Exhibit 10.48
INDENTURE OF TRUST
relating to
$2,185,000
Nursing Facility Refunding Revenue Bonds
(Salem Health Care Corp. Project),
Series 1996
between
THE COUNTY COMMISSION OF HARRISON COUNTY BY AND
ON BEHALF OF HARRISON COUNTY, WEST VIRGINIA
and
ONE VALLEY BANK, NATIONAL ASSOCIATION,
as Trustee
Dated as of September 1, 1996
INDENTURE OF TRUST
INDENTURE OF TRUST dated as of September 1, 1996 (the "Indenture")
between THE COUNTY COMMISSION OF HARRISON COUNTY, by and on behalf of HARRISON
COUNTY, WEST VIRGINIA, a political subdivision of the State of West Virginia
(the "Issuer"), and ONE VALLEY BANK, NATIONAL ASSOCIATION, a national banking
association organized, existing and authorized to accept and execute trusts of
the character herein set out (in such capacity, together with any successor in
such capacity, the "Trustee"), as trustee.
WHEREAS, the Issuer is a duly organized political subdivision of the
State of West Virginia and is authorized by Chapter 13, Article 2C, Code of West
Virginia of 1931, as amended (the "Act"), (a) to issue its revenue bonds for the
purpose of providing funds (i) to pay the cost of acquiring, constructing,
furnishing and equipping a commercial facility comprising a health care facility
and (ii) to refund one or more series of revenue bonds previously issued
pursuant to the Act to finance any such facility, in either case by lending the
proceeds of such revenue bonds or otherwise making such proceeds available for
such purposes to any person, firm or private corporation which will operate and
maintain such facility in such a manner as shall effectuate the purposes of the
Act and (b) to secure its revenue bonds by a trust agreement between the issuer
and a corporate trustee including therein the pledge and assignment of revenues
from any such loan to the payment of such revenue bonds; and
WHEREAS, at the request of Salem Health Care Corp. (the "Company") and
in order to further the purposes of the Act, the Issuer has determined to issue
and sell its Nursing Facility Refunding Revenue Bonds (Salem Health Care Corp.
Project), Series 1996 in the original principal amount of $2,185,000 (the
"Bonds") for the purpose of providing funds, together with other available
funds, to refund in full the outstanding principal amount of its $2,670,000
First Mortgage Refunding Revenue Bonds (Salem Health Care Corp. Project) Series
1986 (the "Prior Bonds"), the proceeds of which were used to refinance the costs
of acquisition, construction and equipping of a 120-bed intermediate and skilled
nursing facility, owned and operated by the Company, located at 146 Water Street
in Salem, Harrison County, West Virginia (the "Facility"); and
WHEREAS, by issuing the Bonds to refund the Prior Bonds, the Issuer and
the Company expect to finance the Facility more economically and thereby to
achieve interest cost savings; and
WHEREAS, the Issuer has undertaken to provide for the refunding of the
Prior Bonds and the refinancing of the acquisition, construction and equipping
of the Facility by making available the proceeds from the sale of the Bonds
pursuant to the provisions of a Financing Agreement (the "Agreement") between
the Issuer and the Company, dated as of even date herewith; and
WHEREAS, the Agreement provides that the Issuer shall issue and sell
the Bonds; and that the Company shall pay, or cause to be paid, pursuant to the
Agreement, in addition to other moneys available for such purpose, an amount
sufficient to pay the Bonds in full and related expenses; and
WHEREAS, the Issuer wishes to provide in this Indenture for the
issuance of its Bonds, and the Trustee is willing to accept the trusts provided
for in this Indenture; and
WHEREAS, the execution and delivery of the Bonds and of this Indenture
and the issuance and sale of the Bonds have been duly authorized by a resolution
duly adopted by the governing body of the Issuer and all things necessary to
make the Bonds, when executed by the Issuer and authenticated by the Trustee (as
hereinafter defined), valid and binding legal obligations of the Issuer and to
make this Indenture a valid and binding agreement have been done;
ACCORDINGLY, THE ISSUER AND THE TRUSTEE AGREE AS FOLLOWS FOR THE
BENEFIT OF THE OTHER AND FOR THE BENEFIT OF THE HOLDERS OF THE BONDS ISSUED
PURSUANT TO THIS INDENTURE (SUBJECT TO THE PROVISIONS OF SECTIONS 6.01 and
12.08):
GRANTING CLAUSE
To secure first, the payment of the Bonds, the Issuer assigns and
pledges to the Trustee, and grants to the Trustee, a security interest in, all
right, title and interest of the Issuer in and to (a) the Agreement, including
any right to delivery of the Letter of Credit, the Receipts and Revenues of the
Issuer from the Agreement (as hereinafter defined), any right to bring actions
and proceedings under the Agreement or for the enforcement of the Agreement and
any right to do all things that the Issuer is entitled to do under the
Agreement, but excluding the Unassigned Rights (as hereinafter defined) and the
right to enforce the Unassigned Rights, and (b) all moneys and securities held
from time to time by the Trustee under this Indenture, first, for the equal and
proportionate benefit of all holders of the Bonds without priority or
distinction as to lien or otherwise of any Bonds over any other Bonds.
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. Definitions. For all purposes of this Indenture, unless
the context requires otherwise, the following terms
shall have the following meanings:
"Act" means Chapter 13, Article 2C, Code of West Virginia of 1931, as
amended.
"Additional Bonds" shall mean any Bonds authorized and issued pursuant
to Section 2.09 of this Indenture.
"Agreement" or "Financing Agreement" means the Financing Agreement,
dated as of the date of this Indenture, between the Issuer and the Company, as
such Agreement may be amended or supplemented from time to time in accordance
with its terms.
"Authorized Denominations" means with respect to all Bonds $5,000 and
any multiple thereof.
"Available Moneys" means moneys that (a) are continuously on deposit
with the Trustee in trust for the benefit of the Bondholders in a separate and
segregated account in which only Available Moneys are held and (b) are proceeds
of either (i) the Bonds received contemporaneously with and directly from the
issuance and sale of the Bonds, (ii) payments made by the Company (and, if the
bonds are then rated by any national securities rating agency, at the time of
the deposit of such payments and for a period of at least 366 days thereafter,
no Bankruptcy Filing shall have occurred), (iii) a draw by the Trustee on the
Letter of Credit, (iv) refunding bonds for which the Trustee has received a
written opinion of Bankruptcy Counsel to the effect that payment of such moneys
to the Bondholders would not constitute an avoidable preference under Section
547 of the United States Bankruptcy Code in the event the Company or the Issuer
were to become a debtor under the United States Bankruptcy Code, provided that
such opinion shall only be required if the Bonds are then rated by any national
rating agency, or (v) income derived from the investment of the foregoing.
"Bank" means the issuer of the Letter of Credit, initially NationsBank
of Texas, N.A., and, upon the issuance and delivery of a Substitute Letter of
Credit, shall mean the issuer of such Substitute Letter of Credit.
"Bankruptcy Counsel" means any counsel nationally recognized in
bankruptcy matters that is independent of the Company and the Issuer and is
reasonably acceptable to the Trustee.
"Bankruptcy Filing" means the filing of a petition by or against the
Company or the Issuer in respect of the Company, any of its partners or the
Issuer, as the case may be, as debtor under the United States Bankruptcy Code or
similar bankruptcy or insolvency act. If the petition has been dismissed and the
dismissal is final and not subject to appeal at the relevant time, the filing
will not be considered to have occurred.
"Beneficial Owner" shall have the meaning set forth in Section 2.05(c).
"Bonds" means the bonds issued pursuant to this Indenture.
"Bond Fund" means the fund by that name created by Section 4. 02.
"Bond Purchase Agreement" means the Bond Purchase Agreement dated
September 26, 1996, among the Company, the Issuer and the Underwriter, with
respect to the sale of the Bonds.
"Bond Year" means the one-year period beginning on the day after the
expiration of the preceding Bond Year. The first Bond Year begins on the date of
the delivery of the Bonds and ends on August 31, 1997. The first and the last
Bond Year may be for periods of less than one year.
"Business Day" means any day other than (a) a Saturday or Sunday, (b) a
day on which commercial banks in New York, New York, or the city or cities in
which the corporate trust office of the Trustee, the primary office of the
Remarketing Agent or the paying office of the Bank are authorized by law or
executive order to close or (c) a day on which the New York Stock Exchange is
closed. For purposes of this definition, "paying office of the Bank" means the
Bank office responsible for making payments under any Letter of Credit, which
initially shall be the office in Los Angeles, California.
"Cede & Co." means Cede & Co., the nominee of DTC or any successor
nominee of DTC with respect to the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, the
regulations (whether proposed, temporary or final) under that Code or the
statutory predecessor of that Code, and any amendments of, or successor
provisions to, the foregoing and any official rulings, announcements, notices,
procedures and judicial determinations regarding any of the foregoing, all as
and to the extent applicable. Unless otherwise indicated, reference to a Section
of the Code means that Section of the Code, including such applicable
regulations, rulings, announcements, notices, procedures and determinations
pertinent to that Section of the Code.
"Company" means Salem Health Care Corp., a West Virginia corporation,
or any successor or successors to the Company's obligations under the Agreement
as permitted under Section 5.8 of the Agreement.
"Company Representative" means a person at the time designated to act
on behalf of the Company by a written instrument furnished to the Trustee
containing the specimen signature of such person and signed on behalf of the
Company by its President, its Vice President or the Chairman of its Board of
Directors. The certificate may designate an alternate or alternates.
"Conversion Date" shall mean that Interest Payment Date, if any, upon
which the interest rate on the Bonds converts from any given rate to a Weekly
Rate, a One-year Rate, a Three-year Rate or a Fixed Rate, all as established in
Section 3.09 of this Indenture.
"Credit Modification" means, and shall be deemed to occur upon, the
acceptance of a Substitute Letter of Credit by the Trustee if (a) as a result of
such acceptance, the rating then assigned to the Bonds by any Rating Agency then
rating the Bonds would be lowered or eliminated or (b) in the event the Bonds
are not then rated, the issuer of such Substitute Letter of Credit has (i)
senior debt or long-term bank deposits that are rated by a Rating Agency at a
lower rating than the rating then assigned to the senior debt or long-term bank
deposits of the Bank, or (ii) outstanding letters of credit or other similar
instruments supporting debt obligations that are rated by a Rating Agency at a
lower rating than the rating assigned to debt obligations supported with letters
of credit or similar instruments issued by the Bank.
"DTC" means The Depository Trust Company, a limited purpose company
organized under the laws of the State of New York, and its successors and
assigns.
"DTC Participant" or "DTC Participants" means securities brokers and
dealers, banks, trust companies and clearing corporations that have access to
the DTC system.
"Determination of Taxability" shall have the meaning set forth in
Section 3.01(c).
"Escrow Agreement" means the Escrow Deposit Agreement, dated as of the
date of this Indenture, among the Issuer, the Company and the Prior Bonds
Trustee, as Escrow Agent.
"Event of Default" is defined in Section 8.01.
"Event of Taxability" shall mean delivery to the Trustee of (a) an
opinion of Bond Counsel or (b) a letter or notice from the Internal Revenue
Service to a Bondholder, in either event to the effect that interest on any Bond
is includable in gross income of the recipient thereof (other than a Bondholder
that is a "substantial user" of the Facility or a "related person" within the
meaning of Section 147(a) of the Code) for Federal income tax purposes. "Date"
of an Event of Taxability shall mean the date of receipt by the Trustee of the
material described in (a) or (b).
"Facility" or "Project" means the 128-bed intermediate and skilled
nursing and rehabilitation facility located at 146 Water Street in Salem,
Harrison County, West Virginia.
"Fixed Rate" means with respect to the Bonds the Fixed Rate established
in accordance with Section 2.02.
"Fixed Rate Period" means that period during which the Fixed Rate is in
effect.
"Indenture" means this Indenture of Trust, as it may be amended or
supplemented from time to time in accordance with its terms.
"Interest Payment Date" means the first day of each March and
September, commencing March 1, 1997, provided, however, that while the Bonds
bear interest at the Weekly Rate, the Interest Payment Date shall be the first
Business Day of each calendar month commencing the first Business Day of the
month subsequent to the Conversion Date.
"Issuer" means Harrison County, West Virginia, a political subdivision
of the State of West Virginia, acting by and through the County Commission of
Harrison County, West Virginia, and its successors and assigns.
"Issuer Representative" means the President of the Harrison County
Commission or other person designated at the time to act on behalf of the Issuer
by a written instrument furnished to the Trustee containing the specimen
signature of such person and signed on behalf of the Issuer by the President of
the Harrison County Commission.
"Letter of Credit" means an irrevocable letter of credit having the
characteristics of a "credit" or "letter of credit" set forth in Section 5-103
of the Uniform Commercial Code of the State except that a letter of credit (a)
may not be revocable and (b) may only be issued by (i) a national bank, (ii) any
banking institution organized under the laws of any state, territory or the
District of Columbia, the business of which is substantially confined to banking
and is supervised by the state or territorial banking commission or similar
officials or (iii) a branch or agency of a foreign bank, provided that the
nature and extent of federal and/or state regulation and the supervision of the
particular branch or agency is substantially equivalent to that applicable to
federal or state chartered domestic banks doing business in the same
jurisdiction. Initially, the term "Letter of Credit" shall mean the irrevocable
letter of credit issued by the Bank to the Trustee, including any permitted
supplements or amendments thereto and any renewals or extensions thereof, and,
upon the expiration or termination of the Letter of Credit and the issuance and
delivery of a Substitute Letter of Credit meeting the requirements set forth in
this paragraph and in Section 5.03 hereof, "Letter of Credit" shall mean such
Substitute Letter of Credit.
"Mandatory Repurchase Date" means, with respect to any Bonds, the date
on which such Bonds are required to be purchased pursuant to Section 3.07(a).
"Maximum Rate" means the lesser of (a) the highest interest rate
that may be borne by the Bonds under State law and (b) 12% per year.
"Note" shall mean the promissory note of the Company in the principal
amount of $2,185,000, dated as of the date of the Bonds, in the form attached to
the Agreement as Exhibit A, issued pursuant to the Agreement and delivered to
the Issuer as consideration for the use of the proceeds of the Bonds to refund
the Prior Bonds, and any amendment or supplement thereto or substitution
therefor.
"Notice of Mandatory Repurchase" means that notice required to be
prepared by the Trustee and given by the Trustee pursuant to Section 3.07.
"One-year Rate" means with respect to the Bonds the variable rate
established annually in accordance with Section 2.02. The Bonds shall initially
bear a One-year Rate of 4.00%.
"One-year Rate Period" means each period during which the One-year Rate
is in effect.
"Opinion of Bond Counsel" means an Opinion of Counsel by nationally
recognized bond counsel.
"Opinion of Counsel" means a written opinion of counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Issuer, the Trustee, the Remarketing Agent or the Company.
"Optional Tender Date" shall have the meaning set forth in Section
3.07(b)(i).
"Outstanding" when used with reference to Bonds, or "Bonds outstanding"
means all Bonds that have been authenticated and delivered by the under this
Indenture, except the following:
(a) Bonds canceled or purchased by or delivered to the Trustee for
cancellation pursuant to the provisions of this Indenture. Except as otherwise
provided in Section 3.08, Bonds purchased by the Company pursuant to optional
tender or mandatory repurchase under Section 3.07 will continue to be
outstanding until the Company directs the Trustee to cancel them;
(b) Bonds that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including interest accrued to
the due date, of which sufficient moneys are held by the Trustee;
(c) Bonds deemed paid by Section 7.01; and
(d) Bonds in lieu of which others have been authenticated under Section
2.05 (relating to registration and exchange of Bonds) or Section 2.06 (relating
to mutilated, lost, stolen, destroyed or undelivered Bonds).
"Owner," "owners," "Bondholder," "bondholder," "Holder," "holder" or
words of similar import mean: (a) in the event that the book-entry system of
evidence and transfer of ownership in the Bonds is employed pursuant to Section
2.05(c), Cede & Co., as nominee for DTC, or its nominee, and (b) in all other
cases, the registered owner or owners of any Bond fully registered as shown on
the register maintained by the Trustee.
"Person" means (a) any individual, (b) any corporation, partnership,
joint venture, association, joint-stock company, business trust or
unincorporated organization, or grouping of any such entities, in each case
formed or organized under the laws of the United States of America, any state
thereof or the District of Columbia or (c) the United States of America or any
state thereof, or any political subdivision of either thereof, or any agency,
authority or other instrumentality of any of the foregoing.
"Parent" means Regency Health Services, Inc., a Delaware Corporation,
and owner of 100% of the stock of the Company.
"Prior Bonds" means Harrison County, West Virginia First Mortgage
Refunding Revenue Bonds (Salem Health Care Corp. Project), Series 1986, in the
original principal amount of $2,670,000.
"Prior Bonds Trustee" means United National Bank, Charleston, West
Virginia, as indenture trustee for the Prior Bonds.
"Rating Agency" means Moody's Investors Service, Inc., if such agency's
ratings are in effect with respect to the Bonds, and Standard & Poor's Ratings
Group, if such agency's ratings are in effect with respect to the Bonds, and
their respective successors and assigns. If either such corporation ceases to
act as a securities rating agency, the Company may, with the approval of the
Remarketing Agent and the Bank, appoint any nationally recognized securities
rating agency as a replacement.
