate Indexing Agents for the purpose of calculating each rate index defined
in Section 1.01. The Indexing Agent shall designate to the Trustee 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 Authority, the
Trustee, the Company and the Remarketing Agent under which the Indexing Agent
will agree, particularly:
(a) to compute the Daily Rate Index, the Commercial Paper Rate Index,
the Weekly Rate Index, the Monthly Rate Index, the Semi-annual Rate Index,
the Term Rate Index or the Fixed Rate Index, as the case may be, pursuant
to and in accordance with Section 3.01, and to give notice to the Trustee,
the Registrar and Paying Agent, the Remarketing Agent and the Company of
such rate index on the date of the computation thereof in accordance with
Section 3.01; and
(b) to keep such books and records as shall be consistent with prudent
industry practice and to make such books and records available for
inspection by the Authority, the Trustee, the Registrar and Paying Agent,
the Remarketing Agent and the Company at all reasonable times.
The Indexing Agent shall perform the duties provided for in Section 3.01.
Whenever the Indexing Agent makes a computation under that Section, it will
promptly notify the Trustee, the Registrar and Paying Agent, the Authority, the
Remarketing Agent (and during any Auction Rate Period, the Auction Agent), and
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the Company of the results and date of computation. The Indexing Agent shall
keep adequate records pertaining to the performance of its duties and allow the
Trustee, Registrar and Paying Agent, the Authority, the Remarketing Agent and
the Company (and, if appropriate, the Auction Agent) to inspect the records at
reasonable times.
Section 12.25. Qualifications of Indexing Agents. Each Indexing Agent shall
be a commercial bank, a member of the National Association of Securities
Dealers, Inc. or a nationally recognized municipal securities evaluation service
authorized by law to perform all the duties imposed upon it by the Indenture.
Any Indexing Agent may at any time resign and be discharged of the duties and
obligations created by the Indenture by giving at least sixty (60) days' notice
to the Authority, the Company, the Remarketing Agent and the Trustee. The
Indexing Agent may be removed at any time, at the written direction of the
Company, by an instrument, signed by the Authority, filed with the Company, the
Indexing Agent, the Remarketing Agent, the Trustee, the Registrar and Paying
Agent and the issuer of a Support Facility, if any.
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ARTICLE XIII
EVENTS OF DEFAULT; REMEDIES UPON
OCCURRENCE THEREOF
Section 13.01. Events of Default. Each of the following is hereby defined
as and declared to be and shall constitute an "Event of Default":
(a) Payment of the principal of and premium, if any, on any Bond
(whether by maturity or proceedings for redemption in accordance with
Article V hereof or otherwise), shall not be made when the same shall
become due and payable; or
(b) Payment of any installment of interest on any Bond shall not be
made when the same shall become due and payable and such nonpayment shall
continue for three (3) Business Days; or
(c) In the event that the Policy is not in effect, the Trustee shall
receive written notice from the issuer of the Support Facility of the
occurrence of a Terminating Event under the Support Facility, if
applicable, or the agreement providing for the issuance thereof; or
(d) Receipt by the Trustee of written notice from the Bond Insurer of
the occurrence and continuance of an event of default under the Insurance
Agreement, dated November 1, 2005, between the Bond Insurer and the
Company, directing the Trustee to declare an Event of Default; or
(e) The Authority shall fail in the due and punctual performance of
any of the covenants, conditions, agreements, provisions or obligations,
other than as set forth in (a) and (b) above, contained in the Bonds or in
this Indenture or in any Supplemental Indenture on the part of the
Authority to be performed, and such failure shall continue for sixty (60)
days after written notice specifying such failure and requiring the same to
be remedied shall have been given to the Authority, the Company, the
Governor, the Comptroller and the Attorney General of the State of New
York, by the Trustee or to the Trustee, the Authority and the Company by
the Holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Bonds then Outstanding as provided for in Section
13.08; provided that if any such failure shall be such that it cannot be
cured or corrected within such sixty (60) day period, it shall not
constitute an Event of Default hereunder if (i) curative or corrective
action is instituted within such period and diligently pursued until the
failure of performance is cured or corrected, and (ii) the Bond Insurer
consents to such extension of the cure period; or
(f) The occurrence of an event of default under the Participation
Agreement.
Section 13.02. Notice to Holders and Others Upon Occurrence of an Event of
Default or a Payment Default. 1. The Trustee shall give notice to the
Bondholders of all Events of Default within sixty (60) days after a Responsible
Officer of the Trustee has been notified thereof or is deemed to have notice
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thereof as provided in Section 12.08, unless the Event of Default shall have
been cured before the giving of such notice or unless the Trustee shall deem it
in the best interest of the Holders to defer or withhold notice under this
Section; provided, however, that if a notice of an Event of Default is given to
any Bondholder, the Trustee shall concurrently therewith, at the request of the
Company, cause a copy to be provided to all beneficial owners; provided further,
that if there is an Event of Default pursuant to Section 13.01(a) or (c), the
Trustee shall give notice to the Bond Insurer immediately. Upon request from the
Company, the Broker-Dealers shall provide the Trustee with a list of the names
of its customers that it believes are Existing Owners of Auction Rate Bonds and
the principal amount of Auction Rate Bonds held by each of such customers.
2. So long as ownership of the Auction Rate Bonds is maintained in
book-entry form by the Securities Depository, upon the occurrence of an Event of
Default, the Trustee shall send a notice thereof in substantially the form
required by the Auction Agreement to the Auction Agent and to the registered
Holders of each series of Bonds.
3. So long as the ownership of the Auction Rate Bonds is maintained in
book-entry form by the Securities Depository, the Trustee shall immediately send
a notice in substantially the form required by the Auction Agreement to the
Auction Agent and to the registered Holders of Bonds if an Event of Default has
been cured or waived in accordance with this Article XIII.
4. Upon the occurrence of a Payment Default, or in the event such Payment
Default is cured, the Trustee shall give the Auction Agent the notices referred
to in Section 6.03 hereof.
Section 13.03. Declaration of Principal and Interest As Due.
Notwithstanding the pendency of a mandatory tender under Section 5.08, upon the
occurrence of an Event of Default specified in clause (b) or (c) of Section
13.01 of which the Trustee has been notified by the issuer of the Support
Facility Issuer or the Bond Insurer, as the case may be, then, subject to the
rights of the Credit Facility Issuer or the Bond Insurer under Section 6.04
hereof, the Trustee shall upon the written request or direction of such issuer
of the Credit Facility or the Bond Insurer, as the case may be, declare the
principal of and accrued interest on all the Bonds then Outstanding (if not then
due and payable) to be due and payable immediately, and upon such declaration
the same shall become due and be immediately due and payable and interest shall
immediately cease to accrue on such Bonds, anything contained in the Bonds or in
this Indenture to the contrary (except for Section 6.04 hereof) notwithstanding.
Upon the occurrence and continuation of any Event of Default, except for an
Event of Default specified in clause (b) or (c) of Section 13.01, of which the
Trustee has been notified or is deemed to have notice as provided in Section
12.08, then and in every case the Trustee, by a notice in writing to the
Authority, the Company and (to addresses then specified by the Authority) the
Governor, the Comptroller and the Attorney General of the State of New York, may
with the written consent of the Credit Facility Issuer, and shall upon the
written request or direction of the Credit Facility Issuer, or, if the Credit
Facility Issuer is in default under the Credit Facility, upon the written
request or direction of the Holders of not less then twenty-five percent (25%)
in principal amount of the Bonds then Outstanding (determined in accordance with
the provisions of Section 14.03) shall, declare the principal of and accrued
interest on all the Bonds then Outstanding (if not then due and payable) to be
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due and payable immediately, and upon such declaration the same shall become due
and be immediately due and payable, anything contained in the Bonds or in this
Indenture to the contrary notwithstanding. Upon any declaration of acceleration
hereunder, the Trustee shall immediately exercise such rights as it may have as
the registered owner of the Company Obligation and under the Participation
Agreement, including the right to have the Company Obligation redeemed by the
Company.
If, however, at any time after the principal of the Bonds shall have been
so declared to be due and payable, and before the entry of final judgment or
decree in any suit, action or proceeding instituted on account of such Event of
Default, or before the completion of the enforcement of any other remedy under
this Indenture, monies shall have accumulated in the Bond Fund sufficient to pay
the principal of and any premium (or redemption price) on all Bonds (or portions
of the principal amount thereof) then or theretofore required to be redeemed
pursuant to any provisions of this Indenture (excluding principal not then due
except by reason of the aforesaid declaration) and all arrears of interest and
interest then due, if any, upon Bonds then Outstanding and if the fees,
compensation, expenses, disbursements, advances and liabilities of the Trustee
and all other amounts then payable by the Company under the Participation
Agreement and the Company Obligation shall have been paid or a sum sufficient to
pay the same shall have been deposited with the Trustee, and every other Event
of Default known to the Trustee in the observance or performance of any
covenant, condition or agreement contained in the Bonds or in this Indenture
(other than default in the payment of the principal of such Bonds then due only
because of a declaration under this Section) shall have been remedied to the
satisfaction of the Trustee or, the Company shall be taking, or shall be causing
to be taken, appropriate action in good faith to effect its cure, then and in
every such case the Trustee may with the written consent of the Credit Facility
Issuer, and shall upon the written request of the Credit Facility Issuer, or, if
the Credit Facility Issuer is in default under the Credit Facility, upon the
written request or direction of the Holders of not less than a majority in
principal amount of the Bonds (determined in accordance with the provisions of
Section 14.03) then Outstanding shall, by written notice to the Authority,
rescind and annul such declaration and its consequences unless the Trustee shall
have received from the Company Indenture Trustee a notice of redemption of any
outstanding Company Obligation held hereunder before such rescission or
annulment and such notice of redemption shall not have been rescinded; provided,
however, that notwithstanding any such rescission and annulment during an
Auction Rate Period, the Bonds shall continue to bear interest at the Default
Rate for the applicable period of time pursuant to and to the extent provided in
Appendix B. No such rescission or annulment pursuant to the next preceding
sentence shall extend to or affect any subsequent default or impair any right
consequent thereto.
Section 13.04. Action by Trustee Upon Occurrence of Event of Default. Upon
the occurrence and continuation of an Event of Default, subject to Section 6.04
hereof, the Trustee (i) for and on behalf of the Holders of the Bonds, shall
have the same rights hereunder which are possessed by any Holders of the Bonds;
(ii) shall be authorized to proceed, in its own name and as trustee of an
express trust; (iii) may pursue any available remedy by action at law or suit in
equity to enforce the payment of the principal of and interest and premium, if
any, on the Bonds; (iv) may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of such
Trustee and of the Bondholders allowed in any judicial proceedings relative to
the Company, its creditors, its property or the Bonds; and (v) may, and upon the
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written request or direction of the Holders of not less than twenty-five percent
(25%) in principal amount of the Bonds then Outstanding (determined in
accordance with the provisions of Section 14.03), with the prior written consent
of the Credit Facility Issuer, shall proceed to protect and enforce all rights
of the Holders and the Trustee under and as permitted by this Indenture and the
laws of the State of New York, by such means or appropriate judicial proceedings
as shall be suitable or deemed by it most effective in the premises, including
the appointment of temporary trustees and any actions, suits or special
proceedings at law or in equity or in bankruptcy or by proceedings in the office
of any board or officer having jurisdiction, or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
the Participation Agreement, or to require the Authority or the Company to
perform its or their duties under the Act, the Participation Agreement, the
Company Obligation, the Bonds and this Indenture, or in aid of execution of any
power granted in this Indenture or to enforce any other legal or equitable right
or remedy vested in the Holders of the Bonds or the Trustee by this Indenture or
by such laws, or for the appointment of a receiver. All rights of action
(including the right to file proofs of claim) under this Indenture or under any
of the Bonds may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or other proceedings relating
thereto. Any such suit or proceeding instituted by the Trustee shall be brought
in its name and as trustee of an express trust without the necessity of joining
as plaintiffs or defendants any Holders of the Bonds, and any recovery or
judgment shall be for the equal benefit of the Holders of the Outstanding Bonds.
In the enforcement of any remedy under this Indenture the Trustee shall be
entitled to xxx for, enforce payment of and receive any and all amounts, then or
during any Event of Default becoming, and at any time remaining, due from the
Company and unpaid under the Participation Agreement and the Company Obligation
for principal, premium, interest or otherwise under any of the provisions of
this Indenture or of the Bonds, with interest on overdue payments if such
interest then is permitted by the laws of the State of New York, together with
any and all costs and expenses of collection and of all proceedings hereunder
and under such Bonds, without prejudice to any other right or remedy of the
Trustee or of the Holders, and to recover and enforce judgment or decree against
the Company which is in default of its respective obligations under the
Participation Agreement and the Company Obligation, but solely as provided
herein and in such Bonds, for any portion of such amounts remaining unpaid, with
interest, costs and expenses, and to collect in any manner provided by law, the
monies adjudged or decreed to be payable. Any such judgment shall be recovered
by the Trustee, in its own name and as trustee of an express trust.
Section 13.05. Powers of Trustee With Respect to Participation Agreement
and Other Agreements. If the payments required to be paid to the Trustee under
the Participation Agreement and the Company Obligation or other agreement
pledged and assigned hereunder, as the case may be, are not paid when due or
upon the happening and continuance of an Event of Default set forth in clause
(a) of Section 13.01, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings at
law or in equity for the collection of all payments due and unpaid under the
Participation Agreement and the Company Obligation or other agreement, as the
case may be, and required to be paid to the Trustee and may prosecute any such
action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or the obligor under any other
agreement, as the case may be, and collect in the manner provided by law out of
the property of the Company or such obligor wherever situated, the monies
adjudged or decreed to be payable.
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In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company under the Participation Agreement or an obligor
under any other agreement pledged and assigned hereunder, as the case may be,
under the Federal Bankruptcy Act or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company
under the Participation Agreement and the Company Obligation or an obligor under
any other agreement pledged and assigned hereunder, as the case may be, the
Trustee, regardless of whether the principal of the Bonds shall then be due and
payable as therein expressed or by declaration or otherwise and regardless of
whether the Trustee shall have made any demand pursuant to the power vested in
it by this Indenture, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid under the Participation Agreement and the Company
Obligation by the Company or under such other agreement by such obligor, as the
case may be, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bad faith) and of
the Holders allowed in any such judicial proceedings relative to the Company or
other obligor, as the case may be, or to the creditors or property of the
Company or other obligor, as the case may be, and to collect and receive any
monies or other property payable or deliverable on such claims, and to
distribute in accordance with the provisions hereof all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf, and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized to make such payments to the Trustee.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holders any plan of
reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holders in any such proceeding.
The provisions of this Section shall not be construed as in any way
limiting the powers of the Trustee, with respect to defaults by the Authority or
by the Company under the Participation Agreement and the Company Obligation, or
an obligor under any other agreement pledged and assigned hereunder, as the case
may be, whether such powers be expressly or implicitly granted to the Trustee
elsewhere in this Indenture or in the Participation Agreement or the Company
Obligation or other agreement, as the case may be, or as a denial that the
Trustee has any such other powers, but the powers granted to the Trustee by this
Section shall be supplemental, additional and cumulative to all other powers
possessed by the Trustee with respect to defaults under this Indenture or under
the Participation Agreement, the Company Obligation or other agreement pledged
and assigned hereunder, as the case may be.
Section 13.06. Disposition of Monies in Event of Insufficiencies in Funds
and Accounts. All monies (other than proceeds of any Support Facility) received
by the Trustee pursuant to any right given or action taken under the provisions
of this Article, after payment of the costs and expenses of the proceedings
resulting in the collection of such monies and of the expenses, fees and
advances incurred or made by the Trustee or Registrar and Paying Agent
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hereunder, shall be deposited in the Bond Fund. If at any time the monies in the
Bond Fund shall not be sufficient to pay the interest or principal or premium,
if any (or the redemption price), of the Bonds as the same become due and
payable (whether at maturity or upon proceedings for the redemption thereof or
by acceleration or otherwise), the monies in such fund, together with any other
monies then available or thereafter becoming available for such purpose, whether
through the exercise of the remedies provided for in this Article XIII or
otherwise, shall be applied as follows:
(a) Unless the principal of all the Bonds shall have become due and
payable or shall have been declared due and payable pursuant to the
provisions of Section 13.03, all such monies shall be applied:
First: to the payment to the persons entitled thereto of all
installments of interest then due, in the order of the maturity of the
installments of such interest, and if the amount available shall not be
sufficient to pay in full any particular installment, then to the payment
ratably, according to the amounts due on such installment, to the persons
entitled thereto, without any discrimination or preference; and
Second: to the payment of the premium, if any, on and the principal of
the Bonds, to the purchase and retirement of Bonds and to the redemption of
Bonds, all in accordance with the provisions of this Indenture.
(b) If the principal of all the Bonds shall have become due and
payable or shall have been declared due and payable pursuant to the
provisions of Section 13.03, all such monies shall be applied to the
payment of the principal and interest then due and unpaid, with interest on
such 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, according to the amounts due respectively for principal and
interest, to the persons entitled thereto without any discrimination or
preference except as to any difference in the respective rates of interest
specified in the Bonds.
(c) If the principal of all the Bonds shall have been declared due and
payable pursuant to the provisions of Section 13.03, and if such
declaration shall thereafter have been rescinded and annulled pursuant to
the provisions of such Section 13.03, then, subject to the provisions of
subparagraph (b) above of this paragraph in the event that the principal of
all the Bonds shall later become due and payable or be declared due and
payable pursuant to the provisions of Section 13.03, the monies then held
in the Bond Fund shall be applied to the payment of the principal of and
premium (or redemption price) on all matured Bonds and all Bonds (or
portions of the principal amount thereof) then or theretofore required to
be redeemed pursuant to any provisions of this Indenture (excluding
principal not then due except by reason of such declaration) and all
arrears of interest and interest then due, if any, upon all Bonds then
Outstanding, and any monies thereafter deposited in the Bond Fund shall be
applied in accordance with the provisions of Article X.
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Whenever monies are to be applied by the Trustee pursuant to the provisions
of subparagraphs (a) and (b) of this Section, (i) such monies shall be applied
by the Trustee at such times, and from time to time, as the Trustee in its sole
discretion shall determine, having due regard to the amount of such monies
available for application and the likelihood of additional monies becoming
available for such application in the future; (ii) the deposit of such monies,
in trust for the proper purpose, shall constitute proper application by the
Trustee; and (iii) the Trustee shall incur no liability whatsoever to the
Authority, to any Holder or to any other person for any delay in applying any
such monies, so long as the Trustee acts with reasonable diligence, having due
regard to the circumstances, and ultimately applies the same in accordance with
such provisions of this Indenture as may be applicable at the time of
application by the Trustee. Whenever the Trustee shall exercise such discretion
in applying such monies, it shall fix the date (which shall be an Interest
Payment Date unless the Trustee shall deem another date more suitable) upon
which such application is to be made and upon such date interest on the amounts
of principal to be paid on such date shall cease to accrue. The Trustee shall
give such notice as it may deem appropriate of the fixing of any such date, and
shall not be required to make payment to the Holder of any unpaid Bond until
such Bond shall be surrendered to the Trustee for appropriate endorsement, or
for cancellation if fully paid.
Section 13.07. Effect of Delay or Omission; Waiver of Default; Direction of
Remedial Proceedings by the Holders. No delay or omission of the Trustee or of
any Holder of the Bonds to exercise any right or power accruing upon any default
or Event of Default shall impair any such right or power or shall be construed
to be a waiver of any such default or acquiescence therein.
Anything in this Indenture to the contrary notwithstanding (but subject to
Section 6.04, which shall be controlling), the Holders of not less than a
majority in principal amount of the Bonds at the time Outstanding (determined in
accordance with the provisions of Section 14.03) with the prior written consent
of the Credit Facility Issuer shall be authorized and empowered and have the
right, by an instrument or concurrent instruments in writing delivered to the
Trustee on behalf of the Holders of the Bonds then Outstanding to consent to the
waiver of any Event of Default or its consequences, and the Trustee shall waive
any Event of Default and its consequences upon the written request of the
Holders of such majority; provided, however, that there shall not be waived (i)
any default in payment of principal or premium when due or (ii) any default in
payment when due of interest unless, in either case, prior to such waiver all
arrears in principal, premium, if any, and interest, with additional interest,
to the extent permitted by law, at the rate then borne by the Bonds (which, in
the case of Auction Rate Bonds and to the extent provided in Appendix B, shall
be the Default Rate), and all fees and expenses of the Trustee shall have been
paid or provided for; provided, however, that notwithstanding any such waiver,
any Auction Rate Bonds shall, to the extent provided in Appendix B, continue to
bear interest at the Default Rate in accordance with Appendix B. No such waiver
shall extend to or affect any other existing or subsequent default or Event of
Default or impair any rights or remedies consequent thereon.
Anything in this Indenture to the contrary notwithstanding (but subject to
Section 6.04, which shall be controlling), the Holders of not less than
twenty-five percent (25%) in principal amount of the Bonds at the time
Outstanding (determined in accordance with the provisions of Section 14.03) with
the prior written consent of the Credit Facility Issuer shall be authorized and
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empowered and have the right, by an instrument or concurrent instruments in
writing delivered to the Trustee to direct the time and method of conducting any
proceeding for any remedy to be taken by the Trustee or available to the Trustee
or available to the Holders of the Bonds, or exercising any trust or power
conferred upon the Trustee hereunder provided: (1) such direction shall not be
in conflict with any rule of law or with this Indenture or expose the Trustee to
personal liability, or be unduly prejudicial to Holders not joining therein, and
(2) the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
Section 13.08. Suits or Actions by Holders; Any Holder May Enforce Overdue
Payment of His or Her Bond or Interest Thereon. No Holder of any of the Bonds
shall have any right to institute any suit, action or proceeding in equity or at
law for the execution of any trust hereunder or for any other remedy hereunder
unless there shall have occurred an Event of Default of which the Trustee has
been notified or is deemed to have notice as provided in Section 12.08, and such
Holder previously shall have given to the Trustee written notice of the Event of
Default on account of which such suit, action or proceeding is to be instituted,
and, subject to Section 6.04 hereof, unless also the Holders of not less than
twenty-five percent (25%) in principal amount of the Bonds then Outstanding
shall have made written request of the Trustee after the right to exercise such
powers or right of action, as the case may be, shall have accrued, and shall
have afforded the Trustee a period of sixty (60) days either to proceed to
exercise the powers hereinabove granted or to institute such action, suit or
proceeding in its or their name, the Trustee shall have been indemnified by
Holders against the costs, expenses and liabilities to be incurred in compliance
with such request, and shall not have received an inconsistent direction from
the Holders of not less than twenty-five percent (25%) in principal amount of
the Bonds and the Trustee shall have refused or neglected to comply with such
request within a reasonable time. Subject to Section 6.04 hereof, it is
understood and intended that no one or more Holders of the Bonds hereby secured
shall have any right in any manner whatever by the action of such Holder or
Holders to affect, disturb or prejudice the security of this Indenture, or to
enforce any right hereunder except in the manner herein provided; that all
proceedings at law or in equity shall be instituted, had and maintained in the
manner herein provided and for the benefit of all Holders of such Outstanding
Bonds; and that any individual rights of action or other right given to one or
more of such Holders by law are restricted by this Indenture to the rights and
remedies herein provided. Notwithstanding the foregoing and subject to Section
12.02, the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Bond to receive payment of the principal of, premium, if any, and
interest on such Bond, on or after the respective due dates expressed in such
Bond, or to institute suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder, except that no Holder of any such Bond shall have the right to
institute any such suit, if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver, or loss of the lien of this
Indenture.
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Section 13.09. Remedies Not Exclusive. No remedy by the terms of this
Indenture conferred upon or reserved to the Trustee or the Holders of the Bonds
is intended to be exclusive of any other remedy so conferred or reserved or to
be exclusive of other remedies now or hereafter existing at law or in equity or
by statute, and each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder to the Trustee or to the Holders of
the Bonds or now or hereafter existing at law or in equity or by statute. Every
such right, power and remedy given hereunder or by law or in equity or by
statute may be exercised from time to time and as often as may be deemed
expedient.