"Receipts and Revenues of the Issuer from the Agreement" means all
moneys paid to the Issuer pursuant to Section 4.1 of the Agreement, and receipts
of the Trustee credited under the provisions of this Indenture against such
payments, including all moneys (other than moneys drawn to purchase Bonds
pursuant to the terms hereof) received by the Trustee from a draw under the
Letter of Credit.
"Record Date" means (i) while the Bonds bear interest at the Weekly
Rate, the Trustee's close of business on the Business Day next preceding each
Interest Payment Date; and (ii) while the Bonds bear interest at any other
interest rate, the 15th day of the calendar month next preceding an Interest
Payment Date.
"Reimbursement Agreement" means the Credit Agreement among the Parent,
the Lenders Identified therein, NationsBank Capital Markets, Inc. and the Bank
pursuant to which the Letter of Credit is issued by the Bank and delivered to
the Trustee, and any and all modifications, alterations, amendments and
supplements thereto.
"Remarketing Agent" means initially Crew and Associates, Inc., and any
successor agent or agents appointed from time to time pursuant to Section 9.12.
"Remarketing Agreement" means (a) initially the Remarketing and
Interest Services Agreement among the Issuer, the Company and the Remarketing
Agent dated as of September 1, 1996, and any and all modifications, alterations,
amendments and supplements thereto and (b) any agreement between the Company,
the Issuer and any successor remarketing agent appointed pursuant to Section
9.12.
"Remarketing Proceeds" shall have the meaning set forth in Section
3.08(c).
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the Corporate Trust Division (or any successor group of the
Trustee), including any vice president, assistant vice president, assistant
secretary or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred at the Trustee's address set forth in Section 12.01 because of his
knowledge of and familiarity with the particular subject.
"State" means the State of West Virginia.
"Substitute Letter of Credit" shall have the meaning set forth in
Section 5.03.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement dated as
of the date of the delivery of the Bonds among the Company, the Issuer and the
Trustee, as the same may be amended or supplemented from time to time in
accordance with its terms or with an opinion of Bond Counsel to the effect that
such amendment will not have an adverse effect on the tax-exempt status of the
Bonds under the Code.
"Three-year Rate" means with respect to the Bonds the variable rate
established every three-years in accordance with Section 2.02.
"Three-year Rate Period" means each period during which a Three-year
Rate is in effect.
"Trustee" means the entity identified as such in the heading of this
Indenture and such entity's successors under this Indenture, and any separate or
co-trustee at the time serving as such under this Indenture.
"Unassigned Rights" means the rights of the Issuer under Section
4.1(b)(2) (relating to fees and expenses) and Section 5.6 (relating to
indemnification) of the Agreement and the rights of the Issuer to receive
documentation and notices, to give or withhold consents in connection with the
provisions of this Indenture or the Agreement and the right to enforce any of
the foregoing.
"Underwriter" means Crews and Associates, Inc.
"U.S. Government Obligations" means (a) direct obligations of the
United States for which its full faith and credit are pledged for the timely
payment thereof, (b) obligations of a person controlled or supervised by and
acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation of the
United States for the timely payment thereof or (c) securities or receipts
evidencing ownership interests in obligations or specified portions (such as
principal or interest) of obligations described in (a) or (b).
"Weekly Rate" means with respect to the Bonds the variable interest
rate on the Bonds established weekly in accordance with Section 2.02.
"Weekly Rate Period" means each period during which a Weekly Rate is in
effect.
All other terms used in this Indenture that are defined in Article I of
the Agreement have the same meanings assigned them in the Agreement unless the
context clearly requires otherwise.
Section 1.02. Rules of Construction. Unless the context otherwise
requires,
(a) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
applied on a consistent basis;
(b) references to Articles and Sections are to the Articles and
Sections of this Indenture;
(c) terms defined elsewhere in this Indenture shall have the
meanings therein prescribed for them;
(d) words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders;
(e) headings used in this Indenture are for convenience of
reference only and shall not define or limit the provisions hereof;
(f) each reference herein or in the Bonds to a percentage of Bonds
required for notices, consents or for any other reason shall be deemed to refer
to Bonds then outstanding; and
(g) all references herein to time shall be Charleston, West
Virginia time unless otherwise expressly stated.
ARTICLE II
THE BONDS
Section 2.01. Issuance of Bonds; Form; Dating.
(a) Authorization. The Issuer hereby authorizes and creates under this
Indenture an issue of Bonds, entitled to the benefit, security and protection of
this Indenture, to be designated "Nursing Facility Refunding Revenue Bonds
(Salem Health Care Corp. Project), Series 1996." The total principal amount of
Bonds that may be issued and outstanding hereunder shall be $2,185,000, except
as provided in Section 2.06 with respect to replacement of mutilated, lost,
stolen, destroyed or undelivered Bonds and Section 2.09 with respect to
Additional Bonds. The Bonds shall be issuable only as fully registered bonds
without coupons in Authorized Denominations only, and in substantially the form
of Exhibit A to this Indenture, with appropriate variations, omissions,
insertions, notations, legends or endorsements required by law or usage or
permitted or required by this Indenture. The Bonds may be in printed or
typewritten form. No Bonds may be issued under the provisions of this Indenture
except in accordance with this Article.
The Bonds shall be payable in lawful money of the United States but
only from the sources pledged to such purpose. The Bonds are limited obligations
of the Issuer payable solely from the revenues and receipts derived from
payments made by the Company on the Note or by the Bank under the Letter of
Credit, which revenues and receipts and security have been pledged and assigned
to the Trustee to secure payment of the Bonds in the manner and to the extent
provided herein. NEITHER THE STATE OF WEST VIRGINIA, HARRISON COUNTY, WEST
VIRGINIA, THE COUNTY COMMISSION OF HARRISON COUNTY, WEST VIRGINIA, NOR ANY OTHER
POLITICAL SUBDIVISION THEREOF SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR
INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES,
MONIES AND PROPERTY PLEDGED THEREFOR, AND NEITHER THE TAXING POWER NOR THE FULL
FAITH AND CREDIT OF THE STATE OF WEST VIRGINIA, HARRISON COUNTY, WEST VIRGINIA,
THE COUNTY COMMISSION OF HARRISON COUNTY, WEST VIRGINIA, OR ANY OTHER POLITICAL
SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON
THE BONDS OR OTHER COSTS INCIDENT THERETO. THE BONDS SHALL NEVER CONSTITUTE AN
INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY
PROVISION AND SHALL NEVER CONSTITUTE OR GIVE RISE TO A PECUNIARY LIABILITY OF
THE ISSUER. NEITHER SHALL THE BONDS NOR THE INTEREST THEREON BE A CHARGE AGAINST
THE GENERAL CREDIT OR TAXING POWERS OF THE ISSUER. NO PRESENT OR FUTURE OFFICER,
MEMBER, COMMISSIONER, EMPLOYEE OR AGENT OF THE ISSUER SHALL BE PERSONALLY LIABLE
ON THE BONDS; AND NO COVENANT, AGREEMENT OR OBLIGATION CONTAINED HEREIN SHALL BE
DEEMED TO BE A COVENANT, AGREEMENT OR OBLIGATION OF ANY PRESENT OR FUTURE
MEMBER, COMMISSIONER, OFFICER, EMPLOYEE OR AGENT OF THE ISSUER IN HIS INDIVIDUAL
CAPACITY.
(b) Details of Bonds. All Bonds shall be dated September 1, 1996 and
delivery of the Bonds and shall mature, subject to prior redemption, on
September 1, 2010. Interest on the Bonds shall be computed from the Interest
Payment Date next preceding the date of authentication thereof, unless such
authentication date (a) is prior to the first Interest Payment Date following
the initial delivery of the Bonds, in which case interest shall be computed from
such initial delivery date, (b) is after a Record Date and before the subsequent
Interest Payment Date, in which case interest shall be computed from the
subsequent Interest Payment Date, or (c) is an Interest Payment Date, in which
case interest shall be computed from such authentication date; provided, that if
interest on the Bonds is in default, Bonds shall bear interest from the last
date to which interest has been paid. The principal of, redemption or purchase
price and premium, if any, and interest on the Bonds shall be payable in lawful
currency of the United States. The principal of and redemption or purchase price
and premium, if any, on the Bonds shall be payable at the principal corporate
trust office of the Trustee upon presentation and surrender of the Bonds.
Payments of interest on the Bonds shall be mailed to the persons in whose names
the Bonds are registered on the register of the Trustee at the close of business
on the Record Date next preceding each Interest Payment Date; provided that, any
Holder of a Bond or Bonds in an aggregate principal amount of not less than
$500,000 may, by prior written instructions filed with the Trustee (which
instructions shall remain in effect until revoked by subsequent written
instructions), instruct that interest payments for any period be made by wire
transfer to an account in the continental United States or other means
acceptable to the Trustee. Bonds shall be numbered from 1 upward as determined
by the Trustee and shall contain the designation "R."
(c) Delivery. Upon the execution and delivery of this Indenture, the
Issuer shall execute and deliver the Bonds to the Trustee and, upon receipt by
the Trustee of the following, the Trustee shall authenticate the principal
amount of Bonds specified in the Issuer's authorization and request, and the
Trustee shall deliver the Bonds to the purchaser or purchasers as directed by
the Issuer:
(i) a copy of the resolution or resolutions of the Issuer
authorizing the issuance of the Bonds, certified by the Clerk of the Harrison
County Commission;
(ii) original executed counterparts of the Agreement, this Indenture,
the Escrow Agreement, the Remarketing Agreement and the Tax Regulatory Agreement
and a copy of the Reimbursement Agreement;
(iii) confirmation that the Trustee has received the original,
executed Letter of Credit from the Bank;
(iv) an authorization and request from the Issuer to the Trustee to
authenticate and deliver the Bonds in specified Authorized Denominations to the
initial purchaser or purchasers upon payment to the Trustee, for the account of
the Issuer, of the purchase price for such principal amount of Bonds;
(v) an Opinion of Bond Counsel for the Bonds, addressed to the Trustee,
or upon which the Trustee may rely, to the effect that the Bonds so specified
have been validly authorized, executed and issued under the law of the State and
this Indenture has been duly authorized, executed and delivered by the Issuer;
(vi) an opinion of Counsel to the Bank addressed to the Trustee, or
upon which the Trustee may rely, to the effect that the Letter of Credit is a
binding and valid obligation of the Bank and is not subject to registration
under the Securities Act of 1933, as amended;
(vii) Internal Revenue Service Form 8038 completed by the Issuer
with respect to the Bonds;
(viii) An Opinion of Counsel that (1) the Company is a corporation duly
organized and validly existing under the laws of the State, and (2) the
Agreement and the Note have been duly authorized, executed and delivered by the
Company and are enforceable against the Company, subject to usual exceptions for
matters relating to bankruptcy and equitable principles; and
(ix) Appropriate evidence that the Remarketing Agent has accepted
its obligations and duties described in this Indenture.
(d) Disbursement. On the date of issuance of the Bonds, the Trustee
shall disburse all of the proceeds derived from the issuance of the Bonds,
together with sufficient equity money provided by the Company, to the Prior
Bonds Trustee as Escrow Agent under the Escrow Agreement in order to provide for
the defeasance in full of the Prior Bonds. All additional moneys should be
deposited in the Bond Fund and shall be applied as set forth in Section 4.04.
Section 2.02. Interest on the Bonds. The Bonds shall bear interest as
herein provided from the date thereof until paid in full. The Bonds will
initially bear interest at a One-year Rate of 4.00%. Interest accrued on the
Bonds shall be paid on each Interest Payment Date (or, if such day is not a
Business Day, on the next succeeding Business Day), commencing on March 1, 1997.
Subsequent to a Conversion Date, the Bonds shall bear interest at the lowest
rate determined by the Remarketing Agent on their date of issuance as necessary
to sell all of the Bonds at par; provided that no interest rate on the Bonds
shall exceed the Maximum Rate. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, whichever may be applicable.
If, subsequent to any Conversion Date, the Bonds bear interest at the
Weekly Rate, during each Weekly Rate Period the Bonds shall bear interest at the
Weekly Rate, determined by the Remarketing Agent initially no later than the
first day of each Weekly Rate Period and thereafter no later than Wednesday (or
the next succeeding Business Day, if such Wednesday is not a Business Day) of
each week during such Weekly Rate Period. The Weekly Rate shall be the minimum
rate of interest that would cause the Bonds on the date such rate is determined
to have a market value equal to the then outstanding principal amount, plus, if
such sale would not be on an Interest Payment Date, accrued interest. Such rate
shall be determined by the Remarketing Agent in its sole discretion based on
prevailing market conditions. The determination of the Weekly Rates as provided
in this Indenture shall be conclusive and binding on the Issuer, the Company,
the Bank, the Trustee, the Remarketing Agent and the Bondholders. The
calculation and verification of interest payable on the Bonds as provided in
this Indenture shall be conclusive and binding on the Issuer, the Company, the
Bank, the Trustee, the Remarketing Agent, and the Bondholders, absent manifest
error.
If the Remarketing Agent shall not have determined a Weekly Rate for
any week, the Weekly Rate shall be the same as the Weekly Rate for the
immediately preceding week. If for any reason, the Weekly Rate cannot be
determined for any week as hereinbefore provided, the Weekly Rate for such week
shall be a rate per annum equal to 100% of the rate published in the then most
recent edition of The Bond Buyer for 30-day prime tax-exempt commercial paper
or, if The Bond Buyer no longer publishes such information, such other
publication or provider of such information as the Remarketing Agent may select.
The first Weekly Rate determined for each Weekly Rate Period shall
apply to the period commencing on the first day of such Weekly Rate Period and
ending on the next succeeding Wednesday (or the next succeeding Business Day, if
such Wednesday is not a Business Day). Thereafter, each Weekly Rate shall apply
to the period commencing on Thursday (or if the date of determination is not a
Wednesday, on the next following Business Day) and ending on the next succeeding
date of determination, or if earlier, on the last day of the Weekly Rate Period.
Promptly following the determination of each Weekly Rate, the
Remarketing Agent shall give notice thereof to the Trustee. Upon the request of
any Bondholder, the Remarketing Agent shall notify any such Bondholder of each
change in the Weekly Rate by first class mail. The failure to give any such
notice shall not affect,the change in the Weekly Rate.
The Remarketing Agent shall notify the Trustee and the Company in
writing (which may be in telecopy form) or by telephone promptly confirmed in
writing by 4:00 p.m. on the last Wednesday of each month (or if such Wednesday
is not a Business Day, on the next succeeding Business Day) of the Weekly Rate
set for each week in such month, and the principal amount of Bonds bearing
interest at the Weekly Rate during each week.
Using the Weekly Rates supplied by the Remarketing Agent, the Trustee
shall calculate the amount of interest payable on the Bonds.
Section 2.03. Execution and Authentication. The Bonds shall be signed
on behalf of the Issuer with the manual or facsimile signature of the President
of the Harrison County Commission, and the seal of the Issuer shall be impressed
or imprinted on the Bonds by facsimile or otherwise, and attested by the manual
or facsimile signature of the Clerk of the Harrison County Commission. If any
officer whose signature is on a Bond no longer holds that office at the time the
Trustee authenticates the Bond, the Bond shall nevertheless be valid. Also, if a
person signing a Bond is the proper officer on the actual date of execution, the
Bond shall be valid even if that person is not the proper officer on the nominal
date of action.
A Bond shall not be valid for any purpose under this Indenture unless
and until the Trustee manually signs the certificate of authentication on the
Bond, and such signature shall be conclusive evidence that the Bond has been
authenticated under this Indenture.
Section 2.04. Bond Register. The Trustee shall keep a register of Bonds
and of their transfer and exchange. Bonds not held under a book-entry system
must be presented at the principal corporate trust operations office of the
Trustee for registration, transfer and exchange, and Bonds may be presented at
that office for payment. Bonds not held under a book-entry system and optionally
tendered by their holders must be delivered as specified in Section 3.07(b).
Section 2.05. Registration and Exchange of Bonds; Persons Treated as
Owners; Book-Entry System.
(a) Bonds may be transferred only on the register maintained by the
Trustee. Upon surrender for transfer of any Bond to the Trustee, duly endorsed
for transfer or accompanied by an assignment duly executed by the holder or the
holder's attorney duly authorized in writing and in either case, with an
appropriate guarantee of signature conforming to the requirements of Exhibit A
hereto, the Trustee shall authenticate a new Bond or Bonds in an equal total
principal amount and registered in the name of the transferee.
Bonds may be exchanged for an equal total principal amount of Bonds of
different Authorized Denominations. The Trustee shall authenticate and deliver
Bonds that the Bondholder making the exchange is entitled to receive, bearing
numbers not then outstanding.
Except in connection with the optional tender of Bonds pursuant to
Section 3.07(b) and the delivery thereof pursuant to Section 3.08, the Trustee
shall not be required to transfer or exchange any Bond during the period
beginning 15 days before the mailing of notice calling the Bond or any portion
of the Bond for redemption and ending on the redemption date. Bonds subject to
redemption or mandatory repurchase may be transferred or exchanged only if the
Trustee provides the new holder thereof with a copy of the notice of redemption
or mandatory repurchase, as the case may be.
The holder of a Bond as shown on the register of the Trustee shall be
the absolute owner of the Bond for all purposes, and payment of principal,
interest or purchase price shall be made only to or upon the written order of
such holder or the holder's legal representative; provided that interest shall
be paid to the Person shown on the register as a holder of a Bond on the
applicable Record Date.
(b) The Trustee may require the payment by a Bondholder requesting
exchange or registration of transfer of any tax or other governmental charge
required to be paid in respect of the exchange or registration of transfer but
shall not impose any other charge.