Section 13.10. Effect of Abandonment of Proceedings on Default. In case any
proceeding taken by the Trustee or the Holders of the Bonds on account of any
Event of Default shall have been discontinued or abandoned for any reason, then
and in every such case the Authority, the Trustee and the Holders shall be
restored to their former positions and rights hereunder, respectively, and all
rights, remedies, powers and duties of the Trustee shall continue as though no
such proceeding had been taken.
Section 13.11. Interest on Overdue Amounts. To the extent permitted by law all
amounts which are due and payable but which have not been so paid under this
Indenture shall bear interest at the then current rate of interest on the Bonds
until paid; provided, however, that during any Auction Rate Period all amounts
which are due and owing but unpaid hereunder as a result of a Payment Default by
the Bond Insurer shall bear interest at the Default Rate until paid pursuant to
and to the extent provided in Appendix B.
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ARTICLE XIV
EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND
OWNERSHIP OF BONDS; EXCLUSION OF BONDS
OWNED BY THE AUTHORITY OR THE CORPORATION
Section 14.01. Execution of Requests, Directions and Consents and Other
Instruments and Proof of Same; Ownership of Bonds and Proof of Same. Any
request, direction, consent or other instrument required by this Indenture to be
signed or executed by Holders of Bonds may be signed or executed by such Holders
in person or by agent or agents duly appointed in writing, and may be in any
number of concurrent writings of substantially similar tenor. Proof of the
execution of any such request, direction, consent or other instrument or of a
writing appointing any such agent, and of the holding or ownership of Bonds,
shall be sufficient for any purpose of this Indenture and shall be conclusive in
favor of the Trustee hereunder with regard to any action taken by it under such
request, direction, consent or other instrument or of a writing appointing any
such agent, if made in the following manner:
(a) the fact and date of the execution by any person of any such request,
direction, consent or other instrument in writing may be proved in
any reasonable manner which the Trustee deems sufficient;
(b) the ownership of Bonds shall be proved by the books of registry kept
under the provisions of this Indenture.
Any request, direction, consent or vote of the Holder of any Bond shall
bind and be conclusive upon the Holder of such Bond giving such request,
direction or consent or casting such vote and upon every future Holder of the
same Bond in respect of anything done or suffered to be done by the Trustee or
otherwise, or by the Holders of other Bonds, in pursuance of such request,
direction, consent or vote, and whether or not such future Holder has knowledge
of or information as to such request, direction, consent or vote; provided that
any request, direction, consent or vote of the Holder of a Bond required by any
of the provisions hereof may be revoked by the Holder giving such request,
direction, consent or vote or by a subsequent Holder if such revocation in
writing is filed with the Trustee, prior to the time when the request,
direction, consent or vote of the percentage of the Holders of the Bonds
required by such provision shall have been given and action taken by the Trustee
or otherwise, or by the Holders of other Bonds, under authority of such request,
direction, consent or vote.
The payment of or on account of principal to or upon the order of the
person in whose name the Bonds shall at the time be registered on said books of
registry and the payment of interest to or upon the order of any person in whose
name the Bonds shall at the time be registered on said books of registry, shall
be valid and effectual fully to satisfy and discharge all liability hereunder or
upon the Bonds to the extent of the sum or sums so paid.
The Authority at the request of the Company may establish a record date for
the taking of any action by the Holders.
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Section 14.02. Meetings of Holders. The Trustee or the Holders of not less
than twenty percent (20%) in principal amount of the Bonds then Outstanding may
at any time call a meeting of the Holders of the Bonds for the purpose of the
consenting to, the approving, the requesting, or the directing by the Holders of
the Bonds of any action required to be consented to or approved by them
hereunder or which they may request or direct hereunder to be taken, or for the
making by the Holders of any appointments they may make hereunder, or for the
purpose of taking any other action which the Holders may take hereunder, or for
any other purpose concerning the payment and security of the Bonds hereunder.
Every such meeting shall be held at such place in The City of New York, State of
New York, as may be specified in the notice calling such meeting. Written notice
of such meeting, stating the place and time of the meeting and in general terms
the business to be submitted, shall be mailed to the Holders whose names and
addresses then appear upon the books of registry by the Registrar and Paying
Agent or the Holders calling such meeting, not less than twenty (20) days nor
more than sixty (60) days before such meeting. Any meeting of Holders shall,
however, be valid without notice if the Holders of all Bonds then Outstanding
are present in person or by proxy or if notice is waived before or within thirty
(30) days after the meeting by those not so present.
Attendance and voting by Holders at meetings thereof may be in person or by
proxy. Holders of Bonds may, by an instrument in writing under their hands,
appoint any person or persons, with full power of substitution, as their proxy
to attend and vote at any meeting for them.
Persons named by the Trustee, or elected by the Holders of a majority in
principal amount of the Bonds represented at the meeting in person or by proxy
in the event the Trustee is not represented at such meeting, shall act as
temporary chairman and temporary secretary of any meeting of Holders. A
permanent chairman and a permanent secretary of such meeting shall be elected by
the Holders of a majority in principal amount of the Bonds represented at such
meeting in person or by proxy. The permanent chairman of the meeting shall
appoint two (2) inspectors of votes who shall count all votes cast at such
meeting, except votes on the election of chairman and secretary as aforesaid,
and who shall make and file with the secretary of the meeting and the Trustee
their verified report of all such votes cast at the meeting.
The Holders of not less than the principal amount of the Bonds required by
the provisions hereof to consent to, approve, request or direct any action to be
taken at a meeting of Holders, or required by the provisions hereof to make any
appointments to be made at such meeting, or required by the provisions hereof to
take any other action to be taken at such meeting, must be present at such
meeting in person or by proxy in order to constitute a quorum for the
transaction of such business. Less than a quorum, however, shall have power to
adjourn the meeting from time to time without notice of such adjournment other
than the announcement thereof at the meeting; provided, however, that if such
meeting is adjourned by less than a quorum for more than ten (10) days, notice
of such adjournment shall be given by the Trustee at least five (5) days prior
to the adjourned date of the meeting.
Any Holder of a Bond shall be entitled in person or by proxy to attend and
vote at such meeting as Holder of the Bond or Bonds registered in his or her
name without producing such Bond or Bonds. Such persons and their proxies shall,
if required, produce such proof of personal identity as shall be satisfactory to
the Secretary of the meeting.
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All proxies presented at such meeting shall be delivered to the Inspector
of Votes and filed with the Secretary of the meeting. The right of a proxy for a
Holder to attend the meeting and act and vote thereat may be proved (subject to
the Trustee's right to require additional proof) by a written proxy executed by
such Holder as aforesaid.
The officers or nominees of the Trustee may be present or represented at
such meeting and take part therein, but shall not be entitled to vote thereat,
except for such officers or nominees who are Holders or proxies for Holders
(including the Trustee).
The vote at any such meeting of the Holder of any Bond, or his or her
proxy, entitled to vote thereat shall be binding upon such Holder and upon every
subsequent Holder of such Bond (whether or not such subsequent Holder has notice
thereof).
Section 14.03. Exclusion of Bonds Held by or for the Authority, the Company
and of Bonds No Longer Deemed Outstanding Hereunder. In determining whether the
Holders of the requisite aggregate principal amount of Bonds have concurred in
any demand, request, direction, consent, vote or waiver under this Indenture,
any Bonds which are owned by or on behalf of or for the account of the
Authority, the Company and, except for the purposes of Section 16.01, any Bonds
which are deemed no longer Outstanding hereunder shall be disregarded and not
included for the purpose of any such determination, and the Holders of such
Bonds shall not be entitled to vote upon, consent to or concur in any action
provided in this Indenture, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such demand, request,
direction, consent, vote or waiver only Bonds which the Trustee knows are owned
as aforesaid shall be disregarded. The Trustee may require each Holder of a Bond
or Bonds, before such Holder's demand, request, direction, consent, vote or
waiver shall be deemed effective, to reveal if the Bonds as to which such
demand, request, direction, consent, vote or waiver is made, granted, cast or
given are disqualified as provided in this Section.
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ARTICLE XV
AMENDING AND SUPPLEMENTING THE INDENTURE,
THE PARTICIPATION AGREEMENT, THE REMARKETING AGREEMENT,
AUCTION AGREEMENT, BROKER-DEALER AGREEMENTS,
BOND PURCHASE TRUST AGREEMENT
Section 15.01. Amending and Supplementing Indenture Without Consent of
Holders. The Authority and the Trustee, from time to time and at any time and
without the consent or concurrence of any Holder, may enter into a Supplemental
Indenture, (i) to make any changes, modifications, amendments or deletions to
this Indenture that may be required to permit the Indenture to be qualified
under the Trust Indenture Act of 1939 of the United States of America or (ii)
for any one or more of the following purposes:
(a) (x) to make any changes or corrections in this Indenture or any
Supplemental Indenture as to which the Authority shall have been advised by
counsel that the same are required for the purpose of curing or correcting
any ambiguity or defective or inconsistent provision or omission or mistake
or manifest error contained in this Indenture or Supplemental Indenture, or
(y) to insert in this Indenture such provisions clarifying matters or
questions arising under this Indenture as are necessary or desirable if
such provisions shall not materially and adversely affect the rights of the
Holders;
(b) to add additional covenants and agreements of the Authority for
the purpose of further securing the payment of the Bonds;
(c) to surrender any right, power or privilege reserved to or
conferred upon the Authority by the terms of this Indenture;
(d) to confirm as further assurance any lien, pledge or charge, or the
subjection to any lien, pledge or charge, created or to be created by the
provisions of this Indenture or any Supplemental Indenture;
(e) to grant to or confer upon the Holders any additional rights,
remedies, powers, authority or security that lawfully may be granted to or
conferred upon them, or to grant to or to confer upon the Trustee for the
benefit of the Holders any additional rights, duties, remedies, power or
authority;
(f) to provide for the issuance of Bonds in book entry or coupon form,
if at the time permitted by applicable law;
(g) to provide for the substitution of rating agencies;
(h) to provide for any new administrative or procedural provisions
made necessary or desirable by the issuance of a Support Facility or an
Alternate Support Facility, other credit, liquidity or support facility,
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including, but not limited to, any amendment necessary to obtain a rating
on the Bonds based upon such facility; and
(i) to modify, amend or supplement the Indenture in such manner as to
permit the qualification of the Bonds for deposit with a Securities
Depository, and, in connection therewith, if they so determine, to add to
the Indenture, such other terms, conditions and provisions as may be
required to permit such qualification.
No Supplemental Indenture shall be entered into without the consent of the
Bond Insurer (which consent shall not be unreasonably withheld), and unless in
the opinion of Bond Counsel which shall be delivered and addressed to the
Trustee (which opinion may be combined with the opinion required by Section
15.04) the execution of such Supplemental Indenture is permitted by the
foregoing provisions of this Section and the provisions of such Supplemental
Indenture do not materially and adversely affect the rights of the Holders of
the Bonds and the Trustee may rely on any such opinion.
Section 15.02. Amending and Supplementing Indenture with Consent of
Holders. With the consent of the Holders of a majority in principal amount of
the Bonds then Outstanding and the Bond Insurer, the Authority and the Trustee
from time to time and at any time may enter into a Supplemental Indenture for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture, or modifying or amending
the rights and obligations of the Authority hereunder, or modifying or amending
in any manner the rights of the Holders; provided that, without the consent of
the Bond Insurer (which consent shall not be unreasonably withheld) and the
specific consent of the Holders of all Bonds Outstanding which would be affected
thereby no Supplemental Indenture amending or supplementing the provisions
hereof shall: (a) change the fixed maturity date for the payment of the
principal of any Bond, or the dates for the payment of interest thereon or the
terms of the purchase or redemption thereof, or reduce the principal amount of
any Bond or the rate of interest thereon or the method of calculating the same
except as otherwise provided in this Indenture; or (b) reduce the aforesaid
percentage of Bonds, the Holders of which are required to consent to any
Supplemental Indenture amending or supplementing the provisions of this
Indenture; or (c) give to any Bond any preference over any other Bond secured
hereby; or (d) authorize the creation of any pledge of payments under the
Participation Agreement or Company Obligation Payments prior or superior to the
pledge of a lien and charge thereon assigned herein for the payment of the
Bonds; or (e) effect any change in the purchase or redemption provisions
relating to the Bonds; or (f) deprive any Holders in any material respect of the
security afforded by this Indenture. A modification or amendment of the
provisions of Article X hereof with respect to the Bond Fund or any other Funds
or Accounts established thereby shall not be deemed a change in the terms of
payment; provided that no such modification or amendment shall, except upon the
consent of the Holders of all Bonds Outstanding affected thereby, reduce the
amount or amounts required to be deposited in the Bond Fund. Nothing in this
paragraph contained, however, shall be construed as making necessary the
approval of the Holders of the execution of any Supplemental Indenture
authorized by the provisions of Section 15.01.
The proof of the giving of any consent by any Holder required by this
Section and of the holding of the Bonds for the purpose of giving consents shall
be made in accordance with the provisions of Article XIV. It shall not be
necessary that the consent of the Holders approve the particular form of wording
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of the proposed supplemental amendment or supplement, but it shall be sufficient
if such consent approves the substance of the proposed amendment or supplement.
After the Holders of the required percentage of Bonds shall have filed their
consents to the amending or supplementing hereof pursuant to this Section, the
Authority shall mail a copy of notice of such consent, postage prepaid, to each
Holder at his or her address as it appears upon the books of registry and to the
Trustee. Nothing in this paragraph contained, however, shall be construed as
requiring the giving of notice of any amending or supplementing of this
Indenture authorized by this Section. A record of the consents shall be filed
with the Trustee, and shall be proof of the matters therein stated until the
contrary is proved. No action or proceeding to set aside or invalidate such
Supplemental Indenture or any of the proceedings for its adoption shall be
instituted or maintained unless such action or proceeding is commenced within
sixty (60) days after the mailing of the notice required by this paragraph.
Notwithstanding anything in this Indenture to the contrary, the consent of
the Holders of the required amount of Bonds, but not the consent of the Bond
Insurer, shall be deemed given with respect to a Supplemental Indenture as
follows:
(a) while the Bonds are in a Commercial Paper Rate Period, an Auction
Rate Period, a Daily Rate Period, a Weekly Rate Period, a Monthly Rate
Period, a Term Rate Period or a Fixed Rate Period, if (i) the Supplemental
Indenture takes effect on a date on which all of the Bonds that are
affected by such Supplemental Indenture are subject to mandatory tender for
purchase in accordance with this Indenture, (ii) any modification or
amendment effected thereby is consented to in writing by the Remarketing
Agent for such Bonds on or prior to such effective date and (iii) the Bonds
so tendered are purchased;
(b) while the Bonds are in a Daily Rate Period or Weekly Rate Period,
if (i) not less than 30 days before the effective date of the Supplemental
Indenture, the Trustee sends a notice of the proposed modification or
amendment to the Holders of the Bonds that are affected by such
Supplemental Indenture and the Holders of such Bonds have the right to
tender their Bonds for purchase pursuant to Section 5.03 hereof before such
effective date, (ii) any modification or amendment effected thereby is
consented to in writing by the Remarketing Agent for Bonds tendered
pursuant to Section 5.03 herein on or prior to such effective date and
(iii) the Bonds so tendered are purchased; or
(c) while the Bonds are in an Auction Rate Period, in accordance with
Section 2.07(b) of Appendix B hereto, to the extent described in such
Section 2.07(b).
Section 15.03. Notation upon Bonds; New Bonds Issued upon Amendments.
The Bonds delivered after the effective date of any action taken as
provided in this Article, if any, may and shall if required by the Trustee
bear a notation as to such action, by endorsement or otherwise and in form
approved by the Authority. In that case, upon demand of any Holder at such
effective date and upon presentation of Bonds at the applicable Principal
Corporate Trust Office of the Trustee or other transfer agent or registrar
hereunder for such Bonds, and at such additional offices, if any, as the
Authority may select and designate for that purpose, a suitable notation
shall be made on the Bonds.
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Section 15.04. Effectiveness of Supplemental Indentures. Upon the execution
pursuant to this Article by the Authority and the Trustee of any Supplemental
Indenture amending or supplementing the provisions of this Indenture and the
delivery to the Trustee of an opinion of Bond Counsel addressed to the Trustee
(upon which opinion the Trustee, subject to the provisions of Section 12.04,
shall be fully protected in relying) to the effect that such Supplemental
Indenture (a) is permitted by the provisions of this Article XV and has been
duly executed in accordance with the provisions hereof and applicable law and
that the provisions thereof are valid, and (b) does not have an adverse effect
on the exclusion of interest on the Bonds from gross income for federal income
tax purposes, or upon such later date as may be specified in such Supplemental
Indenture, (i) this Indenture and the Bonds shall be modified and amended in
accordance with such Supplemental Indenture; (ii) the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Authority, the Trustee, and the Holders shall thereafter be determined,
exercised and enforced under this Indenture subject in all respects to such
modifications and amendments; and (iii) all of the terms and conditions of any
such Supplemental Indenture shall be a part of the terms and conditions of the
Bonds and of this Indenture for any and all purposes.
Section 15.05. Supplemental Indenture Affecting Support Facility Provider.
No Supplemental Indenture affecting the rights or obligations of the Support
Facility Issuer which takes effect while any Support Facility is in effect may
be entered into by the Authority and the Trustee or be consented to by the
Holders without written consent of each Support Facility Issuer. So long as the
conditions set forth in Section 6.04 are met by the Bond Insurer and with
respect to the Policy, no Supplemental Indenture may be entered into by the
Authority and the Trustee without written consent of the Bond Insurer.
Section 15.06. Supplemental Agreements Not Requiring the Consent of the
Holders. The Authority and the Company may, with the written consent of the
Trustee but without notice to or consent of any Holder, from time to time and at
any time, agree to such supplemental agreements supplementing the Participation
Agreement or amendments to the Participation Agreement as shall not be
inconsistent with the terms and provisions of the Participation Agreement or
this Indenture and, in the opinion of the Authority, shall not be detrimental to
the interests of the Holders (which Supplemental Agreements shall thereafter
form a part of the Participation Agreement):
(a) to cure any ambiguity or formal defect or omission in the
Participation Agreement or in any Supplemental Agreement;
(b) to grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers, authority or security that
may lawfully be granted to or conferred upon the Holders or the Trustee;
(c) to provide for any new administrative, security or procedural
provisions necessitated by the issuance of an Alternate Support Facility;
or
(d) to provide for or add any further changes or corrections that are
necessary or desirable to comply with any Supplemental Indenture entered
into pursuant to Section 15.01;
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provided that no such Supplemental Agreement shall be effective without the
consent of the Bond Insurer (which consent shall not be unreasonably withheld),
and provided further that no such Supplemental Agreement which takes effect
while a Support Facility is in effect shall be effective prior to the receipt by
such parties of the written consent of each Support Facility Issuer.
Section 15.07. Notice and Consent for Supplemental Agreements Requiring the
Consent of the Holders. Except for Supplemental Agreements or amendments
provided for in Section 15.06, neither the Authority nor the Trustee shall agree
or consent, as the case may be, to any Supplemental Agreement or amendment to
the Participation Agreement unless notice of the proposed execution of such
Supplemental Agreement or amendment shall have been given and the Holders shall
have consented to and approved the execution thereof in the same manner and form
as provided for in Section 15.02 in the case of Supplemental Indentures;
provided that no such Supplemental Agreement which materially and adversely
affects any issuer of a Support Facility (so long as such Support Facility is in
effect) shall be effective prior to the receipt by such parties of the written
consent of the issuer of such Support Facility.
Notwithstanding anything in this Indenture to the contrary, the consent of
the Holders of the required amount of Bonds, but not the consent of the Bond
Insurer, shall be deemed given with respect to any Supplemental Agreement or
amendment to the Participation Agreement as follows:
(a) while the Bonds are in a Commercial Paper Rate Period, an Auction
Rate Period, a Daily Rate Period, a Weekly Rate Period, a Monthly Rate
Period, a Term Rate Period or a Fixed Rate Period, if (i) the Supplemental
Agreement or amendment to the Participation Agreement takes effect on a
date on which all of the Bonds that are affected by such Supplemental
Agreement or amendment to the Participation Agreement are subject to
mandatory tender for purchase in accordance with this Indenture, (ii) any
modification or amendment effected thereby is consented to in writing by
the Remarketing Agent for Bonds tendered pursuant to Section 5.03 herein on
or prior to such effective date and (iii) the Bonds so tendered are
purchased;
(b) while the Bonds are in a Daily Rate Period or Weekly Rate Period,
if (i) not less than 30 days before the effective date of the Supplemental
Agreement or amendment to the Participation Agreement, the Trustee sends a
notice of the proposed modification or amendment to the Holders of the
Bonds that are affected by such modification or amendment and the Holders
of such Bonds have the right to tender their Bonds for purchase pursuant to
Section 5.03 hereof before such effective date, (ii) any modification or
amendment effected thereby is consented to in writing by the Remarketing
Agent for such Bonds on or prior to such effective date and (iii) the Bonds
so tendered are purchased; or
(c) while the Bonds are in an Auction Rate Period, in accordance with
Section 2.07(b) of Appendix B hereto, to the extent described in such
Section 2.07(b).
Section 15.08. Effectiveness of Supplemental Agreement. Upon the execution
pursuant to this Article and of applicable law by the Authority and the Company
of any Supplemental Agreement amending or supplementing the provisions of the
Participation Agreement and the delivery to the Trustee of an Opinion of Bond
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Counsel that such Supplemental Agreement is in due form, has been duly executed
in accordance with the provisions hereof and applicable law and that the
provisions thereof are valid (upon which opinion the Trustee, subject to the
provisions of Section 12.04, shall be fully protected in relying), or upon such
later date as may be specified in such Supplemental Agreement, (i) the
Participation Agreement shall be modified and amended in accordance with such
Supplemental Agreement; (ii) the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Authority and the Company
shall thereafter be determined, exercised and enforced thereunder subject in all
respects to such modifications and amendments; and (iii) all of the terms and
conditions of any such Supplemental Agreement shall be a part of the terms and
conditions thereof for any and all purposes.
Section 15.09. Supplemental Agreement Affecting Support Facility Provider.
No Supplemental Agreement or amendments to the Participation Agreement affecting
the rights or obligations of the Support Facility Issuer which take effect while
any Support Facility is in effect may be entered into by the Authority or be
consented to by the Holders without written consent of each Support Facility
Issuer. So long as the conditions set forth in Section 6.04 are met by the Bond
Insurer and with respect to the Policy, no Supplemental Agreement may be entered
into by the Authority or be consented to by the Trustee without written consent
of the Bond Insurer.
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ARTICLE XVI
DEFEASANCE; MONEYS HELD FOR PAYMENT OF
DEFEASED BONDS
Section 16.01. Discharge of Liens and Pledges; Bonds No Longer Deemed to be
Outstanding Hereunder. Bonds purchased pursuant to Section 5.03, 5.04, 5.07 or
5.08 shall continue to be Outstanding hereunder until such Bonds shall be
cancelled in accordance with Section 5.14 or paid at maturity or redeemed
pursuant to Article V or otherwise defeased. The obligations of the Authority
under this Indenture and the liens, pledges, charges, trusts, covenants and
agreements of the Authority, herein made or provided for, shall be, subject to
the terms of Section 16.02, fully discharged and satisfied as to the Bonds or
portion thereof and the Bonds shall no longer be deemed to be Outstanding
hereunder:
(a) when the Bonds shall have been cancelled, or shall have been
surrendered for cancellation and are subject to cancellation, or shall have
been redeemed by the Trustee from monies held by it under this Indenture;
or
(b) if the Bonds have not been cancelled or so surrendered for
cancellation or subject to cancellation, or so redeemed, when (1) payment
of the principal of and premium, if any, on the Bonds, plus interest on
such principal to the due date thereof (whether such due date be by reason
of maturity or upon redemption or prepayment, or otherwise) and of any
Purchase Price which is or may become due on such Bonds either (i) shall
have been made or caused to be made in accordance with the terms thereof,
or (ii) shall have been provided for by irrevocably depositing with the
Trustee in trust, and irrevocably appropriating and setting aside
exclusively for such payments (A) monies sufficient to make such payment,
or (B) Governmental Obligations maturing as to principal and interest in
such amounts and at such times as will insure the availability of
sufficient and timely monies to make such payments when due, or (C) a
combination of both such monies and Governmental Obligations, whichever the
Authority deems to be in its best interest, (2) there shall have been
delivered to the Trustee and the Bond Insurer (x) a letter addressed to the
Trustee from a firm of independent public accountants verifying the
mathematical accuracy of the sufficiency of the deposit made pursuant to
(1)(ii) above, (y) an opinion of Bond Counsel to the effect that upon the
provision of payment on the Bonds as described in (1)(ii) above, the Bonds
are no longer deemed to be Outstanding under the Indenture and (z) in the
case of Bonds bearing interest at a Daily Rate, a Weekly Rate, an Auction
Period Rate, a Monthly Rate and a Semi-annual Rate, written confirmation
from S&P and Moody's, if the Bonds are then rated by S&P and Moody's, to
the effect that the deposit made pursuant to (1)(ii) above will not, by
itself, result in a reduction or withdrawal of its short-term or long-term
rating of the Bonds below the rating category of S&P and Moody's,
respectively, then in effect with respect to the Bonds, and (3) all
necessary and proper fees, compensation and expenses of the Trustee, the
Registrar and Paying Agent and the Authority pertaining to the Bonds or
portion thereof with respect to which such deposit is made, shall have been
paid or the payment thereof provided to the satisfaction of the Trustee.