(c) The Trustee or the Remarketing Agent may make appropriate
arrangements for the Bonds (or any portion thereof) to be issued or held by
means of a book-entry system administered by DTC with no physical distribution
of Bonds made to the public (other than those Bonds, if any, not held under such
book-entry system). References in this Section 2.05(c) to a Bond or the Bonds
shall be construed to mean the Bond or the Bonds that are held under the
book-entry system. In such event, one Bond of each maturity shall be issued to
DTC and immobilized in its custody. A book-entry system shall be employed,
evidencing ownership of the Bonds in Authorized Denominations, with transfers of
beneficial ownership effected on the records of DTC and the DTC Participants
pursuant to rules and procedures established by DTC.
Each DTC Participant shall be credited in the records of DTC with the
amount of such DTC Participant's interest in the Bonds. Beneficial ownership
interests in the Bonds may be purchased by or through DTC Participants. The
holders of these beneficial ownership interests are hereinafter referred to as
the "Beneficial owners." The Beneficial Owners shall not receive Bonds
representing their beneficial ownership interests. The ownership interests of
each Beneficial Owner shall be recorded through the records of the DTC
Participant from which such Beneficial Owner purchased its Bonds. Transfers of
ownership interests in the Bonds shall be accomplished by book entries made by
DTC and, in turn, by DTC Participants acting on behalf of Beneficial Owners. SO
LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER OF THE BONDS,
THE TRUSTEE SHALL TREAT CEDE & CO. AS THE ONLY HOLDER OF THE BONDS FOR ALL
PURPOSES UNDER THIS INDENTURE, INCLUDING RECEIPT OF ALL PRINCIPAL OF AND
INTEREST ON THE BONDS, RECEIPT OF NOTICES, VOTING AND REQUESTING OR DIRECTING
THE TRUSTEE TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THIS
INDENTURE.
Payments of principal, interest and purchase price with respect to the
Bonds, so long as DTC is the only owner of the Bonds, shall be paid by the
Trustee directly to DTC or its nominee, Cede & Co. as provided in the Letter of
Representation dated as of September 1, 1996 from the Issuer, the Company, the
Remarketing Agent, the Trustee to DTC (the "Letter of Representation"). DTC
shall remit such payments to DTC Participants, and such payments thereafter
shall be paid by DTC Participants to the Beneficial owners. The Issuer, the
Company, and the Trustee shall not be responsible or liable for payment by DTC
or DTC Participants, for sending transaction statements or for maintaining,
supervising or reviewing records maintained by DTC or DTC Participants.
In the event that (1) DTC determines not to continue to act as
securities depository for the Bonds or (2) the Company or the Remarketing Agent
determines that the continuation of the book-entry system of evidence and
transfer of ownership of the Bonds would adversely affect its interests or the
interests of the Beneficial Owners of the Bonds, the Issuer shall, at the
request of the Company or the Remarketing Agent, discontinue the book-entry
system with DTC. If the Remarketing Agent fails to identify another qualified
securities depository to replace DTC, the Trustee shall authenticate and deliver
replacement Bonds in the form of fully registered Bonds to each Beneficial
Owner.
THE ISSUER, THE COMPANY, THE REMARKETING AGENT, AND THE TRUSTEE SHALL
NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO ANY DTC PARTICIPANT OR ANY
BENEFICIAL OWNER WITH RESPECT TO (i) THE BONDS; (ii) THE ACCURACY OF ANY RECORDS
MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (iii) THE PAYMENT BY DTC OR ANY DTC
PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE
PRINCIPAL OF AND INTEREST ON THE BONDS; (iv) THE DELIVERY OR TIMELINESS OF
DELIVERY BY DTC OR ANY DTC PARTICIPANT OF ANY NOTICE DUE TO ANY BENEFICIAL OWNER
THAT IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS INDENTURE TO BE GIVEN TO
BENEFICIAL OWNERS; (v) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE PAYMENTS IN
THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (vi) ANY CONSENT GIVEN OR
OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS OWNER.
In the event that a book-entry system of evidence and transfer of
ownership of the Bonds is discontinued pursuant to the provisions of this
Section, the Bonds shall be delivered solely as fully registered Bonds without
coupons in the Authorized Denominations, shall be lettered "IR" and numbered
separately from 1 upward, and shall be payable, executed, authenticated,
registered, exchanged and canceled pursuant to the provisions hereof.
(d) The Remarketing Agent shall not be limited to utilizing a
book-entry system maintained by DTC but may enter into a custody agreement with
any bank or trust company serving as custodian (which may be the Trustee serving
in the capacity of custodian) to provide for a book-entry or similar method for
the registration and registration of transfer of all or a portion of the Bonds.
SO LONG AS A BOOK-ENTRY SYSTEM OF EVIDENCE OF TRANSFER OF OWNERSHIP OF
ALL THE BONDS IS MAINTAINED IN ACCORDANCE HEREWITH, THE PROVISIONS OF THIS
INDENTURE RELATING TO THE DELIVERY OF PHYSICAL BOND CERTIFICATES SHALL BE DEEMED
INAPPLICABLE OR BE OTHERWISE SO CONSTRUED AS TO GIVE FULL EFFECT TO SUCH
BOOK-ENTRY SYSTEM.
Section 2.06. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds.
(a) If any Bond is mutilated, lost, stolen or destroyed, the Trustee
shall authenticate a new Bond of the same denomination for any mutilated, lost,
stolen or destroyed Bond if there is delivered to the Trustee at its principal
corporate trust operations office, (1) in the case of a mutilated Bond, such
mutilated Bond and (2) in the case of any lost, stolen or destroyed Bond,
evidence of such loss, theft or destruction reasonably satisfactory to the
Issuer, Bank, Trustee and Company, together with an indemnity from the
Bondholder, reasonably satisfactory to them. If the Bond has matured and if the
evidence and indemnity described above have been provided by the Bondholder,
instead of issuing a duplicate Bond, the Trustee, with the consent of the
Company, shall pay the Bond without requiring surrender of the Bond and make
such requirements as the Trustee deems fit for its protection, including a lost
instrument bond. The Issuer, the Company and the Trustee may charge the
Bondholder their reasonable fees and expenses in this connection.
(b) In the event that any Bond purchased pursuant to an optional tender
or mandatory repurchase is not delivered by the holder thereof on the date such
Bond is purchased, the Issuer shall execute (if necessary) and the Trustee shall
authenticate and deliver a new Bond of like aggregate principal amount as the
Bond purchased, which Bond shall, for all purposes of this Indenture, be deemed
to evidence the same debt as the Bond purchased and shall be remarketed,
delivered and registered in accordance with Section 3.08(d) hereof.
If any Bond is purchased by the Trustee with Available Moneys provided
by the Company and sufficient for such purchase, the Trustee, upon request of
the Company, shall authenticate a new Bond in any Authorized Denomination
specified by the Company, registered as the Company may direct and deliver it to
the Company, or to its order, whether or not such Bond is ever delivered. If any
Bond is purchased with funds obtained by a drawing on the Letter of Credit, the
Trustee shall comply with the provisions of Section 3.08(d)(ii).
(c) Every new Bond issued pursuant to this Section 2.06 shall (i)
constitute an additional contractual obligation of the Issuer regardless of
whether, in the case of (a) above, the mutilated, lost, stolen or destroyed Bond
and, in the case of (b) above, the Bond purchased shall be enforceable at any
time by anyone, and (ii) be entitled to all of the benefits of this Indenture
equally and proportionately with any and all other Bonds issued and outstanding
hereunder.
(d) All Bonds shall be held and owned on the express condition that the
foregoing provisions of this Section 2.06 are exclusive with respect to the
replacement or payment of mutilated, lost, stolen or destroyed Bonds and the
replacement of any Bond purchased pursuant to an optional tender or mandatory
repurchase and, to the extent permitted by law, and shall preclude any and all
other rights and remedies with respect to the replacement or payment of
negotiable instruments or other investment securities without their surrender,
notwithstanding any law or statute to the contrary now existing or enacted
hereafter.
Section 2.07. Cancellation of Bonds. All Bonds paid, redeemed or
purchased, either at or before maturity, shall be delivered to the Trustee when
such payment, redemption or purchase is made, and except as otherwise provided
herein shall be canceled. Whenever a Bond is delivered to the Trustee for
cancellation (upon payment, redemption, defeasance or otherwise), or for
transfer, exchange or replacement pursuant to Section 2.05 or 2.06, the Trustee
shall safeguard such Bond for such period of time as may be required by
governmental regulations and thereafter promptly cancel the Bond and prepare a
certificate of destruction therefor.
Section 2.08. Temporary Bonds. Until definitive Bonds are ready for
delivery, the Issuer may execute and the Trustee shall authenticate temporary
Bonds substantially in the form of the definitive Bonds, with appropriate
variations. The Issuer shall, without unreasonable delay, prepare and the
Trustee shall authenticate definitive Bonds in exchange for the temporary Bonds.
Such exchange shall be made by the Trustee without charge to the Bondholders.
Temporary Bonds shall not otherwise be eligible for transfer or exchange under
Section 2.05.
Section 2.09. Additional Bonds.
(a) At any time while the Issuer is not in default under this Indenture
and subject to the approval and execution of a supplemental Indenture making
appropriate provisions therefor in accordance with Section 10.01 hereof and
subject to receipt by the Trustee of the documents listed below, the Issuer may
issue one or more series of Additional Bonds for the purpose of providing funds
to be used, with any other available funds, for the purpose of (i) paying the
cost of all improvements, restoration, repairing, rebuilding, rearranging and
replacements of the Project or any part thereof by the Company pursuant to, or
(ii) refunding all or part of any prior series of Bonds, or any combination of
the above. Each series of Additional Bonds shall be issued pursuant to a
supplement to this Indenture. Unless otherwise provided in a supplemental
Indenture, all such Additional Bonds shall be in substantially the same form as
the Bonds, but shall be of such denominations, bear such dates, bear interest at
such rates, have such maturity dates, redemption dates and redemption premiums,
contain an appropriate series designation, and be issued at such prices all as
approved by Company.
The Trustee shall authenticate and deliver such Additional Bonds, but
only upon receipt of the following:
(1) A certificate of the Issuer, signed by its President, that it
is not in default under this Indenture.
(2) A certificate of the Company, signed by a Company
Representative approving the issuance and terms of such
Additional Bonds and that it is not in default under the
Agreement.
(3) A certified copy of a resolution or resolutions of the Issuer
authorizing a)the execution and delivery of the amendment to
the Agreement referred to in subparagraph 4 of this Section
2.09, (b) the execution and delivery of the supplemental
Indenture referred to in subparagraph 5 hereof, and (c) the
issuance, award, execution and delivery of such Additional
Bonds.
(4) An original executed counterpart of an amendment to the
Agreement providing, among other things, for increasing the
amounts payable by the Company thereunder to include payment
of principal of, premium, if any, and interest on such
Additional Bonds.
(5) An original executed counterpart of a supplemental Indenture
providing for the issuance of such Additional Bonds.
(6) Evidence of the consent of the Bank to the issuance of such
Additional Bonds.
(7) An opinion of Counsel that the amendment to the Agreement and
a new promissory note each has been properly authorized,
executed, and delivered by Company, that the supplemental
Indenture has been properly authorized, executed, and
delivered by the Issuer, and that such amendment to the
Agreement, new promissory note, and supplemental Indenture
(assuming in the case of the supplemental Indenture, proper
authorization and execution and delivery thereof by the
Trustee), are valid and binding and enforceable in accordance
with their respective terms, except as same is affected by
laws affecting creditors' rights and the enforcement thereof
generally and except to the extent that the remedy of specific
performance and other equitable remedies are always within the
discretion of the Court, and that the amendment to the
Agreement and the supplemental Indenture have been duly
recorded in every necessary recording office and appropriate
financing statements have been filed in all filing offices
where such filing shall be necessary;
(8) A written opinion of Nationally Recognized Bond Counsel that
the issuance of such Additional Bonds has been duly authorized
by the Issuer and will have no adverse effect upon the
exemption from Federal income taxes of interest on the Bonds
or any other then outstanding series of Additional Bonds.
(9) A request and authorization by the Issuer, signed by its
President, to the Trustee to authenticate and deliver such
Additional Bonds upon payment to the Trustee for the account
of the Issuer of a specified sum.
(b) When the requirements of subsection A of this Section have been met
to the reasonable satisfaction of the Trustee and when the Additional Bonds
shall have been executed and authenticated in the manner required by this
Indenture, the Trustee shall deliver such Additional Bonds but only upon payment
to the Trustee of the purchase price of such Additional Bonds.
(c) The proceeds of all Bonds issued under the provisions of this
Section (other than refunding Bonds) shall be deposited with the Trustee in a
special fund appropriately designated and held in trust for the purpose of
paying the costs for which such Additional Bonds were issued to finance except
that any accrued interest received on the sale of such Additional Bonds and any
amount authorized for the payment of interest during any period of acquisition
and construction and for a reasonable period thereafter shall be deposited to
the credit of the Bond Fund (i.e., in the designated subaccount therein). The
proceeds of all refunding Bonds issued under the provisions of this Section
shall be deposited with the Trustee in a special escrow account pledged solely
to the payment of the principal of, premium, if any, and interest on the
refunded Bonds, except that the accrued interest received on the sale of such
Additional Bonds may be deposited instead in the Bond Fund.
ARTICLE III
REDEMPTION, PURCHASE AND REMARKETING
Section 3.01. Redemption of Bonds.
(a) Optional Redemption-Bonds in Weekly Rate Mode. While the Bonds bear
interest at the Weekly Rate, the Bonds may be redeemed by the Issuer at the
direction of the Company, in whole on any Business Day, or in part on any
Interest Payment Date, or, if such Interest Payment Date is not a Business Day
on the next succeeding Business Day, without premium, at the principal amount
thereof with interest accrued to, but excluding, the redemption date; provided
that any such redemption in part shall be in a minimum redemption amount of
$100,000.
(b) Optional Redemption-Bonds in One-year Rate Mode or Three-year Rate
Mode. While the Bonds bear interest at either the One-year Rate or the
Three-year Rate, the Bonds may be redeemed by the Issuer at the direction of the
Company, in whole or in part on the final Interest Payment Date occurring during
such One-year Rate Period or Three-year Rate Period, at a redemption price of
par plus interest accrued to the date fixed for redemption.
(c) Optional Redemption-Bonds in Fixed Rate Mode. While the Bonds bear
interest at a Fixed Rate, the Bonds may be redeemed by the Issuer at the
direction of the Company, in whole or in part at any time on and after the tenth
anniversary date subsequent to the Conversion Date upon which the interest rate
on the Bonds was converted to a Fixed Rate, at a redemption price of par plus
interest accrued to the date fixed for redemption.
NOTWITHSTANDING ANYTHING IN THIS INDENTURE TO THE CONTRARY, IN NO EVENT
SHALL PROCEEDS OF THE LETTER OF CREDIT BE USED TO PAY THE REDEMPTION PRICE OF
BONDS CALLED FOR REDEMPTION PURSUANT TO SECTIONS 3.01(a), 3.01(b) or 3.01(c).
(d) Mandatory Sinking Fund Redemption. (i) The Bonds are subject to
mandatory sinking fund redemption prior to their scheduled maturity, on
September 1, 1997, and on each succeeding September 1 to and including September
1, 2010, or if any such date is not a Business Day, on the next succeeding
Business Day, without premium, at a redemption price of the principal amount
thereof with interest accrued to, but excluding, the redemption date, in the
following principal amounts:
Principal
Year Amount
1997 $110,000
1998 110,000
1999 120,000
2000 125,000
2001 135,000
2002 140,000
2003 150,000
2004 155,000
2005 165,000
2006 175,000
2007 185,000
2008 190,000
2009 205,000
2010 (Maturity) 220,000
(ii) At its option, to be exercised on or before the 45th day next
preceding any such sinking fund redemption date, the Issuer, or the Company on
behalf of the Issuer, may:
(x) deliver to the Trustee for cancellation Bonds in
any aggregate principal amount desired to be credited
against the Issuer's sinking fund redemption obligations; or
(y) instruct the Trustee, to credit against the Issuer's
sinking fund redemption obligations any Bonds that prior to
such date have been redeemed (otherwise than through the
operation of the sinking fund) and canceled by the Trustee and
not theretofore applied as a credit against any sinking fund
redemption obligation.
Each Bond so delivered or previously redeemed shall be credited by the
Trustee at 100% of the principal amount thereof against the obligation of the
Issuer on such sinking fund redemption dates. Any excess over such obligation
shall be credited against future sinking fund redemption obligations in
chronological order, and the principal amount of the Bonds to be redeemed by
operation of the sinking fund shall be accordingly reduced.
(e) Mandatory Redemption on Determination of Taxability. The Bonds are
also subject to mandatory redemption at a redemption price equal to the
principal amount thereof with interest to, but excluding, the redemption date in
whole (or in part as provided below), without premium, on the first day of a
month within 180 days after the Company receives written notice from a
Bondholder or former Bondholder or the Trustee of a final determination by the
Internal Revenue Service or a court of competent jurisdiction that the interest
paid or to be paid on any Bond is or was includable in the gross income of the
Bond's owner (other than an owner that is a "substantial user" of the Facility
or a "related person" within the meaning of Section 147(a) of the Code) for
federal income tax purposes (a "Determination of Taxability"), or if such date
is not a Business Day, on the next succeeding Business Day. No such
determination will be considered final unless the Bondholder or former
Bondholder involved in the determination gives the Company, the Trustee, the
Remarketing Agent and the Bank prompt written notice of the commencement of the
proceedings resulting in the determination and offers the Company, subject to
the Company's agreeing to pay all expenses of the proceeding and to indemnify
the holder against all liabilities that might result from it, the opportunity to
control the defense of the proceeding and either the Company does not agree
within 30 days to pay the expenses, indemnify the holder and control the defense
or the Company exhausts or chooses not to exhaust available procedures to
contest or obtain review of the result of the proceedings. Fewer than all the
Bonds may be redeemed if redemption of fewer than all would result in the
interest payable on the Bonds remaining outstanding being not includable in the
gross income for federal income tax purposes of any holder. If fewer than all
Bonds are redeemed, the Remarketing Agent shall select the Bonds to be redeemed
by lot as provided in Section 3.03 or by such other method acceptable to the
Remarketing Agent as may be approved in an opinion of Bond Counsel.
(f) Mandatory Redemption on Expiration or Termination of Letter of
Credit Without Extension or Providing a Substitute Letter of Credit. The Bonds
are subject to mandatory redemption, in whole without premium at a redemption
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon to, but not including, the redemption date, on the Interest
Payment Date that next precedes by at least 14 days the stated expiration or
termination date of the Letter of Credit or, if such Interest Payment Date is
not a Business Day, on the next succeeding Business Day, unless by the 15th day
prior to such Interest Payment Date the Company provides to the Trustee, and the
Trustee has accepted, (1) evidence that such Letter of Credit has been extended
or (2) a Substitute Letter of Credit to be effective on or prior to such
Interest Payment Date.
(g) Mandatory Redemption upon Failure of Remarketing Agent to Remarket
Bonds. Bonds unable to be remarketed by the Remarketing Agent pursuant to
Section 3.08 of this Indenture shall be subject to mandatory redemption at a
redemption price equal to the principal amount thereof plus accrued and unpaid
interest thereof to, but not including, the redemption date in the manner set
forth in Section 3.08.
Section 3.02. Redemption Date. The redemption date of Bonds to be
redeemed pursuant to the optional redemption provisions in Section 3.01(a)
through (c) shall be a date permitted by such clauses and specified by the
Company in the notice delivered pursuant to the preceding Section. The
redemption date for mandatory redemptions shall be as specified in Section
3.01(d) through (g), as the case may be, or determined by the Trustee
consistently with the provisions thereof.
Section 3.03. Selection of Bonds To Be Redeemed. Except as otherwise
provided in this Section 3.03, if fewer than all the Bonds are to be redeemed,
the Remarketing Agent shall select the Bonds to be redeemed by lot or such other
method as it deems in its sole discretion to be fair and appropriate and shall
notify the Trustee (which notice may be provided by telephone, immediately
confirmed in writing by legible facsimile transmission, registered or certified
mail, overnight express delivery, or other secure means), of the holders and
denominations of Bonds to be redeemed. The Remarketing Agent shall make the
selection from Bonds not previously called for redemption. In the event the
Remarketing Agent fails to notify the Trustee of the Bonds to be redeemed on or
before the 35th day prior to the redemption. day, the Trustee shall select Bonds
for redemption from among the Outstanding Bonds as set forth below. The Trustee
shall treat each holder of Bonds as the owner of one Bond for purposes of
selection for redemption and shall select Bonds for redemption by lot (1) from
among the holders of less than $1,000,000 in aggregate principal amount,
provided that if there are no such holders, or if, after selection from among
such holders such selection has not resulted in redemption of a sufficient
amount of Bonds, then (2) from among the holders of $1,000,000 or more in
aggregate principal amount of Bonds. In the event the Trustee selects Bonds for
redemption, the Trustee shall, on or before the day on which notice of
redemption is mailed to the holders, give telephonic notice to the Remarketing
Agent of the Bonds selected for redemption and the name of the holder or holders
thereof. No portion of a Bond may be redeemed that would result in a Bond that
is smaller than the then permitted minimum Authorized Denomination. For this
purpose, the Remarketing Agent or the Trustee shall consider each Bond in a
denomination larger than the minimum denomination permitted by the Bonds at the
time to be separate Bonds each in the minimum denomination. Provisions of this
Indenture that apply to Bonds called for redemption also apply to portions of
Bonds called for redemption.
Notwithstanding anything to the contrary in this Indenture, there shall
be no redemption of less than all of the Bonds if there shall have occurred and
be continuing an Event of Default.
Section 3.04. Notice to Trustee; Notice of Redemption.
(a) If the Company wishes that any Bonds be redeemed pursuant to the
optional redemption provisions in Section 3.01(a) through (c) hereof, the
Company shall notify the Trustee, the Trustee, the Bank and the Remarketing
Agent in writing of the applicable provision, the redemption date, the principal
amount of Bonds to be redeemed and other necessary particulars. The Company
shall give such notices at least 40 days before the redemption date.
(b) For Bonds being redeemed pursuant to Subsections (a) through (e) of
Section 3.01, the Trustee shall prepare and send notice of each redemption to
each Bondholder whose Bonds are being redeemed, the Company, the Remarketing
Agent and the Bank by first-class mail at least 30 days but not more than 60
days before each redemption. If the Bonds are being held under a book-entry
system administered by DTC and less than all of the Bonds are called for
redemption, the Remarketing Agent shall notify the Trustee of the names and
addresses of the Beneficial Owners of the Bonds selected for redemption pursuant
to Section 3.03, and the Trustee shall prepare and send notice of such
redemption to each such Beneficial owner at the time and in the manner provided
in this Section 3.04(b). The notice shall identify the Bonds or portions thereof
to be redeemed and shall state (i) the type of redemption and the redemption
date, (ii) the redemption price, (iii) that the Bonds called for redemption must
be surrendered to collect the redemption price, (iv) the address at which the
Bonds must be surrendered, (v) that interest on the Bonds called for redemption
ceases to accrue on the redemption date, (vi) the CUSIP number of the Bonds and
(vii) any condition to the redemption.
The procedure for redemption of Bonds pursuant to 3.01(f) shall be
identical except that notice shall be sent at least 7 days before each
redemption.
The procedure for redemption of Bonds pursuant to 3.01(g) shall be as
set forth in Section 3.08 of this Indenture.
With respect to any Bonds to be redeemed that have not been presented
for redemption within 60 days after the redemption date, the Trustee, at the
expense of the Company, shall prepare and the Trustee shall give a second notice
of redemption to the holder of any such Bonds that have not been presented for
redemption, by first-class mail, within 30 days of the end of such 60-day
period.
Failure by the Trustee to give any notice of redemption as to any
particular Bonds will not affect the validity of the call for redemption of any
Bonds in respect of which no such failure has occurred. Any notice mailed as
provided in the Bonds will be conclusively presumed to have been given whether
or not actually received by any holder.
Section 3.05. Payment of Bonds Called for Redemption. Upon surrender to
the Trustee, Bonds called for redemption shall be paid as provided in this
Article at the redemption price provided for in this Article. On the date fixed
for redemption, notice having been given in the manner and under the conditions
hereinabove provided, the Bonds or portions thereof called for redemption shall
be due and payable at the redemption price provided therefor, plus accrued
interest to such date. On such redemption date, if moneys sufficient to pay the
redemption price of the Bonds to be redeemed, plus accrued interest thereon to
the date fixed for redemption, are held by the Trustee, interest on the Bonds
called for redemption shall cease to accrue; such Bonds shall cease to be
entitled to any benefits or security under this Indenture or to be deemed
outstanding; and the holders of such Bonds shall have no rights in respect
thereof except to receive payment of the redemption price thereof, plus accrued
interest to the date of redemption.
Section 3.06. Bonds Redeemed in Part. Upon surrender of a Bond redeemed
in part, the Trustee shall authenticate for the holder a new Bond or Bonds equal
in principal amount to the unredeemed portion of the Bond surrendered.
Section 3.07. Other Redemption; Purchase of Bonds.
(a) Mandatory Repurchase of Bonds; Notice. Except as provided
in Section 3.07(e), Bonds are subject to mandatory repurchase as follows:
(i) on the effective date of any Substitute Letter of Credit delivered
pursuant to Section 5.03, if, but only if, such Substitute Letter of Credit will
result in a Credit Modification, at a purchase price equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon to but not
including the date of purchase; and
(ii) on any Interest Payment Date selected by the Company, or if such
Interest Payment Date is not a Business Day, on the next succeeding Business
Day, at a purchase price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon to but not including the date of purchase;
provided that any such mandatory repurchase, except as provided in Section 9.12
hereof, shall be subject to the prior written consent of the Bank; and
The Trustee shall prepare and send to the holders of Bonds subject to
mandatory repurchase, and to the Remarketing Agent, the Bank and the Company, a
Notice of Mandatory Repurchase at least 15 days but not more than 60 days before
the Mandatory Repurchase Date. Any Notice of Mandatory Repurchase shall be given
by first-class mail and shall be substantially in the form attached hereto as
Exhibit B.
With respect to any Bonds to be purchased that have not been presented
for purchase within 60 days after the Mandatory Repurchase Date, the Trustee, at
the expense of the Company, prepare and send a second notice of purchase to the
holder of any such Bonds, by first-class mail, within 30 days of the end of such
60-day period.
(b) Optional Tender of Bonds. (i) Except as provided in Section
3.07(e), while the Bonds bear interest at the Weekly Rate, the holder (or while
the Bonds are held pursuant to a book-entry system, the Beneficial Owner) of any
Bond may elect to tender such Bond (or portion thereof, provided that each of
the portion to be purchased and the portion to be retained is in an Authorized
Denomination) for purchase at a purchase price equal to 100% of the principal
amount of such Bond (or portion thereof), plus accrued and unpaid interest
thereon to but not including the date of purchase, on any Business Day (the
"Optional Tender Date"), but only upon (A) receipt by the Remarketing Agent by
not later than 11:00 a.m. at least seven calendar days or five Business Days,
whichever may be earlier, but not more than 30 days, prior to such Optional
Tender Date of telephonic (followed, if requested by the Remarketing Agent, by
written or facsimile confirmation delivered to the Remarketing Agent no later
than the close of business on the next succeeding Business Day) or other notice
stating (x) the principal amount of the Bond (or portion thereof) to be
tendered, (y) the Bond number or other identification satisfactory to the
Remarketing Agent, and (z) the Optional Tender Date on which such Bond will be
tendered; and (B) if the Bonds are not being held under a book-entry system,
delivery of such Bond (with an appropriate instrument of transfer duly executed
in blank) to the Trustee by 10:00 a.m. on such Optional Tender Date.
(ii) Any notice of optional tender for purchase delivered pursuant to
subpart (i) above shall be irrevocable and shall be binding on the holder giving
or delivering such notice and on any transferee of such holder.
(iii) Upon receipt by the Remarketing Agent of a notice of optional
tender for purchase pursuant to subparagraph (i) above, the Remarketing Agent
shall give prompt telephonic notice thereof to the Trustee.
(c) Payment for Purchased Bonds. To the extent that sufficient moneys
have been made available therefor to the Trustee by 3:30 p.m. on the purchase
date pursuant to Sections 3.08 and 5.02, upon surrender to the Trustee of Bonds
optionally tendered or called for mandatory repurchase as provided herein, the
purchase price therefor (as provided in this Section) shall be paid in
immediately available funds by the Trustee not later than the close of business
on the purchase date. From and after the Mandatory Repurchase Date or Optional
Tender Date, as applicable, or, if later, the date on which such moneys are made
available to the Trustee, interest accruing on such Bonds shall cease to be
payable to the prior holder thereof, such Bonds shall cease to be entitled to
the benefits or security of this Indenture and to such extent the prior holder
shall have recourse solely to the funds held by the Trustee for the purchase of
such Bonds as provided in Section 4.06.
(d) Bonds Purchased in Part. Upon surrender of a Bond purchased in part
and receipt by the Trustee thereof, the Trustee shall authenticate and deliver
to the surrendering holder a new Bond equal in principal amount to the
unpurchased portion of the Bond surrendered.
(e) Limitations on Tenders.
(i) The holders shall not have the right or be required, as the case
may be, to tender any Bond for purchase on an Optional Tender Date or a
Mandatory Repurchase Date if on such date, following the occurrence of an Event
of Default, the Trustee shall have declared the principal of and interest on the
Bonds to be immediately due and payable pursuant to Section 8.02.
(ii) Notwithstanding the provisions of Section 3.07(b), holders of
Bonds called for redemption or mandatory repurchase shall not have the right
(without the prior consent of the Remarketing Agent) to tender such Bonds for
purchase on an Optional Tender Date if such Optional Tender Date will occur on
or after the 10th day prior to the date fixed for redemption or mandatory
repurchase. Notwithstanding the foregoing, holders of Bonds called for
redemption shall not have the right in any event to tender such Bonds for
purchase on an Optional Tender Date if such Optional Tender Date will occur on
or after the second day prior to the date fixed for redemption.
Section 3.08. Remarketing of Purchased Bonds.
(a) Bonds To Be Remarketed. Bonds purchased pursuant to
optional tender or mandatory repurchase shall be remarketed by the Remarketing
Agent as provided in this Section except an follows:
(i) Bonds purchased pursuant to an optional tender or a mandatory
repurchase and as to which the Remarketing Agent has received a notice of
redemption may be remarketed before the date fixed for redemption only if the
purchaser receives prior to purchasing such Bond a notice that such Bond is
subject to redemption on the date fixed for redemption, notwithstanding the fact
that such notice of redemption may be sent to such purchaser after the time
period mentioned in Section 3.04(b).
(ii) The Remarketing Agent shall not be required to offer Bonds for
sale under this Section (1) during the continuance of an Event of Default, (2)
following receipt of notice from the Internal Revenue Service, a Bondholder or
former Bondholder, the Company, the Trustee of an Event of Taxability or a
Determination of Taxability or (3) as otherwise provided in the Remarketing
Agreement.
(iii) Bonds purchased pursuant to an optional tender and as to which
the Remarketing Agent has received a Notice of Mandatory Repurchase may be
remarketed before the Mandatory Repurchase Date only if the purchaser receives a
copy of the Notice of Mandatory Repurchase prior to purchasing such Bond.
(iv) When a Letter of Credit is in effect, the Remarketing Agent shall
not knowingly remarket any Bonds to the Issuer or the Company or any partner or
affiliate of either thereof pursuant to this Section 3.08 unless either (i) the
entire purchase price is paid from Available Moneys or (ii) prior to such sale,
the Trustee shall have received a written opinion of Bankruptcy Counsel to the
effect that such purchase would not result in a preferential payment pursuant to
the provisions of Section 547 of the Bankruptcy Code.
(b) Remarketing Effort. Except as provided in (a) above or except to
the extent the Company directs the Remarketing Agent not to do so, the
Remarketing Agent shall use reasonable efforts to remarket on the purchase date
all Bonds purchased pursuant to Section 3.07 and to the extent such purchased
Bonds are not remarketed on the purchase date, shall notify the Trustee in the
manner provided below. Bonds not remarketed shall be subject to mandatory
redemption as provided in Section 3.01(g).
As early as practicable but not later than 10:00 a.m. on each Business
Day on which the Remarketing Agent is required to remarket Bonds pursuant to
this Section 3.08, the Remarketing Agent shall (A) notify the Trustee by
telephone, with such notice promptly confirmed in writing, of (i) the amount of
Bonds that have been remarketed and which have not been remarketed, (ii) the
amount of proceeds from such remarketing and the amount needed to redeem the
Bonds which have not been remarketed, and (iii) the information to enable the
Trustee to prepare new Bond certificates with respect to Bonds that were
remarketed and (B) transfer to the Trustee the proceeds from such remarketing as
provided in (c) below. The Trustee shall immediately notify the Company by
telephone, with such notice promptly confirmed in writing, of the amount of such
proceeds and the Trustee shall take action as set forth in Section 5.02(a). If
the Trustee fails to receive such notice from the Remarketing Agent by 10:00
a.m., the Trustee shall immediately the Company of the principal amount of all
Bonds to be remarketed and/or redeemed on such date and the Trustee shall take
action as set forth in Section 5.02(a).
(c) Remarketing Proceeds. To the extent the Remarketing Agent has
remarketed Bonds and has received funds representing a payment for such Bonds
(the "Remarketing Proceeds") from the purchasers thereof, the Remarketing Agent
shall promptly, but in no event later than 10:30 a.m. forward the Remarketing
Proceeds by wire transfer (or in such other manner as is acceptable to the
Remarketing Agent and the Trustee) to the Trustee with notice. All such
Remarketing Proceeds shall be deposited in a separate, segregated account of the
Bond Fund for application in accordance with the provisions of Section 3.08 and
Article IV hereof and, until so applied, shall be held in trust for the benefit
of the holders tendering such Bonds for purchase.