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At such time as the Bonds shall be deemed to be no longer Outstanding
hereunder, as aforesaid, such Bonds shall cease to accrue interest from the due
date thereof (whether such due date occurs by reason of maturity, or upon
redemption or prepayment or otherwise) and, except for the purposes of any such
payment from such monies or Governmental Obligations and except, in the case of
Auction Rate Bonds, to the extent provided in the definition of Outstanding in
Article I shall no longer be secured by or entitled to the benefits of this
Indenture.
Any such monies so deposited with the Trustee as provided in this Section
may at the written direction of the Company also be invested and reinvested in
Governmental Obligations, maturing in the amounts and times as hereinbefore set
forth, and all income from all Governmental Obligations in the hands of the
Trustee pursuant to this Section which is not required for the payment of the
Bonds and interest thereon with respect to which such monies shall have been so
deposited shall be paid to the Company or if any Bonds are then Outstanding, be
deposited in the Bond Fund and credited to the Principal Account as and when
realized and collected, for use and application as are other monies credited to
such Account.
Anything in this Article XVI to the contrary notwithstanding, if monies or
Governmental Obligations have been deposited or set aside with the Trustee
pursuant to this Section for the payment of the Bonds, the Bonds shall be deemed
to have been paid in full. No amendment to the provisions of this Article shall
be made without the consent of the Holders of the Bonds affected thereby.
The Trustee shall promptly surrender any Support Facility (if appropriate
for the type of instrument or instruments then serving as Support Facility) to
the issuer of such Support Facility for cancellation or shall otherwise take
appropriate action to terminate the Support Facility following any such
defeasance.
Section 16.02. Release of Indenture, Termination of Right, Title and
Interest of Trustee. When the Bonds shall be deemed to be paid in accordance
with the provisions of Section 16.01, then and in the case all right, title and
interest of the Trustee under this Indenture shall thereupon cease, determine
and become void, and the Trustee in such case shall release this Indenture,
shall execute such documents to evidence such release as may be reasonably
required by the Authority and furnish the Authority with the same, and shall
turn over to the Company any surplus monies and balances remaining in any of the
Funds and Accounts created in or held under this Indenture, other than monies
and Governmental Obligations held by it pursuant to Section 16.01 or the
provisions of Section 16.03 for the redemption, payment or prepayment of the
Bonds; otherwise, this Indenture shall be, continue and remain in full force and
effect.
Notwithstanding the satisfaction and discharge of this Indenture, the
rights of the Trustee and the Registrar and Paying Agent under Sections 12.02,
12.06 and 12.17 shall survive defeasance of the Bonds hereunder.
Section 16.03. Bonds Not Presented for Payment When Due; Monies Held for
the Bonds after Due Date of Bonds. Subject to the provisions of the next
sentence of this paragraph, if the Bonds shall not be presented for payment when
the principal thereof shall become due, whether at maturity or at the date fixed
for the redemption thereof, or otherwise, and if monies or Governmental
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Obligations shall at such due date be held by the Trustee in trust for that
purpose sufficient and available to pay the principal of and premium, if any, on
the Bonds, together with all interest due on such principal to the due date
thereof or to the date fixed for redemption thereof, all liability of the
Authority and the Company for such payment shall forthwith cease, determine and
be completely discharged, and thereupon it shall be the duty of the Trustee to
hold said monies or Governmental Obligations without liability to the Holders
for interest thereon, in trust for the benefit of the Holders, which thereafter
shall be restricted exclusively to said monies or Governmental Obligations for
any claim of whatever nature on its part on or with respect to the Bonds,
including for any claim for the payment thereof. Notwithstanding anything to the
contrary in Section 10.04, any monies or Governmental Obligations held by the
Trustee for the Holders after the principal of and premium, if any, and interest
on the Bonds or any portion thereof with respect to which such monies or
Governmental Obligations have been so set aside has become due and payable
(whether at maturity or upon redemption or prepayment or otherwise) shall be
either held uninvested as cash or at the written direction of the Company
invested and reinvested in Governmental Obligations which mature on the next
Business Day. Any such monies or Governmental Obligations held by the Trustee
for the Holders after the principal of and premium, if any, and interest on the
Bonds or any portion thereof with respect to which such monies or Governmental
Obligations have been so set aside has become due and payable (whether at
maturity or upon redemption or prepayment or otherwise) shall be deemed
abandoned property when such monies or Governmental Obligations shall have
remained unpaid or undelivered to the Holder or Holders entitled thereto for
three years from the date the principal of and premium, if any, and interest on
the Bonds or any portion thereof has become due and payable and shall be subject
to the laws of the State of New York relating to disposition of unclaimed
property.
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ARTICLE XVII
FORM OF BONDS
AND ENDORSEMENT AND ASSIGNMENT PROVISIONS
Section 17.01. Form of Bonds and Endorsement and Assignment Provisions. The
form of Bond, the form of the certificate of authentication thereof, the form of
endorsement to appear thereon and the form of assignment thereof shall be
substantially in the form set forth in Appendix A hereto.
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ARTICLE XVIII
MISCELLANEOUS
Section 18.01. Benefits of Indenture Limited to Authority, Company,
Trustee, Registrar and Paying Agent, Support Facility Issuer, Remarketing Agent,
Auction Agent and Holders of the Bonds. With the exception of rights or benefits
herein expressly conferred, nothing expressed or mentioned in or to be implied
from this Indenture or the Bonds is intended or should be construed to confer
upon or give to any person other than the Authority, the Company, the Trustee,
the Registrar and Paying Agent, the Support Facility Issuer, the Remarketing
Agent, the Auction Agent and the Holders of the Bonds any legal or equitable
right, remedy or claim under or by reason of or in respect to this Indenture or
any covenant, condition, stipulation, promise, agreement or provision herein
contained. Unless otherwise expressly set forth herein, this Indenture and all
of the covenants, conditions, stipulations, promises, agreements and provisions
hereof are intended to be and shall be for and inure to the sole and exclusive
benefit of the Authority, the Company, the Trustee, the Registrar and Paying
Agent, the Support Facility Issuer, the Remarketing Agent, the Auction Agent,
the Bond Insurer and the Holders of the Bonds as herein and therein provided.
Section 18.02. Indenture a Contract; Indenture Binding Upon Successors or
Assigns of the Authority. In consideration of the acceptance of the Bonds by any
person who shall hold the same from time to time, each of the obligations,
duties, limitations and restraints imposed by this Indenture upon the Authority
or any employee thereof shall be deemed to be a covenant between the Authority
and every Holder and this Indenture and every provision and covenant hereof
shall be a contract by the Authority with the Holders of the Bonds issued
hereunder to secure the full and final payment of the principal of, premium, if
any, of and the interest on the Bonds executed and delivered hereunder. The
provisions of the Act shall be a contract by the Authority with the Holders and
the duties of the Authority and any employee thereof under the Act shall be
enforceable by the Holders. This Indenture shall be enforceable by the Holders,
by mandamus or other appropriate suit, action or proceeding in any court of
competent jurisdiction. The covenants and agreements herein set forth to be
performed by the Authority and any employee thereof, shall be for the benefit,
security and protection of the Holders. All the terms, provisions, conditions,
covenants, warranties and agreements contained in this Indenture shall be
binding upon the assigns of the Authority, and shall inure to the benefit of the
Trustee, its successors or substitutes in trust and assigns, and the Holders.
Section 18.03. Notice to Holders of Bonds. Except as is otherwise provided
in this Indenture, any provision for the mailing of a notice or other paper to
the Holders shall be fully complied with if it is mailed postage prepaid, to the
Holder of the Bonds at such Holder's address appearing upon the books of
registry kept pursuant to Article VII. The Trustee shall furnish a copy of any
notice to a Holder upon a request by the Holder that a copy of such notice be
provided directly to the Holder; provided, however, that any failure to provide
such a copy of a notice to a Holder shall not affect the validity of the
provision of the notice in the preceding sentence.
107
Section 18.04. Waiver of Notice. Whenever in this Indenture the giving of
notice by mail, publication, or otherwise is required, the giving of such notice
may be waived by the person entitled to receive such notice, and in any case the
giving or receipt of such notice shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
Section 18.05. Effect of Saturdays, Sundays and Non-Business Days. Except
as otherwise specifically provided herein, whenever this Indenture requires any
action to be taken on a Saturday, Sunday or other day which is not a Business
Day, such action shall be taken on the first Business Day occurring thereafter.
Except as otherwise specifically provided herein, whenever in this Indenture the
time within which any action is required to be taken or within which any right
will lapse or expire shall terminate on a Saturday, Sunday or other day which is
not a Business Day, such time shall continue to run until midnight on the next
succeeding Business Day.
Section 18.06. Partial Invalidity. If any one or more of the covenants or
agreements or portions thereof provided in this Indenture on the part of the
Authority or the Trustee to be performed should be determined by a court of
competent jurisdiction to be contrary to law, then such covenant or covenants,
or such agreement or agreements, or such portions thereof, shall be deemed
severable from the remaining covenants and agreements or portions thereof
provided in this Indenture and the invalidity thereof shall in no way affect the
validity of the other provisions of this Indenture or of the Bonds, but the
Holders shall retain all the rights and benefits accorded to them hereunder and
under any applicable provisions of law.
If any provisions of this Indenture shall be held or deemed to be or shall,
in fact, be inoperative or unenforceable or invalid in any particular case in
any jurisdiction or jurisdictions or in all jurisdictions, or in all cases
because it conflicts with any constitution or statute or rule of public policy,
or for any other reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable or invalid in
any other case or circumstance, or of rendering any other provision or
provisions herein contained inoperative or unenforceable or invalid to any
extent whatsoever.
Section 18.07. Law and Place of Enforcement of Indenture. This Indenture
shall be construed and interpreted in accordance with the laws of the State of
New York and all suits and actions arising out of this Indenture shall be
instituted in a court of competent jurisdiction in the State of New York.
Section 18.08. Requests, Approvals and Directions of Authority. Whenever in
this Indenture a request, approval, direction or other action is required of the
Authority, such request, approval, direction or other action shall be in the
form of and evidenced by a certificate of an Authorized Officer of the Authority
unless otherwise provided herein.
Section 18.09. Notices, Demands; Requests. Except as otherwise set forth
herein, all notices, demands, directions and requests to be given to or made
hereunder by the Company, the Authority, the Trustee, the Remarketing Agent, the
Auction Agent and the Registrar and Paying Agent shall be given or made in
writing and shall be deemed to be properly given or made if sent by first class
United States mail, postage prepaid, addressed as follows:
108
(a) As to the Company Xxxxxxx Xxxxxxx
Senior Vice President, Treasurer
& Chief Risk Officer
Xxx XxxxxXxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
(b) As to the Authority 00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: President
(c) As to the Trustee Citibank, N.A.
000 Xxxxxxxxx Xxxxxx,
00xx Xxxxx Xxx Xxxx, XX
00000 Attn: Agency & Trust,
KeySpan
(d) As to the Auction Agent at the address specified in
the Auction Agreement
(e) As to the Broker-Dealers at the address specified in the
Broker-Dealer Agreement
(f) As to the Remarketing Agent at the address specified in the
Remarketing Agreement
(g) As to the Registrar Citibank, N.A.
and Paying Agent 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Agency & Trust, KeySpan
(h) As to the Bond Insurer 000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Any such notice, demand, direction or request may also be transmitted to
the appropriate above-mentioned party by telegram, telecopy, telex or similar
means and shall be deemed to be properly given or made at the time of such
transmission if, and only if, such transmission of notice shall be in writing
and sent as specified above.
Any notice, demand, direction or request given or transmitted to the
Trustee or the Authority shall be effective only upon receipt. Any notice
received by the Trustee as provided in this Section 18.09 shall constitute
actual knowledge of a Responsible Officer of the Trustee.
Any notice that is required to be given to a holder of the Bond or to the
Trustee pursuant to the Indenture shall also be provided to the Bond Insurer,
and all notices required to be given to the Bond Insurer under the Indenture
shall be in writing.
109
Any of such addresses may be changed at any time upon written notice of
such change sent by first-class United States mail, postage prepaid, to the
other parties by the party affecting the change.
If the Bonds shall be rated by Moody's, the Trustee shall furnish to
Moody's at 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention: Corporate Department
Structured Finance Group or such other office as Moody's may designate to the
Trustee, if the Bonds shall be rated by S&P, the Trustee shall furnish to S&P at
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Letter of Credit
Surveillance Group, and if the Bonds shall be rated by Fitch, the Trustee shall
furnish to Fitch Ratings at Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Municipal Structured Finance Group (i) a copy of each amendment to
the Indenture, Participation Agreement, Bond Purchase Trust Agreement, and each
Support Facility of which it has knowledge, (ii) notice of the termination,
extension or expiration of any Support Facility, (iii) notice of the payment of
all the Bonds (iv) notice of a Change in the Interest Rate Mode, and (v) notice
of any successor Trustee, Registrar and Paying Agent or Remarketing Agent;
provided, however, that failure by the Trustee to so notify Moody's, S&P or
Fitch shall not result in any liability on the part of the Trustee or affect the
validity of such documents or actions.
Section 18.10. Effect of Article and Section Headings and Table of
Contents. The heading or titles of the several Articles and Sections hereof, and
any table of contents appended hereto or to copies hereof, shall be solely for
convenience of reference and shall not affect the meaning, construction,
interpretation or effect of this Indenture.
Section 18.11. Liability of Authority Limited to Revenues. Notwithstanding
anything in this Indenture or in the Bonds contained, the Authority shall not be
required to advance any monies derived from any source other than the Revenues
and other assets pledged under this Indenture for any of the purposes in this
Indenture mentioned, whether for the payment of the principal or redemption
price of or interest on the Bonds or for any other purpose of this Indenture.
Pursuant to Section 4.08 of the Participation Agreement, the Company has agreed
to indemnify and hold harmless the Authority and the Trustee from all liability
arising hereunder and for any loss or damage to property or any injury to or
death of any person that may be occasioned by any cause whatsoever arising out
of the operation or any Project or the financing thereof.
Section 18.12. Waiver of Personal Liability. No member, officer, agent or
employee of the Authority shall be individually or personally liable for the
payment of the principal of or premium, if any, or interest on the Bonds or be
subject to any personal liability or accountability by reason of the issuance
thereof; but nothing herein contained shall relieve any such member, officer,
agent or employee from the performance of any official duty provided by law or
by this Indenture.
Section 18.13. Indenture May be Executed in Counterparts; Effectiveness of
Indenture. This Indenture may be simultaneously executed in counterparts. Each
such counterpart so executed shall be deemed to be an original, and all together
shall constitute but one and the same instrument. This Indenture shall take
effect on the Effective Date. Notwithstanding the Effective Date, for
110
convenience and purposes of reference this Indenture shall be dated as of
November 1, 2005 and may be cited and referred to as the "Indenture of Trust
dated as of November 1, 2005".
[Signature Page S-1 of this Indenture Follows]
111
IN WITNESS WHEREOF, the Authority has caused this Indenture to
be executed by its President, Vice President or Treasurer and its corporate seal
to be hereunto affixed and attested by its Assistant Secretary, and the Trustee
has caused this Indenture to be executed by its authorized officer, all as of
the date first above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By_____________________________
President
(SEAL)
Attest:
-------------------------------------
Assistant Secretary
CITIBANK, N.A., as Trustee,
By_____________________________
[Signature Page of Indenture relating to Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project),
2005 Series B]
S-1
EXHIBIT A
(For use in change in the Interest Rate Mode)
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
NOTICE OF CHANGE IN THE INTEREST RATE MODE
Notice is hereby given to the Trustee, Remarketing Agent, Registrar and
Paying Agent, the Company, [the Broker-Dealer and the Auction Agent] and the
registered owners of $[__________] of the above-captioned issue (the "Bonds") of
New York State Energy Research and Development Authority (the "Authority") that:
1. In accordance with the Indenture of Trust relating to the Bonds (the
"Indenture"), dated as of November 1, 2005 between the Authority and Citibank,
N.A., as trustee (the "Trustee"), subject to the conditions hereinafter set
forth, if any, the interest rate on the Bonds (or such lesser principal amount
thereof as may be specified in an attachment hereto) will be changed to a
_________Rate. Capitalized terms used herein and not otherwise defined herein
shall have the meanings given to such terms in the Indenture. The following
statements are summaries of certain provisions of the Indenture which do not
purport to be complete and are qualified in their entirety by reference to the
Indenture.
2. The _________ Rate will be effective from and after ______________ (the
"Effective Date").
3. The Bonds are subject to mandatory tender on the Effective Date at a
purchase price equal to the principal amount thereof [plus premium in the amount
of _____] (the "Purchase Price"). Accrued interest on the Bonds is anticipated
to be paid separately in accordance with Section 10.03(a) of the Indenture. In
the event the interest is not so paid, the Purchase Price shall include an
amount equal to the accrued and unpaid interest.
4. The proposed Change in the Interest Rate Mode shall take effect only if
the applicable conditions set forth in Article IV of the Indenture have been
satisfied.
5. Registered owners of Bonds are required to deliver their Bonds to the
Registrar and Paying Agent at Citibank, N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, Attention: 15th Floor Window, no later than [Registrar and
Paying Agent to insert proper time], New York City time, on the Effective Date
at the office of the Registrar and Paying Agent referred to above, endorsed in
blank by the registered owner thereof or accompanied by an instrument of
transfer thereof in form satisfactory to the Registrar and Paying Agent executed
for transfer in blank by the registered owner thereof (the Registrar and Paying
Agent being able to refuse to make payment with respect to any such Bond not
endorsed in blank or for which an instrument of transfer satisfactory to it has
not been provided).
6. Each registered owner of Bonds who has properly tendered such Bonds in
accordance with the above provisions will be paid the Purchase Price therefor on
the Effective Date, and if such Purchase Price is paid, such registered owner
shall have no further rights with respect to said Bonds.
7. Holders of Bonds subject to mandatory tender shall have no right to
retain such Bonds and shall be required to tender such Bonds on the date
established for the mandatory tender for purchase thereof.
8. With respect to any registered owner of Bonds who has not properly
tendered such Bonds in accordance with the above provisions of this notice, (A)
such registered owner's Bonds will be deemed tendered and purchased on the
Effective Date at the Purchase Price, (B) such registered owner will be paid
interest on such Bonds on the Effective Date as provided in the Indenture and
will be paid such Purchase Price for such Bonds upon the tender of such Bonds to
the Registrar and Paying Agent and (C) interest on such Bonds shall cease to be
payable to such registered owner from and after the Effective Date, and after
the Effective Date such registered owner will have no rights with respect to
such Bonds except to receive payment of the Purchase Price upon tender of such
Bonds to the Registrar and Paying Agent.
Dated: ____________
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
By:________________________________
Authorized Officer
2
EXHIBIT B
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
CERTIFICATE PURSUANT TO SECTION [4.01.3(A)(i) or 4.02.3(A)(i)]
OF THE INDENTURE
NOTICE IS HEREBY GIVEN to the Trustee [the Broker-Dealer and the Auction
Agent] that New York State Energy Research and Development Authority (the
"Authority") at the request of The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York (the "Company") hereby authorizes the establishment of
a Rate.
Notice is also HEREBY GIVEN that a written agreement has been entered into
by the Company and the Remarketing Agent to remarket the Bonds affected on
__________ at a price of not less than 100% of the principal amount thereof,
which written agreement (i) may be subject to reasonable terms and conditions
imposed by the Remarketing Agent which in the judgment of the Remarketing Agent
reflect current market standards regarding investment banking risk and (ii) must
include a provision requiring payment by the Remarketing Agent in same-day funds
provided from the remarketing of such Bonds in accordance with the Remarketing
Agreement, from the proceeds of a Liquidity Facility, or from funds deposited
with the Trustee or the Registrar and Paying Agent, for any Bonds tendered or
deemed tendered[; and that a Liquidity Facility is in effect or has been
obtained by the Company with respect to the Bonds, and shall be in effect prior
to such Change in the Interest Rate Mode and thereafter for a period of at least
364 days].
Capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Indenture of Trust relating to the
above-captioned Bonds, dated as of November 1, 2005, by and between the
Authority and Citibank, N.A., as Trustee.
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
By:_______________________________
Authorized Officer
EXHIBIT C
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
CERTIFICATE PURSUANT TO SECTION [4.01.3(A)(ii) or 4.02.3(A)(ii)]
OF THE INDENTURE
NOTICE IS HEREBY GIVEN to the Trustee [the Broker-Dealer and the Auction
Agent] that New York State Energy Research and Development Authority (the
"Authority") at the request of The Brooklyn Union Gas Company d/b/a KeySpan
Energy Delivery New York (the "Company") hereby authorizes the establishment of
a Rate.
Notice is also HEREBY GIVEN that the Authority has obtained confirmation on
behalf of the Company that Bond Counsel expects to be able to give its opinion
on the effective date of the Change in the Interest Rate Mode to the effect that
the change to the ________ Rate is authorized by the Indenture referred to
below, is permitted under the Act and will not have an adverse effect on the
exclusion of interest on the Bonds from gross income for federal income tax
purposes.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Indenture of Trust relating to the
above-captioned Bonds, dated as of November 1, 2005, by and between the
Authority and Citibank, N.A., as Trustee.
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
By:________________________________
Authorized Officer
EXHIBIT D
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
CERTIFICATE PURSUANT TO SECTION [4.01.3(B) or 4.02.3(B)(ii)] OF THE
INDENTURE
NOTICE IS HEREBY GIVEN to the Trustee [the Broker-Dealer and the Auction
Agent] that with respect to a Change in the Interest Rate Mode pursuant to
Section 4.01 or 4.02 of the Indenture referred to below all of the Bonds
referred to above tendered or deemed tendered have been purchased at a price
equal to the principal amount thereof plus premium, if any, plus any accrued and
unpaid interest with funds provided from the remarketing of such Bonds in
accordance with the Remarketing Agreement, from the proceeds of a Support
Facility, or from other funds deposited with the Trustee or the Registrar and
Paying Agent.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Indenture of Trust relating to the
above-captioned Bonds, dated as of November 1, 2005 by and between the New York
State Energy Research and Development Authority and Citibank, N.A., as Trustee.
THE BROOKLYN UNION GAS COMPANY d/b/a
KEYSPAN ENERGY DELIVERY NEW YORK
By:_________________________________
Authorized Company Representative
EXHIBIT E
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
NOTICE OF FAILURE OF CONDITIONS
NOTICE IS HEREBY GIVEN to the Authority, the Company and the registered
owners of the above captioned issue that the conditions for effecting a Change
in the Interest Rate Mode from a Term Rate to a _____Rate have not been met.
The above-captioned Bonds will continue to bear interest at the current
Term Rate and be subject to the provisions of the Indenture referred to below
applicable while such Bonds bear interest at the current Term Rate.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in the Indenture of Trust relating to the
above-captioned Bonds, dated as of November 1, 2005 by and between the New York
State Energy Research and Development Authority and Citibank, N.A., as Trustee.