(d) Delivery of Purchased Bonds. Bonds purchased pursuant to
Section 3.07 shall be delivered to the purchasers thereof upon receipt of
payment therefor. Prior to such delivery the Trustee shall provide for
registration of transfer to the Holders, as provided in a written notice from
the Remarketing Agent; and
Section 3.09. Authority for and Conditions to Conversion of Interest
Rate. The interest rate borne on the Bonds shall be converted to an interest
rate of in a different interest rate mode upon receipt by the Trustee, the
Remarketing Agent, the Bank of a direction from the Issuer, given at the
direction of the Company, specifying the date new interest rate mode shall be
determined (which date shall not be less than five Business Days prior to the
effective date thereof), the resulting interest rate mode (i.e., Weekly Rate,
One-year Rate, Three-year Rate or Fixed Rate) and the effective date thereof
(which shall be a Business Day not less than 45 days from the date the Authority
gives such direction). Such request and direction shall be accompanied by an
opinion of counsel, which counsel shall be acceptable to the Trustee, addressed
to the Trustee, the Company, the Bank and the Remarketing Agent, stating that
such conversion is authorized or permitted by the Indenture, and that conversion
to the new interest rate mode is in accordance with the provisions of the
Indenture and will not adversely affect the exclusion from gross income for
federal income tax purposes of interest on the Bonds. Conversion to a new
interest rate mode shall not occur without such opinion. Upon the date stated in
such directions as the date the new interest rate mode shall be determined, the
Remarketing Agent shall determine the Weekly Rate, One-year Rate, Three-year
Rate or Fixed Rate, which shall be the rate or rates which, if borne by the
Bonds, would, based on prevailing financial market conditions, be the interest
rate or rates necessary, but would not exceed the interest rate or rates
necessary, to enable each maturity of the Bonds to be remarketed at 100% of the
principal amount thereof.
NOTWITHSTANDING ANYTHING IN THIS INDENTURE OR IN THE BONDS CONTRARY, IN
THE EVENT THE INTEREST RATE ON THE BONDS IS CONVERTED TO A FIXED RATE, NO
FURTHER CONVERSIONS WILL BE PERMITTED OR AUTHORIZED UNDER THIS INDENTURE.
Section 3.10. Notice to Owners of Conversion to New Interest Rate Mode.
The Trustee shall give notice to the Remarketing Agent and by first class mail,
postage prepaid, to the Owners of Bonds not less than 30 days prior to the
effective date of conversion to the new interest rate mode. Such notice shall
state (i) that the interest rate on the Bonds will be converted to a new
interest rate mode, (ii) whether the new interest rate mode is the Weekly Rate,
One-year Rate, Three-year Rate or the Fixed Rate, (iii) the effective date of
conversion to the new interest rate mode, (iv) the date the new interest rate
mode is to be determined and the procedure for notifying Owners of the new
interest rate mode, (v) the dates upon which interest on the Bonds will be
payable after the effective date of the new interest rate mode, (vi) that after
conversion to a Fixed Rate, if applicable the Owners of the Bonds will no longer
have the right to deliver the Bonds to the Remarketing Agent for purchase, and
(vii) that all Outstanding Bonds not purchased prior to the effective date will
be purchased on the effective date of the new interest rate mode, except Bonds
with respect to which the Owner has directed the Company not to purchase in
accordance herewith.
Section 3.11. Notification of Interest Rate; Replacement Bonds. Upon
determining the interest rate to be borne under the new interest rate mode, the
Remarketing Agent shall provide notice of such rate to the Trustee by telephone,
with written confirmation in writing and the Trustee shall give notice by first
class mail, postage prepaid to the owners of the Bonds which shall set forth
such interest rate. In connection with the conversion of the interest rate to a
Fixed Rate, the Trustee, at the direction of the Company shall deliver
replacement Bonds bearing the Fixed Rate with deletion of such terms as are no
longer applicable. Any such replacement Bonds shall be executed and
authenticated as provided herein. In the event that definitive Bonds are not
available for delivery, temporary replacement Bonds may be delivered as provided
herein.
Section 3.12. Certain Provisions of Bonds and Indenture Inapplicable
After Conversion to Fixed Rate.
The day after the effective date of conversion to the Fixed Rate, the
Bonds shall no longer be subject to those provisions of the Indenture or the
Bonds relating to computation of interest rate, remarketing of Bonds, optional
tender of the Bonds, mandatory repurchase of the Bonds, or any provisions
relating to the conversion of the interest rate on the Bonds.
Additionally, following conversion to the Fixed Rate, all references
herein to the Remarketing Agent shall be of no further effect.
Section 3.13. Interest on Bonds After Conversion to Fixed Rate.
Following conversion to a One-year Rate, a Three-year Rate, or a Fixed Rate, the
Bonds shall bear interest at such interest rate, payable each March 1 and
September 1, commencing on the first March 1 or September 1 following such
conversion. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of the actual number of days elapsed over a year of 365 or
366 days, whichever may be applicable.
ARTICLE IV
PAYMENT OF BONDS AND
CREATION OF FUNDS
Section 4.01. Payment of Bonds. The Trustee shall make payments when
due of principal of and interest on Bonds (including upon the redemption of the
Bonds as described in Article III hereof) and the purchase price of Bonds
purchased pursuant to an optional tender or a mandatory repurchase:
(a) first, (but only with respect to payments of purchase price) from
the available proceeds of the remarketing of Bonds under Section 3.08, excluding
any remarketing to the Issuer, the Company or affiliate of either thereof unless
the proceeds thereof constitute Available Moneys;
(b) second, from any other Available Moneys held by the Trustee in
the Bond Fund; and
(c) third, from moneys drawn by the Trustee under the Letter of
Credit and deposited in the Bond Fund;
(d) last, from any other moneys available to the Trustee.
The proceeds of investments of any moneys in any of these categories may be used
to the same extent as the moneys invested could be used.
Section 4.02. Creation of Bond Fund. There is hereby created by the
Issuer and ordered established with the Trustee a trust fund to be designated
"Harrison County, West Virginia/Salem Health Care Corp.: Bond Fund." The money
and securities in such fund shall be held in trust by the Trustee and applied as
herein provided and, until such application, the money and securities in such
Fund shall be subject to a lien and charge in favor of the Bondholders.
Section 4.03. Payments into Bond Fund. There shall be deposited into
the Bond Fund, as and when received:
(a) all moneys received from a drawing under the Letter of Credit;
(b) all payments specified in section 4.1 of the Agreement; and
(c) all other moneys received by the Trustee under and pursuant to any
of the provisions of the Agreement (other than Sections 4.1(b) and 5.6 thereof)
that are required or that are accompanied by directions that such moneys are to
be paid into the Bond Fund. To the extent that moneys described in (a), (b) or
(c) above would not constitute Available Moneys at the time of such deposit, the
Trustee shall create separate subaccounts in the Bond Fund in which moneys
described in each of such (a), (b) and (c) above shall be held until such moneys
constitute Available Moneys. The Trustee shall create a separate subaccount in
the Bond Fund for, and shall not commingle moneys described in Section 4.01(a)
with, any other moneys hereunder. So long as any of the Bonds issued hereunder
are Outstanding the Issuer shall deposit, or cause to be paid to the Trustee for
deposit in the Bond Fund for its account, sufficient sums from the amounts
derived from the Agreement promptly to pay when due the principal of all Bonds
(whether at maturity, upon redemption or acceleration or otherwise), interest on
the Bonds and the purchase price of the Bonds as the same become due and
payable, except that all payments shall be limited as provided in Section 2.01
and the Issuer makes no representation or warranty that the amount deposited
will be adequate to make all payments when due.
Section 4.04. Use of Moneys in Bond Fund. Except as provided in Section
4.06, moneys in the Bond Fund shall be used solely for the payment of the
principal of and interest on the Bonds as the same shall become due and payable
whether at maturity, upon redemption or otherwise and for the purchase price of
the Bonds as the same shall become due, and the Trustee shall make such payment
in accordance with the provisions of the Bonds and this Indenture; provided,
however, that to the extent such principal, interest or purchase price is paid
with proceeds of a drawing under the Letter of Credit and the Parent does not
reimburse the Bank directly, the Trustee shall promptly reimburse the Bank from
funds on deposit in the Bond Fund (other than Remarketing Proceeds or proceeds
from a drawing on the Letter of Credit).
Section 4.05. Custody of Bond Fund. The Bond Fund shall be held in the
custody of the Trustee but in the name of the Issuer. The Issuer hereby
authorizes and directs (a) the Trustee to withdraw sufficient funds from the
Bond Fund to pay the principal of, interest on and the purchase price of the
Bonds as the same become due and payable, and to withdraw from the Bond Fund
funds sufficient to pay any other amounts payable therefrom as the same become
due and payable; provided however, that to the extent such principal, interest
or purchase price is paid with proceeds of a drawing under the Letter of Credit
and the Parent does not reimburse the Bank directly, the Trustee shall promptly
reimburse the Bank from funds on deposit in the Bond Fund other than Remarketing
Proceeds to be paid to former holders or proceeds from a drawing on the Letter
of Credit.
Section 4.06. Moneys To Be Held in Trust. All money that the Trustee
shall have withdrawn from the Bond Fund or shall have received from any other
source and set aside for the purpose of paying any of the Bonds hereby secured,
either at the maturity thereof or by purchase (other than as provided in Section
3.08 hereof) or call for redemption or for the purpose of paying any interest on
the Bonds hereby secured, shall be held in trust by the Trustee for the
respective Holders. Moneys received by the Remarketing Agent or Trustee from the
sale of a Bond under Section 3.08 or from the purchase of any Bond shall be held
segregated from other funds held by the Remarketing Agent or Trustee in trust
for the benefit of the person from whom such Bond was purchased and shall not be
invested while so held. Any money that is so set aside or transferred and that
remains unclaimed by the Holders for the escheat period provided by State law
shall be treated as abandoned property, and the Trustee shall report and remit
this property according to the requirements of State law and thereafter the
Holders shall look only to the appropriate State agency or official for payment
and then only to the extent of the amounts so received, without any interest
thereon, and the Trustee and the Issuer shall have no responsibility with
respect to such money.
Section 4.07. Payment to Company From Bond Fund. After payment in full
of the principal of and interest on the outstanding Bonds, the fees, charges and
expenses of the Issuer, the Trustee, the Remarketing Agent and the Bank
(including without limitation the fees and expenses of their respective counsel)
and all other amounts required to be paid hereunder, including payments of
rebatable arbitrage, any amounts remaining in the Bond Fund shall be paid
immediately to the Company.
Section 4.08. Investment of Moneys. To the extent permitted by law, the
Trustee shall invest and reinvest moneys held by it representing proceeds of
drawings under the Letter of Credit and Available Moneys on deposit in the Bond
Fund only in U.S. Government obligations (or in a mutual fund composed solely of
U.S. Government Obligations) maturing at such times as such amounts will be
needed for the purposes thereof. Unclaimed moneys held by the Trustee under
Section 4.06 shall be held uninvested by the Trustee.
The Trustee may make investments permitted by this Article through or
from their own bond departments or the bond departments of any bank or trust
company under common control with the Trustee. Investments shall be registered
in the name of the Trustee, or its nominee and held by or under the control of
the Trustee. The Trustee shall sell and reduce to cash a sufficient amount of
investments whenever the cash held by them is insufficient. The Issuer
represents that it will take no action that would cause moneys held by the
Trustee in connection with the Bonds to be used in a manner that would cause the
Bonds to be classified as "arbitrage bonds" within the meaning of Section 148 of
the Code.
ARTICLE V
LETTER OF CREDIT
Section 5.01. Requirements for Letter of Credit. In order to secure its
obligations under the Agreement, pursuant to Section 4.7 of the Financing
Agreement, the Company has agreed (a) upon the initial authentication and
delivery of the Bonds, to deliver to the Trustee the Letter of Credit, issued by
the Bank in favor of the Trustee and for the benefit of the holders of the
Bonds; and (b) to ensure that so long as any Bonds remain outstanding, a Letter
of Credit shall be in effect with respect to such Bonds with terms substantially
conforming to those of the original Letter of Credit.
Section 5.02. Draws on Letter of Credit; Extensions.
(a) The Trustee shall make timely draws in accordance with the Letter
of Credit such that timely payment under Section 4.01 is made without resort to
the sources of payment described in Subsections (c) and (d) of Section 4.01.
Such draws shall be in amounts equal to the total principal and interest due on
redemption price, or purchase price payable with respect to, the Bonds, less the
amounts (if any) available under Subsection (a) of Section 4.01. If any such
draws are made on a Mandatory Repurchase Date in connection with the delivery of
a Substitute Letter of Credit, such draws shall be made under the existing
Letter of Credit and not on the Substitute Letter of Credit. The Trustee shall
make such draws in such a fashion as to be able to obtain by 3:15 p.m. and to
make such payment when due in accordance with this Indenture and the Bonds.
(b) In drawing on the Letter of Credit, the Trustee will be acting on
behalf of the Bondholders by facilitating payment of the Bonds and not on behalf
of the Issuer or Company and shall not be subject to the control of either.
Proceeds of draws on the Letter of Credit shall be held in the Bond Fund.
(c) The Trustee shall advise the Company and the Parent by telecopy or
telex on the date of each draw on the Letter of Credit of the amount and date of
such draw and of the reason for such draw.
(d) For extensions of the term of the Letter of Credit, the Trustee
shall, at the direction of a Company Representative, but only if required to
evidence an extension of the term of the Letter of Credit, surrender the Letter
of Credit to the Bank in exchange for a new Letter of Credit of the Bank or the
Letter of Credit with notations thereon, as the Bank may so elect, conforming in
all material respects to the Letter of Credit except that the expiration date
shall be extended. Any such extension shall be for a period of at least one year
or, if less, until the 15th day following the maturity date of the Bonds.
Section 5.03. Substitute Letter of Credit.
(a) At any time while a Letter of Credit is in effect with respect to
the Bonds, upon at least 60 days' prior written notice to the Trustee and the
Remarketing Agent, the Company may, subject to the approval of the Remarketing
Agent, provide for the delivery to the Trustee of a substitute Letter of Credit
complying with the provisions of this Indenture (the "Substitute Letter of
Credit"), which shall be effective upon acceptance by the Trustee. Any
Substitute Letter of Credit shall have a stated expiration date of at least one
year following the effective date thereof.
(b) On or before the date of delivery of any Substitute Letter of
Credit to the Trustee, as a condition to the acceptance by the Trustee of such
Substitute Letter of Credit, the Company shall furnish to the Trustee:
An opinion of Counsel addressed to the Trustee to the effect that (A)
the Substitute Letter of Credit is the valid and binding obligation of the
issuer thereof enforceable against such issuer in accordance with its terms
except insofar as its enforceability may be limited by any insolvency or similar
proceedings applicable to the issuer or by proceedings affecting generally the
rights of the issuer's creditors or by general equitable principles; (B)
payments of principal, interest or purchase price on the Bonds from the proceeds
of a draw on the Substitute Letter of Credit will not constitute avoidable
preferences under any applicable bankruptcy, reorganization, insolvency or other
similar laws; and (C) the Substitute Letter of Credit does not constitute a
separate security requiring registration under any applicable federal or state
securities laws. In the case of a Substitute Letter of Credit issued by a branch
or agency of a foreign commercial bank, there shall also be delivered an opinion
of Counsel from a firm licensed to practice law in the jurisdiction in which the
head office of such bank is located, addressed to the Trustee, to the effect
that the Substitute Letter of Credit is the valid and binding obligation of such
bank, enforceable against such bank in accordance with its terms, subject to the
limitations referred to in Section 5.03(b)(i)(A) above;
(ii) written evidence that the issuer of the Substitute Letter of
Credit meets the requirements for an issuer of a Letter of Credit as set forth
in the definition of Letter of Credit;
(iii) an opinion of Bond Counsel addressed to the Trustee to the effect
that the delivery and acceptance of such Substitute Letter of Credit is
authorized under this Indenture and its delivery and acceptance will not
adversely affect the exclusion from gross income of the interest on the Bonds
for federal income tax purposes;
(iv) written approval by the Remarketing Agent of the delivery of
the Substitute Letter of Credit; and
(v) a letter from each Rating Agency or, in the event the Bonds are not
then rated, other written evidence satisfactory to the Trustee and the
Remarketing Agent, stating whether or not the acceptance of the Substitute
Letter of Credit will result in a Credit Modification.
The Trustee shall accept any such Substitute Letter of Credit only in
accordance with the terms, and upon satisfaction of the conditions, contained in
this Section and any other applicable provisions of this Indenture. If
acceptance of the Substitute Letter of Credit results in the occurrence of a
Mandatory Repurchase Date, the Trustee shall not terminate or surrender the
Letter of Credit until the Trustee shall have made such drawings thereunder, if
any, as shall be required under the Indenture to provide for payment of the
purchase price of the Bonds, and shall have received the proceeds of such
drawing from the Bank.
(c) Not more than 60 days and not less than 15 days prior to the
effective date of the Substitute Letter of Credit, the Trustee shall, in
addition to the notice required by Section 12.01(b), send by registered or
certified mail, to each holder of the Bonds, notice of the issuance of the
Substitute Letter of Credit, which notice shall include (i) the identity of the
issuer thereof, (ii) the date the Substitute Letter of Credit will be effective,
(iii) whether the Substitute Letter of Credit will result in a Credit
Modification and (iv) if applicable, notice pursuant to Section 3.07 that the
Bonds are subject to mandatory repurchase pursuant to Section 3.07.
Section 5.04. Enforcement of the Letter of Credit. The Trustee shall
hold and maintain the Letter of Credit for the benefit of the Owners of the
Bonds until the Letter of Credit terminates or expires in accordance with its
terms.
When the Letter of Credit terminates or expires in accordance with its
terms, the Trustee shall immediately surrender it to the Bank. Except in the
case of a redemption in part pursuant to Article III hereof or any other
reduction in the principal amount of Bonds outstanding, the Trustee shall not
request that the Bank reduce the amount of the Letter of Credit. If at any time,
all Bonds shall cease to be outstanding, the Trustee shall surrender the Letter
of Credit to the Bank in accordance with the terms thereof.
If at any time the Bank fails to honor a draft presented under the
Letter of Credit in conformity with the terms thereof, the Trustee shall give
immediate telephonic notice thereof to the Remarketing Agent and the Company.
ARTICLE VI
COVENANTS
Section 6.01. Payment of Bonds. The Issuer shall promptly pay, or cause
to be paid, the principal of, whether at maturity, by acceleration, call for
redemption, or otherwise, and purchase price and interest on the Bonds, to the
Trustee for payment to the registered owners of the Bonds on the dates and in
the manner provided herein authorizing the issuance thereof and in the Bonds,
according to the true intent and meaning thereof, but subject to the limitations
set forth in Section 2.01(a) hereof.
Section 6.02. Covenants and Representations of Issuer. The Issuer shall
observe and perform all covenants, conditions and agreements on its part
contained in this Indenture, in every Bond executed, authenticated and delivered
hereunder and in all of its proceedings pertaining thereto; provided, however,
that the liability of the Issuer under any such covenant, condition or agreement
for any breach or default by the Issuer thereof or thereunder shall be limited
solely to the Receipts and Revenues of the Issuer from the Agreement. The Issuer
represents that it is duly authorized under the Constitution and laws of the
State, including particularly and without limitation the Act, to issue the Bonds
authorized by this Indenture and to execute this Indenture, to assign the
Financing Agreement and the Note and to pledge the Receipts and Revenues of the
Issuer from the Agreement in the manner and to the extent herein set forth; that
all action on its part with respect to the issuance of the Bonds and the
execution and delivery of this Indenture duly and effectively has been taken;
and that the Bonds in the hands of the owners thereof are and will be valid and
enforceable limited obligations of the Issuer according to the terms thereof
except as limited by bankruptcy and usual equity principles.
Section 6.03. Further Assurances. The Issuer shall execute and deliver
such supplemental indentures and such further instruments, and do such further
acts, as the Trustee may reasonably require for the better assuring, assigning
and confirming to the Trustee the amounts assigned under this Indenture for the
payment of the Bonds.
ARTICLE VII
DISCHARGE OF INDENTURE
Section 7.01. Bonds Deemed Paid; Discharge of Indenture. All Bonds
shall be deemed paid for all purposes of this Indenture when
(a) payment of the greater of the principal of and the maximum amount
of interest that may become due on the Bonds to the due date of such principal
and interest (whether at maturity, upon redemption, acceleration or otherwise)
and the payment of the purchase price of any Bond that may be optionally
tendered by the owner either (i) has been made in accordance with the terms of
Section 3.07(c) or (ii) has been provided for by depositing with the Trustee (A)
moneys sufficient to make such payment, which moneys must comply with the
provisions of Section 4.01(b) or (c) and/or (B) noncallable U.S. Government
Obligations maturing as to principal and interest in such amounts and at such
times as will insure the availability of sufficient moneys to make such payment
without regard to the reinvestment thereof, provided that (i) such U.S.
Government Obligations must be purchased from Available Moneys and (ii) the
Trustee shall have received written evidence from each Rating Agency, if any,
rating the Bonds that as a result of such action, their rating on the Bonds will
not be lowered or eliminated; and
(b) all compensation and expenses of the Issuer and the Trustee (as
well as the fees and expenses of their Counsel) pertaining to each Bond in
respect of which such payment or deposit is made have been paid or provided for
to the respective satisfaction of the Trustee.
When a Bond is deemed paid, it shall no longer be secured by or
entitled to the benefits of this Indenture, except for payment from moneys or
U.S. Government Obligations under (a)(ii) above and except that it may be
optionally tendered if and as provided in Section 3.07(b) and it may be
transferred, exchanged, registered, discharged from registration or replaced as
provided in Article II.
Notwithstanding the foregoing, no deposit under (a)(ii) above made for
the purpose of paying the redemption price of a Bond (as opposed to the final
payment thereof upon maturity) will be deemed a payment of a Bond as aforesaid
until (x) notice of redemption of the Bond is given in accordance with Article
III or, if the Bond is not to be redeemed within the next 60 days, until the
Company has given the Trustee, in form satisfactory to the Trustee, irrevocable
instructions to notify, as soon as practicable, the holder of the Bond, in
accordance with Article III, that the deposit required by (a)(ii) above has been
made with the Trustee and that the Bond is deemed to be paid under this Article
and stating the redemption date upon which moneys are to be available for the
payment of the principal of the Bond or (y) the maturity of the Bond.
Additionally, and while the deposit under clause (a)(ii) above made for the
purpose of paying the final payment of a Bond upon its maturity will be deemed a
payment of such Bond as aforesaid, the Trustee shall mail notice to the Owner of
such Bond, as soon as practicable, stating that the deposit required by (a)(ii)
above has been made with the Trustee and that the Bond is deemed to be paid
under this. Article.
When all Outstanding Bonds are deemed paid under the foregoing
provisions of this Section and other sums due hereunder, under the Agreement and
the Remarketing Agreement are paid, the Trustee shall upon request acknowledge
the discharge of the Issuer's obligations under this Indenture except for
obligations relating to optional tender as provided in Section 3.07(b),
obligations under Article II in respect of the transfer, exchange, registration,
discharge from registration and replacement of Bonds, and obligations under
Section 9.06 hereof with respect to the Trustee's compensation and
indemnification, and the Trustee without further direction shall surrender the
Letter of Credit to the Bank, in accordance with the terms of the Letter of
Credit. Bonds delivered to the Trustee for payment shall be canceled by the
Trustee pursuant to Section 2.07.
A Company Representative shall direct the deposit, investment and use
of the moneys and securities described in this Section such that no deposit will
be made and no use made of any such deposit which would cause any Bonds to be
treated as "arbitrage bonds" within the meaning of Section 148 of the Code.
Before accepting or using any such deposit, the Trustee may request an opinion
of Bond Counsel as to whether such use or acceptance would cause the Bonds to be
so treated and that all conditions hereunder have been satisfied, and the
Trustee may conclusively rely on such opinion with regard thereto.
The Trustee may request a certificate of an independent certified
public accountant to the effect that a deposit will be sufficient to defease the
Bonds as provided in this Section 7.01.
Upon receipt of any amount pursuant to this Article VII, the Trustee
shall give written notice thereof, which notice shall include, without
limitation, the amount of such deposit and any instructions given to the Trustee
pursuant thereto, to the Remarketing Agent by first-class mail, postage prepaid.
Section 7.02. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to the
preceding Section and shall apply the deposited money and the money from the
U.S. Government Obligations in accordance with this Indenture only to the
payment of principal of, interest on, or purchase prince of, the Bonds.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01. Events of Default. Each of the following events shall be
an Event of Default:
(a) Default in the due and punctual payment of any interest on any
Bond;
(b) Default in the due and punctual payment of the principal
of any Bond (whether at maturity, by acceleration or redemption, upon
purchase or otherwise);
(c) Subject to the provisions of Section 8.11, default in the
observance or performance of any other of the covenants, conditions or
agreements on the part of the Issuer under the Indenture or in the Bonds;
(d) Receipt by the Trustee of notice from the Bank that an Event of
Default has occurred under the Reimbursement Agreement accompanied by a demand
by the Bank that the Trustee declare the Bonds to be immediately due and
payable; or
(e) The occurrence of an Event of Default under the Financing
Agreement.
Section 8.02. Acceleration and Duty to Draw on Letter of Credit.
(a) Upon the occurrence of an Event of Default under Section 8.01(a),
(b) or (d) hereof, the Trustee shall, by notice to the Issuer, the Holders, the
Bank, the Remarketing Agent and the Company, declare the entire unpaid principal
of and interest on the Bonds immediately due and payable and, thereupon, the
entire unpaid principal of and interest on the Bonds shall forthwith become
immediately due and payable. Upon the occurrence of any other Event of Default,
the Trustee may and, if requested by the holders of 25% in aggregate principal
amount of Bonds then Outstanding, shall, by notice to the Issuer, the Holders,
the Bank, the Remarketing Agent and the Company, declare the entire unpaid
principal of and interest on the Bonds immediately due and payable and,
thereupon, the entire unpaid principal of and interest on the Bonds shall
forthwith become due and payable; provided, however, that anything in this
Article VIII to the contrary, so long as the Bank has honored all proper
drawings under the Letter of Credit, without the prior written consent of the
Bank, the Trustee shall not have the right to declare the principal of all Bonds
and the interest accrued thereon to become immediately due and payable as a
result of the occurrence.of an Event of Default under Section 8.01(c) or (e).
Upon any such declaration the Issuer shall forthwith pay to the holders of the
Bonds the entire unpaid principal of and accrued interest on the Bonds, but only
from the revenues and receipts herein specifically pledged for such purpose.
Upon the occurrence of an Event of Default specified in Section 8.01 and a
declaration of acceleration hereunder, the Trustee as assignee of the Issuer
shall immediately exercise its right under the Note and the Agreement to declare
all installments on the Note to be immediately due and payable. In the event the
Trustee fails to accelerate as required by this Section 8.02(a), the owners of a
majority in aggregate principal amount of Bonds outstanding shall have the right
to take such actions.
(b) Upon the acceleration of the maturity of the Bonds, by declaration
or otherwise, the Trustee shall immediately draw upon the Letter of Credit for
the aggregate unpaid principal amount of the Bonds and all interest accrued
thereon, which shall be applied immediately as set forth in Section 8.03. Upon
such acceleration, interest on the Bonds shall cease to accrue as of the date of
declaration of such acceleration.
Section 8.03. Disposition of Amounts Drawn on Letter of Credit;
Assignment of Rights to Contest.
(a) All amounts drawn on the Letter of Credit by the Trustee in
accordance with Section 8.02(b) shall be held by the Trustee in the Bond Fund
(and invested in accordance with Section 4.08), shall be applied immediately to
the payment of principal and interest accrued on the Bonds.
(b) The Trustee hereby assigns to the Bank all its rights to contest or
otherwise dispute in the Trustee's name, place and stead and at the Bank's sole
election and cost any claim of preferential transfer made by a bankruptcy
trustee, debtor-in-possession or other similar official with respect to any
amount paid to the Trustee by or on behalf of the Company or the Issuer to be
applied to principal of or interest on the Bonds, to the extent of payments made
to the Trustee pursuant to a drawing under the Letter of Credit. The Trustee
shall cooperate with and assist the Bank in any such contest or dispute as the
Bank may reasonably request; provided, however, that the Bank shall reimburse
the Trustee for its reasonable costs incurred in connection with providing such
cooperation and assistance. The Trustee shall give the Bank prompt notice of any
claim of preferential transfer of which the Trustee has knowledge. The foregoing
assignment shall not be deemed to confer upon the Bank any right to contest or
otherwise dispute any claim of preferential transfer with respect to any amount
as to which there has been no drawing under the Letter of Credit. The assignment
set forth above shall in no event be effective until the Bank shall have first
furnished to the Trustee an agreement to indemnify the Trustee and the holders
of the Bonds against any claim, liability or damage that they might suffer by
reason of any such contest or dispute.
Section 8.04. Other Remedies; Rights of Bondholders. Upon the
occurrence of an Event of Default the Trustee, subject to the terms of this
Indenture, may proceed to protect and enforce its rights and the rights of the
Bondholders by mandamus or other suit, action or proceeding at law or in equity,
including but not limited to an action for specific performance of any agreement
herein contained or making a demand for payment from the Company and taking
action pursuant to any other document to which the Trustee is a party.
Upon the occurrence of an Event of Default, if requested to do so by
the holders of 25% in aggregate principal amount of Bonds then outstanding and
if indemnified as provided in Section 9.01(d), the Trustee, subject to the terms
of this Indenture, shall exercise such one or more of the rights and powers
conferred by this Article as the Trustee, upon being advised by counsel, shall
deem most expedient in the interests of the Bondholders.
No remedy conferred by this Indenture upon or reserved to the Trustee
or to the Bondholders is intended to be exclusive of any other remedy, but each
such remedy shall be cumulative and shall be in addition to any other remedy
given to the Trustee or to the Bondholders hereunder or now or hereafter
existing at law or in equity or by statute.
No delay or omission 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 Event of Default or acquiescence
therein, and every such right and power may be exercised from time to time and
as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the
Trustee pursuant to Section 8.10 or by the Bondholders, shall extend to or shall
affect any subsequent default or Event of Default or shall impair any rights or
remedies consequent thereon.
Section 8.05. Right of Bondholders To Direct Proceedings. Anything in
this Indenture to the contrary notwithstanding, the holders of a majority in
aggregate principal amount of Bonds then outstanding shall have the right, at
any time, by an instrument or instruments in writing executed and delivered to
the Trustee, to direct the method and place of conducting all proceedings to be
taken in connection with the enforcement of the terms and conditions of this
Indenture or for the appointment of a receiver or any other proceedings
hereunder; provided, however, that such direction shall not be otherwise than in
accordance with the provisions of law and of this Indenture.
Section 8.06. Application of Moneys. All moneys received by the Trustee
pursuant to any right given or action taken under the provisions of this Article
shall, after payment of the cost and expenses of the proceedings resulting in
the collection of such moneys and of the expenses, liabilities and advances
incurred or made by the Trustee and the fees and expenses, if any, of the Issuer
in carrying out this Indenture or the Agreement, be deposited in the Bond Fund;
provided, however, that no proceeds from any draw on the Letter of Credit shall
be used for any purpose other than payment of principal of and interest on the
Bonds or purchase thereof. All moneys in the Bond Fund shall be applied as
follows:
(a) Unless the principal of all the Bonds shall have become of shall
have been declared due and payable:
First - To the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, in the order of the maturity of
the installments of such interest and, if the amount available shall not be
sufficient to pay in full any particular installment, then to the payment
ratably, according to the amounts due on such installment, to the persons
entitled thereto, without any discrimination or preference except as provided in
Section 8.13 and as to any difference in the respective rates of interest
specified in the Bonds;
Second - To the payment to the persons entitled thereto of the unpaid
principal of any of the Bonds which shall have become due (other than Bonds
called for redemption for the payment of which moneys are held pursuant to the
provisions of this Indenture), in the order of their due dates, with interest on
such Bonds at the respective rates specified therein from the respective dates
upon which they become due and, if the amount available shall not be sufficient
to pay in full Bonds due on any particular date, together with such interest,
then first to the payment of such interest ratably, according to the amount of
such interest due on such date, and then to the amount of such principal,
ratably, according to the amount of such principal due on such date, to the
persons entitled thereto, without any discrimination or preference except as
provided in Section 8.13 and as to any difference in the respective rates of
interest specified in the Bonds; and
Third - To the extent permitted by law, to the payment to the persons
entitled thereto of the unpaid interest on overdue installments of interest
ratably, according to the amounts of such interest due on such date, without any
discrimination or preference except as provided in Section 8.13 and as to any
difference in the respective rates of interest specified in the Bonds.
(b) If the principal of all the Bonds shall have become due or shall
have been declared due and payable, all such moneys shall be applied to the
payment of the principal and interest then due and unpaid upon the Bonds,
including to the extent permitted by law interest on overdue installments of
interest, without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any other
installment of interest, or of any Bond over any other Bond, ratably, according
to the amounts due respectively for principal and interest, to the persons
entitled thereto, without any discrimination or privilege except as provided in
Section 8.13.
(c) If the principal of all the Bonds shall have been declared due and
payable, and if such declaration shall thereafter have been rescinded and
annulled under the provisions of this Article, then, subject to the provisions
of subsection (b) of this Section in the event that the principal of all the
Bonds shall later become due or be declared due and payable, the moneys shall be
applied in accordance with the provisions of subsection (a) of this Section.
(d) All amounts received by the Trustee from a draw upon the Letter of
Credit shall be applied exclusively to the payment of principal of and interest
on the Bonds.
Whenever moneys are to be applied pursuant to the provisions of this
section, such moneys shall be applied at such times and from time to time as the
Trustee shall determine, having due regard to the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such moneys, it shall fix the date (which shall be an Interest Payment Date
unless it shall deem another date more suitable) upon which such application is
to be made. The Trustee shall give such notice as it may deem appropriate of the
deposit with it of any such moneys and of the fixing of any such date, and shall
not be required to make payment to the holder of any Bond until such Bond is
presented to the Trustee for appropriate endorsement or for cancellation if
fully paid.
Whenever all principal of and interest on all Bonds have been paid
under the provisions of this Section and all expenses and charges of the Trustee
and the Issuer have been paid, and all obligations of the Company to the Bank
pursuant to the Reimbursement Agreement have been paid in full the balance
remaining in the Bond Fund shall be paid to the Company as provided in Section
4.07.
Section 8.07. Remedies Vested in Trustee. All rights of action
(including the right to file proof of claims) under this Indenture or under any
of the Bonds may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or other proceeding relating
thereto and any such suit or proceeding instituted by the Trustee may be brought
in its name as Trustee without the necessity of joining as plaintiffs or
defendants any holders of the Bonds, and any recovery of judgment shall be for
the equal benefit of the holders of the outstanding Bonds.