CITIBANK, N.A., as Trustee
By:
EXHIBIT F
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
NOTICE OF ELECTION TO TENDER
Note: The substance of this Notice must be given to the Registrar and
Paying Agent and the Remarketing Agent by telephone at or prior to the
time this Notice must be delivered.
1. The undersigned, ______________, owner of the following Bonds:
Cusip Number(1) Principal Amount
hereby notifies you of its election to tender such Bonds for purchase on [ _ ,
__ ], (which date shall be a Business Day). If this Bond bears interest at a
Daily Rate as defined in the Indenture referred to below, the date of purchase
shall be the date of delivery of this Notice to the Registrar and Paying Agent
and the Remarketing Agent if received by 10:00 a.m., New York City time, or may
be any Business Day thereafter. If this Bond bears interest at a Weekly Rate as
defined in the Indenture the date of purchase shall be a Business Day not prior
to the seventh (7th) day immediately following the date of delivery of this
Notice to the Registrar and Paying Agent and the Remarketing Agent.
2. If only a portion of a Bond is being tendered, both the tendered portion
and untendered portion must be authorized denominations ($100,000 or any
integral multiple thereof) for Bonds bearing a Daily Rate or Weekly Rate.
3. After its execution and delivery by the undersigned, this notice will be
irrevocable.
___________
(1)Bond Number, if Bonds are no longer held by Securities Depository.
4. The person or persons to whom or to whose order the proceeds of the
purchase of the above-referenced Bonds are to be paid, such person's or persons'
taxpayer identification number or numbers and the address or addresses of such
payee or payees is _________________; which information the undersigned, under
the penalties of perjury, certifies to be true, correct and complete.
5. The undersigned hereby undertakes to deliver the Bonds to Citibank, N.A.
(the "Registrar and Paying Agent") no later than 11:30 a.m., New York City time,
for Bonds bearing interest at the Weekly Rate, and 12:00 noon, New York City
time, for Bonds bearing interest at a Daily Rate, at the office of the Registrar
and Paying Agent located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: 15th Floor Window, endorsed in blank for transfer or accompanied by
an instrument of transfer executed in blank for transfer and acknowledges that
any instrument of transfer must be in a form satisfactory to the Registrar and
Paying Agent and that the Registrar and Paying Agent may refuse to make payment
with respect to any Bond not endorsed in blank or for which an instrument of
transfer satisfactory to the Registrar and Paying Agent has not been provided.
6. The undersigned hereby also assigns and transfers and directs the
Registrar and Paying Agent to transfer the Bonds delivered in connection
herewith to the appropriate party under the terms and conditions contained in
the Indenture.
7. The undersigned acknowledges that in the event of a failure to deliver
the Bonds or in the event such Bonds are not properly delivered, such Bonds
shall nevertheless be deemed tendered and purchased on the date referred to in
(1) above, no interest shall accrue thereon to the undersigned from and after
such date of purchase and that the undersigned shall have no rights under the
Bonds or under the Indenture except the right to receive the Purchase Price of
the Bonds.
8. Capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Indenture of Trust relating to the
above-captioned Bonds, dated as of November 1, 2005, by and between the New York
State Energy Research and Development Authority and Citibank, N.A., as Trustee
(the "Indenture"). The statements contained herein are summaries of certain
provisions of the Indenture which do not purport to be complete and are
qualified in their entirety by reference to the Indenture.
Dated: _________________
Name of Owner as it is written on the face
of the above-listed Bonds in every particular,
without alteration, enlargement or any change
whatsoever
__________
Witness
2
EXHIBIT G
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY
GAS FACILITIES REVENUE BONDS
(THE BROOKLYN UNION GAS COMPANY
d/b/a KEYSPAN ENERGY DELIVERY NEW YORK PROJECT),
2005 SERIES B
CUSIP NO. ___________
NOTICE OF MANDATORY TENDER UPON EXPIRATION OF
ANY SUPPORT FACILITY, UPON DELIVERY OF
AN ALTERNATE SUPPORT FACILITY OR
UPON OCCURRENCE OF ANY TERMINATING EVENT
Notice is hereby given to the registered owners of the above-captioned
issue (the "Bonds") of New York State Energy Research and Development Authority
(the "Authority") that:
1. In accordance with the Indenture of Trust relating to the Bonds (the
"Indenture") dated as of November 1, 2005, between the Authority and Citibank,
N.A., as trustee (the "Trustee"), notice is hereby given that [the Support
Facility issued by __________ with respect to the Bonds (the "Support Facility")
will expire on ___________ , an Alternate Support Facility will be substituted
therefor on ____ , or a Terminating Event with respect to a Support Facility has
occurred] and that all Bonds, other than Bonds held by or for the account of the
Company or the Liquidity Facility Issuer, are subject to mandatory tender under
the circumstances set forth in [Section 5.08 or 5.09] of the Indenture as
hereinafter set forth at a purchase price equal to the principal amount thereof
[plus premium in the amount of ___________] (the "Purchase Price"). Accrued
interest on the Bonds is anticipated to be paid separately in accordance with
Section 10.03(a) of the Indenture. In the event the interest is not so paid, the
Purchase Price shall include an amount equal to the accrued and unpaid interest.
2. The Bonds are subject to mandatory tender for purchase on _________ (the
"Mandatory Tender Date").
3. From and after the Mandatory Tender Date the Bonds will [continue to]
bear interest [insert information on interest rate to be effective after
mandatory tender date, including method of determining interest rate and
Interest Payment Dates]. [Insert information whether any letter of credit, line
of credit, insurance policy, surety bond, standby bond purchase agreement or
other instrument will be available for the payment of the principal or purchase
price of, or interest on, such Bonds and, if so, describing such instrument].
4. On and after the Mandatory Tender Date, the [short-term] [long-term]
rating on the Bonds by [Registrar and Paying Agent to insert, as appropriate:
(i) Xxxxx'x and/or S&P will be ______ and/or (ii) Xxxxx'x and/or S&P may be
reduced or withdrawn].
5. Registered owners of Bonds are required to deliver their Bonds to the
Registrar and Paying Agent on the Mandatory Tender Date at the office of the
Registrar and Paying Agent located at Citibank, N.A., 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000, Attention: 15th Floor Window, endorsed in blank by
the registered owner thereof or accompanied by an instrument of transfer thereof
in form satisfactory to the Registrar and Paying Agent executed in blank by the
registered owner thereof (the Registrar and Paying Agent being able to refuse to
make payment with respect to any such Bond not endorsed in blank or for which an
instrument of transfer satisfactory to it has not been provided).
6. Each registered owner of Bonds who has properly tendered such Bonds in
accordance with the above provisions will be paid the Purchase Price, and if
such Purchase Price is paid, such registered owner shall have no further rights
with respect to said Bonds.
7. Holders of Bonds subject to mandatory tender for purchase on the
Mandatory Tender Date shall have no right to retain their Bonds and shall be
required to tender such Bonds no later than the Mandatory Tender Date as
provided herein.
8. With respect to any registered owner of Bonds who has not properly
tendered such Bonds in accordance with the above provisions of this notice (A)
such registered owner's Bonds will nevertheless be deemed tendered and purchased
on the Mandatory Tender Date at the Purchase Price, (B) such registered owner
will be paid interest on such Bonds on the Mandatory Tender Date as provided in
the Indenture and will be paid such Purchase Price for such Bonds upon the
tender of such Bonds to the Registrar and Paying Agent and (C) interest on such
Bonds shall cease to be payable to such registered owner from and after the
Mandatory Tender Date, and after the Mandatory Tender Date such registered owner
will have no rights with respect to such Bonds except to receive payment of the
Purchase Price upon tender of such Bonds to the Registrar and Paying Agent.
2
9. Capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Indenture. The statements contained
herein are summaries of certain provisions of the Indenture which do not purport
to be complete and are qualified in their entirety by reference to the
Indenture.
Dated: _____________
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
By:________________________________
Authorized Officer
3
APPENDIX A
[Form of Bonds other than Bonds bearing an Auction Period Rate]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Authority's
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.
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project),
2005 Series B
No. 2005 BR- $55,000,000
INTEREST RATE
OR INTEREST RATE
MODE ON DATE OF ORIGINAL
AUTHENTICATION MATURITY DATE ISSUE DATE CUSIP
-------------- ------------- ---------- -----
June 1, 2025 November 1, 2005
REGISTERED OWNER:
PRINCIPAL SUM: FIFTY-FIVE MILLION DOLLARS
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY (the "Authority"),
a body corporate and politic, constituting a public benefit corporation,
organized and existing under and by virtue of the laws of the State of New York,
for value received, hereby promises to pay, but solely from the revenues, income
and other monies hereinafter specified and not otherwise, to the registered
owner named above or registered assigns, the principal amount specified above on
the maturity date specified above (subject to the right of prior redemption
hereinafter described), upon presentation and surrender of this Bond, and to pay
interest on such principal amount, but solely from such revenues, income and
other monies hereinafter specified and not otherwise, from the date of
authentication hereof, or if such date shall not be an Interest Payment Date (as
hereinafter defined) from the next preceding Interest Payment Date or, if the
date of authentication is after the Record Date next preceding the next
succeeding Interest Payment Date, from the next succeeding Interest Payment Date
until the payment of such principal amount in full, at the rate of interest per
annum specified above, such interest being payable on each Interest Payment Date
in each year, by check mailed to the registered owner hereof at his or her
address as it appears on the registration books kept by the Registrar and Paying
Agent pursuant to the Indenture hereinafter mentioned; provided, that (i) while
the Securities Depository (as defined in the Indenture) is the registered owner
of the Bonds, all payments of principal of and premium, if any, and interest on
the Bonds shall be paid to the Securities Depository by wire transfer, (ii)
prior to and including any Fixed Rate Conversion Date, interest on the Bonds
shall be payable, at the option of any registered owner of at least one million
dollars ($1,000,000) in aggregate principal amount of the Bonds, by wire
transfer upon written notice received by the Registrar and Paying Agent from
such registered owner at least five days prior to the Record Date, containing
the wire transfer address (which shall be in the continental United States) to
which such registered owner wishes to have such wire directed, and (iii) during
a Commercial Paper Rate Period, interest on this Bond shall be payable only upon
presentation and surrender hereof to the Registrar and Paying Agent upon
purchase thereof pursuant to the Indenture, and if such presentation and
surrender is made by 2:00 p.m. (New York City time) such payment shall be by
wire transfer. If interest is in default it shall be paid to the person in whose
name this Bond is registered as of a special record date as set forth in the
Indenture. Except as set forth above, principal of and premium, if any, on this
Bond are payable at the applicable Principal Corporate Trust Office of Citibank,
N.A., in New York, New York, as Registrar and Paying Agent of the Bonds.
Principal of and premium, if any, and interest on this Bond are payable in
lawful money of the United States of America.
This Bond is one of a duly authorized issue of Bonds of the Authority
designated as "Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company
d/b/a KeySpan Energy Delivery New York Project), 2005 Series B", issued in the
aggregate principal amount of fifty-five million dollars ($55,000,000) (the
"Bonds"). In order to distinguish between Bonds which are subject to different
interest rate determination methods and other features and to distinguish the
portion of the Bonds to be offered or remarketed by any particular underwriter
or Remarketing Agent, the Bonds may be designated and redesignated from time to
time by the Authority in such a way as to identify one or more subseries of the
Bonds pursuant to Article II of the Indenture. This Bond and the issue of which
it is one are authorized to be issued and are issued under, pursuant to and in
full compliance with the Constitution and statutes of the State of New York,
including particularly the New York State Energy Research and Development
Authority Act, Title 9 of Article 8 of the Public Authorities Law of the State
of New York, as amended (the "Act"), a resolution of the Authority adopted on
September 19, 2005, and an Indenture of Trust dated as of November 1, 2005
between the Authority and Citibank, N.A. as Trustee (herein, as it may be
amended from time to time, called the "Indenture"). The Bonds are being issued
pursuant to a Participation Agreement dated as of November 1, 2005 (hereinafter,
as it may be amended or supplemented from time to time, called the
"Participation Agreement"), between the Authority and The Brooklyn Union Gas
Company d/b/a KeySpan Energy Delivery New York (the "Company") for the purpose
of refinancing certain prior obligations originally issued to provide funds for
the acquisition, construction, and installation of certain facilities for the
local furnishing of gas within The City of New York (all of said facilities
being referred to herein as the "Project"). Pursuant to the Participation
Agreement, the Company delivered the Company Obligation to the Trustee, pursuant
to which the Company is required to make payments to the Trustee for deposit to
the Bond Fund established pursuant to the Indenture in an amount sufficient to
2
pay principal of and premium, if any, and interest on the Bonds when due. A copy
of the Participation Agreement is on file at the applicable Principal Corporate
Trust Office of the Trustee, and reference is hereby directed to the
Participation Agreement for the provisions thereof.
The terms and provisions pertaining to Bonds bearing an Auction Period Rate
are set forth in a separate bond certificate.
A copy of the Indenture is on file at the applicable Principal Corporate
Trust Office of the Trustee. Reference is hereby directed to the Indenture for
the provisions, among others, with respect to the custody and application of the
proceeds of the Bonds; the collection and disposition of revenues; a description
of the nature and extent of the security for the Bonds, the funds and monies
pledged for the payment of the principal of and premium, if any, and interest on
the Bonds; the nature and extent and manner of enforcement of the pledge; the
rights and remedies of the registered owners of Bonds with respect thereto; the
conditions for and the permissible extent of alteration, modification and
amendment of the Indenture; the terms and conditions upon which this Bond and
the issue of which it is one are issued; the rights, duties and obligations of
the Authority and the Trustee thereunder; the terms and provisions upon which
the liens, pledges, charges, trusts and covenants made therein may be discharged
at or prior to the maturity, purchase or redemption of this issue and pursuant
to which this Bond thereafter will no longer be secured by the Indenture, or be
deemed to be outstanding thereunder, if sufficient monies or certain specified
securities shall have been deposited with the Trustee and held in trust solely
for the payment thereof; and for all other terms and provisions thereof. The
provisions of the Act and the Indenture shall be a contract with the registered
owner of this Bond, and the duties of the Authority and any employee thereof
under said Act and the Indenture shall be enforceable by the registered owner
hereof, by mandamus or other appropriate suit, action or proceeding, in any
court of competent jurisdiction in the State of New York.
The Bonds are not general obligations of the Authority, and shall not
constitute indebtedness of or a charge against the general credit of the
Authority or give rise to any pecuniary liability of the Authority. The
liability of the Authority under the Bonds shall be enforceable only to the
extent provided in the Indenture, and the Bonds shall be payable solely from the
monies and revenues received from the payments made by the Company pursuant to
the Company Obligation and the Participation Agreement and the other monies,
rights and properties pledged under the Indenture including the proceeds of a
Credit Facility (other than a Policy), if any, and not from any other fund or
source. Pursuant to the Indenture, the Authority has pledged and assigned to the
Trustee its right, title and interest (with certain exceptions) in the
Participation Agreement to secure the payment of the principal of and premium,
if any, and interest on the Bonds. The Bonds are and shall be secured by a prior
and paramount lien and charge on said monies and revenues. The Bonds shall not
be a debt of the State of New York, and the State of New York shall not be
liable thereon. The Bonds are payable solely from the payments made under the
Company Obligation and the monies and revenues pledged under the Indenture to
the payment thereof. Neither the Authority nor the State of New York is
obligated to provide for the payment of the Purchase Price of tendered Bonds or
payment of principal, premium, if any, or interest on the Bonds.
3
This Bond shall not be entitled to any security, right or benefit under the
Indenture or become valid or obligatory for any purpose until it shall have been
authenticated by the Trustee by its execution of the certificate of
authentication endorsed hereon.
No covenant or agreement contained in this Bond or the Indenture shall be
deemed to be a covenant or agreement of any member, agent or employee of the
Authority in his or her individual capacity, and neither the members of the
Authority nor any officer thereof 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 laws of the State of New York and the
Indenture to exist, to have happened and to have been performed precedent to and
in the issuance of this Bond and the issue of which this Bond is a part, do
exist, have happened and have been performed in due time, form and manner as
required by such Constitution, laws and the Indenture; that the amount of this
Bond and the issue of which this Bond is a part does not exceed any
constitutional or statutory limitations of indebtedness; and that provision has
been made for the payment of the principal of and premium, if any, and interest
on this Bond and the series of which it is a part as provided in the Indenture.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.03 OF THE INDENTURE, THIS GLOBAL
BOND MAY, AT THE REQUEST OF THE COMPANY, BE TRANSFERRED, IN WHOLE BUT NOT IN
PART, ONLY TO A NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR
SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.
The Bonds will bear interest at one of the following interest rates: a
"Commercial Paper Rate", an "Auction Period Rate", a "Daily Rate," a "Weekly
Rate," a "Monthly Rate," a "Semi-annual Rate" or a "Term Rate" (each of the
foregoing referred to as an "Adjustable Rate") or a "Fixed Rate". Each
Adjustable Rate other than an Auction Period Rate shall be equal to the lesser
of (i) the Maximum Allowed Rate (as defined in the Indenture), (ii) 110% of the
rate index for such rate on the applicable determination date and (iii) an
adjustable rate which, with respect to the first day of each Calculation Period
(as herein defined) applicable to such Adjustable Rate, shall be equal to the
rate or rates of interest per annum established and certified to the Trustee by
the Remarketing Agent (as herein defined) no later than 12:00 noon (New York
City time) (except that such rate or rates of interest per annum must be
established and certified to the Trustee by the Remarketing Agent (as herein
defined) no later than 10:00 a.m. (New York City time) with respect to a Daily
Rate, 12:30 (New York City time) with respect to a Commercial Paper Rate, and
4:00 p.m. with respect to a Term Rate), on and as of the Determination Date (as
defined in the Indenture) as the minimum rate of interest per annum which, in
the opinion of the Remarketing Agent, would be necessary on and as of the date
of such certification to remarket Bonds at a price equal to the principal amount
thereof plus accrued interest thereon, if any, except as otherwise provided in
the Indenture. Anything in the Indenture to the contrary notwithstanding, in no
event shall the interest rate borne by any Bond exceed the maximum rate
allowable by applicable law.
4
During any Commercial Paper Rate Period, at or prior to 12:30 noon (New
York City time) on each Determination Date, the Remarketing Agent shall
establish Calculation Periods and related Commercial Paper Rates. In determining
Calculation Periods, the Remarketing Agent shall take into account certain
factors set forth in the Indenture. The Remarketing Agent shall select the
Calculation Periods and the applicable Commercial Paper Rates that, together
with all other Calculation Periods and related Commercial Paper Rates, in the
sole judgment of the Remarketing Agent, will result in the lowest overall
borrowing cost on the Bonds or are otherwise in the best financial interests of
the Company, as determined in consultation with the Company. Any Calculation
Period established under the Indenture may not extend beyond the second Business
Day next preceding the expiration date of the Support Facility or the day prior
to the maturity date of the Bonds. The Authority, at the request of the Company,
may place limitations upon the establishment of the Calculation Periods in
accordance with the Indenture.
While the Bonds bear interest at a Commercial Paper Rate, a Daily Rate, a
Weekly Rate or a Monthly Rate, interest accrued on such Bonds shall be computed
on the basis of a 365-day year, as applicable, for the number of days actually
elapsed. While the Bonds bear interest at a Semi-annual Rate, Term Rate or a
Fixed Rate, interest accrued on such Bonds shall be computed on the basis of a
360-day year, consisting of twelve (12) thirty (30) day months.
The Bonds shall cease to bear interest at the Adjustable Rate or a Fixed
Rate, as the case may be, then borne by the Bonds and shall bear interest at
such different Adjustable Rate or Fixed Rate as shall be specified by the
Authority, at the request of the Company, in accordance with the terms of the
Indenture.
Fixed Rate. On a Fixed Rate Conversion Date, the Bonds shall cease to bear
interest at the Adjustable Rate then borne by the Bonds and shall bear interest
at a Fixed Rate upon the election by the Authority, at the request of the
Company, to exercise its Option to Convert (as defined in the Indenture). Fixed
Rate means the lesser of (i) 18%, (ii) 110% of the Fixed Rate Index on such date
and (iii) the rate of interest per annum established and certified to the
Trustee by the Remarketing Agent no later than 12:00 noon (New York City time)
on and as of such date as the minimum rate of interest per annum which, in the
opinion of the Remarketing Agent, would be necessary on and as of such date to
remarket the Bonds in a secondary market transaction at a price equal to 100% of
the outstanding principal amount thereof. A Fixed Rate shall be established in
accordance with the terms and subject to the conditions set forth in the
Indenture. Anything in the Indenture to the contrary notwithstanding, in no
event shall the interest rate borne by any Bond exceed the maximum rate
allowable by applicable law.
Redemption Provisions
Optional Redemption. The Bonds shall be subject to redemption at the option
of the Authority upon the request of the Company:
During any Commercial Paper Rate Period, the Bonds shall be subject to
redemption on each Interest Payment Date, as a whole or in part, at the
principal amount thereof.
5
During any Daily Rate Period, the Bonds shall be subject to redemption on
any Business Day, as a whole or in part, at the principal amount thereof, plus
accrued and unpaid interest to the date fixed for redemption, if any.
During any Weekly Rate Period, the Bonds shall be subject to redemption on
any Business Day, as a whole or in part, at the principal amount thereof, plus
accrued and unpaid interest to the date fixed for redemption, if any.
During any Monthly Rate Period, the Bonds shall be subject to redemption on
each Interest Payment Date, as a whole or in part, at the principal amount
thereof.
During any Semi-annual Rate Period, the Bonds shall be subject to
redemption on each Interest Payment Date, as a whole or in part, at the
principal amount thereof.
During any Term Rate or Fixed Rate Period, such Bonds shall be subject to
redemption in whole at any time on any Business Day or in part on any Interest
Payment Date as follows: after the No-Call Period, which shall begin on the
first day of the Calculation Period applicable to such Bonds or on a Fixed Rate
Conversion Date, as the case may be, at a redemption price equal, initially, to
the principal amount thereof, plus a premium equal to the percentage of the
principal amount to be redeemed (the "Initial Premium"), plus accrued and unpaid
interest if paid on a Business Day other than an Interest Payment Date. The
premium percentage, if any, shall decline by the percentage shown in the
Reduction in Premium column on each anniversary of the date on which such Bonds
are first redeemable until the Bonds shall be redeemable without premium.
Calculation Period or Period to Maturity
Applicable to Subject Bonds
---------------------------
Equal to or But Less No-Call Initial Reduction
Greater Than Than Period Premium in Premium
------------ ---- ------ ------- ----------
18 years N/A 8 Years 1 1/2% 1/2%
12 years 18 Years 6 Years 1 1/2
7 Years 12 Years 3 Years 0 0
5 Years 7 Years 2 Years 0 0
4 Years 5 Years 2 Years 0 0
3 Years 4 Years 2 Years 0 0
0 Years 3 Years Not callable
If upon establishment of a Term Rate Period or a Fixed Rate Period, as the
case may be, the Remarketing Agent certifies to the Trustee, Bond Counsel and
the Authority in writing that the schedule is not consistent with
then-prevailing market conditions, the Authority at the request of the Company
may revise the Initial Premium, Reductions in Premium and No-Call Periods
without the approval of the Holders to reflect then-prevailing market
conditions, upon receipt of an opinion of Bond Counsel to the effect that any
revisions pursuant to this paragraph, either by itself or in conjunction with
the establishment of a Calculation Period or a Fixed Rate, as the case may be,
are made in accordance with the Indenture, is permitted under the Act and will
not adversely affect the exclusion of interest on the Bonds from gross income
for federal income tax purposes.
6
Special Tax Redemption Provisions. The Bonds shall be subject to mandatory
redemption as a whole (provided, however, that the Bonds shall be redeemed in
part if the Company obtains an opinion of Bond Counsel to the effect that, by
redeeming such portion of the Bonds, the interest on the remaining Bonds will
not be included for Federal income tax purposes in the gross income of any owner
of the Bonds (other than an owner who is a "substantial user" of the Project or
a "related person" within the meaning of Section 147(a)(1) of the Code)) at any
time at a redemption price equal to 100% of the principal amount thereof,
together with unpaid interest accrued thereon to the redemption date, if, in a
published or private ruling of the Internal Revenue Service or in a final,
nonappealable judicial decision by a court of competent jurisdiction (provided
that the Company has been afforded the opportunity to participate at its own
expense in the proceeding resulting in such ruling or in the litigation
resulting in such decision, as the case may be), it is determined that, as a
result of a failure by the Company to observe any covenant, agreement or
representation in the Participation Agreement or the Tax Regulatory Agreement,
interest on the Bonds is included for Federal income tax purposes in the gross
income (as defined in Section 61 of the Code) of any owner of a Bond (other than
a "substantial user" of the Project or a "related person" within the meaning of
Section 147(a)(1) of the Code), and, in such event, the Bonds shall be subject
to such mandatory redemption not more than one hundred eighty (180) days after
receipt by the Trustee of notice of such published or private ruling or judicial
decision and a demand for redemption of the Bonds. The occurrence of an event
requiring the redemption of the Bonds under this paragraph does not constitute
an event of default under the Company Obligation or under the Indenture and the
sole obligation in such event shall be for the Company to prepay the Company
Obligation in an amount sufficient to redeem the Bonds to the extent required by
the Indenture.
The Bonds may be redeemed in whole or in part at any time at a redemption
price equal to 100% of the principal amount thereof, together with accrued and
unpaid interest thereon to the redemption date, if the Company has determined,
on the basis of the advice of Bond Counsel that, as a result of any action taken
or expected to be taken, or failure to take action, a reasonable risk exists
that interest on the bonds will not be excludable from gross income for federal
tax purposes. Such conclusion and certification shall be evidenced by delivery
to the Trustee of a written certificate of an Authorized Company Representative
to the effect that the Company has reached such conclusion, together with a copy
of such advice of Bond Counsel. While the Bonds bear interest at an Auction
Period Rate, in any Auction Period other than a daily Auction Period, the
redemption shall occur on the Interest Payment Date immediately preceding such
redemption date. When in a Special Auction Rate Period, the Bonds may be
redeemed prior to the end of the Special Auction Rate Period. The occurrence of
an event permitting the redemption of the Bonds under this paragraph does not
constitute an event of default under the Company Obligation or under the
Indenture and the sole option in such event shall be for the Company to prepay
the Company Obligation in an amount sufficient to redeem the Bonds to the extent
required by this paragraph.
The Bonds will also be subject to mandatory redemption at a redemption
price equal to one hundred three percent (103%) of the principal amount thereof
plus unpaid interest accrued thereon to the redemption date if the Company
reasonably concludes and certifies to the Trustee that the business, properties,
7
condition (financial or otherwise), operations or business prospects of the
Company will be materially and adversely affected unless the Company takes or
omits to take a specified action and that the Company has been advised in
writing by Bond Counsel that the specified action or omission would cause the
use of the Project to be such that, pursuant to Section 150 of the Code, the
Company would not be entitled to deduct the interest on the Bonds for purposes
of determining the Company's Federal taxable income, for a period of not less
than ninety (90) consecutive or nonconsecutive days during a twelve-month
period. Such conclusion and certification shall be evidenced by delivery to the
Trustee of a written certificate of an Authorized Company Representative to the
effect that the Company has reached such conclusion, together with a certified
copy of a resolution of the Board of Trustees of the Company authorizing such
certificate and a copy of such advice of Bond Counsel. In the event that the
Bonds become subject to redemption as provided in this paragraph, the Bonds will
be redeemed in whole unless redemption of a portion of the Bonds outstanding
would, in the opinion of Bond Counsel, have the result that interest payable on
the Bonds remaining outstanding after such redemption would be deductible for
purposes of determining the Federal taxable income of the Company, and, in such
event, the Bonds to be redeemed shall be selected (in the principal amount of
$5,000 or any integral multiple thereof) by lot, in such amount as is necessary
to accomplish that result. The occurrence of an event requiring the redemption
of the Bonds under this paragraph does not constitute an event of default under
the Company Obligation or under the Indenture and the sole option in such event
shall be for the Company to prepay the Company Obligation in an amount
sufficient to redeem the Bonds to the extent required by this paragraph.
Mandatory Redemption Upon State Furnishing Funds. Pursuant to Section 1864
of the Act, the State of New York may, upon furnishing sufficient funds
therefor, require the Authority to redeem prior to maturity, as a whole, the
Bonds on any Interest Payment Date not less than twenty years after the date of
initial delivery of the Bonds. Any such redemption shall be at a redemption
price equal to the optional redemption price, if any, applicable on such date or
if no such optional redemption price is applicable at a redemption price of 105%
of the principal amount thereof, in either case, together with accrued and
unpaid interest, if any, to the date fixed for redemption, all in the manner
provided in the Indenture.
Purchase Upon Election of Holder. During any Daily Rate Period or Weekly
Rate Period, any Bond or portion thereof in a principal amount equal to an
authorized denomination (so long as the principal amount not purchased is an
authorized denomination) shall be purchased on the demand of the registered
owner thereof, on any Business Day at the Purchase Price, upon delivery to the
Registrar and Paying Agent at the applicable Principal Corporate Trust Office
and to the Remarketing Agent at its principal office by the close of business on
any Business Day of a Notice of Election to Tender (the substance of which
notice must also be given telephonically to the Remarketing Agent prior to or
simultaneously with such notice). The date on which such Bond shall be purchased
shall, at the request of the registered owner, (i) if the Bond then bears
interest at a Daily Rate, be the date of delivery of such notice if such notice
is delivered to the Registrar and Paying Agent and the Remarketing Agent by
10:00 a.m. (New York City time) on such date or may be any Business Day
thereafter, and (ii) if the Bond then bears interest at a Weekly Rate, shall be
a Business Day not prior to the 7th day next succeeding the date of the delivery
of such notice to the Registrar and Paying Agent and the Remarketing Agent.
8
During any Monthly Rate Period or Semi-annual Rate Period, this Bond or
portion hereof in a principal amount equal to an authorized denomination (so
long as the principal amount not purchased is an authorized denomination) shall
be purchased on the demand of the registered owner thereof on the first Business
Day following each Calculation Period at a price equal to the principal amount
thereof, upon delivery to the Registrar and Paying Agent at the applicable
Principal Corporate Trust Office and to the Remarketing Agent at its principal
office of a Notice of Election to Tender (the substance of which notice must
also be given telephonically to the Remarketing Agent prior to or simultaneously
with the delivery of such notice) on or prior to a Business Day which is not
less than 10 days, in the case of Bonds bearing interest at a Semi-annual Rate,
or 7 days, in the case of Bonds bearing interest at a Monthly Rate, prior to the
proposed date of purchase. No tender may occur pursuant to the above without the
consent of the Bond Insurer unless a Liquidity Facility is in effect.
Mandatory Tender for Purchase Upon a Change in the Interest Rate Mode. Upon
a Change in the Interest Rate Mode, the Bonds shall be subject to mandatory
tender for purchase in accordance with the Indenture on the effective date of
such Change in the Interest Rate Mode at the Purchase Price (as defined in the
Indenture).
Mandatory Tender for Purchase on Business Day following Calculation
Periods. Bonds bearing a Commercial Paper Rate or a Term Rate shall be subject
to mandatory tender for purchase in accordance with the Indenture on the
Business Day immediately following each Calculation Period at a price equal to
the Purchase Price.
Mandatory Tender For Purchase Upon Expiration of any Support Facility or
Upon Delivery of an Alternate Support Facility. On the third Business Day next
preceding the date of expiration of any Support Facility, the Bonds shall be
subject to mandatory purchase at the Purchase Price, unless on or prior to the
35th day prior to such date of expiration the Company on behalf of the Authority
has furnished to the Trustee an agreement to extend such Support Facility. The
Bonds shall also be subject to mandatory purchase at the Purchase Price on the
date there is delivered an Alternate Support Facility meeting the requirements
of the Indenture. No tender for purchase of any Bonds shall be required if a
Fixed Rate Conversion Date shall have occurred with respect to such Bonds or if
such Bonds have been converted to bear interest at an Auction Period Rate on a
date prior to such date of expiration.
Mandatory Tender Upon Occurrence of any Terminating Event. Upon the
occurrence of any Terminating Event, the Bonds shall be subject to mandatory
tender for purchase on a Business Day selected by the Trustee; provided,
however, such mandatory tender shall not occur later than the 5th day after the
receipt of notice thereof by the Trustee at the Purchase Price. The Bonds will
not be subject to such mandatory tender for purchase during any Auction Period
Rate Period or any Fixed Rate Period.
Procedure for Redemption. In the event any of the Bonds are called for
redemption, the Trustee shall give notice, or cause the Registrar and Paying
Agent to give notice in the name of the Authority, of the redemption of such
Bonds in accordance with the Indenture.
Notice of redemption shall be given by mailing a copy of the redemption
notice by first-class mail at least 30 days prior to the date fixed for
redemption to the registered owners of the Bonds to be redeemed at the addresses
9
shown on the registration books maintained by the Registrar and Paying Agent;
provided, however, that failure to give notice or any defects in such notice
shall not affect the proceedings for the redemption of the Bonds for which
notice has been given.
General Provisions Applicable to Mandatory and Optional Tenders for
Purchase of Bonds. If interest has been paid on the Bonds, or an amount
sufficient to pay interest thereon has been deposited in the Bond Fund Account,
or an amount sufficient to pay accrued interest thereon, if any, has been set
aside in the Bond Purchase Fund under the Bond Purchase Trust Agreement, and the
Purchase Price shall be available under the Bond Purchase Fund for payment of
Bonds subject to tender for purchase in accordance with the Indenture and if a
registered owner fails to deliver or does not properly deliver the Bonds to the
Registrar and Paying Agent for which a Notice of Election to Tender has been
properly filed or which are subject to mandatory tender for purchase on the
purchase date therefor, such Bonds shall nevertheless be deemed tendered and
purchased on the date established for the purchase thereof, no interest shall
accrue on such Bonds from and after the date of purchase and such former
registered owners shall have no rights, benefits or security hereunder as the
registered owners of such Bonds, except the right to receive the Purchase Price
of and accrued and unpaid interest to the purchase date, if any, on such Bonds
upon delivery thereof to the Registrar and Paying Agent in accordance with the
provisions hereof. The purchaser of any such Bonds remarketed by the Remarketing
Agent, or the issuer of any Support Facility, to the extent Bonds are purchased
with the proceeds of a draw on, or borrowing or payment under, the Support
Facility, shall be treated as the registered owner thereof for all purposes of
the Indenture. The payment of Bonds tendered upon the election of the registered
owner shall be subject to delivery of such Bonds duly endorsed in blank for
transfer or accompanied by an instrument of transfer thereof in form
satisfactory to the Registrar and Paying Agent executed in blank for transfer at
the applicable Principal Corporate Trust Office of the Registrar and Paying
Agent at or prior to 10:00 a.m. (11:30 a.m. for Bonds bearing interest at the
Weekly Rate and 12:00 noon, for Bonds bearing interest at the Daily Rate) (New
York City time), on a specified purchase date. The Registrar and Paying Agent
may refuse to make payment with respect to any Bonds tendered for purchase not
endorsed in blank or for which an instrument of transfer satisfactory to the
Registrar and Paying Agent has not been provided.
The Purchase Price of Bonds subject to tender for purchase in an aggregate
principal amount of at least one million dollars ($1,000,000) shall be payable
in immediately available funds or by wire transfer upon written notice from the
registered owner thereof containing the wire transfer address (which shall be in
the continental United States) to which such registered owner wishes to have
such wire directed, if such written notice is received by the Registrar and
Paying Agent not less than five days prior to the related purchase date.
The Bonds may be transferred or exchanged by the registered owners thereof,
in person or by his or her attorney duly authorized in writing, at the
applicable Principal Corporate Trust Office of the Registrar and Paying Agent
but only in the manner, subject to limitations and upon payment of the charges,
if any, provided in the Indenture and upon the surrender thereof to the
Registrar and Paying Agent for cancellation. Upon such transfer or exchange, a
new Bond or Bonds of authorized denominations and of like aggregate principal
amount as the Bond surrendered will be issued in exchange therefor.
10
All terms used herein which are defined in the Indenture and not otherwise
defined herein shall have the respective meanings set forth in the Indenture.
This Bond shall be governed by and construed in accordance with laws of the
State of New York.
11
IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its
name and on its behalf by the manual or facsimile signature of its President,
Vice President or Treasurer and its seal or a facsimile thereof to be impressed,
imprinted or otherwise reproduced hereon and attested by the manual or facsimile
signature of its Secretary or an Assistant Secretary, as of the date set forth
in the Certificate of Authentication.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
[SEAL]
By_____________________________
President
Attest:
--------------------------------------------
Assistant Secretary
12
CERTIFICATE OF AUTHENTICATION
This Bond is one of an issue described in the Indenture mentioned herein.
Citibank, N.A.,
as Trustee
By:_____________________
Authorized Officer
Date of Authentication:
13
STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ("Financial Guaranty") has issued a
policy containing the following provisions with respect to the Bonds, such
policy being on file at the applicable Principal Corporate Trust Office of
Citibank, N.A., as paying agent (the "Paying Agent"):
Financial Guaranty hereby unconditionally and irrevocably agrees to pay for
disbursement to the Bondholders that portion of the principal of and interest on
the Bonds which is then due for payment and which the Authority shall have
failed to provide. Due for payment means, with respect to principal, the stated
maturity date thereof and the date on which the Bonds shall have been duly
called for mandatory redemption as a result of the interest on the Bonds having
been determined to have become subject to federal income taxation, and does not
refer to any earlier date on which the payment of principal of the Bonds is due
by reason of call for redemption, acceleration or other advancement of maturity,
and with respect to interest, the stated date for payment of such interest.
Upon receipt of telephonic or telegraphic notice, subsequently confirmed in
writing, or written notice by registered or certified mail, from a Bondholder or
the Paying Agent to Financial Guaranty that the required payment of principal or
interest (as applicable) has not been made by the Authority to the Paying Agent,
Financial Guaranty on the due date of such payment or within one business day
after receipt of notice of such nonpayment, whichever is later, will make a
deposit of funds, in an account with U.S. Bank Trust National Association, or
its successor as its agent (the "Fiscal Agent"), sufficient to make the portion
of such payment not paid by the Authority. Upon presentation to the Fiscal Agent
of evidence satisfactory to it of the Bondholder's right to receive such payment
and any appropriate instruments of assignment required to vest all of such
Bondholder's right to such payment in Financial Guaranty, the Fiscal Agent will
disburse such amount to the Bondholder.
As used herein the term "Bondholder" means the person other than the
Authority or the borrower(s) of bond proceeds who at the time of nonpayment of a
Bond is entitled under the terms of such Bond to payment thereof.
The policy is non-cancellable for any reason.
FINANCIAL GUARANTY INSURANCE COMPANY
14
[FORM OF ASSIGNMENT]
For value received ____________________________ hereby sells, assigns and
transfers unto _____________________ the within mentioned Bond and hereby
irrevocably constitutes and appoints _______________________, Attorney, to
transfer the same on the registration books in the office of the Registrar and
Paying Agent with full power of substitution in the premises.
___________________________
Dated: _________________________
I hereby certify that the above signature is true and genuine.
_________________________
Authorized Officer
__________________________Bank
15
[Form of Bond Bearing an Auction Period Rate]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Authority's
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.
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
Gas Facilities Revenue Bonds
(The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York Project),
2005 Series B
No. 2005 BR- $55,000,000
INTEREST RATE
OR INTEREST RATE
MODE ON DATE OF ORIGINAL
AUTHENTICATION MATURITY DATE ISSUE DATE CUSIP
-------------- ------------- ---------- -----
June 1, 2025 November 1, 2005
REGISTERED OWNER:
PRINCIPAL SUM: FIFTY-FIVE MILLION DOLLARS
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY (the "Authority"),
a body corporate and politic, constituting a public benefit corporation,
organized and existing under and by virtue of the laws of the State of New York,
for value received, hereby promises to pay, but solely from the revenues, income
and other monies hereinafter specified and not otherwise, to the registered
owner named above or registered assigns, the principal amount specified above on
the maturity date specified above (subject to the right of prior redemption
hereinafter described), upon presentation and surrender of this Bond, and to pay
interest on such principal amount, but solely from such revenues, income and
other monies hereinafter specified and not otherwise, from the date of
authentication hereof, or if such date shall not be an Interest Payment Date (as
hereinafter defined) from the next preceding Interest Payment Date, or if the
date of authentication is after the Record Date next preceding the next
succeeding Interest Payment Date from the next succeeding Interest Payment Date
until the payment of such principal amount in full, at the Auction Period Rate
hereinafter described, such interest being payable on each Interest Payment Date
in each year, by check mailed to the registered owner hereof at such owner's
16
address as it appears on the registration books kept by the Registrar and Paying
Agent pursuant to the Indenture hereinafter mentioned; provided, that (i) while
the Securities Depository (as defined in the Indenture) is the registered owner
of the Bonds, all payments of principal of and premium, if any, and interest on
the Bonds shall be paid to the Securities Depository by wire transfer, (ii)
prior to any Fixed Rate Conversion Date, interest on the Bonds shall be payable,
at the option of any registered owner of at least one million dollars
($1,000,000) in aggregate principal amount of the Bonds, by wire transfer upon
written notice received by the Registrar and Paying Agent from such registered
owner at least five days prior to the Record Date, containing the wire transfer
address (which shall be in the continental United States) to which such
registered owner wishes to have such wire directed, all as set forth in such
registration books at the close of business on the appropriate Record Date
preceding an Interest Payment Date. If interest is in default it shall be paid
to the person in whose name this bond is registered as set forth on the
registration books as of the record date as set forth in the Indenture. Except
as set forth above, principal of and premium, if any, on this Bond are payable
at the applicable Principle Corporate Trust Office of Citibank, N.A., in New
York, New York, as Registrar and Paying Agent of the Bonds. Principal of and
premium, if any, and interest on this Bond are payable in lawful money of the
United States of America.
This Bond is one of a duly authorized issue of Bonds of the Authority
designated as "Gas Facilities Revenue Bonds (The Brooklyn Union Gas Company
d/b/a KeySpan Energy Delivery New York Project), 2005 Series B", issued in the
aggregate principal amount of fifty-five million dollars ($55,000,000) (the
"Bonds"). In order to distinguish between Bonds which are subject to different
interest rate determination methods and other features and to distinguish the
portion of the Bonds to be offered or remarketed by any particular underwriter
or Remarketing Agent, the Bonds may be designated and redesignated from time to
time by the Authority in such a way as to identify one or more subseries of the
Bonds pursuant to Article II of the Indenture. This Bond and the issue of which
it is one are authorized to be issued and are issued under, pursuant to and in
full compliance with the Constitution and statutes of the State of New York,
including particularly the New York State Energy Research and Development
Authority Act, Title 9 of Article 8 of the Public Authorities Law of the State
of New York, as amended (the "Act"), a resolution of the Authority adopted on
September 19, 2005, and an Indenture of Trust dated as of November 1, 2005
between the Authority and Citibank, N.A. as Trustee (herein, as it may be
amended from time to time, called the "Indenture"). The Bonds are being issued
pursuant to a Participation Agreement dated as of November 1, 2005 (hereinafter,
as it may be amended or supplemented from time to time, called the
"Participation Agreement"), between the Authority and The Brooklyn Union Gas
Company d/b/a KeySpan Energy Delivery New York (the "Company") for the purpose
of refinancing certain prior obligations originally issued to provide funds for
the acquisition, construction, and installation of certain facilities for the
local furnishing of gas within The City of New York (all of said facilities
being referred to herein as the "Project"). Pursuant to the Participation
Agreement, the Company delivered the Company Obligation to the Trustee, pursuant
to which the Company is required to make payments to the Trustee for deposit to
the Bond Fund Account established pursuant to the Indenture in an amount
sufficient to pay principal of and premium, if any, and interest on the Bonds
when due. A copy of the Participation Agreement is on file at the applicable
Principal Corporate Trust Office of the Trustee, and reference is hereby
directed to the Participation Agreement for the provisions thereof.
17
The terms and provisions pertaining to Bonds bearing a Fixed Rate or
another Adjustable Rate are set forth in a separate bond certificate.
A copy of the Indenture is on file at the applicable Principal Corporate
Trust Office of the Trustee. Reference is hereby directed to the Indenture for
the provisions, among others, with respect to the custody and application of the
proceeds of the Bonds; the collection and disposition of revenues; a description
of the nature and extent of the security for the Bonds, the funds and monies
pledged for the payment of the premium, if any, and interest on and the
principal of the Bonds; the nature and extent and manner of enforcement of the
pledge; the rights and remedies of the registered owners of Bonds with respect
thereto; the conditions for and the permissible extent of alteration,
modification and amendment of the Indenture; the terms and conditions upon which
this Bond and the issue of which it is one are issued; the rights, duties and
obligations of the Authority and the Trustee thereunder; the terms and
provisions upon which the liens, pledges, charges, trusts and covenants made
therein may be discharged at or prior to the maturity, purchase or redemption of
this issue and pursuant to which this Bond thereafter will no longer be secured
by the Indenture, or be deemed to be outstanding thereunder, if sufficient
monies or certain specified securities shall have been deposited with the
Trustee and held in trust solely for the payment thereof; and for all other
terms and provisions thereof. The provisions of the Act and the Indenture shall
be a contract with the registered owner of this Bond, and the duties of the
Authority and any employee thereof under said Act and the Indenture shall be
enforceable by the registered owner hereof, by mandamus or other appropriate
suit, action or proceeding, in any court of competent jurisdiction in the State
of New York.
The Bonds are not general obligations of the Authority, and shall not
constitute indebtedness of or a charge against the general credit of the
Authority or give rise to any pecuniary liability of the Authority. The
liability of the Authority under the Bonds shall be enforceable only to the
extent provided in the Indenture, and the Bonds shall be payable solely from the
monies and revenues received from the payments made by the Company pursuant to
the Company Obligation and the Participation Agreement and the other monies,
rights and properties pledged under the Indenture including the proceeds of a
Credit Facility (other than a Policy), if any, and not from any other fund or
source. Pursuant to the Indenture, the Authority has pledged and assigned to the
Trustee its right, title and interest (with certain exceptions) in the
Participation Agreement to secure the payment of the principal of and premium,
if any, and interest on the Bonds. The Bonds are and shall be secured by a prior
and paramount lien and charge on said monies and revenues. The Bonds shall not
be a debt of the State of New York, and the State of New York shall not be
liable thereon. The Bonds are payable solely from the payments made under the
Company Obligation and the monies and revenues pledged under the Indenture to
the payment thereof. Neither the Authority nor the State of New York is
obligated to provide for the payment of the Purchase Price of tendered Bonds or
payment of principal, premium, if any, or interest on the Bonds.
This Bond shall not be entitled to any security, right or benefit under the
Indenture or become valid or obligatory for any purpose until it shall have been
authenticated by the Trustee by its execution of the certificate of
authentication endorsed hereon.
No covenant or agreement contained in this Bond or the Indenture shall be
deemed to be a covenant or agreement of any member, agent or employee of the
Authority in his or her individual capacity, and neither the members of the
18
Authority nor any officer thereof 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 laws of the State of New York and the
Indenture to exist, to have happened and to have been performed precedent to and
in the issuance of this Bond and the issue of which this Bond is a part, do
exist, have happened and have been performed in due time, form and manner as
required by such Constitution, laws and the Indenture; that the amount of this
Bond and the issue of which this Bond is a part does not exceed any
constitutional or statutory limitations of indebtedness; and that provision has
been made for the payment of the principal of and premium, if any, and interest
on this Bond and the series of which it is a part as provided in the Indenture.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.03 OF THE INDENTURE, THIS GLOBAL
BOND MAY, AT THE REQUEST OF THE COMPANY, BE TRANSFERRED, IN WHOLE BUT NOT IN
PART, ONLY TO A NOMINEE OF THE SECURITIES DEPOSITORY OR TO A SUCCESSOR
SECURITIES DEPOSITORY OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.
Interest Rate Provisions
THE AUCTION PERIOD, THE AUCTION PERIOD RATE, THE SELECTION OF THE METHOD OF
DETERMINING THE AUCTION PERIOD RATE AND DATES OF PAYMENT OF INTEREST ON THE
BONDS AND THE AUCTION PROCEDURES RELATED THERETO WILL BE DETERMINED UPON THE
TERMS AND CONDITIONS, INCLUDING REQUIRED NOTICES THEREOF TO THE OWNERS,
DESCRIBED IN THE INDENTURE, INCLUDING APPENDIX B THERETO, TO WHICH PROVISIONS
SPECIFIC REFERENCE IS HEREBY MADE AND ALL OF WHICH PROVISIONS ARE HEREBY
SPECIFICALLY INCORPORATED HEREIN BY REFERENCE.
During any Auction Rate Period, the Bonds shall bear interest at the
Auction Period Rate as provided in the Indenture, including, without limitation,
Appendix B thereto.
The Bonds may also bear interest at one of the following interest rates at
the times and in the manner set forth in the Indenture: a "Commercial Paper
Rate," a "Daily Rate," a "Weekly Rate," a "Monthly Rate," a "Semi-annual Rate",
a "Term Rate" or a "Fixed Rate".
Redemption Provisions
Optional Redemption. The Bonds shall be subject to redemption, at the
option of the Authority upon the request of the Company, on the Business Day
immediately succeeding each Auction Date, as a whole or in part, at the
principal amount thereof plus accrued interest to the date fixed for redemption.
Special Tax Redemption Provisions. The Bonds shall be subject to mandatory
redemption as a whole (provided, however, that the Bonds shall be redeemed in
part if the Company obtains an opinion of Bond Counsel to the effect that, by
19
redeeming such portion of the Bonds, the interest on the remaining Bonds will
not be included for Federal income tax purposes in the gross income of any owner
of the Bonds (other than an owner who is a "substantial user" of the Project or
a "related person" within the meaning of Section 147(a)(1) of the Code)) at any
time at a redemption price equal to 100% of the principal amount thereof,
together with unpaid interest accrued thereon to the redemption date, if, in a
published or private ruling of the Internal Revenue Service or in a final,
nonappealable judicial decision by a court of competent jurisdiction (provided
that the Company has been afforded the opportunity to participate at its own
expense in the proceeding resulting in such ruling or in the litigation
resulting in such decision, as the case may be), it is determined that, as a
result of a failure by the Company to observe any covenant, agreement or
representation in the Participation Agreement or the Tax Regulatory Agreement,
interest on the Bonds is included for Federal income tax purposes in the gross
income (as defined in Section 61 of the Code) of any owner of a Bond (other than
a "substantial user" of the Project or a "related person" within the meaning of
Section 147(a)(1) of the Code), and, in such event, the Bonds shall be subject
to such mandatory redemption not more than one hundred eighty (180) days after
receipt by the Trustee of notice of such published or private ruling or judicial
decision and a demand for redemption of the Bonds. The occurrence of an event
requiring the redemption of the Bonds under this paragraph does not constitute
an event of default under the Company Obligation or under the Indenture and the
sole obligation in such event shall be for the Company to prepay the Company
Obligation in an amount sufficient to redeem the Bonds to the extent required by
the Indenture.
The Bonds may be redeemed in whole or in part at any time at a redemption
price equal to 100% of the principal amount thereof, together with accrued and
unpaid interest thereon to the redemption date, if the Company has determined,
on the basis of the advice of Bond Counsel that, as a result of any action taken
or expected to be taken, or failure to take action, a reasonable risk exists
that interest on the bonds will not be excludable from gross income for federal
tax purposes. Such conclusion and certification shall be evidenced by delivery
to the Trustee of a written certificate of an Authorized Company Representative
to the effect that the Company has reached such conclusion, together with a copy
of such advice of Bond Counsel. The occurrence of an event permitting the
redemption of the Bonds under this paragraph does not constitute an event of
default under the Company Obligation or under the Indenture and the sole option
in such event shall be for the Company to prepay the Company Obligation in an
amount sufficient to redeem the Bonds to the extent required by this paragraph.
The Bonds will also be subject to mandatory redemption at a redemption
price equal to one hundred three percent (103%) of the principal amount thereof
plus unpaid interest accrued thereon to the redemption date if the Company
reasonably concludes and certifies to the Trustee that the business, properties,
condition (financial or otherwise), operations or business prospects of the
Company will be materially and adversely affected unless the Company takes or
omits to take a specified action and that the Company has been advised in
writing by Bond Counsel that the specified action or omission would cause the
use of the Project to be such that, pursuant to Section 150 of the Code, the
Company would not be entitled to deduct the interest on the Bonds for purposes
of determining the Company's Federal taxable income, for a period of not less
than ninety (90) consecutive or nonconsecutive days during a twelve-month
period. Such conclusion and certification shall be evidenced by delivery to the
Trustee of a written certificate of an Authorized Company Representative to the
effect that the Company has reached such conclusion, together with a certified
20
copy of a resolution of the Board of Trustees of the Company authorizing such
certificate and a copy of such advice of Bond Counsel. In the event that the
Bonds become subject to redemption as provided in this paragraph, the Bonds will
be redeemed in whole unless redemption of a portion of the Bonds outstanding
would, in the opinion of Bond Counsel, have the result that interest payable on
the Bonds remaining outstanding after such redemption would be deductible for
purposes of determining the Federal taxable income of the Company, and, in such
event, the Bonds to be redeemed shall be selected (in the principal amount of
$5,000 or any integral multiple thereof) by lot, in such amount as is necessary
to accomplish that result. The occurrence of an event requiring the redemption
of the Bonds under this paragraph does not constitute an event of default under
the Company Obligation or under the Indenture and the sole option in such event
shall be for the Company to prepay the Company Obligation in an amount
sufficient to redeem the Bonds to the extent required by this paragraph.
Mandatory Redemption Upon State Furnishing Funds. Pursuant to Section 1864
of the Act, the State of New York may, upon furnishing sufficient funds
therefor, require the Authority to redeem prior to maturity, as a whole, the
Bonds on any Interest Payment Date not less than twenty years after the date of
initial delivery of the Bonds. Any such redemption shall be at a redemption
price equal to the optional redemption price, if any, applicable on such date or
if no such optional redemption price is applicable at a redemption price of 105%
of the principal amount thereof, in either case, together with accrued and
unpaid interest, if any, to the date fixed for redemption, all in the manner
provided in the Indenture.
Procedure for Redemption. In the event any of the Bonds are called for
redemption, the Trustee shall give notice, or cause the Registrar and Paying
Agent to give notice in the name of the Authority, of the redemption of such
Bonds in accordance with the Indenture.
Notice of redemption shall be given by mailing a copy of the redemption
notice by first-class mail at least 30 days prior to the date fixed for
redemption to the registered owners of such Bonds to be redeemed at the
addresses shown on the registration books maintained by the Registrar and Paying
Agent; provided, however, that failure to give notice to any Holder of a Bond or
any defects in such notice shall not affect the proceedings for the redemption
of the Bonds for which notice has been given.
Mandatory Tender for Purchase Upon a Change in the Interest Rate Mode .
Upon a Change in the Interest Rate Mode, the Bonds shall be subject to mandatory
tender for purchase in accordance with the Indenture on the effective date of
such Change in the Interest Rate Mode at the Purchase Price.
General Provisions Applicable to Mandatory Tenders for Purchase of Bonds.
If interest has been paid on the Bonds, or an amount sufficient to pay interest
thereon has been deposited in the Bond Fund Account, or an amount sufficient to
pay accrued interest thereon, if any, has been set aside in the Bond Purchase
Fund held under the Bond Purchase Trust Agreement, and the Purchase Price shall
be available under the Bond Purchase Fund for payment of Bonds subject to tender
for purchase upon a Change in the Interest Rate Mode and if a registered owner
fails to deliver or does not properly deliver such Bonds to the Registrar and
Paying Agent on the purchase date therefor, such Bonds shall nevertheless be
21
deemed tendered and purchased on the date established for the purchase thereof,
no interest shall accrue on such Bonds from and after the date of purchase and
such former registered owners shall have no rights, benefits or security
hereunder as the registered owners of such Bonds, except the right to receive
the Purchase Price of and interest to the purchase date, if any, on such Bonds
upon delivery thereof to the Registrar and Paying Agent in accordance with the
provisions hereof. The purchaser of any such Bonds remarketed by the Remarketing
Agent, or the issuer of any Support Facility, to the extent Bonds are purchased
with the proceeds of a draw on, or borrowing or payment under, the Support
Facility, shall be treated as the registered owner thereof for all purposes of
the Indenture. The payment of Bonds tendered upon the election of the registered
owner shall be subject to delivery of such Bonds duly endorsed in blank for
transfer or accompanied by an instrument of transfer thereof in form
satisfactory to the Registrar and Paying Agent executed in blank for transfer at
the applicable Principal Corporate Trust Office of the Registrar and Paying
Agent at or prior to 10:00 a.m. (New York City time), on a specified purchase
date. The Registrar and Paying Agent may refuse to make payment with respect to
any Bonds tendered for purchase not endorsed in blank or for which an instrument
of transfer satisfactory to the Registrar and Paying Agent has not been
provided.
The Purchase Price of Bonds subject to tender for purchase in an aggregate
principal amount of at least one million dollars ($1,000,000) shall be payable
in immediately available funds or by wire transfer upon written notice from the
registered owner thereof containing the wire transfer address (which shall be in
the continental United States) to which such registered owner wishes to have
such wire directed, if such written notice is received by the Registrar and
Paying Agent not less than five days prior to the related purchase date.
Registered owners of Auction Rate Bonds subject to mandatory tender for
purchase upon a Change in the Interest Rate Mode to or from an Auction Period
Rate Period shall have no right to retain such Bonds and shall be required to
tender such Auction Rate Bonds on the date established for the mandatory tender
for purchase thereof.
The Bonds may be transferred or exchanged by the registered owner hereof,
in person or by his or her attorney duly authorized in writing, at the
applicable Principal Corporate Trust Office of the Registrar and Paying Agent
but only in the manner, subject to limitations and upon payment of the charges,
if any, provided in the Indenture and upon the surrender hereof to the Registrar
and Paying Agent for cancellation. Upon such transfer or exchange, a new Bond or
Bonds of authorized denominations and of like aggregate principal amount as the
Bond surrendered will be issued in exchange herefor. Transfer of Bonds bearing
an Auction Period Rate is subject to the provisions of the Indenture. The
Indenture is available for inspection at the office of the Trustee.
All terms used herein which are defined in the Indenture and not otherwise
defined herein shall have the respective meanings set forth in the Indenture.
This Bond shall be governed by and construed in accordance with laws of the
State of New York.
22
IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its
name and on its behalf by the manual or facsimile signature of its President,
Vice President or Treasurer and its seal or a facsimile thereof to be impressed,
imprinted or otherwise reproduced hereon and attested by the manual or facsimile
signature of its Secretary or an Assistant Secretary, as of the date set forth
in the Certificate of Authentication.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
[SEAL]
By____________________________
President
Attest:
____________________________
Assistant Secretary
23
CERTIFICATE OF AUTHENTICATION
This Bond is one of an issue described in the Indenture mentioned herein.
Citibank, N.A.,
as Trustee
By:________________________
Authorized Officer
Date of Authentication:
24
STATEMENT OF INSURANCE
Financial Guaranty Insurance Company ("Financial Guaranty") has issued a
policy containing the following provisions with respect to the Bonds, such
policy being on file at the applicable Principal Corporate Trust Office of
Citibank, N.A., as paying agent (the "Paying Agent"):
Financial Guaranty hereby unconditionally and irrevocably agrees to pay for
disbursement to the Bondholders that portion of the principal of and interest on
the Bonds which is then due for payment and which the Authority shall have
failed to provide. Due for payment means, with respect to principal, the stated
maturity date thereof, and the date on which the Bonds shall have been duly
called for mandatory redemption as a result of the interest on the Bonds having
been determined to have become subject to federal income taxation, and does not
refer to any earlier date on which the payment of principal of the Bonds is due
by reason of call for redemption, acceleration or other advancement of maturity,
and with respect to interest, the stated date for payment of such interest.
Upon receipt of telephonic or telegraphic notice, subsequently confirmed in
writing, or written notice by registered or certified mail, from a Bondholder or
the Paying Agent to Financial Guaranty that the required payment of principal or
interest (as applicable) has not been made by the Authority to the Paying Agent,
Financial Guaranty on the due date of such payment or within one business day
after receipt of notice of such nonpayment, whichever is later, will make a
deposit of funds, in an account with U.S. Bank Trust National Association, or
its successor as its agent (the "Fiscal Agent"), sufficient to make the portion
of such payment not paid by the Authority. Upon presentation to the Fiscal Agent
of evidence satisfactory to it of the Bondholder's right to receive such payment
and any appropriate instruments of assignment required to vest all of such
Bondholder's right to such payment in Financial Guaranty, the Fiscal Agent will
disburse such amount to the Bondholder.
As used herein the term "Bondholder" means the person other than the
Authority or the borrower(s) of bond proceeds who at the time of nonpayment of a
Bond is entitled under the terms of such Bond to payment thereof.
The policy is non-cancellable for any reason.
FINANCIAL GUARANTY INSURANCE COMPANY
25
(FORM OF ASSIGNMENT)
For value received ________________________ hereby sells, assigns and
transfers unto ___________________________ the within mentioned Bond and hereby
irrevocably constitutes and appoints ________________________, Attorney, to
transfer the same on the registration books in the office of the Registrar and
Paying Agent with full power of substitution in the premises.
______________________
Dated: _________________________
I hereby certify that the above signature is true and genuine.
__________________
Authorized Officer
___________________Bank
26
APPENDIX B
AUCTION RATE PROVISIONS
ARTICLE I
Definitions
Section 1.01. Definitions. In addition to the words and terms elsewhere defined
in the Indenture, the following words and terms as used in this Appendix B and
elsewhere in the Indenture have the following meanings with respect to Bonds in
an Auction Rate Period unless the context or use indicates another or different
meaning or intent:
"Agent Member" means a member of, or participant in, the Securities
Depository who shall act on behalf of a Bidder.
"All Hold Rate" means, as of any Auction Date, 45% of the Reference Rate in
effect on such Auction Date.
"Applicable Percentage" means, as of any Auction Date, the Percentage of
Reference Rate (in effect on such Auction Date) determined as set forth below,
based on the Prevailing Rating of Bonds in effect at the close of business on
the Business Day immediately preceding such Auction Date:
Percentage
Prevailing Rating of Reference Rate
----------------- -----------------
AAA/AAA/Aaa 175%
AA/AA/Aa 200
A/A/A 250
BBB/BBB/Baa 275
Below BBB/BBB/Baa 300
"Auction" means each periodic implementation of the Auction Procedures.
"Auction Agent" means the auctioneer appointed in accordance with Section
2.01 or 2.02 of this Appendix B.
"Auction Agreement" means an agreement between the Company, the Auction
Agent and the Trustee pursuant to which the Auction Agent agrees to follow the
procedures specified in this Appendix B, with respect to the Bonds in an Auction
Rate Period, as such agreement may from time to time be amended or supplemented.
Appendix B-1
"Auction Date" means during any period in which the Auction Procedures are
not suspended in accordance with the provisions hereof:
(a) if the Bonds are in a daily Auction Period, each Business Day;
(b) if the Bonds are in a Special Rate Period, the last Business Day of the
Special Rate Period; and
(c) if the Bonds are in any other Auction Period, the Business Day next
preceding each Interest Payment Date for such Bonds (whether or not an Auction
shall be conducted on such date);
provided, however, that the last Auction Date with respect to Bonds in an
Auction Period other than a daily Auction Period or Special Rate Period shall be
the earlier of (i) the Business Day next preceding the Interest Payment Date
next preceding the effective date of a Change in the Interest Rate Mode, and
(ii) the Business Day next preceding the Interest Payment Date next preceding
the Stated Maturity for such Bonds; and provided, further, that if the Bonds are
in a daily Auction Period, the last Auction Date shall be the earlier of (x) the
Business Day next preceding the effective date of a Change in the Interest Rate
Mode and (y) the Business Day next preceding the Stated Maturity for the Bonds.
The last Business Day of a Special Rate Period shall be the Auction Date
for the Auction Period which begins on the next succeeding Business Day, if any.
On the Business Day preceding the conversion from a daily Auction Period to
another Auction Period, there shall be two Auctions, one for the last daily
Auction Period and one for the first Auction Period following the conversion.
"Auction Period" means:
(a) a Special Rate Period;
(b) with respect to Bonds in a daily Auction Period, a period beginning on
each Business Day and extending to but not including the next succeeding
Business Day;
(c) with respect to Bonds in a seven-day Auction Period and with Auctions
generally conducted on (i) Fridays, a period of generally seven days beginning
on a Monday (or the day following the last day of the prior Auction Period if
the prior Auction Period does not end on a Sunday) and ending on the Sunday
thereafter (unless such Sunday is not followed by a Business Day, in which case
on the next succeeding day which is followed by a Business Day), (ii) Mondays, a
period of generally seven days beginning on a Tuesday (or the day following the
last day of the prior Auction Period if the prior Auction Period does not end on
a Monday) and ending on the Monday thereafter (unless such Monday is not
followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day), (iii) Tuesdays, a period of generally seven days
beginning on a Wednesday (or the day following the last day of the prior Auction
Period if the prior Auction Period does not end on a Tuesday) and ending on the
Tuesday thereafter (unless such Tuesday is not followed by a Business Day, in
Appendix B-2
which case on the next succeeding day which is followed by a Business Day), (iv)
Wednesdays, a period of generally seven days beginning on a Thursday (or the day
following the last day of the prior Auction Period if the prior Auction Period
does not end on a Wednesday) and ending on the Wednesday thereafter (unless such
Wednesday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day), and (v) Thursdays, a period
of generally seven days beginning on a Friday (or the day following the last day
of the prior Auction Period if the prior Auction Period does not end on a
Thursday) and ending on the Thursday thereafter (unless such Thursday is not
followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day);
(d) with respect to Bonds in a 14-day Auction Period and with Auctions
generally conducted on (i) Fridays, a period of generally 14 days beginning on a
Monday (or the last day of the prior Auction Period if the prior Auction Period
does not end on a Sunday) and ending on the second Sunday thereafter (unless
such Sunday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day), (ii) Mondays, a period of
generally 14 days beginning on a Tuesday (or the last day of the prior Auction
Period if the prior Auction Period does not end on a Monday) and ending on the
second Monday thereafter (unless such Monday is not followed by a Business Day,
in which case on the next succeeding day which is followed by a Business Day),
(iii) Tuesdays, a period of generally 14 days beginning on a Wednesday (or the
last day of the prior Auction Period if the prior Auction Period does not end on
a Tuesday) and ending on the second Tuesday thereafter (unless such Tuesday is
not followed by a Business Day, in which case on the next succeeding day which
is followed by a Business Day), (iv) Wednesdays, a period of generally 14 days
beginning on a Thursday (or the last day of the prior Auction Period if the
prior Auction Period does not end on a Wednesday) and ending on the second
Wednesday thereafter (unless such Wednesday is not followed by a Business Day,
in which case on the next succeeding day which is followed by a Business Day),
and (v) Thursdays, a period of generally 14 days beginning on a Friday (or the
last day of the prior Auction Period if the prior Auction Period does not end on
a Thursday) and ending on the second Thursday thereafter (unless such Thursday
is not followed by a Business Day, in which case on the next succeeding day
which is followed by a Business Day);
(e) with respect to Bonds in a 28-day Auction Period and with Auctions
generally conducted on (i) Fridays, a period of generally 28 days beginning on a
Monday (or the last day of the prior Auction Period if the prior Auction Period
does not end on a Sunday) and ending on the fourth Sunday thereafter (unless
such Sunday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day), (ii) Mondays, a period of
generally 28 days beginning on a Tuesday (or the last day of the prior Auction
Period if the prior Auction Period does not end on a Monday) and ending on the
fourth Monday thereafter (unless such Monday is not followed by a Business Day,
in which case on the next succeeding day which is followed by a Business Day),
(iii) Tuesdays, a period of generally 28 days beginning on a Wednesday (or the
last day of the prior Auction Period if the prior Auction Period does not end on
a Tuesday) and ending on the fourth Tuesday thereafter (unless such Tuesday is
not followed by a Business Day, in which case on the next succeeding day which
is followed by a Business Day), (iv) Wednesdays, a period of generally 28 days
beginning on a Thursday (or the last day of the prior Auction Period if the
prior Auction Period does not end on a Wednesday) and ending on the fourth
Appendix B-3
Wednesday thereafter (unless such Wednesday is not followed by a Business Day,
in which case on the next succeeding day which is followed by a Business Day),
and (v) Thursdays, a period of generally 28 days beginning on a Friday (or the
last day of the prior Auction Period if the prior Auction Period does not end on
a Thursday) and ending on the fourth Thursday thereafter (unless such Thursday
is not followed by a Business Day, in which case on the next succeeding day
which is followed by a Business Day);
(f) with respect to Bonds in a 35-day Auction Period and with Auctions
generally conducted on (i) Fridays, a period of generally 35 days beginning on a
Monday (or the last day of the prior Auction Period if the prior Auction Period
does not end on Sunday) and ending on the fifth Sunday thereafter (unless such
Sunday is not followed by a Business Day, in which case on the next succeeding
day which is followed by a Business Day), (ii) Mondays, a period of generally 35
days beginning on a Tuesday (or the last day of the prior Auction Period if the
prior Auction Period does not end on Monday) and ending on the fifth Monday
thereafter (unless such Monday is not followed by a Business Day, in which case
on the next succeeding day which is followed by a Business Day), (iii) Tuesdays,
a period of generally 35 days beginning on a Wednesday (or the last day of the
prior Auction Period if the prior Auction Period does not end on Tuesday) and
ending on the fifth Tuesday thereafter (unless such Tuesday is not followed by a
Business Day, in which case on the next succeeding day which is followed by a
Business Day), (iv) Wednesdays, a period of generally 35 days beginning on a
Thursday (or the last day of the prior Auction Period if the prior Auction
Period does not end on Wednesday) and ending on the fifth Wednesday thereafter
(unless such Wednesday is not followed by a Business Day, in which case on the
next succeeding day which is followed by a Business Day), and (v) Thursdays, a
period of generally 35 days beginning on a Friday (or the last day of the prior
Auction Period if the prior Auction Period does not end on Thursday) and ending
on the fifth Thursday thereafter (unless such Thursday is not followed by a
Business Day, in which case on the next succeeding day which is followed by a
Business Day);
(g) with respect to Bonds in a three-month Auction Period, a period of
generally three months (or shorter period upon a conversion from another Auction
Period) beginning on the day following the last day of the prior Auction Period
and ending on the first day of the month that is the third calendar month
following the beginning date of such Auction Period (unless such first day of
the month is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day); and
(h) with respect to Bonds in a six-month Auction Period, a period of
generally six months (or shorter period upon a conversion from another Auction
Period) beginning on the day following the last day of the prior Auction Period
and ending on the next succeeding April 30 or October 31;
provided, however, that
-------- -------
(a) if there is a conversion of Bonds with Auctions generally conducted on
Fridays (i) from a daily Auction Period to a seven-day Auction Period, the next
Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on the next succeeding
Appendix B-4
Sunday (unless such Sunday is not followed by a Business Day, in which case on
the next succeeding day which is followed by a Business Day), (ii) from a daily
Auction Period to a 14-day Auction Period, the next Auction Period shall begin
on the date of the conversion (i.e. the Interest Payment Date for the prior
Auction Period) and shall end on the Sunday (unless such Sunday is not followed
by a Business Day, in which case on the next succeeding day which is followed by
a Business Day) which is more than seven days but not more than 14 days from
such date of conversion, (iii) from a daily Auction Period to a 28-day Auction
Period, the next Auction Period shall begin on the date of the conversion (i.e.
the Interest Payment Date for the prior Auction Period) and shall end on the
Sunday (unless such Sunday is not followed by a Business Day, in which case on
the next succeeding day which is followed by a Business Day) which is more than
21 days but not more than 28 days from such date of conversion, and (iv) from a
daily Auction Period to a 35-day Auction Period, the next Auction Period shall
begin on the date of the conversion (i.e. the Interest Payment Date for the
prior Auction Period) and shall end on Sunday (unless such Sunday is not
followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day) which is more than 28 days but no more than 35 days
from such date of conversion;
(b) if there is a conversion of Bonds with Auctions generally conducted on
Mondays (i) from a daily Auction Period to a seven-day Auction Period, the next
Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on the next succeeding
Monday (unless such Monday is not followed by a Business Day, in which case on
the next succeeding day which is followed by a Business Day), (ii) from a daily
Auction Period to a 14-day Auction Period, the next Auction Period shall begin
on the date of the conversion (i.e. the Interest Payment Date for the prior
Auction Period) and shall end on the Monday (unless such Monday is not followed
by a Business Day, in which case on the next succeeding day which is followed by
a Business Day) which is more than seven days but not more than 14 days from
such date of conversion, (iii) from a daily Auction Period to a 28-day Auction
Period, the next Auction Period shall begin on the date of the conversion (i.e.
the Interest Payment Date for the prior Auction Period) and shall end on the
Monday (unless such Monday is not followed by a Business Day, in which case on
the next succeeding day which is followed by a Business Day) which is more than
21 days but not more than 28 days from such date of conversion, and (iv) from a
daily Auction Period to a 35-day Auction Period, the next Auction Period shall
begin on the date of the conversion (i.e. the Interest Payment Date for the
prior Auction Period) and shall end on Monday (unless such Monday is not
followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day) which is more than 28 days but no more than 35 days
from such date of conversion;
(c) if there is a conversion of Bonds with Auctions generally conducted on
Tuesdays (i) from a daily Auction Period to a seven-day Auction Period, the next
Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on the next succeeding
Tuesday (unless such Tuesday is not followed by a Business Day, in which case on
the next succeeding day which is followed by a Business Day), (ii) from a daily
Auction Period to a 14-day Auction Period, the next Auction Period shall begin
on the date of the conversion (i.e. the Interest Payment Date for the prior
Auction Period) and shall end on the Tuesday (unless such Tuesday is not
Appendix B-5
followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day) which is more than seven days but not more than 14
days from such date of conversion, (iii) from a daily Auction Period to a 28-day
Auction Period, the next Auction Period shall begin on the date of the
conversion (i.e. the Interest Payment Date for the prior Auction Period) and
shall end on the Tuesday (unless such Tuesday is not followed by a Business Day,
in which case on the next succeeding day which is followed by a Business Day)
which is more than 21 days but not more than 28 days from such date of
conversion, and (iv) from a daily Auction Period to a 35-day Auction Period, the
next Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on Tuesday (unless such
Tuesday is not followed by a Business Day, in which case on the next succeeding
day which is followed by a Business Day) which is more than 28 days but no more
than 35 days from such date of conversion;
(d) if there is a conversion of Bonds with Auctions generally conducted on
Wednesdays (i) from a daily Auction Period to a seven-day Auction Period, the
next Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on the next succeeding
Wednesday (unless such Wednesday is not followed by a Business Day, in which
case on the next succeeding day which is followed by a Business Day), (ii) from
a daily Auction Period to a 14-day Auction Period, the next Auction Period shall
begin on the date of the conversion (i.e. the Interest Payment Date for the
prior Auction Period) and shall end on the Wednesday (unless such Wednesday is
not followed by a Business Day, in which case on the next succeeding day which
is followed by a Business Day) which is more than seven days but not more than
14 days from such date of conversion, (iii) from a daily Auction Period to a
28-day Auction Period, the next Auction Period shall begin on the date of the
conversion (i.e. the Interest Payment Date for the prior Auction Period) and
shall end on the Wednesday (unless such Wednesday is not followed by a Business
Day, in which case on the next succeeding day which is followed by a Business
Day) which is more than 21 days but not more than 28 days from such date of
conversion, and (iv) from a daily Auction Period to a 35-day Auction Period, the
next Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on Wednesday (unless
such Wednesday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day) which is more than 28 days
but no more than 35 days from such date of conversion; and
(e) if there is a conversion of Bonds with Auctions generally conducted on
Thursdays (i) from a daily Auction Period to a seven-day Auction Period, the
next Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on the next succeeding
Thursday (unless such Thursday is not followed by a Business Day, in which case
on the next succeeding day which is followed by a Business Day), (ii) from a
daily Auction Period to a 14-day Auction Period, the next Auction Period shall
begin on the date of the conversion (i.e. the Interest Payment Date for the
prior Auction Period) and shall end on the Thursday (unless such Thursday is not
followed by a Business Day, in which case on the next succeeding day which is
followed by a Business Day) which is more than seven days but not more than 14
days from such date of conversion, (iii) from a daily Auction Period to a 28-day
Auction Period, the next Auction Period shall begin on the date of the
conversion (i.e. the Interest Payment Date for the prior Auction Period) and
Appendix B-6
shall end on the Thursday (unless such Thursday is not followed by a Business
Day, in which case on the next succeeding day which is followed by a Business
Day) which is more than 21 days but not more than 28 days from such date of
conversion, and (iv) from a daily Auction Period to a 35-day Auction Period, the
next Auction Period shall begin on the date of the conversion (i.e. the Interest
Payment Date for the prior Auction Period) and shall end on Thursday (unless
such Thursday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day) which is more than 28 days
but no more than 35 days from such date of conversion.
"Auction Period Rate" means the rate of interest to be borne by the Bonds
during each Auction Period determined in accordance with Section 2.03 of this
Appendix B; provided, however, in no event may the Auction Period Rate exceed
the Maximum Allowed Rate.
"Auction Procedures" means the procedures for conducting Auctions for Bonds
in an Auction Rate Period set forth in this Appendix B.
"Auction Rate" means for each Auction Period, (i) if Sufficient Clearing
Bids exist, the Winning Bid Rate, provided, however, if all of such Bonds are
the subject of Submitted Hold Orders, the All Hold Rate with respect to such
Bonds and (ii) if Sufficient Clearing Bids do not exist, the Maximum Auction
Rate with respect to such Bonds, provided, however, if the preceding Auction
Period was a period of 35 days or less, the new Auction Period shall be the same
as the preceding Auction Period, and if the preceding Auction Period was a
period of greater than 35 days, the new Auction Period shall be a seven-day
Auction Period.
"Authorized Denominations" means $25,000 and integral multiples thereof, so
long as the Bonds bear interest at an Auction Period Rate.
"Available Bonds" means on each Auction Date, the aggregate principal
amount of such Bonds that are not the subject of Submitted Hold Orders.
"Bid" has the meaning specified in subsection (a) of Section 2.01 of this
Appendix B.
"Bidder" means each Existing Owner and Potential Owner who places an Order.
"Broker-Dealer" means any entity that is permitted by law to perform the
function required of a Broker-Dealer described in this Appendix B that is a
member of, or a direct participant in, the Securities Depository, that has been
selected by the Company with the consent of the Authority, and that is a party
to a Broker-Dealer Agreement with the Auction Agent.
"Broker-Dealer Agreement" means an agreement among the Auction Agent, the
Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures described in this Appendix B, as such agreement may from
time to time be amended or supplemented.
Appendix B-7
"Business Day" in addition to any other definition of "Business Day"
included in the Indenture while the Bonds bear interest at an Auction Period
Rate, the term Business Day shall not include days on which the Auction Agent or
any Broker-Dealer are not open for business.
"Default Rate" means, in respect of any Auction Period other than a daily
Auction Period, a per annum rate equal to three hundred percent (300%) of the
Reference Rate determined on the Auction Date next preceding the first day of
such Auction Period or in the case of Bonds in a daily Auction Period, three
hundred percent (300%) of the Reference Rate determined on the Auction Date
which was the first day of such Auction Period, provided, however, the Default
Rate shall not exceed the Maximum Allowed Rate.
"Existing Owner" means (a) with respect to and for the purpose of dealing
with the Auction Agent in connection with an Auction, a Person who is a
Broker-Dealer listed in the Auction Agent's registry at the close of business on
the Business Day immediately preceding the Auction Date for such Auction and (b)
with respect to and for the purpose of dealing with a Broker-Dealer in
connection with an Auction, a Person who is a beneficial owner of the Bonds.
"Fitch" shall mean Fitch Ratings and its successor or successors, and if
such corporation shall for any reason no longer perform the functions of a
securities rating agency or if Fitch shall be replaced, subject to the
definition of "prevailing rating" in the definition of Applicable Percentage, by
some other nationally recognized rating agency by the Authority at the request
of the Company, "Fitch" shall be deemed to refer to such other nationally
recognized rating agency designated by the Authority at the request of the
Company.
"Hold Order" has the meaning specified in subsection (a) of Section 2.01 of
this Appendix B.
"Interest Payment Date" means:
(a) when used with respect to any Auction Period (including the initial
Auction Period commencing on and including the Effective Date or the effective
date of a Change in the Interest Rate Mode, as the case may be, and expiring on
and including the initial Auction Date specified in Section 3.03 of the
Indenture or determined and certified by the Company in writing to the Trustee
on or prior to the effective date of a Change in the Interest Rate Mode (or, if
such initial Auction Date is not followed by a Business Day, the next day which
is followed by a Business Day)) other than a daily Auction Period or a Special
Rate Period, the Business Day immediately following such Auction Period; and
(b) when used with respect to a daily Auction Period, the first Business
Day of the month immediately succeeding such Auction Period; and
(c) when used with respect to a Special Rate Period of (i) more than seven
but fewer than 92 days, the Business Day immediately following such Special Rate
Period, or (ii) 92 or more days, (A) in the case of Bonds with Auctions
generally conducted on Fridays, each thirteenth Monday after the first day of
such Special Rate Period or the next Business Day if such Monday is not a
Appendix B-8
Business Day and on the Business Day immediately following such Special Rate
Period, (B) in the case of Bonds with Auctions generally conducted on Mondays,
each thirteenth Tuesday after the first day of such Special Rate Period or the
next Business Day if such Tuesday is not a Business Day and on the Business Day
immediately following such Special Rate Period, (C) in the case of Bonds with
Auctions generally conducted on Tuesdays, each thirteenth Wednesday after the
first day of such Special Rate Period or the next Business Day if such Wednesday
is not a Business Day and on the Business Day immediately following such Special
Rate Period, (D) in the case of Bonds with Auctions conducted on Wednesdays,
each thirteenth Thursday after the first day of such Special Rate Period or the
next Business Day if such Thursday is not a Business Day and on the Business Day
immediately following such Special Rate Period and (E) in the case of Bonds with
Auctions generally conducted on Thursdays, each thirteenth Friday after the
first day of such Special Rate Period or the next Business Day if such Friday is
not a Business Day and on the Business Day immediately following such Special
Rate Period.
"LIBOR" on any date of determination for any Auction Period, means (i) for
any Auction Period of fewer than 49 days, the offered rate for deposits in U.S.
dollars for a one-month period which appears on the Telerate Page 3750 at
approximately 11:00 A.M., London time, on such date, or if such date is not a
date on which dealings in U.S. dollars are transacted in the London interbank
market, then on the next preceding day on which such dealings were transacted in
such market (the "calculation date") and (ii) for any Auction Period of (A) 49
or more but fewer than 70 days, such rates for deposits in U.S. dollars for a
two-month period, (B) 70 or more but fewer than 85 days, the arithmetic average
of such rates for deposits in U.S. dollars for two and three-month periods, (C)
85 or more but fewer than 120 days, such rate for deposits in U.S. dollars for a
three-month period, (D) 120 or more but fewer than 148 days, the arithmetic
average of such rates for deposits in U.S. dollars for three and six-month
periods, (E) 148 or more but fewer than 180 days, such rate for deposits in U.S.
dollars for a six-month period, (F) 180 or more but fewer than 225 days, the
arithmetic average of such rates for deposits in U.S. dollars for six and
nine-month periods, (G) 225 or more but fewer than 290 days, such rate for
deposits in U.S. dollars for a nine-month period, (H) 290 or more but fewer than
325 days, the arithmetic average of such rates for deposits in U.S. dollars for
nine-month and one-year periods and (I) 325 or more but fewer than 365 days,
such rate for deposits in U.S. dollars for a one-year period.
"Maximum Auction Rate" means as of any Auction Date, the product of the
Reference Rate multiplied by the Applicable Percentage; provided, however, that
in no event shall the Maximum Auction Rate exceed the Maximum Allowed Rate,
anything herein to the contrary notwithstanding.
"Moody's" shall mean Xxxxx'x Investors Service and its successor or
successors, and if such corporation shall for any reason no longer perform the
functions of a securities rating agency or if Moody's shall be replaced, subject
to the definition of "prevailing rating" in the definition of Applicable
Percentage, by some other nationally recognized rating agency by the Authority
at the request of the Company, "Moody's" shall be deemed to refer to such other
nationally recognized rating agency designated by the Authority at the request
of the Company.
Appendix B-9
"Order" means a Hold Order, Bid or Sell Order.
"Potential Owner" means (a) with respect to and for the purpose of dealing
with the Auction Agent in connection with an Auction, a Person who is a
Broker-Dealer listed in the Auction Agent's registry at the close of business on
the Business Day immediately preceding the Auction Date for such Auction and (b)
with respect to and for the purpose of dealing with a Broker-Dealer in
connection with an Auction, a Person who is or will be a beneficial owner of the
Bonds.
"Prevailing Rating" means (a) AAA/AAA/Aaa, if the Bonds shall have a rating
of AAA by S&P and Fitch and a rating of Aaa by Moody's, (b) if not AAA/AAA/Aaa,
AA/AA/Aa if the Bonds shall have a rating of AA- or better by S&P and Fitch and
a rating of Aa3 or better by Moody's, (c) if not AAA/AAA/Aaa or AA/AA/Aa, A/A/A
if the Bonds shall have a rating of A- or better by S&P and Fitch and a rating
of A3 or better by Moody's, (d) if not AAA/AAA/Aaa, AA/AA/Aa or A/A/A,
BBB/BBB/Baa if the Bonds shall have a rating of BBB- or better by S&P and Fitch
and a rating of Baa3 or better by Moody's, and (e) if not AAA/AAA/Aaa, AA/AA/Aa,
A/A/A or BBB/BBB/Baa, then below BBB/BBB/Baa, whether or not the Bonds are rated
by any Rating Agency. For purposes of this definition, S&P's and Fitch's rating
categories of "AAA," "AA-," "A-" and "BBB-" and Xxxxx'x rating categories of
"Aaa," "Aa3," "A3" and "Baa3" shall be deemed to refer to and include the
respective rating categories correlative thereto in the event that any such
Rating Agencies shall have changed or modified their generic rating categories
or if any successor thereto appointed in accordance with the definitions thereof
shall use different rating categories. If the Bonds are not rated by a Rating
Agency, the requirement of a rating by such Rating Agency shall be disregarded.
If the ratings for the Bonds are split between the foregoing categories, the
lowest rating shall determine the Prevailing Rating.
"Reference Rate" shall have the meaning specified in Section 2.06 of this
Appendix B.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and its successor or successors, and if such
corporation shall for any reason no longer perform the functions of a securities
rating agency or if S&P shall be replaced, subject to the definition of
"prevailing rating" in the definition of Applicable Percentage, by some other
nationally recognized rating agency by the Authority at the request of the
Company, "S&P" shall be deemed to refer to such other nationally recognized
rating agency designated by the Authority at the request of the Company.
"Sell Order" has the meaning specified in subsection (a) of Section 2.01 of
this Appendix B.
"Special Rate Period" means any period of more than seven days but less
than five years which is not another Auction Period and which begins on an
Interest Payment Date and ends (i) in the case of Bonds with Auctions generally
conducted on Fridays, on a Sunday unless such Sunday is not followed by a
Business Day, in which case on the next succeeding day which is followed by a
Appendix B-10
Business Day, (ii) in the case of Bonds with Auctions generally conducted on
Mondays, on a Monday unless such Monday is not followed by a Business Day, in
which case on the next succeeding day which is followed by a Business Day, (iii)
in the case of Bonds with Auctions generally conducted on Tuesdays, on a Tuesday
unless such Tuesday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day, (iv) in the case of Bonds
with Auctions generally conducted on Wednesdays, on a Wednesday unless such
Wednesday is not followed by a Business Day, in which case on the next
succeeding day which is followed by a Business Day, and (v) in the case of Bonds
with Auctions generally conducted on Thursdays, on a Thursday unless such
Thursday is not followed by a Business Day, in which case on the next succeeding
day which is followed by a Business Day.
"Submission Deadline" means 1:00 p.m., New York City time, on each Auction
Date for Bonds not in a daily Auction Period and 11:00 a.m., New York City time,
on each Auction Date for Bonds in a daily Auction Period, or such other time on
such date as shall be specified from time to time by the Auction Agent pursuant
to the Auction Agreement as the time by which Broker-Dealers are required to
submit Orders to the Auction Agent.
"Submitted Bid" has the meaning specified in subsection (b) of Section 2.03
of this Appendix B.
"Submitted Hold Order" has the meaning specified in subsection (b) of
Section 2.03 of this
Appendix B.
"Submitted Order" has the meaning specified in subsection (b) of Section
2.03 of this Appendix B.
"Submitted Sell Order" has the meaning specified in subsection (b) of
Section 2.03 of this Appendix B.
"Sufficient Clearing Bids" means with respect to Bonds, an Auction for
which the aggregate principal amount of Bonds that are the subject of Submitted
Bids by Potential Owners specifying one or more rates not higher than the
Maximum Auction Rate is not less than the aggregate principal amount of Bonds
that are the subject of Submitted Sell Orders and of Submitted Bids by Existing
Owners specifying rates higher than the Maximum Auction Rate.
"United States Treasury Securities" means direct obligations issued by the
United States government.
"Winning Bid Rate" means with respect to Bonds the lowest rate specified in
any Submitted Bid for such Bond which if selected by the Auction Agent as the
Auction Period Rate would cause the aggregate principal amount of Bonds that are
the subject of Submitted Bids specifying a rate not greater than such rate to be
not less than the aggregate principal amount of Available Bonds.
Section 1.02. Rules of Construction. (a) This Appendix B constitutes an
integral part of the Appendix A and, except to the extent provided in the next
sentence, has the same force and effect as if set forth in Appendix A. In the
event of any conflict between this Appendix B and Appendix A, Appendix A shall
control.
Appendix B-11
(b) References in this Appendix B to Articles or Sections are to such
Article or Section of this Appendix B.
ARTICLE II
Auction Procedures
Section 2.01. Orders by Existing Owners and Potential Owners. (a) Prior to
the Submission Deadline on each Auction Date:
(i) each Existing Owner may submit to a Broker-Dealer, in writing or by
such other method as shall be reasonably acceptable to such Broker-Dealer,
information as to:
(A) the principal amount of Bonds, if any, held by such Existing Owner
which such Existing Owner irrevocably commits to continue to hold for the
next succeeding Auction Period without regard to the rate determined by the
Auction Procedures for such Auction Period,
(B) the principal amount of Bonds, if any, held by such Existing Owner
which such Existing Owner irrevocably commits to continue to hold for the
next succeeding Auction Period if the rate determined by the Auction
Procedures for such Auction Period shall not be less than the rate per
annum then specified by such Existing Owner (and which such Existing Owner
irrevocably offers to sell on the next succeeding Interest Payment Date (or
the same day in the case of a daily Auction Period) if the rate determined
by the Auction Procedures for the next succeeding Auction Period shall be
less than the rate per annum then specified by such Existing Owner), and/or
(C) principal amount of Bonds, if any, held by such Existing Owner
which such Existing Owner irrevocably offers to sell on the next succeeding
Interest Payment Date (or on the same day in the case of a daily Auction
Period) without regard to the rate determined by the Auction Procedures for
the next succeeding Auction Period; and
(ii) for the purpose of implementing the Auctions and thereby to achieve
the lowest possible interest rate on the Bonds, the Broker-Dealers shall contact
Potential Owners, including Persons that are Existing Owners, to determine the
principal amount of Bonds, if any, which each such Potential Owner irrevocably
offers to purchase if the rate determined by the Auction Procedures for the next
succeeding Auction Period is not less than the rate per annum then specified by
such Potential Owner.
Appendix B-12
For the purposes hereof, an Order containing the information referred to in
clause (i)(A) above is herein referred to as a "Hold Order", an Order containing
the information referred to in clause (i)(B) or (ii) above is herein referred to
as a "Bid", and an Order containing the information referred to in clause (i)(C)
above is herein referred to as a "Sell Order."
(b) (i) A Bid by an Existing Owner shall constitute an irrevocable offer to
sell:
(A) the principal amount of Bonds specified in such Bid if the rate
determined by the Auction Procedures on such Auction Date shall be less
than the rate specified therein; or
(B) such principal amount or a lesser principal amount of Bonds to be
determined as described in subsection (a)(v) of Section 2.04 hereof if the
rate determined by the Auction Procedures on such Auction Date shall be
equal to such specified rate; or
(C) a lesser principal amount of Bonds to be determined as described
in subsection (b)(iv) of Section 2.04 hereof if such specified rate shall
be higher than the Maximum Auction Rate and Sufficient Clearing Bids do not
exist.
(ii) A Sell Order by an Existing Owner shall constitute an irrevocable
offer to sell:
(A) the principal amount of Bonds specified in such Sell Order; or
(B) such principal amount or a lesser principal amount of Bonds
as described in subsection (b)(iv) of Section 2.04 hereof if
Sufficient Clearing Bids do not exist.
(iii) A Bid by a Potential Owner shall constitute an irrevocable offer to
purchase:
(A) the principal amount of Bonds specified in such Bid if the rate
determined by the Auction Procedures on such Auction Date shall be higher
than the rate specified therein; or
(B) such principal amount or a lesser principal amount of Bonds as
described in subsection (a)(vi) of Section 2.04 hereof if the rate
determined by the Auction Procedures on such Auction Date shall be equal to
such specified rate.
(c) Anything herein to the contrary notwithstanding:
(i) for purposes of any Auction, any Order which specifies Bonds to be
held, purchased or sold in a principal amount which is not equal to the
Authorized Denomination for Bonds or an integral multiple thereof shall be
rounded down to the nearest amount that is equal to the Authorized Denomination
for Bonds, and the Auction Agent shall conduct the Auction Procedures as if such
Order had been submitted in such lower amount;
Appendix B-13
(ii) for purposes of any Auction other than during a daily Auction Period,
any portion of an Order of an Existing Owner which relates to a Bond which has
been called for redemption on or prior to the Interest Payment Date next
succeeding such Auction shall be invalid with respect to such portion and the
Auction Agent shall conduct the Auction Procedures as if such portion of such
Order had not been submitted;
(iii) for purposes of any Auction other than during a daily Auction Period,
no portion of a Bond which has been called for redemption on or prior to the
Interest Payment Date next succeeding such Auction shall be included in the
calculation of Available Bonds for such Auction; and
(iv) the Auction Procedures shall be suspended with respect to the Bonds
during the period commencing on the date of the Auction Agent's receipt of
notice from the Trustee of the occurrence of a Payment Default but shall resume
two Business Days after the date on which the Auction Agent receives notice from
the Trustee that such Payment Default has been waived or cured, with the next
Auction to occur on the next regularly scheduled Auction Date occurring
thereafter.
Section 2.02. Submission of Orders by Broker-Dealers to Auction Agent.
(a) Each Broker-Dealer shall submit to the Auction Agent in writing or by
such other method as shall be reasonably acceptable to the Auction Agent,
including such electronic communication acceptable to the parties, prior to the
Submission Deadline on each Auction Date, all Orders obtained by such
Broker-Dealer and, if requested, specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate principal amount of Bonds, if any, that are the
subject of such Order;
(iii) to the extent that such Bidder is an Existing Owner:
(A) the principal amount of Bonds, if any, subject to any Hold
Order placed by such Existing Owner;
(B) the principal amount of Bonds, if any, subject to any Bid
placed by such Existing Owner and the rate specified in such Bid; and
(C) the principal amount of Bonds, if any, subject to any Sell
Order placed by such Existing Owner;
(iv) to the extent such Bidder is a Potential Owner, the rate
specified in such Bid.
Appendix B-14
(b) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall
round such rate up to the next highest one thousandth of one percent
(0.001%).
(c) If an Order or Orders covering all of the Bonds of a
particular Series held by an Existing Owner is not submitted to the
Auction Agent prior to the Submission Deadline, the Auction Agent
shall deem a Hold Order to have been submitted on behalf of such
Existing Owner covering the principal amount of Bonds held by such
Existing Owner and not subject to Orders submitted to the Auction
Agent; provided, however, that if there is a conversion from one
Auction Period to another Auction Period or an amendment or
modification to the Indenture pursuant to Section 2.07(b) of this
Appendix B and Orders have not been submitted to the Auction Agent
prior to the Submission Deadline covering the aggregate principal
amount of Bonds of the Series held by such Existing Owner, the Auction
Agent shall deem a Sell Order to have been submitted on behalf of such
Existing Owner covering the principal amount of Bonds held by such
Existing Owner and not subject to Orders submitted to the Auction
Agent.
(d) If one or more Orders covering in the aggregate more than the
principal amount of Outstanding Bonds held by any Existing Owner are
submitted to the Auction Agent, such Orders shall be considered valid
as follows:
(i) all Hold Orders shall be considered Hold Orders, but only up
to and including in the aggregate the principal amount of Bonds held
by such Existing Owner;
(ii) (A) any Bid of an Existing Owner shall be considered valid
as a Bid of an Existing Owner up to and including the excess of the
principal amount of Bonds held by such Existing Owner over the
principal amount of the Bonds subject to Hold Orders referred to in
paragraph (i) above;
(B) subject to clause (A) above, all Bids of an Existing Owner
with the same rate shall be aggregated and considered a single Bid of
an Existing Owner up to and including the excess of the principal
amount of Bonds held by such Existing Owner over the principal amount
of Bonds held by such Existing Owner subject to Hold Orders referred
to in paragraph (i) above;
(C) subject to clause (A) above, if more than one Bid with
different rates is submitted on behalf of such Existing Owner, such
Bids shall be considered Bids of an Existing Owner in the ascending
order of their respective rates up to the amount of the excess of the
principal amount of Bonds held by such Existing Owner over the
principal amount of Bonds held by such Existing Owner subject to Hold
Orders referred to in paragraph (i) above; and
(D) the principal amount, if any, of such Bonds subject to Bids
not considered to be Bids of an Existing Owner under this paragraph
(ii) shall be treated as the subject of a Bid by a Potential Owner;
Appendix B-15
(iii) all Sell Orders shall be considered Sell Orders, but only up to and
including a principal amount of Bonds equal to the excess of the principal
amount of Bonds held by such Existing Owner over the sum of the principal amount
of the Bonds considered to be subject to Hold Orders pursuant to paragraph (i)
above and the principal amount of Bonds considered to be subject to Bids of such
Existing Owner pursuant to paragraph (ii) above.
(e) If more than one Bid is submitted on behalf of any Potential Owner,
each Bid submitted with the same rate shall be aggregated and considered a
single Bid and each Bid submitted with a different rate shall be considered a
separate Bid with the rate and the principal amount of Bonds specified therein.
(f) Neither the Authority, the Company, the Trustee nor the Auction Agent
shall be responsible for the failure of any Broker-Dealer to submit an Order to
the Auction Agent on behalf of any Existing Owner or Potential Owner.
Section 2.03. Determination of Auction Period Rate. (a) Not later than 9:30
a.m., New York City time, on each Auction Date in an Auction Rate Period, the
Auction Agent shall advise the Broker-Dealers and the Trustee by telephone or
other electronic communication acceptable to the parties of the All Hold Rate,
the Maximum Auction Rate and the Reference Rate for the Bonds.
(b) Promptly after the Submission Deadline on each Auction Date in an
Auction Rate Period, the Auction Agent shall assemble all Orders submitted or
deemed submitted to it by the Broker-Dealers (each such Order as submitted or
deemed submitted by a Broker-Dealer being hereinafter referred to as a
"Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the
case may be, and collectively as a "Submitted Order") and shall determine (i)
the Available Bonds, (ii) whether there are Sufficient Clearing Bids, and (iii)
the Auction Rate.
(c) Promptly after the Auction Agent has made the determinations pursuant
to subsection (b) above, the Auction Agent shall advise the Trustee by telephone
(promptly confirmed in writing), telex or facsimile transmission or other
electronic communication acceptable to the parties of the Auction Rate for the
next succeeding Auction Period and the Trustee shall promptly notify the
Securities Depository of such Auction Rate.
(d) In the event the Auction Agent fails to calculate, or for any reason
fails to timely provide, the Auction Rate for any Auction Period, (i) if the
preceding Auction Period was a period of 35 days or less, the new Auction Period
shall be the same as the preceding Auction Period and the Auction Rate for the
new Auction Period shall be the same as the Auction Rate for the preceding
Auction Period, and (ii) if the preceding Auction Period was a period of greater
than 35 days, the new Auction Period shall be a seven-day Auction Period and the
Auction Rate for the new Auction Period shall be the same as the Auction Rate
for the preceding Auction Period; provided, however, that if the Auction
Procedures are suspended pursuant to paragraph (iv) of subsection (c) of Section
2.01 of this Appendix B with respect to any Bond, the Auction Period Rate for
the next succeeding Auction Period shall be the Default Rate.
Appendix B-16
(e) In the event that the conditions referred to in (B),(C),(D) or (E) of
Section 4.01.3 of the Indenture or in (B) of Section 4.02.3 of the Indenture
have not been met with respect to a Change in the Interest Rate Mode from an
Auction Rate Period to any other interest rate mode or in the event of a failure
to change the length of the current Auction Period due to the lack of Sufficient
Clearing Bids at the Auction on the Auction Date for the first new Auction
Period, the Auction Period Rate for the next Auction Period shall be the Maximum
Auction Rate and the Auction Period shall be a seven-day Auction Period.
(f) If on any Auction Date the Bonds are no longer maintained in book-entry
form by the Securities Depository, then the Auction Period Rate for the
subsequent Auction Period shall be the Maximum Auction Rate and such Auction
Period shall be a seven-day Auction Period.
Section 2.04. Allocation of Bonds.
(a) In the event of Sufficient Clearing Bids for Bonds, subject to the
further provisions of subsections (c) and (d) below, Submitted Orders for such
Series shall be accepted or rejected as follows in the following order of
priority:
(i) the Submitted Hold Order of each Existing Owner shall be accepted, thus
requiring each such Existing Owner to continue to hold the Bonds that are the
subject of such Submitted Hold Order;
(ii) the Submitted Sell Order of each Existing Owner shall be accepted and
the Submitted Bid of each Existing Owner specifying any rate that is higher than
the Winning Bid Rate shall be rejected, thus requiring each such Existing Owner
to sell the Bonds that are the subject of such Submitted Sell Order or Submitted
Bid;
(iii) the Submitted Bid of each Existing Owner specifying any rate that is
lower than the Winning Bid Rate shall be accepted, thus requiring each such
Existing Owner to continue to hold the Bonds that are the subject of such
Submitted Bid;
(iv) the Submitted Bid of each Potential Owner specifying any rate that is
lower than the Winning Bid Rate shall be accepted, thus requiring each such
Potential Owner to purchase the Bonds that are the subject of such Submitted
Bid;
(v) the Submitted Bid of each Existing Owner specifying a rate that is
equal to the Winning Bid Rate shall be accepted, thus requiring each such
Existing Owner to continue to hold the Bonds that are the subject of such
Submitted Bid, but only up to and including the principal amount of Bonds
obtained by multiplying (A) the aggregate principal amount of Outstanding Bonds
which are not the subject of Submitted Hold Orders described in paragraph (i)
above or of Submitted Bids described in paragraphs (iii) or (iv) above by (B) a
fraction the numerator of which shall be the principal amount of Outstanding
Bonds held by such Existing Owner subject to such Submitted Bid and the
denominator of which shall be the aggregate principal amount of Outstanding
Bonds subject to such Submitted Bids made by all such Existing Owners that
specified a rate equal to the Winning Bid Rate, and the remainder, if any, of
such Submitted Bid shall be rejected, thus requiring each such Existing Owner to
sell any excess amount of Bonds;
Appendix B-17
(vi) the Submitted Bid of each Potential Owner specifying a rate that is
equal to the Winning Bid Rate shall be accepted, thus requiring each such
Potential Owner to purchase the Bonds that are the subject of such Submitted
Bid, but only in an amount equal to the principal amount of Bonds obtained by
multiplying (A) the aggregate principal amount of Outstanding Bonds which are
not the subject of Submitted Hold Orders described in paragraph (i) above or of
Submitted Bids described in paragraphs (iii), (iv) or (v) above by (B) a
fraction the numerator of which shall be the principal amount of Outstanding
Bonds subject to such Submitted Bid and the denominator of which shall be the
sum of the aggregate principal amount of Outstanding Bonds subject to such
Submitted Bids made by all such Potential Owners that specified a rate equal to
the Winning Bid Rate, and the remainder of such Submitted Bid shall be rejected;
and
(vii) the Submitted Bid of each Potential Owner specifying any rate that is
higher than the Winning Bid Rate shall be rejected.
(b) In the event there are not Sufficient Clearing Bids for Bonds, subject
to the further provisions of subsections (c) and (d) below, Submitted Orders for
each Bond shall be accepted or rejected as follows in the following order of
priority:
(i) the Submitted Hold Order of each Existing Owner shall be accepted, thus
requiring each such Existing Owner to continue to hold the Bonds that are the
subject of such Submitted Hold Order;
(ii) the Submitted Bid of each Existing Owner specifying any rate that is
not higher than the Maximum Auction Rate with respect to Bonds, shall be
accepted, thus requiring each such Existing Owner to continue to hold the Bonds
that are the subject of such Submitted Bid;
(iii) the Submitted Bid of each Potential Owner specifying any rate that is
not higher than the Maximum Auction Rate with respect to Bonds, shall be
accepted, thus requiring each such Potential Owner to purchase the Bonds that
are the subject of such Submitted Bid;
(iv) the Submitted Sell Orders of each Existing Owner shall be accepted as
Submitted Sell Orders and the Submitted Bids of each Existing Owner specifying
any rate that is higher than the Maximum Auction Rate with respect to Bonds,
shall be deemed to be and shall be accepted as Submitted Sell Orders, in both
cases only up to and including the principal amount of Bonds obtained by
multiplying (A) the aggregate principal amount of Bonds subject to Submitted
Bids described in paragraph (iii) of this subsection (b) by (B) a fraction the
numerator of which shall be the principal amount of Outstanding Bonds held by
such Existing Owner subject to such Submitted Sell Order or such Submitted Bid
deemed to be a Submitted Sell Order and the denominator of which shall be the
principal amount of Outstanding Bonds subject to all such Submitted Sell Orders
and such Submitted Bids deemed to be Submitted Sell Orders, and the remainder of
each such Submitted Sell Order or Submitted Bid shall be deemed to be and shall
be accepted as a Hold Order and each such Existing Owner shall be required to
continue to hold such excess amount of Bonds; and
Appendix B-18
(v) the Submitted Bid of each Potential Owner specifying any rate that is
higher than the Maximum Auction Rate with respect to the Bonds shall be
rejected.
(c) If, as a result of the procedures described in subsection (a) or (b)
above, any Existing Owner or Potential Owner would be required to purchase or
sell an aggregate principal amount of Bonds which is not an integral multiple of
the Authorized Denomination for Bonds on any Auction Date, the Auction Agent
shall by lot, in such manner as it shall determine in its sole discretion, round
up or down the principal amount of Bonds to be purchased or sold by any Existing
Owner or Potential Owner on such Auction Date so that the aggregate principal
amount of Bonds purchased or sold by each Existing Owner or Potential Owner on
such Auction Date shall be an integral multiple of the Authorized Denomination
for Bonds or such Series, even if such allocation results in one or more of such
Existing Owners or Potential Owners not purchasing or selling any Bonds on such
Auction Date.
(d) If, as a result of the procedures described in subsection (a) above,
any Potential Owner would be required to purchase a principal amount of Bonds
that is less than the Authorized Denomination for Bonds on any Auction Date, the
Auction Agent shall by lot, in such manner as it shall determine in its sole
discretion, allocate such Bonds for purchase among Potential Owners so that the
principal amount of Bonds purchased on such Auction Date by any Potential Owner
shall be an integral multiple of the Authorized Denomination for Bonds, even if
such allocation results in one or more of such Potential Owners not purchasing
such Bonds on such Auction Date.
Section 2.05. Notice of Auction Period Rate. (a) On each Auction Date, the
Auction Agent shall notify by telephone or other telecommunication device or
other electronic communication acceptable to the parties or in writing each
Broker-Dealer that participated in the Auction held on such Auction Date of the
following with respect to Bonds for which an Auction was held on such Auction
Date:
(i) the Auction Period Rate determined on such Auction Date for the
succeeding Auction Period;
(ii) whether Sufficient Clearing Bids existed for the determination of the
Winning Bid Rate;
(iii) if such Broker-Dealer submitted a Bid or a Sell Order on behalf of an
Existing Owner, whether such Bid or Sell Order was accepted or rejected and the
principal amount of Bonds, if any, to be sold by such Existing Owner;
(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential Owner,
whether such Bid was accepted or rejected and the principal amount of Bonds, if
any, to be purchased by such Potential Owner;
Appendix B-19
(v) if the aggregate principal amount of the Bonds to be sold by all
Existing Owners on whose behalf such Broker-Dealer submitted Bids or Sell Orders
is different from the aggregate principal amount of Bonds to be purchased by all
Potential Owners on whose behalf such Broker-Dealer submitted a Bid, the name or
names of one or more Broker-Dealers (and the Agent Member, if any, of each such
other Broker Dealer) and the principal amount of Bonds to be (A) purchased from
one or more Existing Owners on whose behalf such other Broker-Dealers submitted
Bids or Sell Orders or (B) sold to one or more Potential Owners on whose behalf
such Broker-Dealer submitted Bids; and
(vi) the immediately succeeding Auction Date.
(b) On each Auction Date, with respect to Bonds for which an Auction was
held on such Auction Date, each Broker-Dealer that submitted an Order on behalf
of any Existing Owner or Potential Owner shall: (i) advise each Existing Owner
and Potential Owner on whose behalf such Broker-Dealer submitted an Order as to
(A) the Auction Period Rate determined on such Auction Date, (B) whether any Bid
or Sell Order submitted on behalf of each such Owner was accepted or rejected
and (C) the immediately succeeding Auction Date; (ii) instruct each Potential
Owner on whose behalf such Broker-Dealer submitted a Bid that was accepted, in
whole or in part, to instruct such Existing Owner's Agent Member to pay to such
Broker-Dealer (or its Agent Member) through the Securities Depository the amount
necessary to purchase the principal amount of such Bonds to be purchased
pursuant to such Bid (including, with respect to such Bonds in a daily Auction
Period, accrued interest if the purchase date is not an Interest Payment Date
for such Bond) against receipt of such Bonds; and (iii) instruct each Existing
Owner on whose behalf such Broker-Dealer submitted a Sell Order that was
accepted or a Bid that was rejected, in whole or in part, to instruct such
Existing Owner's Agent Member to deliver to such Broker-Dealer (or its Agent
Member) through the Securities Depository the principal amount of such Bonds to
be sold pursuant to such Bid or Sell Order against payment therefor.
Section 2.06. Reference Rate. (a) The Reference Rate on any Auction Date
with respect to Bonds in any Auction Period of less than 180 days shall be the
greater of LIBOR or the Thirty-Day "AA" Composite Commercial Paper Rate on such
date. The Reference Rate with respect to Bonds in any Auction Period of 180 days
or more but less than one year shall be the greater of LIBOR or the yield on
United States Treasury Securities having a maturity which most closely
approximates the length of the Auction Period, as last published in The Wall
Street Journal. The Reference Rate with respect to Bonds in any Auction Period
of one year or more but less than five years shall be the yield on United States
Treasury Securities having a maturity which most closely approximates the length
of the Auction Period, as last published in The Wall Street Journal. If any such
rate is unavailable, the Reference Rate will be an index or rate agreed to by
all Broker-Dealers and consented to by the Issuer.
"Thirty-Day `AA' Composite Commercial Paper Rate" on any date of
determination, means the interest equivalent of the Thirty-Day rate on
commercial paper placed on behalf of non financial issuers whose corporate bonds
are rated AA by S&P, or the equivalent of such rating by S&P, as made available
on a discount basis or otherwise by (A) the Federal Reserve Bank of New York for
Appendix B-20
the Business Day immediately preceding such date of determination, or (B) if the
Federal Reserve Bank of New York does not make available any such rate, then the
arithmetic average of such rates, as quoted on a discount basis or otherwise, by
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and X.X. Xxxxxx Securities
Inc. or, in lieu of any thereof, their respective affiliates or successors which
are commercial paper dealers (the "Commercial Paper Dealers"), to the Auction
Agent before the close of business on the Business Day immediately preceding
such date of determination.
For purposes of the definitions of Thirty-Day "AA" Composite Commercial
Paper Rate, the "interest equivalent" means the equivalent yield on a 360-day
basis of a discount-basis security to an interest-bearing security. If any
Commercial Paper Dealer does not quote a commercial paper rate required to
determine the Thirty-Day "AA" Composite Commercial Paper Rate, the Thirty-Day
"AA" Composite Commercial Paper Rate will be determined on the basis of the
quotation or quotations furnished by the remaining Commercial Paper Dealer or
Commercial Paper Dealers and any substitute commercial paper dealer not included
within the definition of Commercial Paper Dealer above, which may be the entity
or entities named by the Company with the consent of the Authority (a
"Substitute Commercial Paper Dealer") selected by the Trustee (who will be under
no liability for such selection) to provide such commercial paper rate or rates
not being supplied by any Commercial Paper Dealer or Commercial Paper Dealers,
as the case may be, or if the Trustee does not select any such Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers.
(b) If for any reason on any Auction Date the Reference Rate shall not be
determined as hereinabove provided in this Section, the Reference Rate shall be
the Reference Rate for the Auction Period ending on such Auction Date.
(c) The determination of the Reference Rate by the Auction Agent as
provided herein shall be conclusive and binding upon the Authority, the Company,
the Trustee, the Broker-Dealers, the Auction Agent and the Holders of the Bonds.
Section 2.07. Miscellaneous Provisions Regarding Auctions.
(a) In this Appendix B, each reference to the purchase, sale or holding of
"Bonds" shall refer to beneficial interests in such Bonds, unless the context
clearly requires otherwise.
(b) During an Auction Rate Period only, with respect to the Bonds, the
provisions of the Indenture, including this Appendix B and the definitions
contained in this Appendix B, including, without limitation, the definitions of
Maximum Auction Rate, All Hold Rate, Reference Rate, Default Rate, Applicable
Percentage and the Auction Period Rate, may be modified or amended, with the
consent of the Bond Insurer, pursuant to the Indenture by obtaining, when
required by the Indenture, the consent of the Holders of all Outstanding Bonds
as follows; provided, however, that no such modification or amendment that
adversely affect the rights, duties or obligations of the Auction Agent or the
Appendix B-21
Trustee shall be made without the consent of the Auction Agent or the Trustee,
respectively. If on the first Auction Date occurring at least 20 days after the
date on which the Trustee mailed notice of such proposed modification or
amendment to the registered owners of the Outstanding Bonds as required by the
Indenture, the Auction Period Rate which is determined on such date is the
Winning Bid Rate, the proposed modification or amendment shall be deemed to have
been consented to by the Holders of all affected Outstanding Bonds.
(c) If the Securities Depository notifies the Authority that it is
unwilling or unable to continue as Holder of the Bonds or if at any time the
Securities Depository shall no longer be registered or in good standing under
the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation and a successor to the Securities Depository is not appointed by the
Authority within 90 days after the Authority receives notice or becomes aware of
such condition, as the case may be, the Authority shall execute and the Trustee
shall authenticate and deliver certificates representing the Bonds. Such Bonds
shall be authorized in such names and authorized denominations as the Securities
Depository, pursuant to instructions from the Agent Members or otherwise, shall
instruct the Authority and the Trustee.
(d) During an Auction Rate Period, so long as the ownership of the Bonds is
maintained in book-entry form by the Securities Depository, an Existing Owner or
a beneficial owner may sell, transfer or otherwise dispose of a Bond only
pursuant to a Bid or Sell Order in accordance with the Auction Procedures or to
or through a Broker-Dealer, provided that (i) in the case of all transfers other
than pursuant to Auctions such Existing Owner or its Broker-Dealer or its Agent
Member advises the Auction Agent of such transfer and (ii) a sale, transfer or
other disposition of Bonds from a customer of a Broker-Dealer who is listed on
the records of that Broker-Dealer as the holder of such Bonds to that
Broker-Dealer or another customer of that Broker-Dealer shall not be deemed to
be a sale, transfer or other disposition for purposes of this paragraph if such
Broker-Dealer remains the Existing Owner of Bonds so sold, transferred or
disposed of immediately after such sale, transfer or disposition.
Section 2.08. Changes in Auction Period or Auction Date.
(a) Changes in Auction Period. (i) During any Auction Rate Period, and with
the consent of the Bond Insurer for changes to Auction Periods over 35 days, the
Authority, at the request of the Company, may from time to time on any Interest
Payment Date, change the length of the Auction Period with respect to all of the
Bonds among daily, seven-days, 14-days, 28-days, 35-days, three months, six
months and a Special Rate Period in order to accommodate economic and financial
factors that may affect or be relevant to the length of the Auction Period and
the interest rate borne by such Bonds. The Authority shall initiate the change
in the length of the Auction Period by giving written notice to the Bond
Insurer, the Auction Agent, the Broker-Dealers, the Trustee and the Securities
Depository that the Auction Period shall change if the conditions described
herein are satisfied and the proposed effective date of the change, at least 10
Business Days prior to the Auction Date for such Auction Period; provided,
however, that in the case of a change from a Special Rate Period of 92 or more
days, the date of such change shall be the Interest Payment Date immediately
following the last day of such Special Rate Period. The Bond Insurer may direct
a change in the length of the Auction Period following an Event of Default.
Appendix B-22
(ii) Any such changed Auction Period shall be for a period of one day,
seven-days, 14-days, 28-days, 35-days, three months, six months or a Special
Rate Period and shall be for all of the Bonds in an Auction Rate Period.
(iii) The change in the length of the Auction Period for Bonds shall not be
allowed unless Sufficient Clearing Bids existed at both the Auction before the
date on which the notice of the proposed change was given as provided in this
subsection (a) and the Auction immediately preceding the proposed change.
(iv) The change in length of the Auction Period for Bonds shall take effect
only if (A) the Trustee and the Auction Agent receive, by 11:00 a.m., New York
City time, on the Business Day before the Auction Date for the first such
Auction Period, a certificate from the Company consenting to the change in the
length of the Auction Period specified in such certificate and (B) Sufficient
Clearing Bids exist at the Auction on the Auction Date for such first Auction
Period. For purposes of the Auction for such first Auction Period only, each
Existing Owner shall be deemed to have submitted Sell Orders with respect to all
of its Bonds for which there is to be a change in the length of the Auction
Period except to the extent such Existing Owner submits an Order with respect to
such Bonds. If the condition referred to in (A) above is not met, the Auction
Rate for the next Auction Period shall be determined pursuant to the Auction
Procedures and the Auction Period shall be the Auction Period determined without
reference to the proposed change. If the condition referred to in (A) is met but
the condition referred to in (B) above is not met, the Auction Rate for the next
Auction Period shall be the Maximum Auction Rate and the Auction Period shall be
a seven-day Auction Period.
(v) On the conversion date for Bonds from one Auction Period to another,
any Bonds which are not the subject of a specific Hold Order or Bid shall be
deemed to be subject to a Sell Order.
(b) Changes in Auction Date. During any Auction Rate Period, the Auction
Agent, with the written consent of the Authority and the Company, may specify an
earlier Auction Date for Bonds (but in no event more than five Business Days
earlier) than the Auction Date that would otherwise be determined in accordance
with the definition of "Auction Date" in order to conform with then current
market practice with respect to similar securities or to accommodate economic
and financial factors that may affect or be relevant to the day of the week
constituting an Auction Date and the interest rate borne on such Bonds. The
Auction Agent shall provide notice of its determination to specify an earlier
Auction Date for an Auction Period by means of a written notice delivered at
least 45 days prior to the proposed changed Auction Date to the Trustee, the
Authority, the Company, the Bond Insurer, the Broker-Dealers and the Securities
Depository.
Appendix B-23