Section 8.08. Limitations on Suits. Except to enforce the rights given
under Sections 8.02(a), 8.05 and 8.12, no holder of any Bond shall have any
right to institute any suit, action or proceeding in equity or at law for the
enforcement of this Indenture or for the execution of any trust thereof or any
other remedy hereunder, unless (a) a default has occurred of which the Trustee
has been notified as provided in Section 9.05, or of which by such Section it is
deemed to have notice, (b) such default shall have become an Event of Default
and the holders of at least 25% in aggregate principal amount of Bonds then
outstanding shall have made written request to the Trustee and shall have
offered it reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such action, suit or proceeding in its own
name, (c) such holders have offered to the Trustee indemnity as provided in
Section 9.01(d), (d) the Trustee for 60 days after such notice shall fail or
refuse to exercise the powers hereinbefore granted, or to institute such action,
suit or proceeding in its own name or in the name of such holders, (e) no
direction inconsistent with such request has been given to the Trustee during
such 60 day period by the holders of a majority in aggregate principal amount of
Bonds then outstanding, and (f) notice of such action, suit or proceeding is
given to the Trustee; it being understood and intended that no one or more
holders of the Bonds shall have any right in any manner whatsoever to affect,
disturb or prejudice this Indenture by its, his or their action or to enforce
any right hereunder except in the manner herein provided, and that all
proceedings at law or in equity shall be instituted and maintained in the manner
herein provided and for the equal benefit of the holders of all Bonds then
outstanding.
The notification, request and offer of indemnity set forth in the
preceding paragraph, at the option of the Trustee, shall be conditions precedent
to the execution of the powers and trusts in this Indenture and to any action or
cause of action for the enforcement of this Indenture or for any other remedy
hereunder.
Section 8.09. Termination of Proceedings. In case the Trustee shall
have proceeded to enforce any right under this Indenture by the appointment of a
receiver, by entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely, then.and in every such case the Issuer, the Company, the Bondholders
and the Trustee shall be restored to their former positions and rights
hereunder, and all rights, remedies and powers of the Trustee shall continue as
if no such proceedings had been taken.
Section 8.10. Waivers of Events of Default. The Trustee, with the
written consent of the Bank, may waive any Event of Default hereunder and its
consequences and rescind any declaration of maturity of principal of and
interest on the Bonds and the Note, and shall do so with the consent of the
Bank, upon the written request of the holders of (a) a majority in aggregate
principal amount of Bonds then outstanding in respect of which default in the
payment of principal and/or interest exists, or (b) a majority in aggregate
principal amount of Bonds then outstanding in the case of any other default;
provided, however, that:
(1) there shall not be waived without the consent of the holders of all
Bonds then outstanding:
(A) any default in the payment of the principal of any
outstanding Bonds when due (whether at maturity or by mandatory or optional
redemption), or
(B) any default in the payment when due of the interest on any such
Bonds unless, prior to such waiver or rescission:
(i) there shall have been paid or provided for all arrears of interest
at the rate borne by the Bonds on overdue installments of principal, all arrears
of payments of principal when due and all expenses of the Trustee in connection
with such default, and
(ii) in case of any such waiver or rescission, or in case of the
discontinuance, abandonment or adverse determination of any proceeding taken by
the Trustee on account of any such default, the Trustee and the Bondholders
shall be restored to their respective former positions and rights hereunder;
(2) no declaration of maturity under Section 8.02 made at the request
of the holders of 25% in aggregate principal amount of Bonds then outstanding
shall be rescinded unless requested by the holders of a majority in aggregate
principal amount of Bonds then outstanding; and
(3) unless the Trustee has received written evidence that the Letter of
Credit is reinstated in full as to principal and interest, there shall be no
waiver or rescission if the Letter of Credit shall have been drawn upon due to
the occurrence of an Event of Default.
No such waiver or rescission shall extend to any subsequent or other
default, or impair any right consequent thereon.
Section 8.11. Notice of Defaults; Opportunity of Company to Cure
Defaults. Anything contained in this Indenture to the contrary notwithstanding,
no default specified in Section 8.01(c) on the part of the Issuer shall
constitute an Event of Default until (a) notice of such default shall be given
(1) by the Trustee to the Issuer, the Bank and the Company or (2) by the holders
of 25% in aggregate principal amount of Bonds then outstanding to the Trustee,
the Issuer, the Bank and the Company, and (b) the Issuer and the Company shall
have had 30 days after such notice to correct such default or cause such default
to be corrected, and shall not have corrected such default or caused such
default to be corrected within such period; provided, however, if any default
specified in Section 8.01(c) shall be such that it cannot be corrected within
such period, it shall not constitute an event of default if corrective action is
instituted by the Issuer or the Company within such period and diligently
pursued until such default is corrected; provided, further, that the period for
corrective action shall not in any event extend more than 180 days after such
notice to correct such default.
With regard to any alleged default concerning which notice is given to
the Company, the Company may, but is under no obligation to, perform any
covenant, condition or agreement the nonperformance of which is alleged in such
notice to constitute a default, in the name and stead of the Issuer with full
power to do any and all things and acts to the same extent that the Issuer could
do and perform any such things and acts with power of substitution.
Section 8.12. Unconditional Right To Receive Principal and Interest.
Nothing in this Indenture shall, however, affect or impair the right of any
Bondholder to enforce, by action at law, payment of the principal or purchase
price of or interest on any Bond at and after the maturity thereof, or on the
date fixed for redemption or purchase or (subject to the provisions of Section
8.02) on the same being declared due prior to maturity as herein provided, or
the obligation of the Issuer to pay the principal or purchase price of and
interest on each of the Bonds issued hereunder to the respective holders thereof
at the time, place, from the source and in the manner herein and in the Bonds
expressed.
Section 8.13. Bonds Outstanding. In the event the Bonds are held under
a book entry system, the securities depositary shall provide the Trustee, upon
request of the Trustee, the names, addresses and principal amount of the
Beneficial Owners of the Bonds. Subject to the provisions of Section 8.14, such
Beneficial Owners shall be treated in all respects as the holders of the Bonds
for purposes of this Article, and the Trustee shall send notices to such
Beneficial owners as required by this Article. Notwithstanding anything else in
this Article to the contrary, Company Bonds shall not be deemed to be
outstanding for purposes of this Article and the Company as holder thereof shall
not be entitled to any rights or payments therefor pursuant to Sections 8.05,
8.06, 8.08 and 8.10.
Section 8.14. Bank Deemed Holder. For all purposes of this Article VIII
(other than receipt of payments), the Bank shall, so long as the Letter of
Credit shall not have been dishonored (other than for a reason permitted by the
Letter of Credit), be deemed the holder and registered owner of all Bonds. As
such, the Bank may take all actions permitted by this Article VIII to be taken
by the holders or Beneficial Owners of the Bonds, to the exclusion of the actual
holders and Beneficial Owners of the Bonds; the purpose of this Section 8.14
being to permit the Bank to direct the taking of actions and enforcement of
remedies permitted by this Article VIII so long as the Letter of Credit shall
not have been dishonored (other than for a reason permitted by the Letter of
Credit).
ARTICLE IX
TRUSTEE AND REMARKETING AGENT
Section 9.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee, and
(ii) in the absence of bad faith, gross negligence or willful
misconduct on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed, upon certificates
or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and opinions to
determine whether they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own grossly
negligent action, its own grossly negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of (b) above;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
grossly negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 8.05.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably satisfactory to it against any
loss, liability or expense, but the Trustee may not require indemnity as a
condition to declaring the principal of and interest on the Bonds to be due
immediately under Section 8.02 or to drawing on the Letter of Credit or to
taking action under the Letter of Credit. The Trustee shall not be required to
give any bond or surety in respect of the execution of the trust created hereby
or the powers granted hereunder.
(e) The Trustee shall not be liable for interest on any cash held by it
except as the Trustee may agree with the Company or with the Issuer with the
consent of the Company.
(f) The Trustee may conclusively rely on a Company
Representative's certificate as to whether a Bankruptcy Filing has occurred.
(g) The Trustee shall strictly comply with the terms of the Letter
of Credit.
(h) The Trustee shall maintain adequate records pertaining to the funds
held by the Trustee, the investment thereof and the disbursement therefrom;
notwithstanding anything to the contrary in this Indenture or the Agreement, the
Trustee shall not be required to advance its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder.
(i) Every provision of this Indenture that in any way relates
to the Trustee is subject to all the foregoing paragraphs of this Section.
(j) The Trustee shall in no event be responsible for ensuring that the
rate of interest due and payable on the Bonds under this Indenture does not
exceed the highest legal rate of interest permissible under federal or state law
applicable thereto.
Section 9.02. Rights of Trustee.
(a) Subject to the foregoing Section, including, but not limited to,
Sections 9.01(b)(ii) and 9.01(c), the Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the document. Any
action taken by the Trustee pursuant to this Indenture upon the request or
authority or consent of any person, who at the time of making such request or
authority or consent is the owner of any Bond, shall be conclusive and binding
upon all future owners of any Bond issued in replacement thereof.
(b) Before the Trustee acts or refrains from acting, it may require a
certificate of an appropriate officer or officers of the Issuer or the Company
or an opinion of Counsel stating that (i) the person making such certificate or
opinion has read such covenant or condition; (ii) the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (iii) in the opinion of such person, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (iv) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with. The Trustee
shall not be liable for any loss or damage or action it takes or omits to take
in good faith in reliance on the certificate or opinion of Counsel.
(c) The Trustee may execute any of the trusts or powers hereunder and
perform any of its duties through agents, attorneys or employees or co-trustees
and shall not be responsible for the misconduct or negligence of any agent,
attorney, employee or co-trustee appointed with due care.
Section 9.03. Individual Rights of Trustee, Etc. The Trustee in its
individual or any other capacity may become the owner, custodian or pledgee of
Bonds and may otherwise deal with the Issuer, the Bank or with the Company or
its affiliates with the same rights it would have if it were not Trustee.
Section 9.04. Trustee's Disclaimer. Subject to Sections 9.01(b) and
9.01(c):
(a) the Trustee makes no representation as to the validity or adequacy
of this Indenture or the Bonds, and it shall not be responsible for any
statement in the Bonds or for the perfection of any lien created by this
Indenture or otherwise as security for the Bonds;
(b) the Trustee may construe any of the provisions of this Indenture
insofar as same may appear to be ambiguous or inconsistent with any other
provision hereof, and any construction of any such provisions hereof by Trustee
in good faith shall be binding upon the Bondholders, the Issuer, the Company and
the Remarketing Agent;
(c) the Trustee shall not be responsible for the application of any of
the proceeds of the Bonds or any other moneys 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;
(d) the Trustee shall not be under any obligation to see to the
recording or filing of this Indenture, the Agreement, any financing statements
or any other instrument or otherwise to the giving to any person of notice of
the provisions hereof or thereof; and
(e) the Trustee shall not be under any obligation to effect or maintain
insurance or to renew any 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 that 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.
Section 9.05. Notice of Defaults. The Trustee shall not be required to
take notice, or be deemed to have notice, of any default or Event of Default
under this Indenture, other than an Event of Default under Section 8.01(a), (b)
or (d), unless specifically notified in writing at such address as set forth in
Section 12.01 hereof of such default or Event of Default by the holders of at
least 25% in principal amount of the Bonds then Outstanding, by the Bank, by the
Remarketing Agent or by the Company.
If an event occurs that with the giving of notice or lapse of time or
both would be an Event of Default, and if the event is continuing and if the
Trustee has actual notice or is deemed to have notice thereof as herein
provided, the Trustee shall mail to each Bondholder, the Remarketing Agent and
the Bank notice of the event upon such occurrence. Except in the case of a
default in payment or purchase of any Bonds, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Bondholders;
provided that, in any event such notice shall not be withheld from the Bank or
the Remarketing Agent.
Section 9.06. Compensation and Indemnification of Trustee. For acting
under this Indenture, the Trustee shall be entitled to compensation by the
Company (which shall not be limited by any statute regulating the compensation
of a trustee of an express trust) of reasonable fees for the Trustee's services
and reimbursement of advances, counsel fees and other expenses reasonably and
necessarily made or incurred by the Trustee in connection with its services
under this indenture.
The Trustee shall be indemnified by the Company for, and shall be held
harmless against, any loss, liability or expense incurred without gross
negligence, willful misconduct or bad faith on the Trustee's part, arising out
of or in connection with the acceptance or administration of the trust created
by this Indenture, 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.
To secure the payment or reimbursement to the Trustee provided for in
this Section, the Trustee shall have a senior claim, to which the Bonds are made
subordinate, on all money or property held or collected by the Trustee, except
moneys held under Article VII or otherwise held in trust to pay principal of,
interest on and purchase price of the Bonds, and except amounts drawn under the
Letter of Credit and Available Moneys on deposit in the Bond Fund.
Section 9.07. Eligibility of Trustee. Each of the initial Trustee and
any successor Trustee at the time of its appointment shall: (i) be a corporation
or national banking association duly organized under the laws of the United
States of America or any state or territory thereof, doing business and having
an office in such location as shall be approved by the Issuer and the
Remarketing Agent, (ii) have a combined capital and surplus of at least
$25,000,000 as set forth in its most recent published annual report of
condition, and (iii) be authorized by law to perform all the duties imposed upon
it by this Indenture.
Section 9.08. Replacement of Trustee. The Trustee may resign and be
discharged of the trust created by this Indenture by notifying the Issuer, the
Bank and the Company; provided, however, that no such resignation shall become
effective until the appointment of a successor trustee, as hereinafter provided.
The holders of not less than a majority in principal amount of the Bonds may
remove the Trustee by notifying the removed Trustee and may appoint a successor
Trustee with the Issuer's, the Bank's and the Company's prior written consent;
provided, however, that no such removal-shall become effective until the
appointment of a successor trustee, as hereinafter provided. The Issuer may, in
its sole discretion, and at the request of the Company shall, remove the
Trustee, but in the case where such removal is requested by the Company, only
after obtaining the prior written consent of the Bank. Upon the removal or
replacement of the Trustee for any reason, the Issuer and the Company shall give
written notice thereof to the Remarketing Agent and the Bank by first-class
mail, postage prepaid.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer, with the prior written consent of
the Bank and the Company, shall, at the expense of the Company, use its best
efforts to appoint promptly a successor Trustee. Notice of such appointment
shall be given by the Issuer to the Remarketing Agent in writing by first-class
mail.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer, the Bank, the Company and
the Remarketing Agent. Immediately thereafter, the retiring Trustee shall
transfer all property held by it as Trustee to the successor Trustee, the
resignation or removal of the retiring Trustee shall then (but only then) become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall notify
the holders of the Bonds of its acceptance of the trusts hereunder by
first-class mail promptly following such acceptance.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, the
Bank, the Company or the holders of a majority in principal amount of the Bonds
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 9.07, any Bondholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Section 9.09. Duties of Remarketing Agent.
(a) The Remarketing Agent shall, in accordance with the Remarketing
Agreement, determine the Weekly Rate on the Bonds and perform the other duties
provided for to be done by it in Section 2.02, Section 3.08, Section 4.01 and
Section 4.06. The Remarketing Agent may for its own account or as broker or
agent for others deal in Bonds and may do anything any other Bondholder may do
to the same extent as if the Remarketing Agent were not serving as such. The
Remarketing Agent shall have no duty to act hereunder to the extent the
Remarketing Agent is not required to perform its obligations under the
Remarketing Agreement.
(b) The Remarketing Agent may execute and perform any of its duties
hereunder through agents, attorneys, employees or co-remarketing agents and
shall not be responsible for the misconduct or negligence of any agent,
attorney, employee or co-remarketing agent appointed with due care.
Section 9.12. Eligibility of Remarketing Agent; Replacement. The
Remarketing Agent shall be a member of the National Association of Securities
Dealers, Inc. having excess net capital of at least $5,000,000 or, in the
alternative, a national banking association having a combined capital stock,
surplus and undivided profits of at least $50,000,000, and, if the Bonds are
rated by a Rating Agency, the Remarketing Agent must be rated at least Baa3/P-3
or otherwise be acceptable to the Rating Agency.
Crews and Associates, Inc. is hereby appointed as the initial
Remarketing Agent and is herein referred to as the "Remarketing Agent." Any
Remarketing Agent shall accept its appointment hereunder in writing. The
Remarketing Agent may resign by notifying the Issuer, the Company, the Trustee
and the Bank at least 45 days before the effective date of the resignation. The
Issuer, at the direction of the Company but only with the Bank's prior written
consent, which consent shall not be unreasonably withheld, shall, at any time
remove the Remarketing Agent as the Issuer's designee for determining interest
rates and appoint a successor by notifying the Remarketing Agent, the Bank and
the Trustee at least 60 days prior to the effective date of such removal. Upon
the resignation or removal of the Remarketing Agent, the Issuer, at the
direction of the Company, but only with the prior written consent of the Bank,
which consent shall not be unreasonably withheld, shall appoint a successor by
notifying the Remarketing Agent, the Bank and the Trustee, if the Remarketing
Agent resigns or is removed pursuant to the terms of this Indenture and, after
45 days in the case of resignation or 60 days in the case of removal, the Issuer
at the direction of the Company, has failed to appoint a successor Remarketing
Agent in accordance with the terms of this Section 9.12, the Company shall
immediately give notice thereof to the Trustee and shall direct the Trustee to
give notice to the holders of all Bonds of a mandatory repurchase of such bonds
pursuant to Section 3.07(a)(ii) hereof. Such mandatory repurchase shall take
place on the first Interest Payment Date to occur following such Notice of
Mandatory Repurchase by the Trustee (of if such date is not a Business Day, on
the next succeeding Business Day), unless such Mandatory Repurchase Date is a
date less than 15 days after such Notice of Mandatory Repurchase is given, in
which case such mandatory repurchase shall occur on the next succeeding Interest
Payment Date (or, if such date is not a Business Day, on the next succeeding
Business Day). Notwithstanding the foregoing, no such resignation or removal
shall be effective until either (i) the successor Remarketing Agent has
delivered an acceptance of its appointment to the Trustee or (ii) the Mandatory
Repurchase Date described above.
Section 9.10. [Reserved]
Section 9.11. Successor Trustee or Agent by Merger. If the Trustee or
the, Remarketing Agent consolidates with, merges or converts into, or transfers
all or substantially all its assets (or, in the case of a bank or trust company,
its corporate trust assets) to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee, the
Remarketing Agent, provided that such corporation or national banking
association shall otherwise be eligible to serve in such capacity under this
Indenture.
Section 9.12. Appointment of Co-Trustee. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including particularly the law of the State) denying or restricting the right
of banking corporations or associations to transact business as trustee in such
jurisdiction. It is recognized that in case of litigation under this Indenture
or the Agreement, and in particular in case of the enforcement thereof upon a
default or an Event of Default, or in case the Trustee deems that by reason of
any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee or hold title to the
properties, in trust, as herein granted, or take any action which may be
desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an additional individual or institution as a separate or
co-trustee. The following provisions of this Section are adapted to these ends.
In the event that the Trustee appoints an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate or
co-trustee shall run to and be enforceable by either of them; provided, however,
that no co-trustee shall be liable by reason of any act or omission of any other
such co-trustee.
Should any instrument in writing from the Issuer be required by the
separate or co-trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to him or it such properties, rights, powers, trusts,
duties and obligations, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Issuer. In case any
separate or co-trustee or a successor to either shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligations of such separate or co-trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a new co-trustee or successor to such separate or co-trustee.
ARTICLE X
AMENDMENTS OF AND
SUPPLEMENTS TO INDENTURE
Section 10.01. Without Consent of Bondholders. The Issuer and the
Trustee may amend or supplement this Indenture or the Bonds without prior notice
to or consent of any Bondholder:
(a) to cure any ambiguity, inconsistency or formal defect or
omission;
(b) to grant to the Trustee for the benefit of the Bondholders
additional rights, remedies, powers or authority;
(c) to subject to this Indenture additional collateral or to add
other agreements of the Issuer;
(d) to modify this Indenture or the Bonds to permit qualification under
the Trust Indenture Act of 1939, as amended, or any similar federal statute at
the time in effect; to permit the qualification of the Bonds for sale under the
securities laws of any state of the United States; or to prevent the application
of the Investment Company Act of 1940, as amended, to any of the transactions
contemplated by, or any of the parties to this Indenture, the Agreement or the
Bonds;
(e) to provide for uncertificated Bonds or to make any change
necessary to give effect to a custody agreement pursuant to Section 2.05(d);
(f) to evidence the succession of a new Trustee or the appointment
by the Trustee of a co-trustee;
(g) to make any change to reflect any provision in the Code or the
interpretations thereof by the Internal Revenue Service provided that such
change does not materially adversely affect the rights of any Bondholder;
(h) to make any change not materially adversely affecting any
Bondholder's rights requested by the Rating Agency in order (i) to obtain a
rating from the Rating Agency after the initial issuance of the Bonds if the
Bonds are initially issued without a rating equivalent to the rating assigned to
other securities supported by a Letter of Credit of the Bank or (ii) to maintain
any rating on the Bonds;
(i) to make any change not materially adversely affecting any
Bondholder's rights to provide for or to implement the provisions of a Letter
of Credit;
(j) to make any change to provide for or to implement the provisions of
a Letter of Credit only if such Letter of Credit and the changes to this
Indenture become effective on a Mandatory Repurchase Date;
(k) to make any change to be effective on any Mandatory Repurchase Date
provided that such change has been disclosed to all owners of Bonds who purchase
on such date;
(l) to make any change that does not materially adversely affect
the rights of any Bondholder;
(m) to add to this Indenture the obligation of the Trustee, the Issuer
or the Company to disclose such information regarding the Bonds, the Facility,
the Issuer, the Company or the Bank as shall be required or recommended to be
disclosed in accordance with applicable regulations or guidelines established
by, among others, the American Bankers Association Corporate Trust Committee; or
(n) to provide for the issuance of Additional Bonds under Section
2.09.
Section 10.02. With Consent of Bondholders. If an amendment of or
supplement to this Indenture or the Bonds without any consent of Bondholders is
not permitted by the preceding Section, the Issuer and the Trustee may enter
into such amendment or supplement without prior notice to any Bondholders but
with the consent of the holders of at least a majority in principal amount of
the Bonds then outstanding. However, without the consent of all Bondholders
affected, no amendment or supplement may (a) extend the maturity of the
principal of, or interest on, any Bond, (b) reduce the principal amount of, or
rate of interest on, any Bond or change the terms of any redemption, (c) effect
a privilege or priority of any Bond or Bonds over any other Bond or Bonds
(except as provided herein), (d) reduce the percentage of the principal amount
of the Bonds required for consent to such amendment or supplement, (e) impair
the exclusion from gross income for purposes of federal income taxation of
interest on any Bond, (f) eliminate the holders' rights to optionally tender the
Bonds, extend the due date for the purchase of Bonds optionally tendered by the
holders thereof or reduce the purchase price of such Bonds, (g) create a lien
ranking prior to or on a parity with the lien of this Indenture on the property
described in the Granting Clause of this Indenture or (h) deprive any Bondholder
of the lien created by this Indenture on such property. In addition, if moneys
or U.S. Government Obligations have been deposited or set aside with the Trustee
pursuant to Article VII for the payment of Bonds and those Bonds shall not have
in fact been actually paid in full, no amendment to the provisions of that
Article shall be made without the consent of the holder of each of those Bonds
affected.
Section 10.03. Effect of Consents. After an amendment or supplement
becomes effective, it shall bind every Bondholder unless it makes a change
described in any of the lettered clauses of the preceding Section. In such case,
the amendment or supplement shall bind each Bondholder who consented to it and
each subsequent holder of a Bond or portion of a Bond evidencing the same debt
as the consenting holder's Bond.
Section 10.04. Notation on or Exchange of Bonds. If an amendment or
supplement changes the terms of a Bond, the Trustee may request that the holder
deliver the Bond to it. The Trustee may place an appropriate notation on the
Bond regarding the changed terms and return it to the holder. Alternatively, if
the Trustee, the Issuer and the Company determine, the Issuer in exchange for
the Bond shall issue and the Trustee shall authenticate a new Bond that reflects
the changed terms. In either event, the cost of placing such notation on the
Bond(s) shall be borne by the Company.
Section 10.05. Signing by Trustee of Amendments and Supplements. The
Trustee shall sign any amendment or supplement to this Indenture or the Bonds
authorized by this Article if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing an amendment or supplement,
the Trustee shall be entitled to receive and (subject to Section 9.01) shall be
fully protected in relying on an Opinion of Counsel stating that such amendment
or supplement is authorized by this Indenture and is duly authorized, executed
and delivered and enforceable in accordance with its terms.
Section 10.06. Company, Bank and Remarketing Agent Consent Required. An
amendment or supplement to this Indenture or the Bonds shall not become
effective unless the Company, the Remarketing Agent (but only to the extent that
such amendment affects the rights, duties or obligations of the Remarketing
Agent hereunder) and the Bank deliver to the Trustee their written consents to
the amendment or supplement. In any event, no amendment or supplement hereto
shall become effective until the Remarketing Agent acknowledges receipt of a
copy of such supplement or amendment.
Section 10.07. Notice to Bondholders. The Trustee shall cause notice of
the execution of a supplemental indenture to be mailed promptly by first-class
mail to each Bondholder at the holder's registered address. The notice shall
state briefly the nature of the supplemental indenture and that copies thereof
are on file with the Trustee for inspection by all Bondholders.
Section 10.08. Opinion of Bond Counsel Required. An amendment or
supplement to this Indenture shall not become effective unless the Trustee has
received an opinion of Bond Counsel addressed to the Trustee, the Bank, the
Company and the Remarketing Agent to the effect that the amendment or supplement
will not impair the exclusion of interest on the Bonds from the gross income of
the recipients thereof for purposes of federal income taxation.
ARTICLE XI
AMENDMENTS OF AND SUPPLEMENTS TO AGREEMENT
Section 11.01. Without Consent of Bondholders. The Issuer, with the
consent of the Company, may enter into, and the Trustee may consent to, any
amendment of or supplement to the Agreement or the Note, without prior notice to
or consent of any Bondholder, if the amendment or supplement is required (a) by
the provisions of the Agreement or this Indenture, (b) to cure any ambiguity,
inconsistency or formal defect or omission, (c) to identify more precisely the
Facility, (d) in connection with any authorized amendment of or supplement to
this Indenture, or (e) to make any change comparable to those described in
Section 10.01.
Section 11.02. With Consent of Bondholders. If an amendment of or
supplement to the Agreement or the Note without any consent of Bondholders is
not permitted by the foregoing Section, the Issuer may enter into, and the
Trustee may consent to, such amendment or supplement without prior notice to any
Bondholder but with the consent of the holders of at least a majority in
principal amount of the Bonds then outstanding. However, without the consent of
each Bondholder affected, no amendment or supplement may result in a change
comparable to those described in the lettered clauses of Section 10.02.
Section 11.03. Consent by Trustee to Amendments or Supplements. The
Trustee shall consent to any amendment or supplement to the Agreement or the
Note authorized by this Article if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, consent to such an amendment or
supplement. In consenting to an amendment or supplement, the Trustee shall be
entitled to receive and (subject to Section 9.01) shall be fully protected in
relying on an opinion of Counsel stating that such amendment or supplement is
authorized by this Indenture and has been duly authorized, executed and
delivered and is enforceable in accordance with its terms.
Section 11.04. Notice to Bondholders. The Trustee shall cause notice of
the execution of an amendment or supplement to the Agreement or the Note to be
mailed promptly by first-class mail to each Bondholder at the holder's
registered address. The notice shall state briefly the nature of the amendment
or supplement and that copies thereof are on file with the Trustee for
inspection by all Bondholders.
Section 11.05. Bank and Remarketing Agent Consent Required. An
amendment or supplement to the Agreement or the Note shall not become effective
unless the Remarketing Agent (but only to the extent that such amendment or
supplement affects the rights, duties or obligations of the Remarketing Agent
hereunder or thereunder) and the Bank deliver to the Trustee their written
consents to the amendment or supplement. In any event, no such amendment or
supplement shall become effective until the Remarketing Agent acknowledges
receipt of a copy of such amendment or supplement.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Notices.
(a) Any notice, request, direction, designation, consent,
acknowledgment, certification, appointment, waiver or other communication
required or permitted by this Indenture or the Bonds must be in writing except
as expressly provided otherwise in this Indenture or the Bonds.
(b) Except as otherwise provided herein, any notice or other
communication shall be sufficiently given and deemed given when delivered by
hand or mailed by first-class mail, postage prepaid, addressed as follows or, if
the communication may be given by telex or telecopy under the provisions of this
Indenture, when telexed or telecopied to the following numbers:
(1) if to the Issuer, to Harrison County, West Virginia,
Harrison County Courthouse, Clarksburg, West Virginia 26301, Attention:
President of Harrison County Commission;
(2) if to the Trustee, to One Valley Bank, National
Association, P.O. Box 1793, Charleston, West Virginia 25326, Attention:
Corporate Trust Department;
(3) if to the Company, to Salem Health Care Corp., 146 Water
Street, Salem, West Virginia 26426;
(4) if to the Underwriter or Remarketing Agent, to Crews and
Associates, Inc. 2000 Union National Plaza, 124 West Capitol, Little Rock,
Arkansas 72201;
(5) if to the Bank, to NationsBank of Texas, N.A, 901 Main
Street, 13th Floor, Dallas, Texas 75202, Attention: Marie Lancanster; and
(6) if to the Parent, Regency Health Services, Inc. 2742 Dow
Avenue, Tustin, California 92780, Attention: David Grant, Esquire.
Any addressee may designate additional or different addresses or telex
or telecopy numbers for purposes of this Section. Notwithstanding the provisions
of this Section 12.01, any notice to the Trustee shall only be sufficient and
deemed given when mailed to the Trustee at the address provided in this Section
12.01 by certified mail, return receipt requested, and received by the Trustee.
A copy of any notice to any party given hereunder (with the exception
of notices required for drawings under any Letter of Credit) shall be provided
to the Remarketing Agent in the manner such notice is otherwise given.
The Beneficial Owner of $1,000,000 or more or Bonds may, by written
notice to the Trustee, request that all notices given with respect to such Bonds
be given to the registered owner thereof and to a second address provided in
such written notice to the Trustee. Upon receipt of such notice described in the
preceding sentence, the Trustee shall send all notices relating to the relevant
Bonds to the registered owner and the second address so designated.
Section 12.02. Bondholders' Consents. Any consent or other instrument
required by this Indenture to be signed by Bondholders may be in any number of
concurrent documents and may be signed by a Bondholder or by the holder's agent
appointed in writing. Proof of the execution of such instrument or of the
instrument appointing an agent and of the ownership of Bonds, if made in the
following manner, shall be conclusive for any purposes of this Indenture with
regard to any action taken by the Trustee under the instrument:
(a) The fact and date of a person's signing an instrument may be proved
by the certificate of any officer in any jurisdiction who by law has power to
take acknowledgments within that jurisdiction that the person signing the
writing acknowledged before the officer the execution of the writing, or by an
affidavit of any witness to the signing.
(b) The fact of ownership of Bonds, the amount or amounts, numbers and
other identification of such Bonds and the date of holding shall be proved by
the registration books kept pursuant to this Indenture.
In determining whether the holders of the required principal amount of
Bonds Outstanding have taken any action under this Indenture, Bonds owned by the
Issuer, the Company or any partner or affiliate of either thereof shall be
disregarded and deemed not to be Outstanding; provided, however, that Bank Bonds
shall not be disregarded and shall be deemed to be outstanding for such purpose.
In determining whether the Trustee shall be protected in relying on any such
action, only Bonds that the Trustee knows to be so owned shall be disregarded.
Section 12.03. Notices to Rating Agency. If applicable, the Trustee
shall notify any Rating Agency rating the Bonds, in writing, of the occurrence
of any of the following events prior to the occurrence thereof: (a) any change
in the identity of the Trustee or the Remarketing Agent; (b) any amendment or
modification of or change to this Indenture, the Agreement, the Reimbursement
Agreement or the Letter of Credit; (c) the expiration or termination of the
Letter of Credit, or any extension thereof; (d) the payment in full of the
principal of and interest on the Bonds; and (e) the delivery of any written
opinion of Bankruptcy Counsel required to be delivered under the terms of this
Indenture.
Section 12.04. Limitation of Rights. Nothing expressed or implied in
this Indenture or the Bonds shall give any person other than the Trustee, the
Issuer, the Bank, the Company, the Remarketing Agent and the Bondholders any
right, remedy or claim under or with respect to this Indenture.
Section 12.05. Severability. If any provision of this Indenture shall
be determined to be unenforceable by a court of law, that shall not affect any
other provision of this Indenture; provided, no holding or invalidity shall
require the Trustee to make any payment from any source except those pledged
hereunder.
Section 12.06. Payments Due on Non-Business Days. If a payment date is
not a Business Day at the place of payment, then payment shall be made at that
place on the next succeeding Business Day, with the same force and effect as if
made on the payment date, and, in the case of any such payment, no interest
shall accrue for the intervening period.
Section 12.07. Governing Law. This Indenture and the authority of the
Issuer to issue the Bonds shall be governed by and construed in accordance with
the laws of the State, but it is the intention of the Issuer that the situs of
the trust created by this Indenture be in the state in which is located the
corporate trust office of the Trustee from time to time acting under this
Indenture. The word "Trustee" as used in the preceding sentence shall not be
deemed to include any additional individual or institution appointed as a
separate or co-trustee pursuant to Section 9.15 of this Indenture. It is the
further intention of the Issuer that the Trustee administer said trust in the
state in which it is located, from time to time, and that same be for all
purposes hereunder, the situs of said trust.
Section 12.08. No Liability. No provision, covenant or agreement
contained in this Indenture or in the Bonds, or any obligation herein or therein
imposed upon the Issuer, or the breach thereof, shall constitute or give rise to
or impose upon the Issuer a pecuniary liability or a charge upon its general
credit or taxing power. In making the agreements, provisions, and covenants set
forth in this Indenture, the Issuer has not obligated itself except with respect
to the Facility and the application of the revenues, income and all other
property therefrom and the security therefor including the Letter of Credit, as
hereinabove provided. No official or member of the Issuer shall be personally
liable on the Indenture or the Bonds, nor shall the issuance of the Bonds be
considered as misfeasance in office.
Section 12.09. Counterparts. This Indenture may be signed in several
counterparts, each of which shall be an original and all of which together
shall constitute the same instrument.
Section 12.10. References to the Bank. The Bank shall have no rights to
enforce any provision of this Indenture during any period in which it is in
default under the Letter of Credit.
IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed
in its name and on its behalf by the President of the County Commission of
Harrison County, West Virginia and its official seal to be impressed hereon and
attested by the Clerk of the County Commission of Harrison County, West
Virginia, and the Trustee, to evidence its acceptance of the trust hereby
created, has caused this Indenture to be executed in its name and on its behalf
by its duly authorized officers, all as of the day and year first above written.
HARRISON COUNTY, WEST VIRGINIA
By:
President, Harrison County Commission
[SEAL]
ATTEST:
Clerk, Harrison County Commission
ONE VALLEY BANK, NATIONAL ASSOCIATION
By:
Its:
[SEAL]
ATTEST:
By:
Its: