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EXHIBIT 4(b)-2
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TRUST INDENTURE
BETWEEN
CITY OF FORSYTH, MONTANA
AND
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION,
AS TRUSTEE
$66,700,000
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(AVISTA CORPORATION COLSTRIP PROJECT)
SERIES 1999A
DATED AS OF SEPTEMBER 1, 1999
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TABLE OF CONTENTS
SECTION PAGE
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Recitals................................................................................ 1
Granting Clauses........................................................................ 1
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION............................. 2
Section 1.01. General Definitions............................................... 2
Section 1.02. PARS Rate Definitions............................................. 14
Section 1.03. Rules of Construction............................................. 20
ARTICLE II THE BONDS......................................................... 21
Section 2.01. Authorization and Terms of Bonds.................................. 21
Section 2.02. Interest Rates and Rate Periods................................... 22
Section 2.03. PARS Rates; Conversions to and from PARS Rate Periods............. 23
Section 2.04. Daily Interest Rate; Adjustment to Daily Interest Rate
Period........................................................ 25
Section 2.05. Weekly Interest Rate; Adjustment to Weekly Interest Rate
Period........................................................ 26
Section 2.06. Term Interest Rate; Adjustment to Term Interest Rate Period....... 27
Section 2.07. Flexible Interest Rate; Adjustment to Flexible Interest
Rate Period................................................... 30
Section 2.08. Rescission of Election............................................ 32
Section 2.09. Form of Bonds..................................................... 33
Section 2.10. Execution of Bonds................................................ 33
Section 2.11. Transfer and Exchange of Bonds.................................... 34
Section 2.12. Bond Register..................................................... 34
Section 2.13. Bonds Mutilated, Lost, Destroyed or Stolen........................ 35
Section 2.14. Bonds; Limited Obligations........................................ 35
Section 2.15. Disposal of Bonds................................................. 36
Section 2.16. Book-Entry System................................................. 36
Section 2.17. Payments Pursuant to the Credit Facility.......................... 38
Section 2.18. Change of Credit Facility......................................... 40
Section 2.19. CUSIP Numbers..................................................... 40
ARTICLE III PURCHASE AND REMARKETING OF BONDS................................. 40
Section 3.01. Owner's Option to Tender for Purchase............................. 40
Section 3.02. Mandatory Purchase................................................ 42
Section 3.03. Payment of Purchase Price......................................... 42
Section 3.04. Remarketing of Bonds by Remarketing Agent......................... 43
Section 3.05. Limits on Remarketing............................................. 44
Section 3.06. Delivery of Bonds; Delivery of Proceeds of Remarketing Sale....... 44
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SECTION PAGE
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Section 3.07. No Remarketing Sales After Certain Events......................... 46
ARTICLE IV REDEMPTION OF BONDS............................................... 46
Section 4.01. Redemption of Bonds Generally..................................... 46
Section 4.02. Redemption Upon Optional Prepayment............................... 46
Section 4.03. Redemption Upon Mandatory Prepayment.............................. 48
Section 4.04. Selection of Bonds for Redemption................................. 48
Section 4.05. Notice of Redemption.............................................. 48
Section 4.06. Partial Redemption of Bonds....................................... 49
Section 4.07. No Partial Redemption After Default............................... 50
Section 4.08. Payment of Redemption Price....................................... 50
Section 4.09. Effect of Redemption.............................................. 50
ARTICLE V GENERAL COVENANTS................................................. 50
Section 5.01. Payment of Bonds.................................................. 50
Section 5.02. Performance of Covenants by Issuer; Authority; Due
Execution..................................................... 51
Section 5.03. Immunities and Limitations of Responsibility of Issuer;
Remedies...................................................... 52
Section 5.04. Defense of Issuer's Rights........................................ 53
Section 5.05. Recording and Filing; Further Instruments......................... 53
Section 5.06. Rights Under Agreement............................................ 53
Section 5.07. Arbitrage and Tax Covenants....................................... 54
Section 5.08. No Disposition of Trust Estate.................................... 54
Section 5.09. Access to Books................................................... 54
Section 5.10. Source of Payment of Bonds........................................ 54
Section 5.11. Credit Facility................................................... 54
ARTICLE VI DEPOSIT OF BOND PROCEEDS; FUND AND ACCOUNTS; REVENUES............. 55
Section 6.01. Creation of Bond Fund and Accounts; Rebate Fund................... 55
Section 6.02. Disposition of Bond Proceeds and Certain Other Moneys............. 55
Section 6.03. Deposits Into the Bond Fund; Use of Moneys in the Bond Fund....... 55
Section 6.04. Bonds Not Presented for Payment of Principal...................... 56
Section 6.05. Payment to the Company............................................ 56
ARTICLE VII INVESTMENTS....................................................... 56
Section 7.01. Investment of Moneys in Funds..................................... 56
Section 7.02. Conversion of Investment to Cash.................................. 57
Section 7.03. Credit for Gains and Charge for Losses............................ 57
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SECTION PAGE
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ARTICLE VIII DEFEASANCE........................................................ 57
ARTICLE IX DEFAULTS AND REMEDIES............................................. 60
Section 9.01. Events of Default................................................. 60
Section 9.02. Acceleration; Other Remedies...................................... 61
Section 9.03. Restoration to Former Position.................................... 63
Section 9.04. Owners' Right to Direct Proceedings............................... 63
Section 9.05. Limitation on Owners' Right to Institute Proceedings.............. 63
Section 9.06. No Impairment of Right to Enforce Payment......................... 64
Section 9.07. Proceedings by Trustee Without Possession of Bonds................ 64
Section 9.08. No Remedy Exclusive............................................... 64
Section 9.09. No Waiver of Remedies............................................. 64
Section 9.10. Application of Moneys............................................. 64
Section 9.11. Severability of Remedies.......................................... 66
ARTICLE X TRUSTEE; PAYING AGENT; REGISTRAR; REMARKETING AGENT............... 66
Section 10.01. Acceptance of Trusts.............................................. 66
Section 10.02. No Responsibilities for Recitals.................................. 66
Section 10.03. Limitations on Liability.......................................... 66
Section 10.04. Compensation, Expenses and Advances............................... 67
Section 10.05. Notice of Events of Default and Determination of Taxability....... 68
Section 10.06. Action by Trustee................................................. 68
Section 10.07. Good-Faith Reliance............................................... 69
Section 10.08. Dealings in Bonds; Allowance of Interest.......................... 69
Section 10.09. Several Capacities................................................ 70
Section 10.10. Resignation of Trustee............................................ 70
Section 10.11. Removal of Trustee................................................ 70
Section 10.12. Appointment of Successor Trustee.................................. 71
Section 10.13. Qualifications of Successor Trustee............................... 71
Section 10.14. Judicial Appointment of Successor Trustee......................... 71
Section 10.15. Acceptance of Trusts by Successor Trustee......................... 72
Section 10.16. Successor by Merger or Consolidation.............................. 72
Section 10.17. Standard of Care.................................................. 72
Section 10.18. Intervention in Litigation of the Issuer.......................... 72
Section 10.19. Remarketing Agent................................................. 72
Section 10.20. Qualifications of Remarketing Agent............................... 73
Section 10.21. Registrar......................................................... 73
Section 10.22. Qualifications of Registrar; Resignation; Removal................. 74
Section 10.23. Paying Agents..................................................... 74
Section 10.24. Additional Duties of Trustee...................................... 75
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SECTION PAGE
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ARTICLE XI EXECUTION OF INSTRUMENTS BY OWNERS AND PROOF OF OWNERSHIP
OF BONDS.......................................................... 75
ARTICLE XII MODIFICATION OF THIS INDENTURE AND THE AGREEMENT.................. 76
Section 12.01. Supplemental Indentures Without Owner Consent..................... 76
Section 12.02. Supplemental Indentures Requiring Owner Consent................... 78
Section 12.03. Effect of Supplemental Indenture.................................. 79
Section 12.04. Consent of the Company and the Provider........................... 79
Section 12.05. Amendment of Agreement Without Owner Consent...................... 79
Section 12.06. Amendment of Agreement Requiring Owner Consent.................... 80
ARTICLE XIII MISCELLANEOUS..................................................... 81
Section 13.01. Successors of the Issuer.......................................... 81
Section 13.02. Parties in Interest............................................... 81
Section 13.03. Severability...................................................... 81
Section 13.04. No Personal Liability of Issuer Officials......................... 82
Section 13.05. Bonds Owned by the Issuer or the Company.......................... 82
Section 13.06. Counterparts...................................................... 82
Section 13.07. Governing Law..................................................... 82
Section 13.08. Notices........................................................... 82
Section 13.09. Holidays.......................................................... 83
Section 13.10. Purchase of Bonds by Trustee and Remarketing Agent................ 83
Section 13.11. Notices to Moody's and S&P........................................ 83
Section 13.12. Rights of Provider................................................ 84
Signatures.............................................................................. 85
EXHIBIT A -- FORM OF BOND
EXHIBIT B -- PARS AUCTION PROCEDURES
Section 1.01. Auction Procedures................................................ B-1
Section 1.02. Orders by Existing Owners and Potential Owners.................... B-1
Section 1.03. Submission of Orders by Broker-Dealers to Auction Agent........... B-3
Section 1.04. Determination of PARS Rate........................................ B-5
Section 1.05. Allocation of the PARS Rate Bonds................................. B-6
Section 1.06. Notice of PARS Rate............................................... B-8
Section 1.07. PARS Index........................................................ B-10
Section 1.08. Miscellaneous Provisions Regarding Auctions....................... B-11
Section 1.09. Changes in Auction Period or Auction Date......................... B-12
Section 1.10. Auction Agent..................................................... B-13
Section 1.11. Qualifications of Auction Agent: Resignation; Removal............. B-13
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TRUST INDENTURE
THIS TRUST INDENTURE is made and entered into as of September 1, 1999,
between the CITY OF FORSYTH, MONTANA, a political subdivision duly organized and
existing under the Constitution and laws of the State and CHASE MANHATTAN BANK
AND TRUST COMPANY, NATIONAL ASSOCIATION, as trustee.
RECITALS
A. In furtherance of its public purposes, the Issuer has entered into a
Loan Agreement, dated as of September 1, 1999, with Avista Corporation, a
Washington corporation, providing for the issuance by the Issuer of the Bonds
for the purpose of refunding, in advance of stated maturity, the Prior Bonds.
B. The execution and delivery of this Indenture and the issuance and sale
of the Bonds have been in all respects duly and validly authorized by proper
action duly adopted by the governing authority of the Issuer.
C. The execution and delivery of the Bonds and of this Indenture have been
duly authorized and all things necessary to make the Bonds, when executed by the
Issuer and authenticated by the Trustee, valid and binding legal obligations of
the Issuer and to make this Indenture a valid and binding agreement have been
done.
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
GRANTING CLAUSES
The Issuer, in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of the purchase and acceptance of the
Bonds by the Owners thereof, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, in order to secure the payment of the
principal of, and premium, if any, and interest on, the Bonds according to their
tenor and effect and to secure the performance and observance by the Issuer of
all the covenants expressed or implied herein and in the Bonds, does hereby
grant, bargain, sell convey, mortgage and warrant, and assign, pledge and grant
a security interest in, the Trust Estate to the Trustee, and its successors in
trust and assigns forever for the benefit of the Owners:
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned
or hereafter acquired, to the Trustee and its respective successors in trust and
assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the
equal and proportionate benefit, security and protection of all present and
future Owners of the Bonds issued under and secured by this Indenture without
privilege, priority or distinction as to the lien or otherwise of any of the
Bonds over any of the other Bonds;
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PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall
well and truly pay, or cause to be paid, the principal of, and premium, if any,
and interest on, the Bonds due or to become due thereon, at the times and in the
manner mentioned in the Bonds and as provided in Article VIII hereof according
to the true intent and meaning thereof, and shall cause the payments to be made
as required under Article V hereof, or shall provide, as permitted hereby, for
the payment thereof in accordance with Article VIII hereof, and shall well and
truly keep, perform and observe all the covenants and conditions pursuant to the
terms of this Indenture to be kept, performed and observed by it, and shall pay,
or cause to be paid, the principal of, and premium, if any, and interest on, the
Bonds due or to become due in accordance with the terms and provisions hereof,
then and in that case this Indenture and the rights hereby granted shall cease,
terminate and be void and the Trustee shall thereupon cancel and discharge this
Indenture and execute and deliver to the Issuer and the Company such instruments
in writing as shall be requisite to evidence the discharge hereof, otherwise
this Indenture shall be and remain in full force and effect.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared,
that all Bonds issued and secured hereunder are to be issued, authenticated and
delivered, and all of the Trust Estate is to be dealt with and disposed of,
under, upon and subject to the terms, conditions, stipulations, covenants,
agreements, trusts, uses and purposes hereinafter expressed, and the Issuer has
agreed and covenanted, and does hereby agree and covenant, with the Trustee and
with the respective Owners, from time to time, of the Bonds, or any part
thereof, as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. GENERAL DEFINITIONS. The terms defined in this Section 1.01
shall have the meanings provided herein for all purposes of this Indenture and
the Agreement, unless the context clearly requires otherwise. Additional
definitions relating to the PARS Rate are contained in Section 1.02. The two
sets of definitions contained in Sections 1.01 and 1.02 are set forth separately
for convenience of reference only.
"Act" means Sections 90-5-101 to 90-5-114, inclusive, Montana Code
Annotated, as from time to time supplemented and amended.
"Administration Expenses" means reasonable compensation and reimbursement
of reasonable expenses and advances payable to the Issuer, the Trustee, the
Registrar, the Remarketing Agent, the Paying Agent, Moody's and S&P.
"Agreement" or "Loan Agreement" means the Loan Agreement, dated as of
September 1, 1999, between the Issuer and the Company, as amended and
supplemented from time to time.
"Ambac" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance company.
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"Authorized Company Representative" means each person at the time
designated to act on behalf of the Company by written certificate furnished to
the Issuer and the Trustee containing the specimen signature of such person and
signed on behalf of the Company by its President, any Vice President, its
Secretary, any Assistant Secretary, its Treasurer or any Assistant Treasurer.
Such certificate may designate an alternate or alternates.
"Authorized Denomination" means (i) $25,000 or any integral multiple of
$25,000 when the Bonds bear interest as a PARS Rate; (ii) $100,000 or any
integral multiple of $100,000 when the Bonds bear interest at a Daily Interest
Rate or Weekly Interest Rate; (iii) $100,000 or any integral multiple of $5,000
in excess of $100,000 when the Bonds bear interest at a Flexible Interest Rate;
and (iv) $5,000 or any integral multiple of $5,000 when the Bonds bear interest
at a Term Interest Rate.
"Beneficial Owner" has, when the Bonds are held in book-entry form, the
meaning ascribed to such term in Section 2.16 hereof
"Bond" or "Bonds" means the Issuer's Pollution Control Revenue Refunding
Bonds (Avista Corporation Colstrip Project) Series 1999A, issued pursuant to
this Indenture.
"Bond Counsel" means Chapman and Cutler or any other firm of nationally
recognized bond counsel familiar with the type of transactions contemplated
under this Indenture selected by the Company and acceptable to the Trustee.
"Bond Documents" means this Indenture, the Agreement and the Bonds.
"Bond Fund" means the trust fund by that name created pursuant to Section
6.01(a) hereof.
"Bond Payment Date" means any Interest Payment Date and any other date on
which the principal of, and premium, if any, and interest on, the Bonds is to be
paid to the Owners thereof, whether upon redemption, at maturity or upon
acceleration of maturity of the Bonds.
"Bond Purchase Contract" means the Bond Purchase Contract dated
September 8, 1999, between the Issuer and Goldman, Sachs & Co., as
Underwriter.
"Bond Resolution" means the resolution duly adopted and approved by the
City Council of the Issuer on August 23, 1999, authorizing the issuance and sale
of the Bonds and the execution of this Indenture and the Agreement.
"Business Day" means any day except a Saturday, Sunday or other day (a) on
which commercial banks located in the cities in which the Principal Office of
the Trustee, the Principal Office of the Company, the Principal Office of the
Remarketing Agent or the Principal Office of the Paying Agent are located are
required or authorized by law or regulation to remain closed or are closed, or
(b) on which The New York Stock Exchange is closed.
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"Change of Credit Facility" means (a) the delivery of a Credit Facility
(or evidence thereof) to the Trustee, (b) the termination of an existing Credit
Facility or (c) a combination of (a) and (b), in each case in accordance with
Section 4.07 of the Agreement.
"Closing" and "Closing Date" means the date of the first authentication
and delivery of fully-executed and authenticated Bonds under this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended. Each reference
to a section of the Code herein shall be deemed to include the United States
Treasury Regulations, including temporary and proposed regulations, relating to
such section which are applicable to the Bonds or the use of the proceeds
thereof.
"1954 Code" means the Internal Revenue Code of 1954, as amended. Each
reference to a section of the 1954 Code herein shall be deemed to include the
United States Treasury Regulations, including temporary and proposed
regulations, relating to such section which are applicable to the Bonds or the
use of the proceeds thereof.
"Company" means Avista Corporation, a corporation organized and existing
under the laws of the State of Washington and formerly known as The Washington
Water Power Company, or its successors and assigns pursuant to Section 5.01 of
the Agreement.
"Costs of Issuance" means any items of expense directly or indirectly
payable or reimbursable by the Company and directly or indirectly attributable
to the authorization, sale and issuance of the Bonds, including, but not limited
to, printing costs; costs of preparation and reproduction of documents; initial
fees and charges of the Trustee, the Registrar and the Paying Agent; legal fees
and charges, if any; underwriting discount or fees paid to Goldman, Sachs & Co.
in connection with the initial offering and sale of the Bonds; the Issuer fees
and direct out-of-pocket expenses incurred in issuing and paying the Bonds and
loaning the proceeds of the Bonds to the Company (but not including any overhead
or administrative costs of the Issuer relating to the Bonds); letter of credit
fees and municipal bond insurance premiums, if any, (but such fees or premiums
shall not be treated as Costs of Issuance to the extent such fees and premiums
are for the payment of the reasonable costs of a transfer of credit risk under
the Code and do not reflect indirect payment of additional Costs of Issuance);
fees and disbursements of financial advisers, consultants and professionals; and
costs of credit ratings.
"Credit Facility" means a facility provided in accordance with Section
4.07 of the Agreement to provide security or liquidity for the Bonds. The term
"Credit Facility" includes, by way of example and not of limitation, one or more
letters of credit, bond insurance policies, standby bond purchase agreements,
lines of credit, first mortgage bonds and other security instruments or
liquidity devices. A Credit Facility may have an expiration date earlier than
the maturity of the Bonds. The initial Credit Facility is the Insurance Policy.
"Credit Facility Agreement" means any agreement between the Company and
the Provider and relating to the Credit Facility then in effect. The initial
Credit Facility Agreement is that Insurance Agreement dated as of September 1,
1999 between Ambac and the Company.
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"Daily Interest Rate" means the interest rate on the Bonds established
pursuant to Section 2.04 hereof
"Daily Interest Rate Period" means each period during which a Daily
Interest Rate is in effect.
"Delivery Office of the Trustee" means the office designated as such by
the Trustee in writing to the Remarketing Agent, the Registrar, the Issuer and
the Company.
"Determination of Taxability" shall have the meaning set forth in Section
8.03 of the Agreement. The Trustee shall give notice of a Determination of
Taxability as provided in Section 10.05 hereof.
"DTC" means The Depository Trust Company and its successors and assigns.
"DTC Participants" means those brokers, securities dealers, banks, trust
companies, clearing corporations and certain other organizations from time to
time for which DTC holds Bonds as securities depository.
"DTC Representation Letter" has the meaning assigned thereto in Section
2.16(c) hereof.
"Due for Payment" has the meaning specified in the Credit Facility.
"Event of Default" means any occurrence or event specified in
Section 9.01 hereof
"Executive Officer" means the Mayor of the Issuer.
"Exempt Facilities" means facilities which qualify as "sewage or solid
waste disposal facilities" or "air or water pollution control facilities" as
defined in the 1954 Code and which qualify as a "project" under the Act.
"Favorable Opinion of Bond Counsel" means an opinion of Bond Counsel
addressed to the Issuer and the Trustee to the effect that the proposed action
is not prohibited by the Act or the Indenture or the Loan Agreement, as
applicable, and will not adversely affect the Tax-Exempt status of the Bonds.
"Flexible Interest Rate" means, with respect to any Bond, the interest
rate or rates associated with such Bond established in accordance with Section
2.07 hereof.
"Flexible Interest Rate Period" means each period comprised of Flexible
Segments during which Flexible Interest Rates are in effect.
"Flexible Segment" means, with respect to each Bond bearing interest at a
Flexible Interest Rate, the period established in accordance with Section
2.07(a) hereof.
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"Government Obligations" means direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed as to full and
timely payment by, the United States of America, which are not subject to
redemption or prepayment prior to stated maturity.
"Indenture" means this Trust Indenture between the Issuer and the Trustee
relating to issuance of the Bonds, as amended or supplemented from time to time
as permitted herein.
"Information Services" means Financial Information, Inc.'s "Daily Called
Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302,
Attention: Editor; Kenny Information Services' "Called Bond Service," 65
Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal and
Government," 99 Church Street, 8th Floor, New York, New York 10007, Attention:
Municipal News Reports; the Municipal Securities Rulemaking Board, CDI Pilot,
1640 King Street, Suite 300, Alexandria, Virginia 22314 and Standard and Poor's
"Called Bond Record," 55 Water Street, New York, New York 10041; or, in
accordance with then-current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other services providing
information with respect to called bonds, or no such services, as the Company
may designate in a certificate delivered to the Trustee.
"Initial Period" means the period from and including the Closing Date
through and including February 1, 2000.
"Insurance Policy" shall mean the municipal bond insurance policy issued
by Ambac insuring the payment when due of the principal of and interest on the
Bonds as provided therein.
"Insurance Trustee" has the meaning specified in the Insurance Policy. The
Insurance Policy specifies that the United States Trust Company of New York is
initially the Insurance Trustee.
"Interest Account" means the trust account by that name established in the
Bond Fund pursuant to Section 6.01 hereof.
"Interest Coverage Rate" means the interest rate specified in a Credit
Facility as being the rate used to determine the amount of interest on the Bonds
covered by such Credit Facility.
"Interest Payment Date" means:
(a) with respect to any PARS Rate Period, the Business Day
immediately following the Initial Period and (i) when used with respect to
any Auction Period other than a daily Auction Period, the Business Day
immediately following such Auction Period and (ii) when used with respect
to a daily Auction Period, the first Business Day of the month immediately
succeeding such Auction Period,
(b) with respect to any Daily or Weekly Interest Rate Period, the
first Business Day of each calendar month,
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(c) with respect to any Term Interest Rate Period, the first day of
the sixth month following the commencement of the Term Interest Rate
Period and the first day of each sixth month thereafter, and the day
following the last day of a Term Interest Rate Period,
(d) with respect to any Flexible Segment, the Business Day next
succeeding the last day of such Flexible Segment, and
(e) with respect to any Rate Period, the day next succeeding
the last day thereof.
"Investment Securities" means any of the following obligations or
securities, to the extent permitted by law and subject to the provisions of
Article VII hereof, on which neither the Company nor any of its subsidiaries is
the obligor.
(a) Government Obligations;
(b) Obligations of any of the following federal agencies, which
obligations represent the full faith and credit of the United States of
America:
- Export-Import Bank
- Farm Credit System Financial Assistance Corporation
- Rural Economic Community Development Administration
(formerly the Farmers Home Administration)
- General Services Administration
- U.S. Maritime Administration
- Small Business Administration
- Government National Mortgage Association (GNMA)
- U.S. Department of Housing & Urban Development (PHA's)
- Federal Housing Administration
- Federal Financing Bank;
(c) Direct obligations of any of the following federal agencies
which obligations are not fully guaranteed by the full faith and credit of
the United States of America:
- Senior debt obligations rated "Aaa" by Moody's and "AAA"
by S&P issued by the Federal National Mortgage
Association (FNMA) or Federal Home Loan Mortgage
Corporation (FHLMC)
- Obligations of the Resolution Funding Corporation
(REFCORP)
- Senior debt obligations of the Federal Home Loan Bank
System
- Senior debt obligations of other government-sponsored
agencies approved by the Provider;
(d) U.S. dollar denominated deposit accounts, federal funds and
bankers' acceptances with domestic commercial banks which have a rating on
their short term
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certificates of deposit on the date of purchase of "A-1" or "A-1+" by S&P
and "P-1" by Moody's and maturing no more than 360 days after the date of
purchase. (Ratings on holding companies are not considered as the rating
of the bank.);
(e) Commercial paper which is rated at the time of purchase in the
single highest classification, "A-1+" by S&P and "P-1" by Moody's and
which matures not more than 270 days after the date of purchase;
(f) Investments in a money market fund rated "AAAm" or "AAAm-G" or
better by S&P;
(g) Pre-refunded Municipal Obligations defined as follows: Any bonds
or other obligations of any state of the United States of America or of
any agency, instrumentality or local governmental unit of any such state
which are not callable at the option of the obligor prior to maturity or
as to which irrevocable instructions have been given by the obligor to
call on the date specified in the notice; and
(1) which are rated, based on an irrevocable escrow account or
fund (the "escrow"), in the highest rating category of S&P and
Moody's or any successors thereto; or
(2) (i) which are fully secured as to principal and interest
and redemption premium, if any, by an escrow consisting only of cash
or Government Obligations, which escrow may be applied only to the
payment of such principal of and interest and redemption premium, if
any, on such bonds or other obligations on the maturity date or
dates thereof or the specified redemption date or dates pursuant to
such irrevocable instructions, as appropriate, and (ii) which escrow
is sufficient, as verified by a nationally recognized independent
certified public accountant, to pay principal of and interest and
redemption premium, if any, on the bonds or other obligations
described in this clause (g) on the maturity date or dates specified
in the irrevocable instructions referred to above, as appropriate;
(h) General obligations of states with a rating of at least "A2/A"
or higher by both Moody's and S&P;
(i) Investment agreements approved in writing by the Provider
supported by appropriate opinions of counsel with notice to S&P; and
(j) Other forms of investments (including repurchase agreements)
approved in writing by the Provider with notice to S&P.
"Issue Date" means the date of the initial authentication and delivery of
the Bonds, being September 15, 1999.
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"Issuer" means the City of Forsyth, Montana, and its successors, and any
political subdivision resulting from or surviving any consolidation or merger to
which it or its successors may be a party.
"Loan Payments" means the payments required to be made by the Company
pursuant to Section 4.01(a) of the Agreement.
"Mail" means by first-class mail postage prepaid.
"Maturity Date" means October 1, 2032.
"Maximum Interest Rate" means (a) while a Credit Facility is in effect
that specifies an Interest Coverage Rate, the lesser of 18% per annum or the
Interest Coverage Rate specified in the Credit Facility, and (b) at all other
times, 18% per annum.
"Moody's" means Moody's Investors Service, a corporation organized and
existing under the laws of the State of Delaware, its successors and assigns,
and, if such corporation shall for any reason no longer perform the functions of
a securities rating agency, "Moody's" shall be deemed to refer to any other
nationally recognized rating agency designated by the Company by notice to the
Issuer, the Trustee and the Remarketing Agent.
"Outstanding" or "Bonds Outstanding" or "Outstanding Bonds" means, as of
any given date, all Bonds which have been authenticated and delivered by the
Trustee under this Indenture, except:
(a) Bonds canceled or purchased by or delivered to the Trustee for
cancellation;
(b) Bonds that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including premium if any,
and interest accrued to the due date, of which sufficient moneys are held
by the Trustee;
(c) Bonds deemed paid in accordance with Article VIII hereof; and
(d) Bonds in lieu of which others have been authenticated under
Section 2.11 (relating to transfer and exchange of Bonds) or Section 2.13
(relating to mutilated, lost, stolen, destroyed or undelivered Bonds) or
Bonds paid pursuant to Section 2.13;
provided, however, that if the principal of or interest due on Bonds is paid by
the Provider pursuant to the Credit Facility, such Bonds shall remain
Outstanding for all purposes of this Indenture until the Provider receives
payment therefor as contemplated by the Credit Facility.
Bonds purchased by the Trustee or the Company pursuant to Article III
hereof will continue to be Outstanding until the Company has paid or caused to
be paid to the Trustee an amount sufficient to provide for the payment of all
accrued interest on such Bonds and the Company has directed the Trustee to
cancel such Bonds. Bonds purchased pursuant to tenders
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and not delivered to the Trustee for payment are not Outstanding, but there will
be Outstanding Bonds authenticated and delivered in lieu of such undelivered
Bonds as contemplated by Section 3.03 hereof.
"Owner" or "Owners" or "Owner of Bonds" or "Owners of Bonds" means the
registered owner of any Bond; provided however, when used in the context of the
Tax-Exempt status of the Bonds, the term "Owners" shall include a Beneficial
Owner.
"PARS" and other definitions relating to PARS Rate Bonds are set forth in
Section 1.02 hereto. Reference is also hereby made to Exhibit B for certain
provisions relating to Auction Procedures for the PARS Rate Bonds.
"Paying Agent" means any paying agent appointed as provided in Section
10.23 hereof, or any successor thereto.
"Person" means one or more individuals, estates, joint ventures,
joint-stock companies, partnerships, associations, corporations, limited
liability companies, trusts or unincorporated organizations, and one or more
governments or agencies or political subdivisions thereof.
"Plant" means the Colstrip Plant Units 3 and 4 coal-fired steam electric
generating plant, located in Rosebud County, Montana.
"Pollution Control Facilities" means those items of machinery, equipment,
structures, improvements, other facilities and related property, which have been
or will be acquired, constructed and improved at the Plant and are particularly
described in Exhibit A to the Agreement, as said Exhibit A may be from time to
time amended.
"Principal Account" means the trust account by that name established
within the Bond Fund pursuant to Section 6.01 hereof.
"Principal Office of the Company" means the office of the Company
specified in or designated pursuant to Section 3.06(c) hereof.
"Principal Office of the Paying Agent" means the office designated in
writing by the Paying Agent to the Trustee, the Issuer, the Company, the
Registrar, the Provider and the Remarketing Agent.
"Principal Office of the Registrar" means the office or offices designated
as such by the Registrar in writing to the Trustee, the Company, the Issuer, the
Provider and the Remarketing Agent.
"Principal Office of the Remarketing Agent" means the office designated in
writing by the Remarketing Agent to the Trustee, the Issuer, the Company, the
Provider, the Registrar and the Paying Agent.
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"Principal Office of the Trustee" means the office designated as such by
the Trustee in writing to the Remarketing Agent, the Registrar, the Provider,
the Issuer and the Company.
"Prior Agreement" means the Loan Agreement between the Issuer and the
Company, dated as of October 1, 1989, pursuant to which the Company is obligated
to provide for payment of the Prior Bonds.
"Prior Bond Fund" means the bond fund created under Section 4.01(b) of the
Prior Indenture from which payments of principal and interest on the Prior Bonds
are made.
"Prior Bonds" means the City of Forsyth, Rosebud County, Montana,
Pollution Control Revenue Refunding Bonds (The Washington Water Power Company
Colstrip Project) Series 1989A which are being refunded pursuant to the
Refunding with the proceeds of the Bonds.
"Prior Indenture" means the Indenture of Trust between the Issuer and the
Prior Trustee, dated as of October 1, 1989, pursuant to which the Prior Bonds
were issued.
"Prior Trustee" means Chemical Bank (which is now known as The Chase
Manhattan Bank), as trustee under the Prior Indenture.
"Project" means the Company's 15% undivided interest in the Pollution
Control Facilities.
"Project Certificate" means the Company's certificate or certificates,
delivered concurrently with the initial authentication and delivery of the
Bonds, with respect to certain facts which are within the knowledge of the
Company to enable Bond Counsel to determine whether interest on the Bonds is
includible in the gross income of the Owners thereof under applicable provisions
of the Code.
"Provider" and "Provider of the Credit Facility" means the provider of
the Credit Facility. The initial Provider is Ambac.
"Provider Default" means any of the following events:
(a) the failure of the Provider to make any payment required under
the Credit Facility when the same shall become due and payable or the
Credit Facility shall for any reason cease to be in full force and effect;
(b) a decree or order for relief shall be entered by a court or
insurance regulatory authority having jurisdiction over the Provider in an
involuntary case under an applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, custodian, trustee, sequestrator (or similar official) of the
Provider or for any substantial part of the property of the Provider or
ordering the winding-up or liquidation of the affairs of the Provider, and
the continuance of any such decree or order shall be unstayed and remain
in effect for a period of 60 consecutive days thereafter; or
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(c) the Provider shall commence a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the Provider shall consent to or acquiesce
in the entry of an order for relief in an involuntary case under any such
law, or the Provider shall consent to the appointment of or taking of
possession by a receiver, liquidator, trustee, custodian, sequestrator (or
similar official) of the Provider or for any substantial part of its
property, or the Provider shall make a general assignment for the benefit
of creditors, or the Provider shall fail generally or admit in writing its
inability to pay its debts as such debts become due, or the Provider shall
take corporate action in contemplation or furtherance of any of the
foregoing.
"Rate" means any PARS Rate, Daily Interest Rate, Weekly Interest Rate,
Flexible Interest Rate or Term Interest Rate.
"Rate Period" means any PARS Rate Period, Daily Interest Rate Period,
Weekly Interest Rate Period, Flexible Interest Rate Period or Term Interest Rate
Period.
"Rating Category" means one of the generic rating categories of either
Moody's or S&P, without regard to any refinement or gradation of such rating
category by a numerical modifier or otherwise.
"Rebate Fund" means the trust fund by that name created pursuant to
Section 6.01(b) hereof.
"Record Date" means:
(a) with respect to a PARS Rate Period other than a daily Auction
Period, the second Business Day preceding an Interest Payment Date
therefor and during a daily Auction Period, the last Business Day of the
month preceding an Interest Payment Date therefor,
(b) with respect to any Interest Payment Date in respect of any
Daily Interest Rate Period, Weekly Interest Rate Period or Flexible
Segment, the Business Day next preceding such Interest Payment Date,
(c) with respect to any Interest Payment Date in respect of any Term
Interest Rate Period (except as provided in clause (d) below), the
fifteenth day of the month preceding such Interest Payment Date, and
(d) for any Interest Payment Date established pursuant to clause (e)
of the definition of "Interest Payment Date" in this Section 1.01 in
respect of a Term Interest Rate Period, the Business Day next preceding
such Interest Payment Date.
"Redemption Date" means December 1, 1999, the date upon which the Prior
Bonds are to be redeemed.
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"Refunding" means the series of transactions whereby the Prior Bonds are
refunded and cancelled with the proceeds of the Bonds and other money provided
by the Company.
"Registrar" means the Trustee or any successor Registrar appointed in
accordance with Section 10.22.
"Remarketing Agent" means any Person serving from time to time as
Remarketing Agent under this Indenture.
"Remarketing Agreement" means the remarketing agreement between the
Company and the Remarketing Agent pursuant to which the Remarketing Agent agrees
to act as Remarketing Agent for the Bonds, as such remarketing agreement may be
amended and supplemented from time to time.
"Revenues" means all moneys pledged hereunder and paid or payable to the
Trustee for the account of the Issuer in accordance with the Agreement and the
Credit Facility, and all receipts credited under the provisions of this
Indenture against such payments; provided however, that "Revenues" shall not
include moneys held by the Trustee in the Rebate Fund or to pay the purchase
price of Bonds subject to purchase pursuant to Article III hereof.
"S&P" means Standard & Poor's Ratings Services, a Division of The
McGraw-Hill Companies, Inc., a corporation organized and existing under the laws
of the State of New York, its successors and assigns, and, if such corporation
shall for any reason no longer perform the functions of a securities rating
agency, "S&P" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Company by notice to the Issuer, the
Trustee and the Remarketing Agent.
"Securities Depositories" means The Depository Trust Company, Call
Notification Department, 711 Stewart Avenue, Garden City, New York 11530,
Telephone: (516) 227-4070, Fax: (516) 227-4190, or, in accordance with
then-current guidelines of the Securities and Exchange Commission, such other
addresses and/or such other securities depositories, or no such depositories, as
the Company may designate in a certificate delivered to the Trustee.
"State" means the State of Montana.
"Supplemental Indenture" means any indenture supplemental to this
Indenture entered into between the Issuer and the Trustee pursuant to the
provisions of Section 12.01 or Section 12.02 hereof.
"Tax Certificate" means the Tax Exemption Certificate and Agreement
relating to the Bonds to be executed by the Company, the Issuer and the Trustee
on the date of the initial authentication and delivery of the Bonds, as amended
and supplemented from time to time.
"Tax-Exempt" means, with respect to interest on any obligations of a state
or local government, including the Bonds, that such interest is not includible
in gross income of the owners of such obligations for federal income tax
purposes, except for interest on any such
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obligations for any period during which such obligations are owned by a person
who is a "substantial user" of any facilities financed or refinanced with such
obligations or a "related person" within the meaning of Section 103(b)(13) of
the 1954 Code, whether or not such interest is includible as an item of tax
preference or otherwise includible directly or indirectly for purposes of
calculating other tax liabilities, including any alternative minimum tax or
environmental tax under the Code.
"Term Interest Rate" means the interest rate on the Bonds established in
accordance with Section 2.06 hereof.
"Term Interest Rate Period" means each period of six months or more during
which a Term Interest Rate is in effect.
"Treasury Regulations" means the United States Treasury Regulations
dealing with the tax-exempt bond provisions of the Code.
"Trustee" means Chase Manhattan Bank and Trust Company, National
Association, as trustee under this Indenture, and any successor Trustee
appointed hereunder.
"Trust Estate" means all right, title and interest of the Issuer in and to
the Agreement (except for amounts payable to, and the rights of, the Issuer
under Section 4.04, Section 4.06(a), Section 5.03, Section 5.06, Section 5.07,
Section 5.08 and Section 7.05 thereof, and the Issuer's right to receive
notices, certificates, requests, requisitions, directions and other
communications thereunder), including, without limitation, all right, title and
interest of the Issuer in the Revenues, all moneys and other obligations which
are, from time to time, deposited or required to be deposited with or held or
required to be held by or on behalf of the Trustee in trust in the Bond Fund
under any of the provisions of this Indenture (except moneys or obligations
deposited with or paid to the Trustee for payment or redemption of Bonds that
are deemed no longer Outstanding hereunder), the Credit Facility, and all other
rights, title and interest which are subject to the lien of this Indenture;
provided, however, that the "Trust Estate" shall not include (a) moneys held by
the Trustee in the Rebate Fund or to pay the purchase price of Bonds subject to
purchase pursuant to Article III hereof or (b) the Plant, the Pollution Control
Facilities, the Project or any part thereof.
"Weekly Interest Rate" means the interest rate on the Bonds established in
accordance with Section 2.05 hereof.
"Weekly Interest Rate Period" means each period during which a Weekly
Interest Rate is in effect.
SECTION 1.02 PARS RATE DEFINITIONS. The terms defined in this Section 1.02
shall have the meanings provided herein for all purposes of this Indenture and
the Agreement, unless the context clearly requires otherwise.
"Agent Member" means a member of, or participant in, the Securities
Depository who will act on behalf of a Bidder and is identified as such in the
Bidder's Master Purchaser's Letter.
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"Auction" means each periodic implementation of the Auction Procedures.
"Auction Agent" means IBJ Whitehall Bank & Trust Company, New York, New
York, or any successor auctioneer appointed in accordance with Section 1.10 or
1.11 of Exhibit B hereto.
"Auction Agreement" means an agreement between the Auction Agent and the
Trustee pursuant to which the Auction Agent agrees to follow the procedures
specified in Exhibit B hereto, as such agreement may from time to time be
amended or supplemented.
"Auction Date" means during any period in which the Auction Procedures are
not suspended in accordance with the provisions hereof, if the PARS Rate Bonds
are in a daily Auction Period, each Business Day, and if the PARS Rate Bonds are
in any other Auction Period, the Business Day next preceding each Interest
Payment Date for such PARS Rate Bonds (whether or not an Auction shall be
conducted on such date); provided, however, that the last Auction Date with
respect to the PARS Rate Bonds in an Auction Period other than a daily Auction
Period shall be the earlier of (i) the Business Day next preceding the Interest
Payment Date next preceding the Conversion Date for the PARS Rate Bonds and (ii)
the Business Day next preceding the Interest Payment Date next preceding the
final maturity date for the PARS Rate Bonds; and provided, further, that if the
PARS Rate Bonds are in a daily Auction Period, the last Auction Date shall be
the earlier of (x) the Business Day next preceding the Conversion Date for the
PARS Rate Bonds and (y) the Business Day next preceding the final maturity date
for the PARS Rate Bonds. On the Business Day preceding the conversion from a
daily Auction Period to another Auction Period, there will be two Auctions, one
for the last daily Auction Period and one for the first Auction Period following
the conversion. The first Auction Date for the PARS Rate Bonds is February 1,
2000.
"Auction Period" means:
(i) with respect to the PARS Rate Bonds in a daily mode, a period
beginning on each Business Day and extending to but not including the next
succeeding Business Day,
(ii) with respect to the PARS Rate Bonds in a seven-day mode, a
period of generally seven days beginning on a Wednesday (or the day
following the last day of the prior Auction Period if the prior Auction
Period does not end on a Tuesday) and ending on the Tuesday thereafter
(unless such Tuesday is not a Business Day, in which case ending on the
Business Day immediately preceding such Tuesday),
(iii) with respect to the PARS Rate Bonds in a 28 day mode, a period
of generally 28 days beginning on a Wednesday (or the last day of the
prior Auction Period if the Auction Period does not end on a Tuesday) and
ending on the fourth Tuesday thereafter (unless such Tuesday is not a
Business Day, in which case on the Business Day immediately preceding such
Tuesday),
(iv) with respect to the PARS Rate Bonds in a 35 day mode, a period
of generally 35 days beginning on a Wednesday (or the last day of the
prior Auction Period if
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the Auction Period does not end on a Tuesday) and ending on the fifth
Tuesday thereafter (unless such Tuesday is not a Business Day, in which
case on the Business Day immediately preceding such Tuesday), and
(v) with respect to the PARS Rate Bonds in a semiannual mode, a
period of generally six months (or shorter period upon a conversion from
another Auction Period) beginning on the day following the last day of the
prior Auction Period and ending on the next succeeding April 1 or October
1;
provided, however, that if there is a conversion from a daily Auction Period to
a seven-day Auction Period, the next Auction Period will begin on the date of
the conversion (i.e. the Interest Payment Date for the prior Auction Period) and
will end on the next succeeding Tuesday (unless such Tuesday is not a Business
Day, in which case on the next preceding Business Day), if there is a conversion
from a daily Auction Period to a 28-day Auction Period, the next Auction Period
will begin on the date of the conversion (i.e. the Interest Payment Date for the
prior Auction Period and will end on the Tuesday (unless such Tuesday is not a
Business Day, in which case on the next preceding Business Day) which is more
than 21 days but not more than 28 days from such date of conversion, and, if
there is a conversion from a daily Auction Period to a 35-day Auction Period,
the next Auction Period will begin on the date of the conversion (i.e. the
Interest Payment Date for the prior Auction Period) and will end on the Tuesday
(unless such Tuesday is not a Business Day, in which case on the next preceding
Business Day) which is more than 28 days but no more than 35 days from such date
of conversion.
"Auction Procedures" means the procedures for conducting Auctions for the
PARS Rate Bonds during a PARS Rate Period set forth in Exhibit B hereto.
"Auction Rate" means for each Tranche of PARS for each Auction Period, (i)
if Sufficient Clearing Bids exist, the Winning Bid Rate for such Tranche,
provided, however, if all of the PARS Rate Bonds are the subject of Submitted
Hold Orders, the Minimum PARS Rate for such Tranche and (ii) if Sufficient
Clearing Bids do not exist, the Maximum PARS Rate.
"Available Bonds" means the aggregate principal amount of the PARS Rate
Bonds that are not the subject of Submitted Hold Orders.
"Bid" shall have the meaning specified in subsection (a) of Section 1.02
of Exhibit B hereto.
"Bidder" means each Existing Owner and Potential Owner who places an
Order.
"Broker-Dealer" means any entity that is permitted by law to perform the
function required of a Broker-Dealer in Exhibit B hereto that is a member of, or
a direct participant in, the Securities Depository, that has been selected by
the Company, with the consent of Goldman, Sachs & Co. as long as Goldman, Sachs
& Co. is a Broker-Dealer, and that is a party to a Broker-Dealer Agreement with
the Auction Agent.
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"Broker-Dealer Agreement" means an agreement between the Auction Agent and
a Broker Dealer pursuant to which such Broker-Dealer agrees to follow the
procedures specified in Exhibit B hereto, as such agreement may from to time be
amended or supplemented.
"Broker-Dealer Rate" means a rate of 0.25% with respect to Tranche I PARS
and a rate of 0.15% with respect to Tranche II PARS or such different rates as
may be established pursuant to a Broker-Dealer Agreement, provided that the
Broker-Dealer Rate must be the same in all Broker-Dealer Agreements relating to
the PARS.
"Existing Owner" means a Person who has signed a Master Purchaser's Letter
and is listed as the beneficial owner of the PARS Rate Bonds in the records of
the Auction Agent.
"Hold Order" shall have the meaning specified in subsection (a) of Section
1.02 of Exhibit B hereto.
"Master Purchaser's Letter" means a letter substantially in the form
attached to the Broker-Dealer Agreement addressed to a Broker-Dealer, among
others, in which a Person agrees, among other things, to offer to purchase, to
purchase, to offer to sell and/or to sell the PARS Rate Bonds as set forth in
Exhibit B hereto.
"Maximum PARS Rate" means, as of any Auction Date, the Maximum Interest
Rate.
"Minimum PARS Rate" means, as of any Auction Date, the lesser of the
Maximum Interest Rate and:
(a) for Tranche I PARS, a per annum rate equal to 45% of the
PARS Index in effect on such Auction Date; and
(b) for Tranche II PARS, the Minimum PARS Rate for the Tranche I
PARS plus the difference between the Broker-Dealer Rate for the Tranche I
PARS and the Broker-Dealer Rate for the Tranche II PARS.
"No Auction Rate" means for Tranche I PARS, as of any Auction Date, the
lesser of the Maximum PARS Rate and the rate determined by multiplying the
Percentage of PARS Index set forth below, based on the Prevailing Rating of the
PARS Rate Bonds in effect at the close of business on the Business Day
immediately preceding such Auction Date, by the PARS Index:
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PREVAILING RATING OF PERCENTAGE OF
PARS BONDS PARS INDEX
-------------------- -------------
AAA/Aaa 65%
AA/Aa 70%
A/A 85%
Below A/A 100%
For Tranche II PARS, the No Auction Rate shall equal the No Auction Rate
for Tranche I PARS plus the difference between the Broker-Dealer Rate for the
Tranche I PARS and the Broker-Dealer Rate for the Tranche II PARS.
"Order" means a Hold Order, Bid or Sell Order.
"PARS" means the PARS Rate Bonds consisting of Tranche I PARS and Tranche
II PARS while they bear interest at the PARS Rates.
"PARS Index" shall have the meaning specified in Section 1.07 of Exhibit B
hereto.
"PARS Rate" means the rates of interest to be borne by the PARS Rate Bonds
during each Auction Period, not greater than the Maximum Interest Rate,
determined in accordance with Section 2.03; provided that all Tranche I PARS
shall bear the same PARS Rate, and all Tranche II PARS shall bear the same PARS
Rate, which rate for the Tranche II PARS shall be equal to the PARS Rate for
Tranche I PARS plus the difference between the Broker-Dealer Rate for Tranche I
PARS and the Broker-Dealer Rate for Tranche II PARS.
"PARS Rate Adjustment Date" means the first day of each Auction Period.
"PARS Rate Bonds" means the Bonds during any PARS Rate Period.
"PARS Rate Conversion Date" means the date on which the PARS Rate Bonds
convert from an interest rate period other than a PARS Rate Period and begin to
bear interest at a PARS Rate.
"PARS Rate Period" means each period during which a PARS Rate is in
effect.
"Payment Default" means the failure to make payment of interest on,
premium, if any, and principal of the PARS Rate Bonds when due.
"Potential Owner" means any Person, including any Existing Owner, who
shall have executed a Master Purchaser's Letter and who may be interested in
acquiring a beneficial interest in the PARS Rate Bonds in addition to the PARS
Rate Bonds currently owned by such Person, if any,
"Prevailing Rating" means:
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(a) AAA/Aaa, if the PARS Rate Bonds shall have a rating of AAA or
better by S&P and a rating of Aaa or better by Moody's';
(b) if not AAA/Aaa, AA/Aa if the PARS Rate Bonds shall have a rating
of AA- or better by S&P and a rating of Aa3 or better by Moody's;
(c) if not AAA/Aaa or AA/Aa, A/A if the PARS Rate Bonds shall have a
rating of A- or better by S&P and a rating of A3 or better by Moody's; and
(d) if not AAA/Aaa, AA/Aa or A/A, then below A/A, whether or not the
PARS Rate Bonds are rated by any securities rating agency.
For purposes of this definition, S&P's rating categories of "AAA", "AA" and "A-"
and Moody's rating categories of "Aaa," "Aa3" and "A3," shall be deemed to refer
to and include the respective rating categories correlative thereto in the event
that any such Rating Agencies shall have changed or modified their generic
rating categories or if any successor thereto appointed in accordance with the
definitions thereof shall use different rating categories. If the PARS Rate
Bonds are not rated by a Rating Agency, the requirement of a rating by such
Rating Agency shall be disregarded. If the ratings for the PARS Rate Bonds are
split between two or more of the foregoing categories, the lower rating will
determine the Prevailing Rating.
"Principal Office" means, with respect to the Auction Agent, the office
thereof designated in writing to the Issuer, the Trustee and each Broker-Dealer.
"Securities Depository" means The Depository Trust Company and its
successors and assigns or any other securities depository selected by the Issuer
which agrees to follow the procedures required to be followed by such securities
depository in connection with the PARS Rate Bonds.
"Sell Order" shall have the meaning specified in subsection (a) of Section
1.02 of Exhibit B hereto.
"Submission Deadline" means 1:00 p.m., New York, New York time, on each
Auction Date not in a daily Auction Period and 11:00 a.m., New York, New York
time, on each Auction Date in a daily Auction Period, or such other time on such
date as shall be specified from time to time by the Auction Agent pursuant to
the Auction Agreement as the time by which Broker-Dealers are required to submit
Orders to the Auction Agent.
"Submitted Bid" shall have the meaning specified in subsection (b) of
Section 1.04 of Exhibit B hereto.
"Submitted Hold Order" shall have the meaning specified in subsection (b)
of Section 1.04 of Exhibit B hereto.
"Submitted Order" shall have the meaning specified in subsection (b) of
Section 1.04 of Exhibit B hereto.
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"Submitted Sell Order" shall have the meaning specified in subsection (b)
of Section 1.04 of Exhibit B hereto.
"Sufficient Clearing Bids" means an Auction for which the aggregate
principal amount of the PARS Rate Bonds that are the subject of Submitted Bids
by Potential Owners specifying one or more rates not higher than the Maximum
PARS Rate is not less than the aggregate principal amount of the PARS Rate Bonds
that are the subject of Submitted Sell Orders and of Submitted Bids by Existing
Owners specifying rates higher than the Maximum PARS Rate.
"Tranche" means Tranche I PARS or Tranche II PARS, as the case may be.
"Tranche I PARS" means all PARS which are not Tranche II PARS.
Notwithstanding anything to the contrary herein, during a daily Auction Period,
all PARS will be Tranche I PARS.
"Tranche II PARS" means all PARS for which the amount of a Submitted Bid
equals or exceeds $5,000,000 whether or not the Potential Owner of such PARS is
allocated less than $5,000,000 of PARS pursuant to the allocation provisions of
Section 1.05 of Exhibit B hereto. Once a PARS becomes a Tranche II PARS, such
PARS shall remain a Tranche II PARS until it is sold pursuant to an Auction.
Notwithstanding anything to the contrary herein, during a daily Auction Period,
all PARS will be Tranche I PARS.
"Winning Bid Rates" means the lowest rate in any Submitted Bid for Tranche
I PARS and the lowest rate in any Submitted Bid for Tranche II PARS which, in
each case, when added to the applicable Broker-Dealer Rates would be equal to
each other and which, if selected by the Auction Agent as the PARS Rates, would
cause the aggregate principal amount of PARS Rate Bonds that are the subject of
Submitted Bids specifying rates not greater than such rates to be at least equal
to the aggregate principal amount of Available Bonds.
SECTION 1.03. 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;
(b) references to Articles and Sections are to the Articles and Sections
of this Indenture or the Agreement, as the case may be;
(c) words importing the singular number shall include the plural number
and vice versa and words importing the masculine shall include the feminine and
vice versa; and
(d) the headings and Table of Contents herein are solely for convenience
of reference and shall not constitute a part of this Indenture nor shall they
affect its meanings, construction or effect.
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ARTICLE II
THE BONDS
SECTION 2.01. AUTHORIZATION AND TERMS OF BONDS.
(a) There is hereby authorized and created under this Indenture an issue of
bonds designated as City of Forsyth, Montana, Pollution Control Revenue
Refunding Bonds (Avista Corporation Colstrip Project) Series 1999A. The total
aggregate principal amount of Bonds that may be issued and Outstanding under
this Indenture is expressly limited to $66,700,000 exclusive of Bonds executed
and authenticated as provided in Section 2.07 hereof; provided however, that no
Bonds shall be delivered hereunder until the Trustee receives a request and
authorization of the Issuer signed by the Executive Officer to authenticate and
deliver the principal amount of the Bonds therein specified to the purchaser or
purchasers therein identified upon payment to the Prior Trustee, for the account
of the Issuer, of the sum specified in such request and authorization.
(b) The Bonds shall be issued as registered Bonds, without coupons, in
Authorized Denominations and shall all be dated as of the Issue Date. The Bonds
shall mature, subject to prior redemption as provided in Article IV hereof, upon
the terms and conditions hereinafter set forth, on the Maturity Date. The Bonds
shall bear interest at the rate or rates determined as provided in this Article
II.
(c) The Bonds shall be numbered consecutively from 1 upward. Each Bond
shall bear interest from the Interest Payment Date next preceding the date of
registration and authentication thereof unless it is registered and
authenticated on or prior to the first Interest Payment Date, in which event it
shall bear interest from the Issue Date; provided, however, that if, as shown by
the records of the Paying Agent, interest on the Bonds shall be in default,
Bonds issued in exchange for Bonds surrendered for registration of transfer or
exchange shall bear interest from the last date to which interest has been paid
in full or duly provided for on the Bonds, or, if no interest has been paid or
duly provided for on the Bonds, from the Issue Date. Payment of the interest on
any Bond shall be made to the person appearing on the bond registration books of
the Registrar as the registered Owner thereof on the Record Date, such interest
to be paid by the Paying Agent to such registered Owner, as follows:
(1) in respect of any Bond which is registered in the
book-entry system pursuant to Section 2.16 hereof, in immediately
available funds by no later than 2:30 p.m., New York, New York time, and
(2) in respect of any Bond which is not registered in the book-entry
system pursuant to Section 2.16 hereof, (i) by bank check mailed by
first-class mail on the Interest Payment Date, to such Owner's address as
it appears on the registration books of the Registrar or at such other
address as has been furnished to the Registrar in writing by such Owner,
or (ii) during any Rate Period other than a Term Interest Rate Period, in
immediately available funds on the Interest Payment Date (by wire transfer
or by deposit to the account of the Owner of any such Bond if such account
is maintained with
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the Paying Agent), but in respect of any Owner of Bonds during a Daily
Interest Rate Period, a Weekly Interest Rate Period or a Flexible Interest
Rate Period, only to any Owner which owns Bonds in an aggregate principal
amount of at least $1,000,000 on the Record Date, according to the written
instructions given by such Owner to the Paying Agent or, if no such
instructions have been provided as of the Record Date, by bank check
mailed by first-class mail on the Interest Payment Date to the Owner at
such Owner's address as it appears as of the Record Date on the
registration books of the Registrar, except, in each case, that, if and to
the extent that there shall be a default in the payment of the interest
due on such Interest Payment Date, such defaulted interest shall be paid
to the Owners in whose name any such Bonds are registered as of a special
record date to be fixed by the Trustee, notice of which shall be given to
such Owners not less than ten (10) days prior thereto.
Both the principal of and premium, if any, on the Bonds shall be payable
upon surrender thereof in lawful money of the United States of America at the
Principal Office of the Paying Agent. Notwithstanding the foregoing, interest on
any Bond bearing a Flexible Interest Rate and not registered in the book-entry
system pursuant to Section 2.16 hereof shall be paid only upon presentation to
the Trustee of the Bond on which such payment is due.
SECTION 2.02. INTEREST RATES AND RATE PERIODS.
(a) General. The Bonds shall bear interest from and including the Issue
Date until final payment of the principal or redemption price thereof shall have
been made or provided for in accordance with the provisions hereof, whether at
maturity, upon redemption or otherwise, at the lesser of (A) the Maximum
Interest Rate or (B) the interest rate or rates determined as provided in this
Article II. Such rate or rates shall be effective for the periods set forth in
this Article II. During any Rate Period other than a PARS Rate Period or a Term
Interest Rate Period, interest on the Bonds shall be computed upon the basis of
a 365- or 366-day year, as applicable, for the number of days actually elapsed.
During any PARS Rate Period, interest on the Bonds shall be computed on the
basis of a 360-day year for the actual number of days elapsed except that
interest during a six month Auction Period shall be calculated on the basis of a
360-day year composed of twelve 30-day months. During any Term Interest Rate
Period, interest on the Bonds shall be computed upon the basis of a 360-day
year, consisting of twelve 30-day months. Notwithstanding any other provision of
this Indenture, it shall not be required that all Bonds bear interest at the
same rate, provided that only one Rate Period may apply to the Bonds. Not later
than 11:15 a.m. (New York, New York time) on the Business Day immediately
following the day on which there has been a change in the rate of interest
applicable to the Bonds, the Remarketing Agent shall give notice of such change
to the Trustee by telephone, promptly confirmed in writing. The Trustee hereby
agrees to give telephonic notice to the Company, promptly confirmed in writing,
on each Record Date of the amount of interest to be due and payable on the Bonds
on the next succeeding Interest Payment Date.
(b) Rate Periods. The term of the Bonds shall be divided into consecutive
Rate Periods during which the Bonds shall bear interest at the PARS Rate, Daily
Interest Rate, Weekly Interest Rate, Term Interest Rate or at Flexible Interest
Rates. During the initial Rate Period, the Bonds shall bear interest at a PARS
Rate.
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(c) Initial Period. The Bonds shall bear interest at the PARS Rate of 3.60%
per annum for the Initial Period. Immediately following the Initial Period, the
Bonds shall bear interest at PARS Rates established for daily Auction Periods
unless, prior to the end of the Initial Period, the Company changes the length
of the Auction Periods immediately succeeding the Initial Period to a longer
Auction Period in accordance with Section 1.09 of Exhibit B hereto.
(d) Determination Conclusive. The determination of each PARS Rate by the
Auction Agent and of each Flexible Interest Rate, Daily Interest Rate, Weekly
Interest Rate and Term Interest Rate and each Flexible Segment by the
Remarketing Agent, as the case may be, shall be conclusive and binding upon such
parties, the Trustee, the Paying Agent, the Issuer, the Company, the Owners of
the Bonds and any provider of a Credit Facility.
(e) Conversions Subject to Compliance With Credit Facility Agreement. The
Bonds shall not be converted from one Rate Period to a different Rate Period
unless any applicable conditions precedent to such conversion specified in the
Credit Facility Agreement (unless a Provider Default shall have occurred and be
continuing) have been satisfied.
SECTION 2.03. PARS RATES; CONVERSIONS TO AND FROM PARS RATE PERIODS.
(a) Determination and Notice of PARS Rates. The PARS Rates to be applicable
to the PARS Rate Bonds during each Auction Period shall be determined by the
Auction Agent and notice thereof shall be given, all as provided in Exhibit B
hereto. Exhibit B hereto is hereby incorporated herein by this reference.
(b) Conversions to PARS Rate Periods. At the option of the Company and
subject to Section 2.02(e), all of the Bonds may be converted to a PARS Rate
Period from any other Rate Period as follows:
(i) In any such conversion from a Daily Interest Rate Period or a
Weekly Interest Rate Period, the PARS Rate Conversion Date shall be a
regularly scheduled Interest Payment Date on which interest is payable for
the Daily Interest Rate Period or the Weekly Interest Rate Period from
which the conversion is to be made. In any such conversion from a Term
Interest Rate Period, the PARS Rate Conversion Date shall be a regularly
scheduled Interest Payment Date on which a new Term Interest Rate Period
would otherwise have commenced, and in any such conversion from a Flexible
Interest Rate Period, the PARS Rate Conversion Date shall be the last
regularly scheduled Interest Payment Date on which interest is payable for
any Flexible Segment theretofore established for the Bonds to be
converted.
(ii) The Company shall give written notice of any such conversion to
the Auction Agent, any Remarketing Agent, the Issuer, the Trustee and any
provider of a Credit Facility not less than seven (7) Business Days prior
to the date on which the Trustee is required to notify the Owners of the
conversion pursuant to subparagraph (iii) below. Such notice shall specify
the PARS Rate Conversion Date and the length of the initial Auction
Period. Together with such notice, the Company shall file with the Issuer,
the Trustee and any provider of a Credit Facility a Favorable Opinion of
Bond Counsel.
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No such change to a PARS Rate Period shall become effective unless the
Company shall also file, with the Issuer and the Trustee, such a Favorable
Opinion of Bond Counsel dated the PARS Rate Conversion Date.
(iii) Not less than fifteen (15) days prior to the PARS Rate
Conversion Date the Trustee shall mail a written notice of the conversion
to the Owners of all Bonds to be converted; provided, however, that the
Trustee shall not mail such written notice if converting from a Flexible
Rate Period until it has received a written confirmation from the
Remarketing Agent that no Flexible Segment for the Bonds extends beyond
the PARS Rate Conversion Date. Such notice shall state that the Bonds to
be converted will be subject to mandatory purchase on the PARS Rate
Conversion Date at the purchase price determined pursuant to Section
3.02(a) and will specify the time at which Bonds are to be tendered for
purchase.
(iv) The PARS Rate for the Auction Period commencing on the PARS
Rate Conversion Date shall be determined by the Broker-Dealer before the
Conversion Date and shall be the lowest rate which, in the judgment of the
Broker-Dealer, is necessary to enable the Bonds to be remarketed at the
principal amount thereof, plus accrued interest, if any, on the PARS Rate
Conversion Date. Such determination shall be conclusive and binding upon
the Issuer, the Company, the Trustee, the Auction Agent and the Owners and
Beneficial Owners of the Bonds to which such rate will be applicable.
(v) Not later than 5:00 p.m., New York, New York time, on the date
of determination of the PARS Rate, the Broker-Dealer shall notify the
Trustee and the Company of such rate by telephone confirmed in writing.
Not later than 5:00 p.m., New York, New York time, on the next succeeding
Business Day, the Trustee shall give notice of such rate to the Issuer and
the Auction Agent.
(vi) The Company may revoke its election to effect a conversion of
the interest rate on any Bonds to a PARS Rate by giving written notice of
such revocation to the Issuer, the Trustee, the Remarketing Agent, the
Auction Agent, the Broker-Dealer and any provider of a Credit Facility at
any time prior to the setting of the PARS Rate by the Broker-Dealer.
(c) Conversions From PARS Rate Periods. At the option of the Company and
subject to Section 2.02(e), all of the Bonds may be converted from a PARS Rate
Period to a Daily Interest Rate Period, a Weekly Interest Rate Period, a Term
Interest Rate Period or a Flexible Interest Rate Period, as follows:
(i) If the PARS are in an Auction Period other than the daily
Auction Period, the conversion date shall be the second regularly
scheduled Interest Payment Date following the final Auction Date. If the
PARS are in a daily Auction Period, the conversion date shall be the next
regularly scheduled Interest Payment Date.
(ii) The Company shall give written notice of any such conversion to
the Issuer, the Trustee, the Auction Agent, the Broker-Dealer and any
provider of a Credit
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Facility not less than seven (7) Business Days prior to the date on which
the Trustee is required to notify the Owners of the conversion pursuant to
subparagraph (iii) below. Such notice shall specify the conversion date
and the Rate Period to which the conversion will be made and, if
applicable, the length of any Term Rate Period. Together with such notice,
the Company shall file with the Issuer and the Trustee a Favorable Opinion
of Bond Counsel regarding such conversion. No conversion shall become
effective unless the Company shall also file, with the Issuer, the Trustee
and any provider of a Credit Facility, such a Favorable Opinion of Bond
Counsel dated the date of such conversion.
(iii) Not less than twenty (20) days prior to the conversion date,
the Trustee shall mail a written notice of the conversion to the Owners of
all Bonds to be converted, specifying the Rate Period to which the Bonds
are being converted, stating that the Bonds to be converted will be
subject to mandatory purchase on the conversion date at the purchase price
determined pursuant to Section 3.02(a), specifying the time at which Bonds
are to be tendered for purchase, stating any conditions precedent to such
conversion and stating that, if such conditions are not satisfied, the
Bonds will continue to bear interest at PARS Rates but that the Bonds will
be subject to mandatory purchase in accordance with the last paragraph of
Section 2.08 hereof.
SECTION 2.04. DAILY INTEREST RATE; ADJUSTMENT TO DAILY INTEREST RATE PERIOD.
(a) Determination of Daily Interest Rate. During each Daily Interest Rate
Period, the Bonds shall bear interest at the Daily Interest Rate determined by
the Remarketing Agent on each Business Day for such Business Day. The Daily
Interest Rate shall be the rate determined by the Remarketing Agent (based on an
examination of Tax-Exempt obligations comparable to the Bonds known by the
Remarketing Agent to have been priced or traded under then-prevailing market
conditions) to be the lowest rate which would enable the Remarketing Agent to
sell the Bonds on the effective date of such rate at a price (without regard to
accrued interest) equal to 100% of the principal amount thereof. If the
Remarketing Agent shall not have determined a Daily Interest Rate for any day by
10:00 a.m., New York, New York time, the Daily Interest Rate for such day shall
be the same as the Daily Interest Rate for the immediately preceding day. The
Remarketing Agent shall notify the Company, the Trustee and the Paying Agent of
each Daily Interest Rate on the date of the determination thereof by written
notice communicated by electronic mail, by facsimile or by other means
acceptable to the Company, the Trustee, and the Paying Agent.
(b) Adjustment to Daily Interest Rate Period. At any time, the Company, by
written notice to the Issuer, the Trustee, the Paying Agent and the Remarketing
Agent may, subject to Section 2.02(e), elect that the Bonds shall bear interest
at a Daily Interest Rate. Such notice (A) shall specify the effective date of
such adjustment to a Daily Interest Rate, which shall be (1) a Business Day not
earlier than the fifteenth day following the fifth Business Day after the date
of receipt by the Trustee and the Paying Agent of such notice (or such shorter
period after the date of such receipt as shall be acceptable to the Trustee);
(2) in the case of an adjustment from a Term Interest Rate Period, a day on
which the Bonds would be permitted to be redeemed at the option of the Company
pursuant to Section 4.02(b)(iv) hereof or the day immediately following the last
day of the then-current Term Interest Rate Period, and (3) in the case of an
adjustment from a
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Flexible Interest Rate Period, the day immediately following the last day of the
then-current Flexible Interest Rate Period as determined in accordance with
Section 2.07(d) hereof; provided, however, that if prior to the Company's
mailing of notice of such election, any Bonds shall have been called for
redemption and such redemption shall not have theretofore been effected, the
effective date of such Daily Interest Rate Period shall not precede such
redemption date; and (B) if the adjustment is from a Term Interest Rate Period
having a duration in excess of one year, shall be accompanied by a Favorable
Opinion of Bond Counsel with respect to such adjustment.
(c) Notice of Adjustment to Daily Interest Rate Period. The Trustee shall
give notice by Mail of an adjustment to a Daily Interest Rate Period to the
Owners not less than 15 days prior to the effective date of such Daily Interest
Rate Period. Such notice shall state (A) that the interest rate on the Bonds
will be adjusted to a Daily Interest Rate (subject to the Company's ability to
rescind its election as provided in Section 2.08 hereof), (B) the effective date
of such Daily Interest Rate Period, (C) that such Bonds are subject to mandatory
purchase on such effective date, (D) the procedures for such mandatory purchase,
(E) the purchase price of such Bonds on such effective date (expressed as a
percentage of the principal amount thereof), and (F) that the Owners of such
Bonds do not have the right to retain their Bonds on such effective date.
SECTION 2.05. WEEKLY INTEREST RATE; ADJUSTMENT TO WEEKLY INTEREST RATE PERIOD.
(a) Determination of Weekly Interest Rate. During each Weekly Interest Rate
Period, the Bonds shall bear interest at the Weekly Interest Rate determined by
the Remarketing Agent no later than the first day of such Weekly Interest Rate
Period and thereafter no later than Tuesday of each week during such Weekly
Interest Rate Period, unless any such Tuesday shall not be a Business Day, in
which event the Weekly Interest Rate shall be determined by the Remarketing
Agent no later than the Business Day next preceding such Tuesday. The Weekly
Interest Rate shall be the rate determined by the Remarketing Agent (based on an
examination of Tax-Exempt obligations comparable to the Bonds known by the
Remarketing Agent to have been priced or traded under then prevailing market
conditions) to be the lowest rate which would enable the Remarketing Agent to
sell the Bonds on the effective date of such rate at a price (without regard to
accrued interest) equal to 100% of the principal amount thereof. If the
Remarketing Agent shall not have determined a Weekly Interest Rate for any
period, the Weekly Interest Rate shall be the same as the Weekly Interest Rate
in effect for the immediately preceding week. The first Weekly Interest Rate
determined for each Weekly Interest Rate Period shall apply to the period
commencing on the first day of such Weekly Interest Rate Period and ending on
the next succeeding Tuesday. Thereafter, each Weekly Interest Rate shall apply
to the period commencing on each Wednesday and ending on the next succeeding
Tuesday, unless such Weekly Interest Rate Period shall end on a day other than
Tuesday, in which event the last Weekly Interest Rate for such Weekly Interest
Rate Period shall apply to the period commencing on the Wednesday preceding the
last day of such Weekly Interest Rate Period and ending on such last day. The
Remarketing Agent shall notify the Company, the Trustee and the Paying Agent of
each Weekly Interest Rate on the date of the determination thereof by written
notice communicated by electronic mail, by facsimile or by other means
acceptable to the Company, the Trustee, and the Paying Agent.
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(b) Adjustment to Weekly Interest Rate Period. The Company, by written
notice to the Issuer, the Trustee, the Paying Agent and the Remarketing Agent
may, subject to Section 2.02(e), at any time elect that the Bonds shall bear
interest at a Weekly Interest Rate. Such notice (A) shall specify the effective
date of such adjustment to a Weekly Interest Rate, which shall be (1) a Business
Day not earlier than the fifteenth day following the fifth Business Day after
the date of receipt by the Trustee and the Paying Agent of such notice (or such
shorter period after the date of such receipt as shall be acceptable to the
Trustee); (2) in the case of an adjustment from a Term Interest Rate Period, a
day on which the Bonds would be permitted to be redeemed at the option of the
Company pursuant to Section 4.02(b)(iv) hereof or the day immediately following
the last day of the then-current Term Interest Rate Period; and (3) in the case
of an adjustment from a Flexible Interest Rate Period the day immediately
following the last day of the then-current Flexible Interest Rate Period as
determined in accordance with Section 2.07(d); provided however, that if prior
to the Company's making such election, any Bonds shall have been called for
redemption and such redemption shall not have theretofore been effected, the
effective date of such Weekly Interest Rate Period shall not precede such
redemption date; and (B) if the adjustment is from a Term Interest Rate Period
having a duration in excess of one year, shall be accompanied by a Favorable
Opinion of Bond Counsel with respect to such adjustment.
(c) Notice of Adjustment to Weekly Interest Rate Period. The Trustee shall
give notice by Mail of an adjustment to a Weekly Interest Rate Period to the
Owners not less than 15 days prior to the effective date of such Weekly Interest
Rate Period. Such notice shall state (A) that the interest rate on the Bonds
will be adjusted to a Weekly Interest Rate (subject to the Company's ability to
rescind its election as provided in Section 2.08 hereof), (B) the effective date
of such Weekly Interest Rate Period, (C) that such Bonds are subject to
mandatory purchase on such effective date, (D) the procedures for such mandatory
purchase, (E) the purchase price of such Bonds on such effective date (expressed
as a percentage of the principal amount thereof), and (F) that the Owners of
such Bonds do not have the right to retain their Bonds on such effective date.
SECTION 2.06. TERM INTEREST RATE; ADJUSTMENT TO TERM INTEREST RATE PERIOD.
(a) Determination of Term Interest Rate. During each Term Interest Rate
Period, the Bonds shall bear interest at the Term Interest Rate determined by
the Remarketing Agent on a Business Day selected by the Remarketing Agent, but
not more than 60 days prior to and not later than the effective date of such
Term Interest Rate Period. The Term Interest Rate shall be the rate determined
by the Remarketing Agent on such date as being the lowest rate (based on an
examination of Tax-Exempt obligations comparable to the Bonds known by the
Remarketing Agent to have been priced or traded under then prevailing market
conditions) which would enable the Remarketing Agent to sell the Bonds on the
effective date of such Term Interest Rate Period at a price (without regard to
accrued interest) equal to 100% of the principal amount thereof, provided
however, that if, for any reason, a Term Interest Rate for any Term Interest
Rate Period shall not be determined or become effective, then (A) in the event
the then-current Term Interest Rate Period is for one year or less, the Rate
Period for the Bonds shall automatically convert to a Daily Interest Rate Period
and (B) in the event the current Term Interest Rate Period is for more than one
year, the Rate Period for the Bonds shall automatically adjust to a Term
Interest Rate Period of one year and one day; provided, however, that if the
last day of any successive Term
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Interest Rate Period shall not be a day immediately preceding a Business Day,
then such successive Term Interest Rate Period shall end on the first day
immediately preceding the Business Day next succeeding such day or, if such Term
Interest Rate Period would end after the day prior to the final maturity date of
the Bonds, the next succeeding Rate Period shall be a Term Interest Rate Period
ending on the day prior to the final maturity date of the Bonds; provided
further that in the case of clause (B) above, if the Company delivers to the
Trustee a Favorable Opinion of Bond Counsel prior to the end of the
then-effective Term Interest Rate Period, the Rate Period for the Bonds will
adjust to a Daily Interest Rate Period. If the Daily Interest Rate for the first
day of a Daily Interest Rate Period described in clause (A) above is not
determined as provided in Section 2.04(a) hereof the Daily Interest Rate for the
first day of such Daily Interest Rate Period shall be 110% of the most recent
PSA Municipal Swap Index theretofore published in The Bond Buyer (or, if The
Bond Buyer is no longer published or no longer publishes the PSA Municipal Swap
Index, the variable rate index contained in the publication determined by the
Remarketing Agent, or, if the Remarketing Agent is the Trustee, determined by
the Company, as the most comparable to The Bond Buyer). If a Term Interest Rate
for any such Term Interest Rate Period described in clause (B) above is not
determined as described in the first sentence of this Section 2.06(a), the Term
Interest Rate for such Term Interest Rate Period shall be 110% of the most
recent One-Year Note Index theretofore published in The Bond Buyer (or, if The
Bond Buyer is no longer published or no longer publishes the One-Year Note
Index, the one-year note index contained in the publication determined by the
Remarketing Agent, or, if the Remarketing Agent is the Trustee, determined by
the Company, as the most comparable to The Bond Buyer). The Remarketing Agent
shall notify the Company, the Trustee and the Paying Agent of each Term Interest
Rate on the date of the determination thereof by written notice communicated by
electronic mail, by facsimile or by other means acceptable to the Company, the
Trustee, and the Paying Agent.
(b) Adjustment to or Continuation of Term Interest Rate Period. At any
time, the Company, by written notice to the Issuer, the Trustee, the Paying
Agent and the Remarketing Agent, may, subject to Section 2.02(e), elect that the
Bonds shall bear, or continue to bear, interest at a Term Interest Rate and
shall determine the duration of the Term Interest Rate Period during which such
Bonds shall bear interest at such Term Interest Rate. At the time the Company so
elects an adjustment to or continuation of a Term Interest Rate Period, the
Company may specify two or more consecutive Term Interest Rate Periods and, if
the Company so specifies, shall specify the duration of each such Term Interest
Rate Period as provided in this paragraph (b). Such notice shall specify the
effective date of each Term Interest Rate Period, which shall be (A) a Business
Day not earlier than the fifteenth day following the fifth Business Day after
the date of receipt by the Trustee and the Paying Agent of such notice (or such
shorter period after the date of such receipt as shall be acceptable to the
Trustee); (B) in the case of an adjustment from a Term Interest Period to a Term
Interest Period of a different duration or the continuation of a Term Interest
Rate Period, a day on which the Bonds would be permitted to be redeemed at the
option of the Company pursuant to Section 4.02(b)(iv) hereof or the day
immediately following the last day of the then-current Term Interest Rate
Period; and (C) in the case of an adjustment from a Flexible Interest Rate
Period the day immediately following the last day of the then-current Flexible
Interest Rate Period as determined in accordance with Section 2.07(d) hereof;
provided, however, that if prior to the Company's making such election, any
Bonds shall have been called for redemption and such redemption shall not have
theretofore been effected, the
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effective date of such Term Interest Rate Period shall not precede such
redemption date. In addition, such notice (x) shall specify the last day of such
Term Interest Rate Period (which shall be either the day preceding the date of
final maturity of the Bonds or a day which both immediately precedes a Business
Day and is at least 180 days after such effective date), and (y) unless such
Term Interest Rate Period immediately succeeds a Term Interest Rate Period of
the same duration and is subject to the same optional redemption rights under
Section 4.02(b)(iv) hereof, shall be accompanied by a Favorable Opinion of Bond
Counsel with respect to such adjustment.
If, by 15 days prior to the end of the then-current Term Interest Rate
Period, the Trustee shall not have received notice of the Company's election
that the Bonds shall bear interest at a PARS Rate, a Daily Interest Rate, a
Weekly Interest Rate, a Term Interest Rate or a Flexible Interest Rate, (A) in
the event the then-current Term Interest Rate Period is for one year or less,
the Rate Period for the Bonds shall automatically convert to a Daily Interest
Rate Period and (B) in the event the current Term Interest Rate Period is for
more than one year, the Rate Period for the Bonds shall automatically adjust to
a Term Interest Rate Period of one year and one day, provided however, that if
the last day of any successive Term Interest Rate Period shall not be a day
immediately preceding a Business Day, then such successive Term Interest Rate
Period shall end on the first day immediately preceding the Business Day next
succeeding such day or, if such Term Interest Rate Period would end after the
day prior to the Maturity Date, the next succeeding Rate Period shall be a Term
Interest Rate Period ending on the day prior to the Maturity Date; provided
however, that in the case of clause (B) above, if the Company delivers to the
Trustee a Favorable Opinion of Bond Counsel prior to the end of the
then-effective Term Interest Rate Period, the Rate Period for the Bonds will
adjust to a Daily Interest Rate Period. If the Daily Interest Rate for the first
day of a Daily Interest Rate Period described in clause (A) above is not
determined as provided in Section 2.04(a) hereof, the Daily Interest Rate for
the first day of such Daily Interest Rate Period shall be 110% of the most
recent PSA Municipal Swap Index theretofore published in The Bond Buyer (or, if
The Bond Buyer is no longer published or no longer publishes the PSA Municipal
Swap Index, the variable rate index contained in the publication determined by
the Remarketing Agent, or, if the Remarketing Agent is the Trustee, determined
by the Company, as the most comparable to The Bond Buyer). If a Term Interest
Rate for any such Term Interest Rate Period described in clause (B) above is not
determined as described in the first sentence of this Section 2.06(a), the Term
Interest Rate for such Term Interest Rate Period shall be 110% of the most
recent One-Year Note Index theretofore published in The Bond Buyer (or, if The
Bond Buyer is no longer published or no longer publishes the One-Year Note
Index, the one-year note index contained in the publication determined by the
Remarketing Agent, or, if the Remarketing Agent is the Trustee, determined by
the Company, as the most comparable to The Bond Buyer).
At the same time that the Company elects to have the Bonds bear interest
at a Term Interest Rate or to continue to bear interest at a Term Interest Rate,
the Company may also elect that such Term Interest Rate Period shall be
automatically renewed for successive Term Interest Rate Periods each having the
same duration as the Term Interest Rate Period so specified; provided however,
that such election must be accompanied by a Favorable Opinion of Bond Counsel
with respect to such continuing automatic renewals of such Term Interest Rate
Period. If such election is made, no Favorable Opinion of Bond Counsel shall be
required in connection
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with the commencement of each successive Term Interest Rate Period determined in
accordance with such election. Further, at the same time that the Company elects
to have the Bonds bear interest at a Term Interest Rate or continue to bear
interest at a Term Interest Rate, subject to the provisions of Section 4.02(c)
hereof the Company may also specify to the Trustee optional redemption prices
and periods different from those set out in Section 4.02 hereof during the Term
Interest Rate Period(s) with respect to which such election is made.
(c) Notice of Adjustment to or Continuation of Term Interest Rate Period.
The Trustee shall give notice by Mail of an adjustment to or continuation of a
Term Interest Rate Period to the Owners not less than 15 days prior to the
effective date of such Term Interest Rate Period. Such notice shall state (A)
that the interest rate on the Bonds will be adjusted to, or continue to be, a
Term Interest Rate (subject to the Company's ability to rescind its election as
provided in Section 2.08 hereof), (B) the effective date and the last date of
such Term Interest Rate Period, (C) that the Term Interest Rate for such Term
Interest Rate Period will be determined not later than the effective date
thereof (D) how such Term Interest Rate may be obtained from the Remarketing
Agent, (E) the Interest Payment Dates after such effective date, (F) that,
during such Term Interest Rate Period, the Owners of such Bonds will not have
the right to tender their Bonds for purchase, (G) the redemption provisions that
will apply to the Bonds during such Term Interest Rate Period, and (H) that,
except when the new Term Interest Rate Period is preceded by a Term Interest
Rate Period of the same duration, such Bonds are thereby subject to mandatory
purchase on such effective date, the procedures for such mandatory purchase, the
purchase price of such Bonds on such effective date (expressed as a percentage
of the principal amount thereof), and the Owners of such Bonds do not have the
right to retain their Bonds on such effective date.
SECTION 2.07. FLEXIBLE INTEREST RATE; ADJUSTMENT TO FLEXIBLE INTEREST RATE
PERIOD.
(a) Determination of Flexible Segments and Flexible Interest Rates. During
each Flexible Interest Rate Period, each Bond shall bear interest during each
Flexible Segment for such Bond at the Flexible Interest Rate for such Bond as
described herein. Each Flexible Segment and Flexible Interest Rate for each Bond
shall be the Flexible Segment and Flexible Interest Rate determined by the
Remarketing Agent. Each Flexible Segment for any Bond shall be a period of not
less than one nor more than 270 days (subject to any limitations set forth in
the Remarketing Agreement), determined by the Remarketing Agent to be, in its
judgment, the period which, together with all other Flexible Segments for the
Bonds then outstanding, is likely to result in the lowest overall net interest
expense on the Bonds; provided however, that (A) any such Bond purchased on
behalf of the Company and remaining unsold in the hands of the Remarketing Agent
as of the close of business on the effective date of the Flexible Segment for
such Bond shall have a Flexible Segment of one day or, if such Flexible Segment
would not end on a day immediately preceding a Business Day, a Flexible Segment
of more than one day ending on the day immediately preceding the next Business
Day and (B) each Flexible Segment shall end on a day which immediately precedes
a Business Day and no Flexible Segment shall extend beyond the final maturity
date of the Bonds.
The Flexible Interest Rate for each Flexible Segment for each Bond shall
be the rate determined by the Remarketing Agent (based on an examination of
Tax-Exempt obligations comparable to the Bonds known by the Remarketing Agent to
have been priced or traded under
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then prevailing market conditions) no later than the first day of such Flexible
Segment (and in the case of a Flexible Segment of one day, no later than 12:30
p.m. New York, New York time, on such date) to be the lowest rate which would
enable the Remarketing Agent to sell the Bonds on the effective date of such
rate at a price (without regard to accrued interest) equal to 100% of the
principal amount thereof. If a Flexible Segment or a Flexible Interest Rate for
a Flexible Segment is not determined or effective, the Flexible Segment for such
Bond shall be a Flexible Segment of one day, and the interest rate for such
Flexible Segment of one day shall be 110% of the most recent PSA Municipal Swap
Index theretofore published in The Bond Buyer (or, if The Bond Buyer is no
longer published or no longer publishes the PSA Municipal Swap Index, the
variable rate index contained in the publication determined by the Remarketing
Agent, or, if the Remarketing Agent is the Trustee, determined by the Company,
as most comparable to The Bond Buyer). The Remarketing Agent shall notify the
Company, the Trustee and the Paying Agent of each Flexible Interest Rate and
Flexible Segment on the date of the determination thereof by written notice
communicated by electronic mail, by facsimile or by other means acceptable to
the Company, the Trustee, and the Paying Agent.
(b) Adjustment to Flexible Interest Rate Period. At any time, the Company,
by written notice to the Issuer, the Trustee, the Paying Agent and the
Remarketing Agent, may, subject to Section 2.02(e), elect that the Bonds shall
bear interest at Flexible Interest Rates. Such notice (A) shall specify the
effective date of the Flexible Interest Rate Period during which such Bonds
shall bear interest at Flexible Interest Rates, which shall be (1) a Business
Day not earlier than the fifteenth day following the fifth Business Day after
the date of receipt by the Trustee and the Paying Agent of such notice (or such
shorter period after the date of such receipt as shall be acceptable to the
Trustee), and (2) in the case of an adjustment from a Term Interest Rate Period,
a day on which the Bonds would be permitted to be redeemed at the option of the
Company pursuant to Section 4.02(b)(iv) hereof or the day immediately following
the last day of the then-current Term Interest Rate Period, provided however,
that if prior to the Company's making such election any Bonds shall have been
called for redemption and such redemption shall not have theretofore been
effected, the effective date of such Flexible Interest Rate Period shall not
precede such redemption date; and (B) in the case of an adjustment from a Term
Interest Rate Period having a duration in excess of one year, shall be
accompanied by a Favorable Opinion of Bond Counsel with respect to such
adjustment. During each Flexible Interest Rate Period commencing on the date so
specified (provided that the Favorable Opinion of Bond Counsel described in
clause (B) above, if required, is reaffirmed as of such date) and ending on the
day immediately preceding the effective date of the next succeeding Rate Period,
each Bond shall bear interest at a Flexible Interest Rate during each Flexible
Segment for such Bond.
(c) Notice of Adjustment to Flexible Interest Rate Period. The Trustee
shall give notice by Mail of an adjustment to a Flexible Interest Rate Period to
the Owners not less than 15 days prior to the effective date of such Flexible
Interest Rate Period. Such notice shall state (A) that the interest rate on the
Bonds will be adjusted to Flexible Interest Rates (subject to the Company's
ability to rescind its election as provided in Section 2.08 hereof), (B) the
effective date of such Flexible Interest Rate Period, (C) that such Bonds are
thereby subject to mandatory purchase on the effective date of such Flexible
Interest Rate Period, (D) the procedures for such mandatory purchase, (E) the
purchase price of such Bonds on such effective date (expressed as a
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percentage of the principal amount thereof), and (F) that the Owners of such
Bonds do not have the right to retain their Bonds on such effective date.
(d) Adjustment From Flexible Interest Rates. At any time during a Flexible
Interest Rate Period, the Company may elect that the Bonds shall no longer bear
interest at Flexible Interest Rates and shall instead bear interest as otherwise
permitted under this Indenture. The Company shall notify the Issuer, the
Trustee, the Paying Agent and the Remarketing Agent of such election by Mail and
shall specify the Rate Period to follow with respect to such Bonds upon
cessation of the Flexible Interest Rate Period and instruct the Remarketing
Agent to determine Flexible Segments of such duration that, as soon as possible,
all Flexible Segments shall end on the same date, not earlier than the day that
would permit the notices required by Sections 2.03(b)(iii), 2.04(c), 2.05(c) or
2.06(c), as applicable, to be given, and such date shall be the last day of the
then current Flexible Interest Rate Period. Upon the establishment of such
Flexible Segments, the day next succeeding the last day of all such Flexible
Segments shall be the effective date of the Rate Period elected by the Company.
The Remarketing Agent, promptly upon the determination thereof, shall give
written notice of such last day and such effective dates to the Issuer, the
Company, the Trustee and the Paying Agent.
SECTION 2.08. RESCISSION OF ELECTION. Notwithstanding anything herein to the
contrary, the Company may rescind any election by it to adjust to or, in the
case of a Term Interest Rate Period, continue a Rate Period pursuant to Section
2.03, Section 2.04, Section 2.05, Section 2.06 or Section 2.07 hereof prior to
the effective date of such adjustment or continuation or, as provided in Section
2.03(b)(vi) hereof, prior to the setting of the PARS Rate by the Broker-Dealer,
by giving written notice thereof to the Issuer, the Trustee, the Paying Agent,
any Auction Agent and any Remarketing Agent prior to such effective date. At the
time that the Company gives notice of rescission, it may also elect in such
notice to continue the Rate Period then in effect; provided however, that if the
Rate Period then in effect is a Term Interest Rate Period, the subsequent Term
Interest Rate Period shall not be of a different duration than the Term Interest
Rate Period then in effect unless the Company provides to the Trustee a
Favorable Opinion of Bond Counsel prior to the expiration of the then-current
Term Interest Rate Period. If the Trustee receives notice of such rescission
prior to the time the Trustee has given notice to the Owners of the Bonds of the
change in or continuation of Rate Periods pursuant to Section 2.03, Section
2.04, Section 2.05, Section 2.06 or Section 2.07 hereof, then such notice of
change in or continuation of Rate Periods shall be of no force and effect and
shall not be given to the Owners. If the Trustee receives notice of such
rescission after the Trustee has given notice to the Owners of the Bonds
pursuant to Section 2.03, Section 2.04, Section 2.05, Section 2.06 or Section
2.07 hereof of an adjustment from any Rate Period other than a Term Interest
Rate Period in excess of one year or if an attempted adjustment from one Rate
Period (other than a Term Interest Rate Period in excess of one year) to another
Rate Period does not become effective for any other reason, and if the Company
does not elect to continue the Rate Period then in effect, then the Rate Period
for the Bonds shall automatically adjust to or continue in a Daily Interest Rate
Period and the Trustee shall promptly give notice thereof to the Owners of the
Bonds. If the Trustee receives notice of such rescission after the Trustee has
given notice to the Owners of the Bonds pursuant to Section 2.03, Section 2.04,
Section 2.05, Section 2.06 or Section 2.07 hereof of an adjustment from a Term
Interest Rate Period in excess of one year to another Rate Period (including a
Term Interest Rate Period of a different duration), or if an attempted
adjustment from
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a Term Interest Rate Period in excess of one year to another Rate Period
(including a Term Interest Rate Period of a different duration) does not become
effective for any reason and if the Company does not elect to continue the Rate
Period then in effect, then the Rate Period for the Bonds shall continue to be a
Term Interest Rate Period of the same duration as the immediately preceding Term
Interest Rate Period, subject to the second proviso contained in Section
2.06(a); provided that if the Company delivers to the Trustee a Favorable
Opinion of Bond Counsel prior to the end of the then-effective Term Interest
Rate Period, the Rate Period for the Bonds shall be as directed by the Company
in writing. If a Daily Interest Rate for the first day of any Daily Interest
Rate Period to which a Rate Period is adjusted under this Section 2.08 is not
determined as provided in Section 2.04(a) hereof, the Daily Interest Rate for
the first day of such Daily Interest Rate Period shall be 110% of the most
recent PSA Municipal Swap Index theretofore published in The Bond Buyer (or, if
The Bond Buyer is no longer published or no longer publishes the PSA Municipal
Swap Index, the variable rate index contained in the publication determined by
the Remarketing Agent or if the Remarketing Agent is the Trustee, determined by
the Company, as most comparable to The Bond Buyer). The Trustee shall promptly
give written notice of each such automatic adjustment to a Rate Period pursuant
to this Section 2.08 to the Owners in the form provided in Section 2.04(c)
hereof.
Notwithstanding the rescission by the Company of any notice to adjust to
or from or continue a Rate Period, if notice has been given to Owners pursuant
to Section 2.03(b)(iii), Section 2.03(c)(iii), Section 2.04(c), Section 2.05(c),
Section 2.06(c) or Section 2.07(c), the Bonds shall be subject to mandatory
purchase as specified in such notice.
SECTION 2.09. FORM OF BONDS. The Bonds and the certificate of authentication
to be executed thereon shall be in substantially the form attached hereto as
Exhibit A, with such appropriate variations, omissions and insertions as are
permitted or required by this Indenture. Upon adjustment to a Term Interest Rate
Period, the form of Bond may include a summary of the mandatory and optional
redemption provisions to apply to the Bonds during such Term Interest Rate
Period, or a statement to the effect that the Bonds will not be optionally
redeemed during such Term Interest Rate Period; provided that the Registrar
shall not authenticate such a revised Bond form prior to receiving a Favorable
Opinion of Bond Counsel that such Bond form satisfies the requirements of the
Act and of this Indenture and that authentication thereof will not adversely
affect the Tax-Exempt status of the Bonds.
SECTION 2.10. EXECUTION OF BONDS. The Bonds shall be signed in the name and on
behalf of the Issuer with the manual or facsimile signature of its Mayor and
attested by the manual or facsimile signature of the City Clerk. The Bonds shall
then be delivered to the Registrar for authentication by it. In case any officer
who shall have signed any of the Bonds shall cease to be such officer before the
Bonds so signed or attested shall have been authenticated or delivered by the
Registrar or issued by the Issuer, such Bonds may nevertheless be authenticated,
delivered and issued and, upon such authentication, delivery and issuance, shall
be as binding upon the Issuer as though those who signed and attested the same
had continued to be such officers of the Issuer. Also, any Bond may be signed on
behalf of the Issuer by such persons as on the actual date of the execution of
such Bond shall be the proper officers although on the nominal date of such Bond
any such person shall not have been such officer.
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Only such of the Bonds as shall bear thereon a certificate of
authentication in the form set forth in Exhibit A hereto, manually executed by
an authorized signatory of the Registrar, shall be valid or obligatory for any
purpose or entitled to the benefits of this Indenture, and such certificate of
the Registrar shall be conclusive evidence that the Bonds so authenticated have
been duly authenticated and delivered hereunder and are entitled to the benefits
of this Indenture.
Upon authentication of any Bond, the Registrar shall set forth on such
Bond (1) the date of such authentication and (2) in the case of a Bond bearing
interest at a Flexible Interest Rate and not registered in the book-entry system
pursuant to Section 2.16 hereof, such Flexible Interest Rate, the last day of
the applicable Flexible Segment, the number of days comprising such Flexible
Segment and the amount of interest to accrue during such Flexible Segment.
SECTION 2.11. TRANSFER AND EXCHANGE OF BONDS. Registration of any Bond may, in
accordance with the terms of this Indenture, be transferred at the Principal
Office of the Registrar, upon the books of the Registrar required to be kept
pursuant to the provisions of Section 2.12 hereof, by the Person in whose name
it is registered, in person or by its attorney duly authorized in writing, upon
surrender of such Bond for cancellation, accompanied by a written instrument of
transfer in a form approved by the Registrar, duly executed. The Registrar shall
require the payment by the Owner of the Bond requesting such transfer of any tax
or other governmental charge required to be paid and there shall be no other
charge to any Owners for any such transfer. Whenever any Bond shall be
surrendered for registration of transfer, the Issuer shall execute and the
Registrar shall authenticate and deliver a new Bond or Bonds of the same tenor
and of Authorized Denominations. Except with respect to Bonds purchased pursuant
to Sections 3.01 and 3.02 hereof, no registration of transfer of Bonds shall be
required to be made for a period of fifteen (15) days next preceding the date on
which the Trustee Mails any notice of redemption, nor shall any registration of
transfer of Bonds called for redemption be required, except the unredeemed
portion of any Bond being redeemed in part.
Bonds may be exchanged at the Principal Office of the Registrar for a like
aggregate principal amount of Bonds of the same tenor and of Authorized
Denominations. The Registrar shall require the payment by the Owner of the Bond
requesting such exchange of any tax or other governmental charge required to be
paid with respect to such exchange, and there shall be no other charge to any
Owners for any such exchange. Except with respect to Bonds purchased pursuant to
Section 3.01 and Section 3.02 hereof, no exchange of Bonds shall be required to
be made for a period of fifteen (15) days next preceding the date on which the
Trustee Mails notice of redemption, nor shall any exchange of Bonds called for
redemption be required, except the unredeemed portion of any Bond being redeemed
in part.
The Issuer, the Registrar, the Trustee and any agent of the Issuer, the
Registrar or the Trustee may treat the person in whose name the Bond is
registered as the owner thereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not the Bond be overdue, and
neither the Issuer, the Registrar, the Trustee, any paying agent nor any such
agent shall be affected by notice to the contrary.
SECTION 2.12. BOND REGISTER. The Registrar will keep or cause to be kept at
its Principal Office sufficient books for the registration and the registration
of transfer of the Bonds, which
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shall at all times, during regular business hours, be open to inspection by the
Issuer, the Trustee, the Provider, the Remarketing Agent and the Company; and,
upon presentation for such purpose, the Registrar shall under such reasonable
regulations as it may prescribe, register the transfer or cause to be registered
the transfer, on said books, Bonds as hereinbefore provided.
SECTION 2.13. BONDS MUTILATED, LOST, DESTROYED OR STOLEN. If any Bond shall
become mutilated, the Issuer, upon the request and at the expense of the Owner
of said Bond, shall execute, and the Registrar shall thereupon authenticate and
deliver, a new Bond of like tenor and number in exchange and substitution for
the Bond so mutilated, but only upon surrender to the Registrar of the Bond so
mutilated. Every mutilated Bond so surrendered to the Registrar shall be
canceled by it and delivered to the Company. If any Bond issued hereunder shall
be lost, destroyed or stolen, evidence of such loss, destruction or theft may be
submitted to the Issuer, the Company and the Registrar, and if such evidence
shall be satisfactory to them and indemnity satisfactory to them shall be given,
the Issuer, at the expense of the Owner, shall execute, and the Registrar shall
thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall be about to mature, instead of issuing a substitute
Bond the Registrar may pay the same without surrender thereof). The Issuer may
require payment of a reasonable fee for each new Bond issued under this Section
and payment of the expenses which may be incurred by the Issuer and the
Registrar. Any Bond issued under the provisions of this Section in lieu of any
Bond alleged to be lost, destroyed or stolen shall constitute an original
additional contractual obligation on the part of the Issuer whether or not the
Bond so alleged to be lost, destroyed or stolen be at any time enforceable by
anyone, and shall be equally and proportionately entitled to the benefits of
this Indenture with all other Bonds secured by this Indenture.
To the extent permitted by law, the provisions of this Section are
exclusive and shall preclude all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or stolen Bonds.
SECTION 2.14. BONDS; LIMITED OBLIGATIONS. The Bonds, together with premium, if
any, and interest thereon, shall be limited and not general obligations of the
Issuer not constituting or giving rise to a pecuniary liability of the Issuer
nor any charge against its general credit or taxing powers nor an indebtedness
of or a loan of credit thereof within the meaning of any provision or limitation
of the State Constitution or laws, shall be payable solely from the Revenues and
other moneys pledged therefor under this Indenture, and shall be a valid claim
of the respective Owners thereof only against the Bond Fund, the Revenues and
other moneys held by the Trustee as part of the Trust Estate. The Issuer shall
not be obligated to pay the purchase price of Bonds from any source.
THE BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT, LIABILITY OR GENERAL
OBLIGATION OF THE ISSUER, THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF, OR
A PLEDGE OF THE FAITH AND CREDIT OF THE ISSUER, THE STATE OR OF ANY SUCH
POLITICAL SUBDIVISION, BUT SHALL BE PAYABLE SOLELY FROM THE REVENUES AND
PROCEEDS PROVIDED THEREFOR. THE ISSUER SHALL NOT BE OBLIGATED TO PAY THE SAME
NOR INTEREST THEREON EXCEPT FROM THE REVENUES AND PROCEEDS PLEDGED THEREFOR, AND
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE ISSUER, THE STATE OR OF
ANY POLITICAL
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SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE
INTEREST ON THE BONDS.
No recourse shall be had for the payment of the principal of, or premium,
if any, or interest on any of the Bonds or for any claim based thereon or upon
any obligation, covenant or agreement contained in this Indenture, the Bonds,
the Agreement or any other related documents, against any past, present or
future officer, elected official agent or employee of the Issuer, or any
incorporator, officer, director or member of any successor corporation, as such,
either directly or through the Issuer or any successor corporation, under any
rule of law or equity, statute or constitution or by the enforcement of any
assessment or penalty or otherwise, and all such liability of any such
incorporator, officer, director or member as such is hereby expressly waived and
released as a condition of and in consideration for the execution of this
Indenture and the issuance of any of the Bonds.
SECTION 2.15. DISPOSAL OF BONDS. Upon payment of the principal of, premium, if
any, and interest represented thereby or transfer or exchange pursuant to
Section 2.11 hereof or, replacement pursuant to Section 2.13 hereof, any Bond
shall be canceled and such Bond shall be disposed of by the Registrar in
accordance with its customary procedures and the Registrar shall provide
evidence satisfactory to the Company of such cancellation and disposition.
SECTION 2.16. BOOK-ENTRY SYSTEM.
(a) Unless otherwise determined by the Issuer, the Bonds shall be issued in
the form of a single certificated fully-registered Bond, registered in the name
of Cede & Co., as nominee of DTC, or any successor nominee (the "Nominee"). The
actual owners of the Bonds (the "Beneficial Owners") will not receive physical
delivery of Bond certificates except as provided herein. Except as provided in
paragraph (d) below, all of the outstanding Bonds shall be so registered in the
registration books kept by the Registrar, and the provisions of this Section
shall apply thereto.
(b) With respect to Bonds registered on the registration books kept by the
Registrar in the name of the Nominee, the Issuer, the Company, the Paying Agent,
the Registrar, the Trustee and the Remarketing Agent shall have no
responsibility or obligation to any DTC Participant or the Beneficial Owners.
Without limiting the immediately preceding sentence, the Issuer, the Company,
the Paying Agent, the Registrar, the Trustee and the Remarketing Agent shall
have no responsibility or obligation to DTC, any DTC Participant or any
Beneficial Owner with respect to (1) the accuracy of the records of DTC, the
Nominee or any DTC Participant with respect to any ownership interest in the
Bonds, (2) the delivery by DTC or any DTC Participant of any notice with respect
to the Bonds, including any notice of redemption, or (3) the payment to any DTC
Participant or Beneficial Owner of any amount with respect to principal or
purchase price of, or premium, if any, or interest on, the Bonds. The Issuer,
the Company, the Paying Agent, the Registrar, the Trustee and the Remarketing
Agent may treat and consider the person in whose name each Bond is registered in
the registration books kept by the Registrar as the owner and absolute owner of
such Bond for the purpose of payment of principal purchase price, premium and
interest with respect to such Bond, for the purpose of giving notices of
redemption and other matters with respect to such Bond, for the purpose of
registering transfers with respect to such
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Bond, and for all other purposes whatsoever. The Paying Agent shall pay all
principal of and premium if any, and interest on, the Bonds only to or upon the
order of the respective Owners, as shown in the registration books kept by the
Registrar, or their respective attorneys duly authorized in writing, and all
such payments shall be valid and effective to fully satisfy and discharge the
Issuer's obligations with respect to payment of principal of, and premium, if
any, and interest on, the Bonds to the extent of the sum or sums so paid. No
person other than an Owner, as shown in the registration books kept by the
Registrar, shall receive a certificated Bond evidencing the obligation of the
Issuer to make payments of principal, premium, if any, and interest pursuant to
this Indenture.
(c) The Issuer, the Paying Agent, the Remarketing Agent and the Trustee
shall execute and deliver to DTC a letter of representations in customary form
with respect to the Bonds in book-entry form (the "DTC Representation Letter"),
but such DTC Representation Letter shall not in any way limit the provisions of
the foregoing paragraph (b) or in any other way impose upon the Issuer, the
Trustee or the Paying Agent any obligation whatsoever with respect to persons
having interests in the Bonds other than the Owners, as shown on the
registration books kept by the Registrar. The Trustee, the Remarketing Agent and
the Paying Agent shall take all action necessary for all representations of the
Issuer in the DTC Representation Letter with respect to the Trustee, the
Remarketing Agent and the Paying Agent to be complied with at all times,
including but not limited to, the giving of all notices required under the DTC
Representation Letter. The Trustee and Paying Agent are hereby authorized by the
Issuer to enter into the DTC Representation Letter.
(d) DTC may determine to discontinue providing its services with respect to
the Bonds at any time by giving reasonable notice to the Issuer or the Trustee
and discharging its responsibilities with respect thereto under applicable law.
The Issuer, with the consent of the Company, may terminate the services of DTC
with respect to the Bonds. Upon the discontinuance or termination of the
services of DTC with respect to the Bonds, unless a substitute securities
depository is appointed to undertake the functions of DTC hereunder, the Issuer,
at the expense of the Company, is obligated to deliver Bond certificates to the
Beneficial Owners of such Bonds, as described in this Indenture, and such Bonds
shall no longer be restricted to being registered in the registration books kept
by the Registrar in the name of the Nominee, but may be registered in whatever
name or names Owners transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Indenture.
(e) Notwithstanding any other provision of this Indenture to the contrary,
so long as any Bond is registered in the name of the Nominee, all payments with
respect to principal or purchase price of or, premium if any, and interest on
such Bond and all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the DTC Representation Letter. Owners
shall have no lien or security interest in any rebate or refund paid by DTC to
the Paying Agent which arises from the payment by the Paying Agent of principal
of, or premium, if any, or interest on, the Bonds in immediately available funds
to DTC.
(f) So long as any Bond is held in book-entry form a Beneficial Owner
(through its DTC Participant) shall give notice to the Trustee to elect to have
its Bonds purchased, and shall effect delivery of such Bonds by causing such DTC
Participant to transfer its interest in the Bonds equal
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to such Beneficial Owner's interest on the records of DTC to the Trustee's
participant account with DTC. The requirement for physical delivery of the Bonds
in connection with any purchase pursuant to Section 3.01 and Section 3.02 hereof
shall be deemed satisfied when the ownership rights in the Bonds are transferred
by DTC Participants on the records of DTC to the Trustee's participant account.
SECTION 2.17. PAYMENTS PURSUANT TO THE CREDIT FACILITY. So long as the Credit
Facility shall be in effect, the Trustee, Registrar and Paying Agent shall
observe the following provisions respecting the Credit Facility:
(a) If on the Business Day prior to each Interest Payment Date and
prior to each date upon which the principal of the Bonds becomes due on
the Maturity Date or pursuant to a mandatory redemption pursuant to
Section 4.03 hereof, the Trustee has received actual notice that
sufficient amounts will not be on deposit in the Bond Fund on such
Interest Payment Date, Maturity Date or redemption date to pay the
principal of or interest on the Bonds then maturing or subject to such
mandatory redemption, or if the Trustee determines on any Interest Payment
Date or on any date upon which the principal of the Bonds becomes due on
the Maturity Date or pursuant to a mandatory redemption effected pursuant
to Section 4.03 hereof that there are not sufficient funds in the Bond
Fund to pay the principal of or interest on the Bonds coming due on such
date, the Trustee shall so notify the Provider. Such notice shall specify
the amount of the anticipated or actual deficiency, as the case may be,
the Bonds to which such deficiency is applicable and whether such Bonds
will be or are deficient as to principal or interest, or both. The
Insurance Policy provides, in effect, that if the Trustee has not so
notified the Provider at least one Business Day prior to an Interest
Payment Date or prior to any date upon which the principal of the Bonds
becomes due on the Maturity Date or pursuant to a mandatory redemption
effected pursuant to Section 4.03 hereof, the Provider will make payments
of principal or interest, or both, due on the Bonds on or before the first
Business Day next following the date on which the Provider shall have
received notice of nonpayment from the Trustee. Otherwise, such payments
shall be made on such Interest Payment Date, Maturity Date or redemption
date.
(b) The Trustee shall, after giving notice to the Provider as
provided in (a) above, make available to the Provider and, at the
Provider's direction, to the Insurance Trustee, the registration books of
the Issuer maintained by the Registrar, and all records relating to the
Bond Fund and any other funds and accounts maintained under this
Indenture.
(c) The Trustee or the Registrar shall provide the Provider and the
Insurance Trustee with a list of Owners entitled to receive principal or
interest payments from the Provider under the terms of the Credit
Facility, and shall make arrangements with the Insurance Trustee (i) to
mail checks or drafts to the Owners entitled to receive full or partial
interest payments from the Provider and (ii) to pay principal upon Bonds
surrendered or, if a book-entry system is in effect, ownership interests
in Bonds transferred to the Insurance Trustee by the Owners or Beneficial
Owners entitled to receive full or partial principal payments from the
Provider.
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(d) The Trustee shall, at the time it provides notice to the
Provider pursuant to (a) above, notify the Owners entitled to receive the
payment of principal thereof or interest thereon from the Provider (i) as
to the fact of such entitlement, (ii) that the Provider will remit to them
all or a part of the interest payments next coming due upon proof of the
entitlement of such Owners to interest payments and delivery to the
Insurance Trustee, in form satisfactory to the Insurance Trustee, of an
appropriate assignment of the Owner's right to payment, (iii) that should
they be entitled to receive full payment of principal from the Provider,
they must surrender their Bonds (along with an appropriate instrument of
assignment in form satisfactory to the Insurance Trustee to permit
ownership of such Bonds to be registered in the name of the Provider) for
payment to the Insurance Trustee, and not the Trustee or Paying Agent, and
(iv) that should they be entitled to receive partial payment of principal
from the Provider, they must surrender their Bonds for payment thereon
first to the Paying Agent, which shall note on such Bonds the portion of
the principal previously paid by the Paying Agent, and then, along with an
appropriate instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee, which will then pay the unpaid portion
of principal thereof. At any time that there is a DTC book-entry system in
effect for the Bonds, the notice required pursuant to this Section 2.17
shall specify that, in lieu of surrendering the Bonds, the beneficial
ownership interests to receive payment of such principal or interest shall
be transferred on the records of DTC to the order of the Insurance
Trustee.
(e) In the event that the Trustee or Paying Agent has notice that
any payment of principal of or interest on a Bond which has become Due for
Payment and which is made to an Owner by or on behalf of the Issuer has
been deemed a preferential transfer and theretofore recovered from such
Owner pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable order of a court
having competent jurisdiction, the Trustee or Paying Agent shall, within
five Business Days after it has notice that such payment has been deemed a
preferential transfer, notify all Owners that in the event that any
Owner's payment is so recovered, such Owner will be entitled to payment
from the Provider to the extent of such recovery if sufficient funds are
not otherwise available, and the Paying Agent shall furnish to the
Provider its records evidencing the payments of principal of and interest
on the Bonds which have been made by the Paying Agent and subsequently
recovered from Owners and the dates on which such payments were made.
(f) In addition to those rights granted the Provider under this
Indenture, the Provider shall, to the extent it makes payment of principal
of or interest on the Bonds, become subrogated to the rights of the
recipients of such payments in accordance with the terms of the Credit
Facility, and to evidence such subrogation (i) in the case of subrogation
as to claims for past due interest, the Registrar shall note the
Provider's rights as subrogee on the registration books of the Issuer
maintained by the Registrar upon receipt from the Provider of proof of the
payment of interest thereon to the Owners, and (ii) in the case of
subrogation as to claims for past due principal, the Registrar shall note
the Provider's rights as subrogee on the registration books of the Issuer
maintained by the Registrar upon surrender of the Bonds by the Owners
thereof, together with proof of the payment of principal thereof.
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SECTION 2.18. CHANGE OF CREDIT FACILITY.
(a) The Trustee shall give notice by Mail of a proposed Change of Credit
Facility pursuant to Section 4.07(a) of the Agreement to the Owners prior to a
date upon which the Owners can give the requisite notice to tender their Bonds
on or prior to the effective date of such Change of Credit facility. Such notice
shall (a) describe the proposed Change of Credit Facility (subject to the
Company's ability to rescind its election to make such Change of Credit
Facility), (b) state the effective date of such Change of Credit Facility, and
(c) state such other matters as the Company may direct.
(b) The Trustee shall give notice by Mail of a proposed Change of Credit
Facility pursuant to Section 4.07(b) of the Agreement to the Owners not less
than 15 days prior to the effective date of such Change of Credit Facility. Such
notice shall (a) describe the proposed Change of Credit Facility (subject to the
Company's ability to rescind its election to make such Change of Credit
Facility), (b) state the effective date of such Change of Credit Facility, (c)
state that such Bonds are subject to mandatory purchase on or before such
effective date pursuant to Section 3.02(a)(iii), (d) describe the procedures for
such mandatory purchase and the date thereof, (e) state the purchase price of
such Bonds on such effective date (expressed as a percentage of the principal
amount thereof), (f) state that the Owners of such Bonds do not have the right
to retain their Bonds on such effective date, and (g) state such other matters
as the Company may direct.
SECTION 2.19. CUSIP NUMBERS. The Issuer in issuing the Bonds may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to Owners; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Bonds or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Issuer or the Company will
promptly notify the Trustee and the Registrar of any change in any CUSIP
number(s).
Neither the Issuer, the Registrar nor the Trustee shall have any
responsibility for any defect in the CUSIP number that appears on any Bond,
check, advice of payment or redemption notice, and any such document may contain
a statement to the effect that CUSIP numbers have been assigned by an
independent service for convenience of reference and that neither the Issuer,
the Registrar nor the Trustee shall be liable for any inaccuracy in such
matters.
ARTICLE III
PURCHASE AND REMARKETING OF BONDS
SECTION 3.01. OWNER'S OPTION TO TENDER FOR PURCHASE.
(a) Daily Interest Rate Period. During any Daily Interest Rate Period, any
Bond or portion thereof in an Authorized Denomination shall be purchased at the
option of the Owner
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thereof on any Business Day at a purchase price equal to 100% of the principal
amount thereof plus accrued interest, if any, from the Interest Payment Date
next preceding the date of purchase to the date of purchase (unless the date of
purchase shall be an Interest Payment Date, in which case the purchase price
shall be equal to the principal amount thereof), upon (i) delivery to the
Trustee at the Delivery Office of the Trustee, by no later than 11:00 a.m., New
York, New York time, on such Business Day, of an irrevocable written notice or
irrevocable notice by telephone (promptly confirmed by telecopy or other
writing) which states the principal amount and certificate number (if the Bonds
are not then held in book-entry form) of such Bond and the date on which the
same shall be purchased, and (ii) subject to Section 2.16(f) hereof and the last
paragraph of Section 3.03 hereof, delivery of such Bond tendered for purchase to
the Trustee at the Delivery Office of the Trustee, accompanied by an instrument
of transfer thereof in a form satisfactory to the Trustee, executed in blank by
the Owner thereof with the signature of such Owner guaranteed by a member or
participant in a "signature guarantee program" as provided in the form of
assignment attached to such Bond, at or prior to 1:00 p.m., New York, New York
time, on the purchase date. The Trustee shall keep a written record of each
notice described in clause (i) above.
(b) Weekly Interest Rate Period. During any Weekly Interest Rate Period,
any Bond or portion thereof in an Authorized Denomination shall be purchased at
the option of the Owner thereof on any Business Day at a purchase price equal to
100% of the principal amount thereof plus accrued interest, if any, from the
Interest Payment Date next preceding the date of purchase to the date of
purchase (unless the date of purchase shall be an Interest Payment Date, in
which case the purchase price shall be equal to the principal amount thereof),
upon (i) delivery to the Trustee at the Delivery Office of the Trustee of an
irrevocable written notice or an irrevocable notice by telephone (promptly
confirmed by telecopy or other writing), by 5:00 p.m., New York, New York time,
on any Business Day, which states the principal amount of such Bond and the
certificate number (if the Bonds are not then held in book-entry form) and the
date on which the same shall be purchased, which date shall not be prior to the
seventh day next succeeding the date of the delivery of such notice to the
Trustee, and (ii) subject to Section 2.16(f) hereof and the last paragraph of
Section 3.03 hereof, delivery of such Bond to the Trustee at the Delivery Office
of the Trustee, accompanied by an instrument of transfer thereof in a form
satisfactory to the Trustee, executed in blank by the Owner thereof with the
signature of such Owner guaranteed by a member or participant in a "signature
guarantee program" as provided in the form of assignment attached to such Bond,
at or prior to 1:00 p.m., New York, New York time, on the purchase date. The
Trustee shall keep a written record of each notice described in clause (i)
above.
(c) Term Interest Rate Period. Any Bond or portion thereof in an
Authorized Denomination shall be purchased at the option of the Owner thereof on
the first day of any Term Interest Rate Period which is preceded by a Term
Interest Rate Period of equal duration at a purchase price equal to 100% of the
principal amount thereof upon (x) delivery to the Trustee at the Delivery Office
of the Trustee of an irrevocable notice in writing by 5:00 p.m., New York, New
York time, on any Business Day not less than fifteen days before the purchase
date, which states the principal amount and certificate number (if the Bonds are
not then held in book-entry form) of such Bond to be purchased, and (y) subject
to Section 2.16(f) hereof and the last paragraph of Section 3.03 hereof delivery
of such Bond to the Trustee at the Delivery Office of
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the Trustee, accompanied by an instrument of transfer thereof in a form
satisfactory to the Trustee, executed in blank by the Owner thereof with the
signature of such Owner guaranteed by a member or participant in a "signature
guarantee program" as provided in the form of assignment attached to such Bond,
at or prior to 1:00 p.m. New York, New York time, on the purchase date. The
Trustee shall keep a written record of each notice described in clause (x)
above.
(d) If any Bond is to be purchased in part pursuant to Section 3.01(a),
Section 3.01(b) or Section 3.01(c) hereof, the amount so purchased and the
amount not so purchased must each be an Authorized Denomination.
SECTION 3.02. MANDATORY PURCHASE.
(a) The Bonds shall be subject to mandatory purchase at a purchase price
equal to 100% of the principal amount thereof, plus accrued interest, if any, to
the purchase date described below, upon the occurrence of any of the events
stated below:
(i) as to any Bond, on the effective date of any change in a Rate
Period with respect to such Bond, other than the effective date of a Term
Interest Rate Period which was preceded by a Term Interest Rate Period of
the same duration;
(ii) as to each Bond in a Flexible Interest Rate Period, on the
Business Day next succeeding the last day of any Flexible Segment with
respect to such Bond; or
(iii) as to any Bond, on the date set forth in any notice of a
Change of Credit Facility given by the Company pursuant to Section 4.07(b)
of the Agreement, which shall be a date that is on or before the effective
date of such Change of Credit Facility, provided, however, that if the
Bonds are then subject to optional redemption pursuant to Section
4.02(b)(iv), the purchase price shall include any premium that would have
been payable upon such redemption had the Bonds been redeemed.
(b) When Bonds are called for redemption pursuant to Section 4.02(b)(iv)
hereof and if the Company gives notice to the Trustee on or before the Business
Day prior to the redemption date that the Company elects to have the Bonds
purchased in lieu of redemption, all or any portion of the Bonds that the
Company elects to purchase shall be subject to mandatory purchase on such
redemption date at a purchase price equal to 100% of the principal amount
thereof plus an amount equal to any premium that would have been payable upon
such redemption had the Bonds been redeemed. If the Bonds are purchased in lieu
of redemption on or prior to the applicable Record Date, the purchase price
shall include accrued interest from the Interest Payment Date next preceding the
date of purchase to the date of purchase (unless the date of purchase shall be
an Interest Payment Date, in which case the purchase price shall be equal to the
amount specified in the preceding sentence). If the Bonds are purchased in lieu
of redemption after such Record Date, the purchase price shall not include
accrued interest.
SECTION 3.03. PAYMENT OF PURCHASE PRICE. If Bonds are to be purchased pursuant
to Section 3.01 or Section 3.02, the Trustee shall pay the purchase price of
such Bonds but solely
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from the following sources in the order of priority indicated, and the Trustee
shall not have any obligation to use funds from any other source:
(a) proceeds of the remarketing and sale of such Bonds pursuant to
Section 3.04 hereof;
(b) moneys furnished to the Trustee pursuant to Article VIII hereof,
such moneys to be applied only to the purchase of Bonds which are deemed
to be paid in accordance with Article VIII hereof; and
(c) any other moneys furnished by or on behalf of the Company to the
Trustee for purchase of the Bonds; provided, however, that funds for the
payment of the purchase price of Bonds which are deemed to be paid in
accordance with Article VIII hereof shall be derived only from the sources
described in Section 3.03(a) and Section 3.03(b), in such order of
priority.
Subject to Section 2.16 hereof, the Registrar shall register new Bonds as
directed by the Remarketing Agent and make such Bonds available for delivery on
the date of such purchase. Payment of the purchase price of any Bond shall be
made in immediately available funds for Bonds in a Flexible, Daily, Weekly or
Term Interest Rate Period (subject to Section 2.16(f) hereof) in each case only
upon presentation and surrender of such Bond to the Trustee.
If moneys sufficient to pay the purchase price of Bonds to be purchased
pursuant to Section 3.01 or Section 3.02 hereof shall be held by the Trustee on
the date such Bonds are to be purchased, such Bonds shall be deemed to have been
purchased and shall be purchased according to the terms hereof, for all purposes
of this Indenture, irrespective of whether or not such Bonds shall have been
delivered to the Trustee, and the former Owner of such Bonds shall have no claim
under this Indenture or otherwise, for any amount due with respect to such Bonds
other than the purchase price thereof.
SECTION 3.04. REMARKETING OF BONDS BY REMARKETING AGENT.
(a) Whenever any Bonds are subject to purchase pursuant to Section 3.01 or
Section 3.02 hereof, the Remarketing Agent shall offer for sale and use its best
efforts to remarket such Bonds to be so purchased, any such remarketing to be
made at a price equal to 100% of the principal amount thereof, plus accrued
interest, if any, to the purchase date. The Company may direct the Remarketing
Agent from time to time to cease and to resume sales efforts with respect to
some of or all of the Bonds.
(b) If the Remarketing Agent is remarketing the Bonds after the date notice
has been given of the redemption of such Bonds pursuant to Section 4.02 or 4.03
hereof (and prior to the redemption date thereof), the Remarketing Agent shall
provide to the Trustee the names of the Persons to whom the Bonds are being
remarketed so that the Trustee can provide the notice required by Section
3.05(a) hereof.
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(c) By 11:30 a.m., New York, New York time, on the date the Trustee
receives notice from any Owner in accordance with Section 3.01(a) hereof, and
promptly, but in no event later than 11:30 a.m., New York, New York time, on the
Business Day following the day on which the Trustee receives notice from any
Owner of its demand to have the Trustee purchase Bonds pursuant to Section
3.01(b) or Section 3.01(c) hereof, the Trustee shall give facsimile or
telephonic notice, confirmed in writing thereafter, to the Remarketing Agent
specifying the principal amount of Bonds which such Owner has demanded to have
purchased and the date on which such Bonds are demanded to be purchased.
SECTION 3.05. LIMITS ON REMARKETING. Any Bond purchased pursuant to Sections
3.01 and 3.02 hereof from the date notice is given of redemption pursuant to
Sections 4.02 and 4.03 hereof through the date of such redemption shall not be
remarketed unless the Person buying such Bonds has been given notice in writing
by the Trustee that such Bonds are to be redeemed. Furthermore, in addition to
the requirements of the preceding sentence, if the Bonds are subject to
redemption pursuant to Section 4.03 hereof, the Person buying such Bonds shall
also be given notice in writing by the Trustee that a Determination of
Taxability has occurred and that such Bonds are subject to mandatory redemption
pursuant to Section 4.03 hereof.
SECTION 3.06. DELIVERY OF BONDS; DELIVERY OF PROCEEDS OF REMARKETING Sale.
(a) DELIVERY OF BONDS.
Bonds purchased pursuant to Section 3.01 or Section 3.02 hereof shall be
delivered as follows:
(i) Delivery of Remarketed Bonds. Subject to Section 2.16 hereof,
Bonds remarketed by the Remarketing Agent pursuant to Section 3.04 hereof
shall not be delivered to any Person until it shall have paid the purchase
price therefor.
(ii) Delivery of Bonds Purchased by the Company. Bonds delivered to
the Trustee and purchased with moneys furnished by the Company shall at
the direction of the Company, be (A) held by the Trustee for the account
of the Company, (B) delivered to the Trustee for cancellation or (C)
delivered to the Company.
(iii) Delivery of Defeased Bonds. Bonds purchased by the Remarketing
Agent with moneys described in Section 3.03(b) hereof shall not be
remarketed and shall be delivered to the Trustee for cancellation.
(b) REGISTRATION OF DELIVERED BONDS. Bonds delivered as provided in this
Section 3.06 shall be registered in the manner directed by the recipient
thereof.
(c) NOTICE OF FAILED REMARKETING. In the event that any Bonds are not
remarketed, the Remarketing Agent shall notify the Company by telephone,
promptly confirmed in writing by telecopy, and the Trustee in writing (which may
be delivered by telecopy) no later than 1:30 p.m., New York, New York time, on
any day on which Bonds are delivered or deemed delivered for purchase under this
Indenture, of the aggregate principal amount of Bonds not
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remarketed on such date and the aggregate principal amount of Bonds remarketed
on such date but for which the purchase price has not been paid (which Bonds for
purposes of this Indenture shall be considered to not be remarketed), as
follows:
(i) Such notice to the Company shall be given to the Principal
Office of the Company, as follows:
Avista Corporation
1411 East Mission Avenue
Spokane, Washington 99220
Attention: Treasurer
Telephone: (509) 495-8045
Telecopy: (509) 495-4879
The Company may, by notice given in accordance with Section 13.08 hereof
to the Remarketing Agent and the Trustee, designate any further or different
addresses to which subsequent such notices may be given.
(ii) Such notice to the Trustee shall be given to the Trustee, as
follows:
Chase Manhattan Bank and Trust Company, National Association
101 California Street, Suite 2725
San Francisco, California 94111
Attention: Corporate Trust Administration
Telephone: (415) 954-9518
Telecopy: (415) 693-8850
The Trustee may, by notice given in accordance with Section 13.08 hereof
to the Company and the Trustee, designate any further or different addresses to
which subsequent such notices may be given.
(d) PROCEEDS OF SALE HELD FOR SELLER OF BONDS. Moneys deposited with the
Trustee for the purchase of Bonds pursuant to Section 3.01 and Section 3.02
hereof shall be held uninvested in trust in one or more separate accounts and
shall be paid to the former Owners of such Bonds upon presentation thereof. The
Trustee shall notify the Company in writing within five days after the date of
purchase if the Bonds have not been delivered, and if so directed by the
Company, shall give notice by Mail to each Owner whose Bonds are deemed to have
been purchased pursuant to Section 3.01 and Section 3.02 hereof stating that
interest on such Bonds ceased to accrue on the date of purchase and that moneys
representing the purchase price of such Bonds are available against delivery
thereof at the Delivery Office of the Trustee. Bonds deemed purchased pursuant
to Section 3.01 and Section 3.02 hereof shall cease to accrue interest on the
date of purchase. The Trustee shall hold moneys deposited for the purchase of
Bonds without liability for interest thereon, for the benefit of the former
Owner of the Bond on such date of purchase, who shall thereafter be restricted
exclusively to such moneys for any claim of whatever nature on its part under
this Indenture or on, or with respect to, such Bond. Any moneys so deposited
with and held by the Trustee not so applied to the payment of Bonds within six
months
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after such date of purchase shall be paid by the Trustee to the Company upon the
written direction of the Authorized Company Representative, and thereafter the
Trustee shall have no further liability with respect to such moneys and the
former Owners shall be entitled to look only to the Company for payment, and
then only to the extent of the amount so repaid to the Company, and the Company
shall not be liable for any interest thereon and shall not be regarded as a
trustee of such money.
SECTION 3.07. NO REMARKETING SALES AFTER CERTAIN EVENTS. Anything in this
Indenture to the contrary notwithstanding, there shall be no sales of Bonds
pursuant to a remarketing in accordance with Section 3.04 hereof, if (a) there
shall have occurred and not have been cured or waived an Event of Default
described in Section 9.01(a), Section 9.01(b) or Section 9.01(c) hereof of which
an authorized officer in the Principal Office of the Remarketing Agent and an
authorized officer of the corporate trust department of the Trustee have actual
knowledge or (b) the Bonds have been declared to be immediately due and payable
pursuant to Section 9.02 hereof and such declaration has not been rescinded
pursuant to Section 9.02(d) hereof.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01. REDEMPTION OF BONDS GENERALLY.
(a) The Bonds are subject to redemption if and to the extent the Company is
entitled or required to make and makes a prepayment pursuant to Article VIII of
the Agreement. Except as specifically provided in Section 4.03 hereof, the
Trustee shall not give notice of any redemption under Section 4.05 hereof unless
the Company has so directed in accordance with Section 8.01 of the Agreement;
provided that the Trustee may require prepayment of Loan Payments under Section
4.01 of the Agreement in the case of mandatory redemption.
(b) If the Bonds are to be redeemed in part, they shall only be redeemed in
the principal amount of $100,000 or any integral multiple thereof unless such
redemption occurs during a Term Interest Rate Period which extends to and
includes the Maturity Date, in which case the Bonds may be redeemed in the
principal amount of $5,000 or any integral multiple thereof.
SECTION 4.02. REDEMPTION UPON OPTIONAL PREPAYMENT.
(a) The Bonds shall be redeemed in whole or in part, and if in part by lot,
at any time at a redemption price equal to 100% of the principal amount thereof
(except as otherwise provided in Section 4.02(a)(v) below) plus accrued interest
to the redemption date, upon receipt by the Trustee of a written notice from the
Company stating that any of the following events has occurred and that the
Company therefore intends to exercise its option to prepay the payments due
under the Agreement in whole or in part pursuant to Section 8.01 of the
Agreement and thereby effect the redemption of Bonds in whole or in part to the
extent of such prepayments:
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(i) the Company shall have determined or concurred in a
determination that the continued operation of the Plant is impracticable,
uneconomical or undesirable for any reason; or
(ii) all or substantially all of the Plant shall have been condemned
or taken by eminent domain;
(iii) the operation of the Plant shall have been enjoined or shall
have otherwise been prohibited by, or shall conflict with, any order,
decree, rule or regulation of any court or of any federal, state or local
regulatory body, administrative agency or other governmental body;
(iv) unreasonable burdens or excessive liabilities shall have been
imposed upon the Company in respect of all or a part of the Pollution
Control Facilities or the Plant including, without limitation, federal,
state or other ad valorem, property, income or other taxes not being
imposed on the date of the Agreement, as well as any statute or regulation
enacted or promulgated after the date of the Agreement that prevents the
Company from deducting interest in respect of the Agreement for federal
income tax purposes; or
(v) all or substantially all of the Project shall be transferred or
sold to any entity other than an affiliate of the Company; provided,
however, that in the case of a redemption under this Section 4.02(a)(v),
the redemption price of the Bonds shall be equal to 101% of the principal
amount thereof, plus accrued interest to the date of redemption, unless a
smaller or no premium would be due upon optional redemption of the Bonds
as described in Section 4.02(b) below.
(b) The Bonds shall be subject to redemption in whole, or in part by lot,
prior to their maturity, following receipt by the Issuer and the Trustee of a
written notice from the Company pursuant to Section 8.01 of the Agreement and
upon prepayment of the Loan Payments at the option of the Company, as follows:
(i) While the Bonds bear interest at a PARS Rate, the Bonds shall be
subject to such redemption on the date next succeeding the last day of any
PARS Rate Period at a redemption price equal to 100% of the principal
amount thereof plus accrued interest, if any, to the redemption date.
(ii) While the Bonds bear interest at a Flexible Interest Rate or
Rates, each Bond shall be subject to such redemption on the day next
succeeding the last day of each Flexible Segment for such Bond at a
redemption price equal to 100% of the principal amount thereof plus
accrued interest, if any, to the redemption date.
(iii) While the Bonds bear interest at a Daily Interest Rate or a
Weekly Interest Rate, the Bonds shall be subject to such redemption on any
Business Day at a redemption price equal to 100% of the principal amount
thereof plus accrued interest, if any, to the redemption date.
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(iv) While the Bonds bear interest at a Term Interest Rate, the
Bonds shall be subject to such redemption (1) on the day next succeeding
the last day of each Term Interest Rate Period at a redemption price equal
to the principal amount of the Bonds being redeemed plus accrued interest,
if any, to the redemption date and (2) either (A) on the redemption dates
and at the redemption prices specified by the Company pursuant to Section
4.02(c) hereof or (B) during the redemption periods specified below, in
each case in whole or in part, at the redemption prices (expressed as
percentages of principal amount) hereinafter indicated plus accrued
interest, if any, to the redemption date:
LENGTH OF TERM
INTEREST RATE PERIOD REDEMPTION DATES AND PRICES
-------------------- ---------------------------
Greater than or equal to 11 At any time on or after the first day
years of the calendar month following the
tenth anniversary of the effective date
at 102% declining 1% annually to 100%
Less than 11 years Not redeemable
(c) With respect to any Term Interest Rate Period, the Company may specify
in the notice required by Section 2.06(b) hereof redemption provisions, prices
and periods other than those set forth above; provided however, that such notice
shall be accompanied by a Favorable Opinion of Bond Counsel with respect to such
changes in redemption dates and prices.
SECTION 4.03. REDEMPTION UPON MANDATORY PREPAYMENT. The Bonds shall be subject
to mandatory redemption in whole on any date from amounts which are to be
prepaid by the Company under Section 8.03 of the Agreement, at a redemption
price equal to 100% of the principal amount thereof plus interest accrued, if
any, to the redemption date within one hundred eighty (180) days following a
Determination of Taxability; provided that if, in the opinion of Bond Counsel
delivered to the Trustee, the redemption of a specified portion of the Bonds
outstanding would have the result that interest payable on the Bonds remaining
outstanding after such redemption would remain Tax-Exempt, then the Bonds shall
be redeemed in part by lot (in Authorized Denominations), in such amount as Bond
Counsel in such opinion shall have determined is necessary to accomplish that
result.
SECTION 4.04. SELECTION OF BONDS FOR REDEMPTION. If less than all of the Bonds
are called for redemption the Trustee shall select the Bonds or any given
portion thereof to be redeemed, from the outstanding Bonds or such given portion
thereof not previously called for redemption, by lot. For the purpose of any
such selection the Trustee shall (to the extent practicable) assign a separate
number for each minimum Authorized Denomination of each Bond of a denomination
of more than such minimum; provided that, following any such selection, both the
portion of such Bond to be redeemed and the portion remaining shall be in
Authorized Denominations. The Trustee shall promptly notify the Issuer and the
Company in writing of the numbers of the Bonds or portions thereof so selected
for redemption.
SECTION 4.05. NOTICE OF REDEMPTION.
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(a) The Trustee, for and on behalf of the Issuer, shall give notice of the
redemption of any Bond by Mail, postage prepaid, not less than fifteen (15) nor
more than sixty (60) days prior to the redemption date, to the Owner of such
Bond at the address shown on the registration books of the Registrar on the date
such notice is mailed and to any Auction Agent, any Remarketing Agent, any
Provider, Moody's, S&P, the Securities Depositories and one or more of the
Information Services. Notice of redemption shall also be given to DTC in
accordance with the DTC Representation Letter. Notice of redemption to the
Securities Depositories and the Information Services shall be given by
registered mail. Each notice of redemption shall state the date of such notice,
the date of issue of the Bonds to be redeemed, the redemption date, the
redemption price, the place of redemption (including the name and appropriate
address or addresses of the Paying Agent), the source of the funds to be used
for such redemption, the principal amount, the CUSIP number (if any) of the
maturity and, if less than all, the distinctive certificate numbers of the Bonds
to be redeemed and, in the case of Bonds to be redeemed in part only, the
respective portions of the principal amount thereof to be redeemed. Each such
notice shall also state that the interest on the Bonds designated for redemption
shall cease to accrue from and after such redemption date and that on said date
there will become due and payable on each of said Bonds the principal amount
thereof to be redeemed, interest accrued thereon, if any, to the redemption date
and the premium, if any, thereon (such premium to be specified) and shall
require that such Bonds be then surrendered at the address or addresses of the
Paying Agent specified in the redemption notice. Notwithstanding the foregoing,
failure by the Trustee to give notice pursuant to this Section 4.05 to any one
or more of the Information Services or Securities Depositories or the
insufficiency of any such notices shall not affect the sufficiency of the
proceedings for redemption. Failure to give any required notice of redemption as
to any particular Bond shall not affect the validity of the call for redemption
of any Bonds in respect of which no such failure has occurred.
(b) With respect to any notice of optional redemption of Bonds in
accordance with Section 4.02 hereof, unless, upon the giving of such notice,
such Bonds shall be deemed to have been paid within the meaning of Article VIII
hereof, such notice may state that such redemption is conditioned upon the
receipt by the Trustee, on or prior to the date fixed for such redemption, of
moneys sufficient to pay the principal of, and premium, if any, and interest on,
such Bonds to be redeemed. In the event such moneys are not so received, the
redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, in the manner in which the notice of redemption was
given, that such redemption will not take place.
(c) The Trustee shall also provide the notice with respect to the Bonds to
be redeemed as required by Section 3.05(a) hereof.
SECTION 4.06. PARTIAL REDEMPTION OF BONDS. Upon surrender of any Bond redeemed
in part only, the Registrar shall exchange the Bond redeemed for a new Bond of
like tenor and in an Authorized Denomination without charge to the Owner in the
principal amount of the portion of the Bond not redeemed. In the event of any
partial redemption of a Bond which is registered in the name of Cede & Co., DTC
may elect to make a notation on the Bond certificate which reflects the date and
amount of the reduction in the principal amount of said Bond in lieu of
surrendering the Bond certificate to the Registrar for exchange. The Issuer, the
Company and the
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Trustee shall be fully released and discharged from all liability to the extent
of payment of the redemption price for such partial redemption.
SECTION 4.07. NO PARTIAL REDEMPTION AFTER DEFAULT. Anything in this Indenture
to the contrary notwithstanding, if there shall have occurred and be continuing
an Event of Default (other than an Event of Default described in Section 9.0l(d)
hereof) of which an authorized officer of the corporate trust department of the
Trustee has actual knowledge, there shall be no redemption of less than all of
the Bonds at the time Outstanding.
SECTION 4.08. PAYMENT OF REDEMPTION PRICE. For the redemption of any of the
Bonds, the Issuer shall cause to be deposited in the Bond Fund, solely out of
the Revenues and any other moneys constituting the Trust Estate, an amount
sufficient to pay the principal of, and premium, if any, and interest to become
due on, the Bonds called for redemption on the date fixed for such redemption.
The obligation of the Issuer to cause any such deposit to be made hereunder
shall be reduced by the amount of moneys in the Bond Fund or any fund in Article
VIII hereof available for and used on such redemption date for payment of the
principal of, and premium, if any, and accrued interest on, the Bonds to be
redeemed. The Trustee shall apply amounts as and when required available
therefor in the Bond Fund to pay principal of, and premium, if any, and interest
on, the Bonds.
SECTION 4.09. EFFECT OF REDEMPTION. Notice of redemption having been duly
given as aforesaid, and moneys for payment of the redemption price being held by
the Trustee if such redemption was conditioned thereon, the Bonds so called for
redemption shall, on the redemption date designated in such notice, become due
and payable at the redemption price specified in such notice, interest on the
Bonds so called for redemption shall cease to accrue, said Bonds shall cease to
be entitled to any lien, benefit or security under this Indenture, and the
Owners of said Bonds shall have no rights in respect thereof except to receive
payment of the redemption price thereof, without interest accrued on any funds
held to pay such redemption price accruing after the date of redemption.
All Bonds fully redeemed pursuant to the provisions of this Article IV
shall be canceled upon surrender thereof to the Paying Agent, which shall upon
the written request of the Issuer, deliver to the Company a certificate
evidencing such cancellation.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. PAYMENT OF BONDS.
(a) The Issuer covenants that it will promptly pay or cause to be paid the
principal of, and premium, if any, and interest on, every Bond issued under this
Indenture at the place, on the dates and in the manner provided herein and in
the Bonds, provided that the principal, premium if any, and interest are payable
by the Issuer solely from the Revenues, and nothing in the Bonds or
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this Indenture shall be considered as assigning or pledging any other funds or
assets of the Issuer other than the Trust Estate.
(b) Each and every covenant made herein by the Issuer is predicated upon
the condition that the Issuer shall not in any event be liable for the payment
of the principal of, or premium, if any, or interest on the Bonds, or for the
payment of the purchase price of the Bonds, or the performance of any pledge,
mortgage, obligation or agreement created by or arising under this Indenture or
the Bonds from any property other than the Trust Estate; and, further, that
neither the Bonds nor any such obligation or agreement of the Issuer shall be
construed to constitute an indebtedness or a lending of credit of the Issuer
within the meaning of any constitutional or statutory provision whatsoever, or
constitute or give rise to a pecuniary liability of the Issuer or a charge
against its general credit or taxing power.
(c) For the payment of interest on the Bonds, the Issuer shall cause to be
deposited in the Interest Account on or prior to each Interest Payment Date,
solely out of Revenues and other moneys pledged therefor, an amount sufficient
to pay the interest to become due on such Interest Payment Date. The obligation
of the Issuer to cause any such deposit to be made hereunder shall be reduced by
the amount of moneys in the Interest Account available on the Interest Payment
Date for the payment of the interest on the Bonds.
(d) For payment of the principal of the Bonds upon redemption, maturity or
acceleration of maturity, the Issuer shall cause to be deposited in the
Principal Account, on or prior to the redemption date or the maturity date
(whether accelerated or not) of the Bonds, solely out of Revenues and other
moneys pledged therefor, an amount sufficient to pay the principal of the Bonds.
The obligation of the Issuer to cause any such deposit to be made hereunder
shall be reduced by the amount of moneys in the Principal Account available on
the redemption date or the maturity date (whether accelerated or not) for the
payment of the principal of the Bonds.
SECTION 5.02. PERFORMANCE OF COVENANTS BY ISSUER; AUTHORITY; DUE EXECUTION.
The Issuer covenants that it will faithfully perform at all times any and all
covenants, undertakings, stipulations and provisions contained in this
Indenture, in any and every Bond executed, authenticated and delivered hereunder
and in all of its proceedings pertaining thereto. The Issuer represents that it
is duly authorized under the Constitution and laws of the State to issue the
Bonds and to execute this Indenture, to execute and deliver the Agreement, to
assign the Agreement and amounts payable thereunder, and to pledge the amounts
hereby pledged in the manner and to the extent herein set forth. The Issuer
further represents that all action on its part for the issuance of the Bonds and
the execution and delivery of this Indenture has been duly and effectively
taken, and that the Bonds in the hands of the Owners thereof are and will be
valid and binding limited obligations of the Issuer.
The Issuer shall fully cooperate with the Trustee and with the Owners of
the Bonds to the end of fully protecting the rights and security of the Owners
of any Bonds.
The Issuer represents that it now has, and covenants that it shall use its
best efforts to maintain, complete and lawful authority and privilege to enter
into and perform its obligations under this Indenture and the Agreement, and
covenants that it will at all times use its best efforts
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to maintain its existence or provide for the assumption of its obligations under
this Indenture and the Agreement.
Except to the extent otherwise provided in this Indenture, the Issuer
shall not enter into any contract or take any action by which the rights of the
Trustee or the Owners of the Bonds may be impaired and shall, from time to time,
execute and deliver such further instruments and take such further action as may
be reasonably required to carry out the purposes of this Indenture.
SECTION 5.03. IMMUNITIES AND LIMITATIONS OF RESPONSIBILITY OF ISSUER;
REMEDIES. Without limiting the obligation of the Issuer to perform its covenants
and obligations hereunder:
(a) The Issuer shall be entitled to the advice of counsel and shall
be wholly protected as to action taken or omitted in good faith in
reliance on such advice.
(b) The Issuer may rely conclusively on any communication or other
document furnished to it hereunder and reasonably believed by it to be
genuine.
(c) The Issuer shall not be liable for any action.
(i) taken by it in good faith and reasonably believed by it to
be within its discretion or powers hereunder, or
(ii) in good faith omitted to be taken by it because such
action was reasonably believed to be beyond its discretion or powers
hereunder, or
(iii) taken by it pursuant to any direction or instruction by
which it is governed hereunder, or
(iv) omitted to be taken by it by reason of the lack of any
direction or instruction required hereby for such action; nor shall
it be responsible for the consequences of any error of judgment made
by it in good faith.
(d) The Issuer shall in no event be liable for the application or
misapplication of funds or for other acts or defaults by any person,
except its own officers and employees.
(e) When any payment or consent or other action by it is called for
hereby, it may defer such action pending receipt of such evidence (if any)
as it may require in support thereof.
(f) The Issuer shall not be required to take any remedial action
(other than the giving of notice) unless reasonable indemnity satisfactory
to it is furnished for any expense or liability to be incurred thereby.
(g) As provided herein and in the Agreement, the Issuer shall be
entitled to reimbursement from the Company for its expenses reasonably
incurred or advances
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reasonably made, with interest at a rate per annum equal to the rate of
interest then in effect and as announced by The Chase Manhattan Bank as
its prime lending rate for domestic commercial loans in New York, New
York, in the exercise of its rights or the performance of its obligations
hereunder, to the extent that it acts without previously obtaining
indemnity.
(h) No permissive right or power to act which it may have shall be
construed as a requirement to act, and no delay in the exercise of a right
or power shall affect its subsequent exercise of that right or power.
SECTION 5.04. DEFENSE OF ISSUER'S RIGHTS. The Issuer agrees that the Trustee
may defend the Issuer's rights to the payments and other amounts due under the
Agreement, for the benefit of the Owners of the Bonds, against the claims and
demands of all persons whomsoever. The Issuer covenants that it will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further acts,
instruments and transfers as the Trustee may reasonably require for the better
assuring, transferring, pledging, assigning and confirming to the Trustee all
and singular the rights assigned hereby and the amounts pledged hereby to the
payment of the principal of, and premium, if any, and interest on, the Bonds.
The Issuer covenants and agrees that, except as herein and in the Agreement
provided, it will not sell, convey, assign, pledge, encumber or otherwise
dispose of any part of the Trust Estate.
SECTION 5.05. RECORDING AND FILING; FURTHER INSTRUMENTS.
(a) The Issuer and the Trustee shall cooperate with the Company in causing
to be filed and recorded all documents, notices and financing statements related
to this Indenture and to the Agreement which are necessary, as required by law,
in order to perfect the lien of this Indenture in the Trust Estate. Concurrently
with the execution and delivery of the Bonds and in accordance with the
requirements of Section 5.04 of the Agreement, the Company shall cause to be
delivered to the Trustee an opinion of counsel (i) stating that, in the opinion
of such counsel either (A) such action has been taken, as set forth therein,
with respect to the recording and filing of such documents, notices and
financing statements as is necessary to perfect the lien of this Indenture in
the Trust Estate, or (B) no such action is necessary to perfect such lien, and
(ii) stating the requirements for the filing of continuation statements or other
documentation or notices in order to maintain the perfection of the lien of this
Indenture in the Trust Estate.
(b) The Issuer shall upon the reasonable request of the Trustee, from time
to time execute and deliver such further instruments and take such further
action as may be reasonable (and consistent with the Bond Documents) and as may
be required to effectuate the purposes of this Indenture or any provisions
hereof, provided however, that no such instruments or actions shall pledge the
general credit or the full faith of the Issuer.
SECTION 5.06. RIGHTS UNDER AGREEMENT. The Agreement, a duly executed
counterpart, of which has been filed with the Trustee, sets forth the covenants
and obligations of the Issuer and the Company, including provisions that,
subsequent to the issuance of the Bonds and prior to the payment in full or
provision for payment thereof in accordance with the provisions hereof, the
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Agreement (except as expressly provided therein) may not be effectively amended,
changed, modified, altered or terminated without the concurring written consent
of the Trustee, as provided in Article XII hereof, and reference is hereby made
to the Agreement for a detailed statement of such covenants and obligations of
the Company, and the Issuer agrees that the Trustee in its name or (to the
extent required by law) in the name of the Issuer may enforce all rights of the
Issuer and all obligations of the Company under and pursuant to the Agreement,
whether or not the Issuer is in default hereunder. The Issuer shall cooperate
with the Trustee in enforcing the obligations of the Company to pay or cause to
be paid all amounts payable by the Company under the Agreement.
SECTION 5.07. ARBITRAGE AND TAX COVENANTS. The Issuer will not take or fail to
take any action that would impair the exclusion of interest on the Bonds from
gross income for federal income tax purposes. The Issuer further will not
knowingly act or fail to act so as to cause the proceeds of the Bonds, any
moneys derived, directly or indirectly, from the use or investment thereof and
any other moneys on deposit in any fund or account maintained in respect of the
Bonds (whether such moneys were derived from the proceeds of the sale of the
Bonds or from other sources) to be used in a manner which would cause the Bonds
to be treated as "arbitrage bonds" within the meaning of Section 148 of the
Code, or which would otherwise adversely affect the Tax-Exempt status of the
Bonds.
SECTION 5.08. NO DISPOSITION OF TRUST ESTATE. Except as permitted by this
Indenture, the Issuer shall not sell lease, pledge, assign or otherwise encumber
or dispose of its interest in the Trust Estate and will promptly pay (but only
from the Revenues) or cause to be discharged, or make adequate provision to
discharge, any lien or charge on any part thereof not permitted hereby.
SECTION 5.09. ACCESS TO BOOKS. All books and documents in the possession
of the Issuer relating to the Revenues and the Trust Estate shall at all
reasonable times be open to inspection by such accountants or other agencies
as the Trustee may from time to time designate.
SECTION 5.10. SOURCE OF PAYMENT OF BONDS. The Bonds are not general
obligations of the Issuer but are limited obligations payable solely from the
Revenues. The Revenues have been pledged and assigned as security for the equal
and ratable payment of the Bonds and shall be used for no other purpose than to
pay the principal of, and premium, if any, and interest on, the Bonds, except as
may be otherwise expressly authorized in this Indenture or the Agreement.
SECTION 5.11. CREDIT FACILITY. The Trustee and the Paying Agent shall take
action under the Credit Facility, in accordance with the terms and subject to
the coverage thereof, to the extent necessary in order to cause amounts in
respect of the principal of and interest on the Bonds to be payable by the
Provider pursuant to the Credit Facility to the Owners of the Bonds. The Trustee
shall not sell, assign, transfer or surrender the Credit Facility (a) except to
a successor Trustee hereunder or (b) except in connection with a Change of
Credit Facility.
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ARTICLE VI
DEPOSIT OF BOND PROCEEDS; FUND AND ACCOUNTS; REVENUES
SECTION 6.01. CREATION OF BOND FUND AND ACCOUNTS; REBATE FUND.
(a) There is hereby created by the Issuer and ordered established a
separate Bond Fund, to be held by the Trustee and to be designated "City of
Forsyth, Montana, Pollution Control Revenue Refunding Bonds (Avista Corporation
Colstrip Project) Series 1999A Bond Fund" and therein a Principal Account and an
Interest Account.
(b) For purposes of complying with the requirements of Section 148 of the
Code, the Rebate Fund is hereby established with the Trustee to make arbitrage
payments as contemplated by the Tax Certificate. The Trustee shall deposit such
amounts into the Rebate Fund and pay such amounts from the Rebate Fund as it
shall be directed by an Authorized Company Representative. The Trustee shall
have no responsibility for calculating the amount of arbitrage rebate with
respect to the Bonds.
SECTION 6.02. DISPOSITION OF BOND PROCEEDS AND CERTAIN OTHER MONEYS. In
accordance with the direction contained in Section 3.03 of the Agreement,
simultaneously with the initial authentication and delivery of the Bonds: (i)
there shall be deposited with the Prior Trustee in the Prior Bond Fund and used
for the purpose of the Refunding of the Prior Bonds, an amount equal to
$66,700,000, representing the principal proceeds received from the sale of the
Bonds, and (ii) there shall be deposited into the Interest Account the accrued
interest on the Bonds, if any, from the Issue Date to the date of the initial
authentication and delivery of the Bonds.
SECTION 6.03. DEPOSITS INTO THE BOND FUND; USE OF MONEYS IN THE BOND FUND.
(a) The Trustee shall deposit into the Principal Account of the Bond Fund
(i) payments made by the Company pursuant to the Agreement in respect of
principal of or premium payable on the Bonds, and (ii) any other moneys required
by this Indenture or the Agreement to be deposited into the Principal Account of
the Bond Fund.
(b) The Trustee shall deposit into the Interest Account of the Bond Fund
(i) payments made by the Company pursuant to the Agreement in respect of
interest on the Bonds, and (ii) any other moneys required by this Indenture or
the Agreement to be deposited into the Interest Account of the Bond Fund.
(c) Except as provided in Sections 6.04, 6.05, 9.10 and 10.04 and Article
VIII hereof, moneys in the Principal Account of the Bond Fund shall be used
solely for the payment of principal of and premium if any, on the Bonds as the
same shall become due and payable at maturity, upon redemption or upon
acceleration of maturity.
(d) Except as provided in Sections 6.04, 6.05, 9.10 and 10.04 and Article
VIII hereof, moneys in the Interest Account of the Bond Fund shall be used
solely to pay interest on the Bonds when due.
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SECTION 6.04. BONDS NOT PRESENTED FOR PAYMENT OF PRINCIPAL. In the event any
Bonds shall not be presented for payment when the principal thereof becomes due,
either at maturity or at the date fixed for redemption thereof or the
acceleration of maturity or in the event that any interest thereon is unclaimed,
if moneys sufficient to pay such Bonds or interest are held by the Trustee, the
Trustee shall segregate and hold such moneys in trust (but shall not invest such
moneys), without liability for interest thereon, for the benefit of Owners of
such Bonds who shall except as provided in the following paragraph, thereafter
be restricted exclusively to such fund or funds for the satisfaction of any
claim of whatever nature on their part under this Indenture or relating to said
Bonds or interest. Such Bonds which shall not have been so presented for payment
shall be deemed paid for any purposes of this Indenture.
Any moneys which the Trustee shall segregate and hold in trust for the
payment of the principal of or interest on any Bond and remaining unclaimed for
two years after such principal or interest has become due and payable shall be
paid by the Trustee to the Company upon request of an Authorized Company
Representative. After the payment of such unclaimed moneys to the Company, the
Owner of such Bond shall look only to the Company for payment, and then only to
the extent of the amount so repaid to the Company, and the Company shall not be
liable for any interest thereon and shall not be regarded as a trustee of such
money, and all liability of the Issuer and the Trustee with respect to such
moneys shall thereupon cease.
Neither the Company nor the Issuer shall have any right, title or interest
in or to any moneys held by the Trustee pursuant to this Section. The Trustee
shall not be liable to the Issuer or any Owner for interest on funds held by it
for the payment and discharge of the principal, interest, or premium on any of
the Bonds to any Owner.
SECTION 6.05. PAYMENT TO THE COMPANY. After the right, title and interest of
the Trustee in and to the Trust Estate and all covenants, agreements and other
obligations of the Issuer to the Owners shall have ceased, terminated and become
void and shall have been satisfied and discharged in accordance with Section
6.04 and Article VIII hereof, and all fees, expenses and other amounts payable
to the Registrar, the Paying Agent, the Trustee, the Remarketing Agent, the
Provider and the Issuer pursuant to any provision of this Indenture or the
Credit Facility Agreement shall have been paid, any moneys remaining in the Bond
Fund and the Rebate Fund shall be paid to the Company upon request of an
Authorized Company Representative, other than any unclaimed moneys held pursuant
to Section 6.04. The Trustee may conclusively rely on certificates of the
Remarketing Agent and the Provider as to the amount of any fees, expenses and
other amounts owing to them.
ARTICLE VII
INVESTMENTS
SECTION 7.01. INVESTMENT OF MONEYS IN FUNDS. Subject to Section 5.07 hereof
and the provisions of the Tax Certificate, moneys in the Bond Fund and the
Rebate Fund may be invested and reinvested in Investment Securities. Such
investments shall be made by the Trustee as specifically directed and designated
by the Company in a certificate of, or telephonic advice
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promptly confirmed by a certificate of, an Authorized Company Representative.
Each such certificate or telephonic advice shall contain a statement that each
investment so designated by the Company constitutes an Investment Security and
can be made without violation of any provision hereof or of the Agreement or of
the Tax Certificate. The Trustee shall be entitled to rely on each such
certificate or advice and shall incur no liability for making any such
investment so designated or for any loss, fee, tax or other charge incurred in
selling such investment or for any action taken pursuant to this Section that
causes the Bonds to be treated as "arbitrage bonds" within the meaning of
Section 148 of the Code. No investment instructions shall be given by the
Company if the investments to be made pursuant thereto would violate any
covenant set forth in Section 5.07 hereof or the provisions of the Agreement or
the Tax Certificate. The Trustee may act as principal or agent in the
acquisition or disposition of investments. The Trustee shall not be responsible
for any loss on any investment made in accordance herewith.
SECTION 7.02. CONVERSION OF INVESTMENT TO CASH. As and when any amounts so
invested may be needed for disbursements from the Bond Fund or the Rebate Fund,
the Trustee shall cause a sufficient amount of such investments to be sold or
otherwise converted into cash to the credit of such fund. As long as no Event of
Default shall have occurred and be continuing, the Company shall have the right
to designate the investments to be sold and to otherwise direct the Trustee in
the sale or conversion to cash of such investments; provided that the Trustee
shall be entitled to conclusively assume the absence of any Event of Default
unless it has notice thereof within the meaning of Section 10.05 hereof.
SECTION 7.03. CREDIT FOR GAINS AND CHARGE FOR LOSSES. Gains from
investments shall be credited to and held in and losses shall be charged to
the fund or account from which the investment is made.
ARTICLE VIII
DEFEASANCE
If the Issuer shall pay or cause to be paid to the Owner of any Bond
secured hereby the principal of, and premium, if any, and interest due and
payable, and thereafter to become due and payable, upon such Bond or any portion
of such Bond in an Authorized Denomination thereof, such Bond or portion thereof
shall cease to be entitled to any lien, benefit or security under this
Indenture.
If the Issuer shall pay or cause to be paid the principal of, and premium
if any, and interest due and payable on, all Outstanding Bonds, and thereafter
to become due and payable thereon, and shall pay or cause to be paid all other
sums payable hereunder by the Issuer, including any necessary and proper fees,
compensation and expenses of the Trustee, the Paying Agent, the Registrar, the
Provider and the Remarketing Agent, then, and in that case, the right, title and
interest of the Trustee in and to the Trust Estate shall thereupon cease,
terminate and become void. In such event, the Trustee shall assign, transfer and
turn over the Trust Estate to the Company and any surplus in the Bond Fund and
any balance remaining in any other fund created under this Indenture shall be
paid to the Company upon the request of an Authorized Company
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Representative, other than any unclaimed moneys held pursuant to Sections
3.06(d) and 6.04. The Trustee may conclusively rely on certificates of the
Remarketing Agent and the Provider as to the amount of any fees, expenses and
other amounts owing to them. Notwithstanding anything herein to the contrary, in
the event that the principal of and interest due on any Bonds shall be paid by
the Provider pursuant to the Credit Facility, such Bonds shall remain
Outstanding for all purposes, shall not be defeased or otherwise satisfied and
shall not be considered paid by the Issuer, and the assignment and pledge of the
Trust Estate and all covenants, agreements and other obligations of the Issuer
to such Owners shall continue to exist and shall run to the benefit of the
Provider and the Provider shall be subrogated to the rights of such Owners.
All or any portions of Bonds (in Authorized Denominations) shall, prior to
the maturity or redemption date thereof, be deemed to have been paid within the
meaning of this Article VIII and for all purposes of this Indenture when:
(a) in the event said Bonds or portions thereof have been selected
for redemption in accordance with Section 4.04 hereof, the Trustee shall
have given, or the Company shall have given to the Trustee in form
satisfactory to it irrevocable instructions to give, on a date in
accordance with the provisions of Section 4.05 hereof, notice of
redemption of such Bonds or portions thereof;
(b) there shall have been deposited with the Trustee moneys in an
amount sufficient (without relying on any investment income) to pay when
due the principal of, and premium, if any, and interest due and to become
due (which amount of interest to become due shall be calculated at the
Maximum Interest Rate unless the interest rate borne by all of such Bonds
is not subject to adjustment prior to the maturity or redemption thereof,
in which case the amount of interest shall be calculated at the rate borne
by such Bonds) on said Bonds or portions thereof on and prior to the
redemption date or maturity date thereof, as the case may be;
(c) in the event said Bonds or portions thereof do not mature and
are not to be redeemed within the next succeeding 60 days, the Issuer at
the direction of the Company shall have given the Trustee in form
satisfactory to it irrevocable instructions to give, as soon as
practicable in the same manner as a notice of redemption is given pursuant
to Section 4.05 hereof, a notice to the Owners of said Bonds or portions
thereof and to the Provider that the deposit required by clause (b) above
has been made with the Trustee and that said Bonds or portions thereof are
deemed to have been paid in accordance with this Article VIII and stating
the maturity or redemption date upon which moneys are to be available for
the payment of the principal of, and premium, if any, and interest on,
said Bonds or portions thereof; and
(d) the Trustee shall have received a Favorable Opinion of Bond
Counsel with respect to such deposit.
In the event the requirements of the next succeeding paragraph can be
satisfied, the preceding paragraph shall not apply, and the following two
paragraphs shall be applicable.
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Any Bond shall be deemed to be paid within the meaning of this Article
VIII and for all purposes of this Indenture when:
(a) payment of the principal of and premium if any, on such Bond,
plus interest thereon to the due date thereof (whether such due date is by
reason of maturity or acceleration or upon redemption as provided herein)
either (A) shall have been made or caused to be made in accordance with
the terms thereof or (B) shall have been provided for by irrevocably
depositing with the Trustee in trust and irrevocably set aside exclusively
for such payment (1) moneys sufficient to make such payment, and/or (2)
Government Obligations maturing as to principal and interest in such
amount and at such time as will insure, without reinvestment, the
availability of sufficient moneys to make such payment;
(b) all necessary and proper fees, compensation and expenses of the
Issuer, the Trustee, the Remarketing Agent, the Provider, the Paying Agent
and the Registrar pertaining to the Bonds with respect to which such
deposit is made shall have been paid or the payment thereof provided for
to the satisfaction of the Trustee, the Trustee being able to conclusively
rely on certificates of the Remarketing Agent and the Provider as to the
amount of any fees, compensation and expenses owing to them; and
(c) an opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the effect that such
moneys and/or Government Obligations will insure, without reinvestment,
the availability of sufficient moneys to make such payment, and a
Favorable Opinion of Bond Counsel with respect to such deposit shall have
been delivered to the Trustee. At such times as a Bond shall be deemed to
be paid hereunder, as aforesaid, such Bond shall no longer be secured by
or entitled to the benefits of this Indenture, except for the purposes of
registration and exchange of Bonds and of any such payment from such
moneys or Government Obligations.
The foregoing provisions of this paragraph shall apply only if (x) such Bond is
to mature or be called for redemption prior to the next date upon which such
Bond is subject to purchase pursuant to Section 3.01 and 3.02 hereof; and (y)
the Company has waived, to the satisfaction of the Trustee, its right to convert
the interest rate borne by such Bond.
No deposit under clause (a)(B) of the preceding paragraph shall be deemed
a payment of such Bonds as aforesaid until: (i) proper notice of redemption of
such Bonds shall have been previously given in accordance with Section 4.05
hereof, or in the event said Bonds are not to be redeemed within the next
succeeding 60 days, until the Company shall have given the Trustee on behalf of
the Issuer, in form satisfactory to the Trustee, irrevocable instructions to
notify, as soon as practicable, the Owners of the Bonds and the Provider in
accordance with Section 4.05 hereof, that the deposit required by clause (a)(B)
above has been made with the Trustee and that said Bonds are deemed to have been
paid in accordance with this Article VIII and stating the maturity or redemption
date upon which moneys are to be available for the payment of the principal of
and the applicable redemption premium, if any, on said Bonds, plus interest
thereon to the due date thereof; or (ii) the maturity of such Bonds.
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Moneys deposited with the Trustee pursuant to this Article VIII shall not
be withdrawn or used for any purpose other than, and shall be held in trust for,
the payment of the principal of, premium, if any, and interest on said Bonds or
portions thereof, or for the payment of the purchase price of Bonds in
accordance with Section 3.03 hereof; provided that such moneys, if not then
needed for such purpose, shall to the extent practicable, be invested and
reinvested in Government Obligations maturing on or prior to the earlier of (i)
the date moneys may be required for the purchase of Bonds pursuant to Section
3.03 hereof or (ii) the Interest Payment Date next succeeding the date of
investment or reinvestment, and interest earned from such investments shall be
paid over to the Company, as received by the Trustee, free and clear of any
trust, lien or pledge. If payment of less than all the Bonds is to be provided
for in the manner and with the effect provided in this Article VIII, the Trustee
shall select such Bonds or portion of such Bonds in the manner specified by
Section 4.04 hereof for selection for redemption of less than all Bonds in the
principal amount, not less than $100,000 or, to the extent permitted by Section
4.01(b) hereof, $5,000, designated to the Trustee by the Company.
Notwithstanding that all or any portion of the Bonds are deemed to be paid
within the meaning of this Article VIII, the provisions of this Indenture
relating to (i) the registration and exchange of Bonds, (ii) the delivery of
Bonds to the Trustee for purchase and the related obligations of the Trustee
with respect thereto, (iii) replacement of mutilated, lost, destroyed or stolen
Bonds, (iv) payment of the Bonds from the moneys deposited as described in this
Article and (v) payment, compensation, reimbursement and indemnification of the
Trustee, shall remain in full force and effect with respect to all Bonds until
the Maturity Date or the last date fixed for redemption of all Bonds prior to
maturity and, in the case of clause (v), until payment, compensation,
reimbursement or indemnification, as the case may be, of the Trustee.
ARTICLE IX
DEFAULTS AND REMEDIES
SECTION 9.01. EVENTS OF DEFAULT. Each of the following events shall constitute
and is referred to in this Indenture as an "Event of Default":
(a) a failure to pay the principal of or premium, if any, on any of
the Bonds when the same shall become due and payable at maturity, upon
redemption or otherwise;
(b) a failure to pay an installment of interest on any of the Bonds
for a period of (i) 30 days after the date upon which such interest has
become due and payable if the Bonds bear interest at a Term Interest Rate,
or (ii) two Business Days after the date upon which such interest has
become due and payable if the Bonds bear interest at a PARS Rate, a
Flexible Interest Rate, a Daily Interest Rate or a Weekly Interest Rate;
(c) a failure to pay an amount due in respect of the purchase price
of Bonds pursuant to Section 3.01 and Section 3.02 hereof after such
payment has become due and payable;
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(d) a failure by the Issuer to observe and perform any covenant,
condition, agreement or provision (other than as specified in Section
9.01(a), Section 9.01(b) and Section 9.01(c)) contained in the Bonds or in
this Indenture on the part of the Issuer to be observed or performed,
which failure shall continue for a period of 90 days after written notice,
specifying such failure and requesting that it be remedied, shall have
been given to the Issuer and the Company by the Trustee by registered or
certified mail which may give such notice in its discretion and shall give
such notice at the written request of the Owners of not less than 33-1/3%
in principal amount of the Bonds then Outstanding, unless the Trustee, or
the Trustee and the Owners of a principal amount of Bonds not less than
the principal amount of Bonds the Owners of which requested such notice,
as the case may be, shall agree in writing to an extension of such period
prior to its expiration; provided however, that the Trustee, or the
Trustee and the Owners of such principal amount of Bonds, as the case may
be, shall be deemed to have agreed to an extension of such period if
corrective action is initiated by the Issuer or the Company on behalf of
the Issuer within such period and is being diligently pursued; or
(e) an "Event of Default" under the Agreement.
If on the date on which payment of principal of, interest on or other
amount in any respect of the Bonds is due, sufficient moneys are not available
to make such payment, the Trustee shall promptly give telephonic notice of such
insufficiency to the Company given to the person at the telephone number
provided for in Section 3.06(c) hereof.
SECTION 9.02. ACCELERATION; OTHER REMEDIES.
(a) If an Event of Default described in Section 9.01(a), Section 9.01(b)
or Section 9.01(c) or an Event of Default described in Section 9.01(e) hereof
resulting from an "Event of Default" under Section 7.01(a) or Section 7.01(c) of
the Agreement (of which the Trustee shall be deemed to have notice pursuant to
the provisions of Section 10.05 hereof) has occurred and has not been cured or
waived, then the Trustee may, with the consent of the Provider (unless a
Provider Default shall have occurred and be continuing) or upon the written
direction of the Provider (unless a Provider Default shall have occurred and be
continuing) or upon the written request of the Owners of not less than 33-1/3%
in principal amount of the Bonds then Outstanding and with the consent of the
Provider (unless a Provider Default shall have occurred and be continuing), the
Trustee shall, by written notice by registered or certified mail to the Issuer,
the Company and the Provider, declare the Bonds to be immediately due and
payable, whereupon the Bonds shall without further action, become and be
immediately due and payable, anything in this Indenture or in the Bonds to the
contrary notwithstanding, and the Trustee shall give notice thereof by Mail to
all Owners of Outstanding Bonds.
(b) The provisions of Section 9.02(a) are subject further to the condition
that if, after the principal of the Bonds shall have been so declared to be due
and payable and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Issuer shall
cause to be deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all Bonds, any unpaid purchase price and the
principal of any and all Bonds which shall have become due otherwise than by
reason of such declaration
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(with interest upon such principal and, to the extent permissible by law, on
overdue installments of interest, at the rate per annum then borne by the Bonds)
and such amount as shall be sufficient to cover reasonable compensation and
reimbursement of expenses payable to the Trustee and all Events of Default
(other than nonpayment of the principal of Bonds which shall have become due by
said declaration) shall have been remedied, then, in every such case, such Event
of Default shall be deemed waived and such declaration and its consequences
rescinded and annulled, and the Trustee shall promptly give written notice of
such waiver, rescission or annulment to the Issuer and the Company, and shall
give notice thereof by Mail to all Owners of Outstanding Bonds; provided,
however, that no such waiver, rescission and annulment shall extend to or affect
any other Event of Default or subsequent Event of Default or impair any right,
power or remedy consequent thereon.
(c) Upon the occurrence and continuance of any Event of Default, then and
in every such case the Trustee in its discretion, with the consent of the
Provider (unless a Provider Default shall have occurred and be continuing) may,
and upon the written request of the Owners of not less than 33-1/3% in principal
amount of the Bonds then Outstanding and receipt of indemnity to its
satisfaction (except against negligence or willful misconduct) shall in its own
name and as the Trustee of an express trust:
(i) by mandamus, or other suit, action or proceeding at law or in
equity, enforce all rights of the Owners under, and require the Issuer,
the Company or the Provider to carry out any agreements with or for the
benefit of the Owners of Bonds and to perform its or their duties under,
the Act, the Agreement, this Indenture, the Credit Facility and the Credit
Facility Agreement, provided that any such remedy may be taken only to the
extent permitted under the applicable provisions of the Agreement or this
Indenture, as the case may be;
(ii) bring suit upon the Bonds;
(iii) by action or suit in equity require the Issuer to account as
if it were the trustee of an express trust for the Owners of Bonds; or
(iv) by action or suit in equity enjoin any acts or things which may
be unlawful or in violation of the rights of the Owners of Bonds.
Anything in this Indenture to the contrary notwithstanding, upon the
occurrence and continuance of an Event of Default, the Provider (unless a
Provider Default shall have occurred and be continuing) shall be entitled
(subject to Section 9.04) to control and direct the enforcement of all rights
and remedies granted to the Owners of the Bonds or the Trustee for the benefit
of such Owners under this Indenture and shall be entitled to consent to any
request or direction of the Owners as a condition to the effectiveness of any
such request or direction.
(d) The Trustee shall waive any Event of Default hereunder and its
consequences and rescind any declaration of acceleration of principal upon (i)
the written direction of the Provider (unless a Provider Default shall have
occurred and be continuing) and (ii) the written request of the Owners of (A)
more than a majority in principal amount of all Outstanding Bonds in respect
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of which default in the payment of principal or purchase price of or interest on
the Bonds exists or (B) more than a majority in principal amount of all
Outstanding Bonds in the case of any other Event of Default; provided, however,
that (x) there shall not be waived any Event of Default specified in Section
9.01(a), Section 9.01(b) or Section 9.01(c) hereof unless prior to such waiver
or rescission the Issuer shall have caused to be deposited with the Trustee a
sum sufficient to pay all matured installments of interest upon all Bonds and
the principal and purchase price of any and all Bonds which shall have become
due otherwise than by reason of such declaration of acceleration (with interest
upon such principal and, to the extent permissible by law, on overdue
installments of interest, at the rate per annum then borne by the Bonds) and (y)
no Event of Default shall be waived unless (in addition to the applicable
conditions as aforesaid) there shall have been deposited with the Trustee such
amount as shall be sufficient to cover reasonable compensation and reimbursement
of expenses payable to the Trustee. In case of any waiver or rescission
described above, or in case any proceeding taken by the Trustee on account of
any such Event of Default shall have been discontinued or concluded or
determined adversely, then and in every such case the Issuer, the Trustee and
the Owners of Bonds shall be restored to their former positions and rights
hereunder, respectively; provided further that no such waiver or rescission
shall extend to any subsequent or other Event of Default, or impair any right
consequent thereon.
SECTION 9.03. RESTORATION TO FORMER POSITION. In the event that any proceeding
taken by the Trustee to enforce any right under this Indenture shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, then the Issuer, the Trustee and the Owners of Bonds
shall be restored to their former positions and rights hereunder, respectively,
and all rights, remedies and powers of the Trustee shall continue as though no
such proceeding had been taken.
SECTION 9.04. OWNERS' RIGHT TO DIRECT PROCEEDINGS. Anything in this Indenture
to the contrary notwithstanding, upon the occurrence and continuance of an Event
of Default, the Provider (provided that a Provider Default shall not have
occurred and be continuing) or the Owners of a majority in principal amount of
the Bonds then Outstanding, with the consent of the Provider (if no Provider
Default shall have occurred and be continuing), shall have the right, by an
instrument in writing executed and delivered to the Trustee and upon furnishing
to the Trustee indemnity satisfactory to it (except against negligence or
willful misconduct), to direct the time, method and place of conducting all
remedial proceedings available to the Trustee under this Indenture or exercising
any trust or power conferred on the Trustee by this Indenture, provided that
such direction shall not be other than in accordance with the provisions of law,
the Agreement and this Indenture and shall not result in any personal liability
of the Trustee.
SECTION 9.05. LIMITATION ON OWNERS' RIGHT TO INSTITUTE PROCEEDINGS. No Owner
shall have any right to institute any suit, action or proceeding in equity or at
law for the execution of any trust or power hereunder, or any other remedy
hereunder or in the Bonds, unless such Owner previously shall have given to the
Trustee written notice of an Event of Default as herein above provided and
unless the Owners of not less than 33-1/3% in principal amount of the Bonds then
Outstanding shall have made written request of the Trustee so to do after the
right to institute said suit, action or proceeding under Section 9.02 hereof
shall have accrued, and shall have afforded the Trustee a reasonable opportunity
to proceed to institute the same in either its or their name, and unless there
also shall have been offered to the Trustee security and indemnity satisfactory
to
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it against the costs, expenses and liabilities to be incurred therein or thereby
(except against negligence or willful misconduct), and the Trustee shall not
have complied with such request within a reasonable time; and such notification,
request and offer of indemnity are hereby declared in every such case, at the
option of the Trustee, to be conditions precedent to the institution of said
suit, action or proceeding, it being understood and intended that no one or more
of the Owners shall have any right in any manner whatever by his or their action
to affect, disturb or prejudice the security of this Indenture, or to enforce
any right hereunder or under the Bonds, except in the manner herein provided,
and that all suits, actions and proceedings at law or in equity shall be
instituted, had and maintained in the manner herein provided and for the equal
benefit of all Owners.
SECTION 9.06. NO IMPAIRMENT OF RIGHT TO ENFORCE PAYMENT. Notwithstanding any
other provision in this Indenture, the right of any Owner to receive payment of
the principal or purchase price of, and premium, if any, and interest on, its
Bond, on or after the respective due dates expressed therein, or to institute
suit for the enforcement of any such payment on or after the respective due
dates expressed therein, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Owner.
SECTION 9.07. PROCEEDINGS BY TRUSTEE WITHOUT POSSESSION OF BONDS. All rights
of action under this Indenture or under any of the Bonds secured hereby which
are enforceable by the Trustee may be enforced by it without the possession of
any of the Bonds, or the production thereof at the trial or other proceedings
relative thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the equal and ratable benefit of the
Owners, subject to the provisions of this Indenture.
SECTION 9.08. NO REMEDY EXCLUSIVE. Except as provided in Section 2.13, no
remedy herein conferred upon or reserved to the Trustee or to the Owners is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or under the Agreement, or now or hereafter existing at law or
in equity or by statute; provided, however, that any conditions set forth herein
to the taking of any remedy to enforce the provisions of this Indenture, the
Bonds or the Agreement shall also be conditions to seeking any remedies under
any of the foregoing pursuant to this Section 9.08.
SECTION 9.09. NO WAIVER OF REMEDIES. No delay or omission of the Trustee or of
any Owner to exercise any right or power accruing upon any Event of Default
shall impair any such right or power or shall be construed to be a waiver of any
such Event of Default, or an acquiescence therein; and every power and remedy
given by this Article IX to the Trustee and to the Owners, respectively, may be
exercised from time to time and as often as may be deemed expedient.
SECTION 9.10. APPLICATION OF MONEYS. Any moneys received by the Trustee, by
any receiver or by any Owner pursuant to any right given or action taken under
the provisions of this Article IX, after payment of the costs and expenses,
liabilities and advances incurred or made by the Trustee or its agents or
counsel (provided that moneys held for Bonds not presented for
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payment or deemed paid pursuant to Section 3.06(d), Section 6.04 or Article VIII
hereof shall not be used for purposes other than payment of such Bonds), shall
be deposited in the Bond Fund and all moneys so deposited in the Bond Fund
during the continuance of an Event of Default (other than moneys for the payment
of Bonds which had matured or otherwise become payable prior to such Event of
Default or for the payment of interest due prior to such Event of Default) shall
be applied as follows:
(a) Unless the principal of all the Bonds shall have been declared
due and payable, all such moneys shall be applied (i) first, to the
payment to the persons entitled thereto of all installments of interest
then due on each Bond, with interest on overdue installments of interest,
if lawful at the rate per annum then borne by such Bond, in the order of
maturity of the installments of such interest and, if the amount available
shall not be sufficient to pay in full any particular installment of
interest, then to the payment ratably, according to the amounts due on
such installment, and (ii) 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 money is held pursuant to the provisions of this Indenture) with
interest on each Bond at its rate from the respective dates upon which it
became due and, if the amount available shall not be sufficient to pay in
full Bonds due on any particular date, together with such interest, then
to the payment ratably, according to the amount of principal and interest
due on such date, in each case to the persons entitled thereto, without
any discrimination or privilege.
(b) If the principal of all the Bonds 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, with interest
on overdue interest and principal as aforesaid, without preference or
priority of principal over interest or 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.
(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 subparagraph (b) of this Section 9.10 which shall be
applicable in the event that the principal of all the Bonds shall later
become due and payable, the moneys shall be applied in accordance with the
provisions of subparagraph (a) of this Section 9.10.
Whenever moneys are to be applied pursuant to the provisions of this
Section 9.10, such moneys shall be applied at such times, and from time to time,
as the Trustee shall determine, having due regard to the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such funds, it shall fix the Bond Payment Date upon which such application is to
commence and upon such Bond Payment Date interest on the amounts of principal
and interest to be paid on such Bond Payment Date shall cease to accrue. The
Trustee shall give notice of the deposit with it of any such moneys and of the
fixing of any such Bond Payment Date by Mail to the Provider and all Owners of
Outstanding Bonds and shall not be required to make payment to
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any Owner until such Bond shall be presented to the Trustee for appropriate
endorsement or cancellation if fully paid.
SECTION 9.11. SEVERABILITY OF REMEDIES. It is the purpose and intention of
this Article IX to provide rights and remedies to the Trustee and the Owners
which may be lawfully granted under the provisions of the Act, but should any
right or remedy herein granted be held to be unlawful the Trustee and the Owners
shall be entitled, as above set forth, to every other right and remedy provided
in this Indenture and by law.
ARTICLE X
TRUSTEE; PAYING AGENT; REGISTRAR; REMARKETING AGENT
SECTION 10.01. ACCEPTANCE OF TRUSTS. The Issuer initially appoints Chase
Manhattan Bank and Trust Company, National Association, as Trustee and Paying
Agent. The Trustee hereby accepts and agrees to execute the trusts hereby
created, but only upon the additional terms set forth in this Article X, to all
of which the Issuer agrees and the respective Owners agree by their acceptance
of delivery of any of the Bonds. The Trustee, prior to the occurrence of an
Event of Default and after the curing of all Events of Default, undertakes to
perform such duties and only such duties as are specifically set forth herein
and no implied covenant shall be read into this Indenture.
SECTION 10.02. NO RESPONSIBILITIES FOR RECITALS. The recitals, statements
and representations contained in this Indenture or in the Bonds, save only the
Trustee's authentication upon the Bonds, shall not be taken and construed as
made by or on the part of the Trustee, and the Trustee does not assume, and
shall not have, any responsibility or obligation for the correctness of any
thereof or for the validity, sufficiency or priority of this Indenture or the
Agreement, or the perfection or the maintenance of the perfection of any
security interest granted hereby.
SECTION 10.03. LIMITATIONS ON LIABILITY. The Trustee may execute any of the
trusts or powers hereof and perform the duties required of it hereunder by or
through attorneys, agents, receivers or employees, and shall be entitled to
advice of counsel concerning all matters of trust and its duties hereunder and
shall not be answerable for the conduct of any such attorney, agent, receiver or
employee if appointed by the Trustee with reasonable care, and the advice of any
such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted hereunder in good faith and reliance
thereon. The Trustee shall not be answerable for the exercise of any discretion
or power under this Indenture or for anything whatsoever in connection with the
trusts created hereby, except only for its own negligence or willful misconduct.
The Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Provider or the Owners of a majority in aggregate principal amount of the Bonds
Outstanding relating to the time, method and place of
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conducting any proceeding or any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Indenture.
No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers.
The permissive rights of the Trustee to do things enumerated in this Trust
Indenture shall not be construed as a duty unless so specified herein.
The Trustee shall not be liable for any error of judgment made in good
faith by an officer, director or employee unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts.
The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request, order or direction of any
of the Provider or the Owners pursuant to the provisions of this Trust Indenture
unless such Owners shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
Whether or not expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of the Trustee shall be
subject to the provisions of this Article X and shall extend to the Registrar,
Paying Agents, and employees and agents of the Trustee.
SECTION 10.04. COMPENSATION, EXPENSES AND ADVANCES. The Trustee, the Paying
Agent and the Registrar shall be entitled to such compensation as shall be
agreed in writing with the Company for their services rendered hereunder (not
limited by any provision of law in regard to the compensation of the trustee of
an express trust) and to reimbursement for their actual out-of-pocket expenses
(including reasonable counsel fees and expenses) reasonably incurred in
connection therewith except as a result of their negligence or willful
misconduct. If the Issuer shall fail to perform any of the covenants or
agreements contained in this Indenture, the Trustee may, in its uncontrolled
discretion and without notice to the Owners, at any time and from time to time,
make advances to effect performance of the same on behalf of the Issuer, but the
Trustee shall be under no obligation so to do; and any and all such advances
shall bear interest at a rate per annum equal to the lesser of the Maximum
Interest Rate and the rate of interest then in effect and as announced by The
Chase Manhattan Bank as its prime lending rate for domestic commercial loans in
New York, New York; but no such advance shall operate to relieve the Issuer from
any Event of Default. In no event shall the Trustee be liable for any claims
resulting from any decision on its part not to advance funds as permitted in the
immediately preceding sentence. In the Agreement, the Company has agreed that it
will pay to the Trustee, the Paying Agent, and the Registrar compensation and
reimbursement of expenses and advances and certain indemnitees, but the Company
may, without creating an Event of Default, contest in good faith the
reasonableness of any such expenses and advances. If the Company shall have
failed to make any payment to the Trustee, the Paying Agent or the Registrar
under the Agreement, then each of the Trustee, the Paying Agent and the
Registrar shall have, in addition to any other rights hereunder, a claim, prior
to the claim of the Owners, for the payment of their compensation and
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indemnitees and the reimbursement of their expenses and any advances made by
them, as provided in this Section 10.04, upon the moneys and obligations in the
Bond Fund, except for moneys or obligations deposited with or paid to the
Trustee for the redemption or payment of Bonds which are deemed to have been
paid in accordance with Article VIII hereof, or funds held pursuant to Section
6.04 hereof.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 7.01(c) of the
Agreement, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section 10.04 shall survive the termination of this
Indenture.
SECTION 10.05. NOTICE OF EVENTS OF DEFAULT AND DETERMINATION OF TAXABILITY.
The Trustee shall not be required to take notice, or be deemed to have notice of
any default or Event of Default, other than an Event of Default under Section
9.01(a), Section 9.01(b) or Section 9.01(c) hereof or any Provider Default,
unless the Trustee shall have been specifically notified in writing at the
Principal Office of the Trustee, Attention: Corporate Trust Administration, of
such Event of Default or Provider Default by the Owners of at least 25% in
principal amount of the Bonds then Outstanding, the Issuer, the Company, the
Provider or the Remarketing Agent. The Trustee may, however, at any time, in its
discretion, require of the Issuer full information and cooperation as to the
performance of any of the covenants, conditions and agreements contained herein.
Such inquiry shall not for the purposes of this Section 10.05 constitute notice
of any Event of Default. The Issuer shall not be required to take notice, or be
deemed to have notice, of any Event of Default, other than an Event of Default
of which it shall have actual knowledge. If an Event of Default occurs after the
Trustee has notice of the same as provided in this Section 10.05, or if a
Determination of Taxability occurs of which the Trustee has actual knowledge,
then the Trustee shall give notice thereof by Mail to the Provider, the
Remarketing Agent and the Owners of Outstanding Bonds.
SECTION 10.06. ACTION BY TRUSTEE. Except as provided in Section 3.03, Section
9.02 and Section 9.04 hereof and except for the payment of principal of, and
premium, if any, and interest on, the Bonds when due from moneys held by the
Trustee as part of the Trust Estate, the Trustee shall be under no obligation to
take any action in respect of any Event of Default or toward the execution or
enforcement of any of the trusts hereby created, or to institute, appear in or
defend any suit or other proceeding in connection therewith, unless requested in
writing so to do by the Owners of at least 33-1/3% in principal amount of the
Bonds then Outstanding and, if in its opinion such action may tend to involve it
in expense or liability, unless furnished, from time to time as often as it may
require, with security and indemnity satisfactory to it (except against
negligence or willful misconduct); but the foregoing provisions are intended
only for the protection of the Trustee, and shall not affect any discretion or
power given by any provisions of this Indenture to the Trustee to take action in
respect of any Event of Default without such notice or request from the Owners,
or without such security or indemnity.
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Notwithstanding any other provision of this Indenture, in determining
whether the rights of the Owners will be adversely affected by any action taken
pursuant to the terms and provisions of this Indenture, the Trustee shall
consider the effect on the Owners as if there were no Credit Facility.
SECTION 10.07. GOOD-FAITH RELIANCE. The Trustee, the Registrar, the Provider
and the Remarketing Agent, shall be protected and shall incur no liability in
acting or proceeding in good faith upon any resolution, notice, telegram, telex
or facsimile transmission, request, consent, waiver, certificate, statement,
affidavit, voucher, bond, requisition or other paper or document which it shall
in good faith believe to be genuine and to have been passed or signed by the
proper board, body or person or to have been prepared and furnished pursuant to
any of the provisions of this Indenture or the Agreement, or upon the written
opinion of any attorney, engineer, accountant or other expert believed, without
independent investigation, by the Trustee, the Registrar or the Remarketing
Agent, as the case may be, to be qualified in relation to the subject matter.
The Trustee, the Registrar, the Provider and the Remarketing Agent, shall be
under no duty to make any investigation or inquiry as to any statements
contained or matters referred to in any such instrument, but may accept and rely
upon the same as conclusive evidence of the truth and accuracy of such
statements; provided, however, that the Trustee may, in its discretion, make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation it shall be entitled to examine the books, records and premises of
the Company personally or by agent or attorney. Neither the Trustee, the
Registrar, the Provider nor the Remarketing Agent shall be bound to recognize
any person as an Owner or to take any action at such person's request unless
satisfactory evidence of the ownership of such Bond shall be furnished to such
entity.
Whenever in the administration of this Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of negligence or bad faith on its
part, request and conclusively rely upon a certificate of an Authorized Company
Representative or an Executive Officer.
The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
Notwithstanding anything elsewhere in this Indenture contained, the
Trustee shall have the right, but shall not be required, to demand, in respect
of the authentication of any Bonds or the taking of any other action whatsoever
within the purview of this Indenture or the Agreement, any showings,
certificates, opinions or other information, or corporate action or evidence
thereof, in addition to those by the terms hereof or thereof required as a
condition of such action which are reasonably deemed desirable by the Trustee
for the purpose of establishing the right of the Issuer or the Company to
request the taking of such action by the Trustee.
SECTION 10.08. DEALINGS IN BONDS; ALLOWANCE OF INTEREST. The Trustee, the
Registrar, the Provider, or the Remarketing Agent, in its individual capacity,
may in good faith buy, sell own,
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hold and deal in any of the Bonds issued hereunder and may join in any action
which any Owner may be entitled to take with like effect as if it did not act in
any capacity hereunder. The Trustee, the Registrar, the Provider, or the
Remarketing Agent, in its individual capacity, either as principal or agent, may
also engage in or be interested in any financial or other transaction with the
Issuer or the Company, and may act as depositary, trustee or agent for any
committee or body of Owners secured hereby or other obligations of the Issuer or
the Company as freely as if it did not act in any capacity hereunder.
All moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any moneys received
hereunder except such as it may agree with the Company to pay thereon.
SECTION 10.09. SEVERAL CAPACITIES. Anything in this Indenture to the contrary
notwithstanding, the same entity may serve hereunder as the Trustee, the
Registrar, the Paying Agent and the Remarketing Agent and in any other
combination of such capacities, to the extent permitted by law. For purposes of
this Trust Indenture, the Remarketing Agent shall not be deemed to be an agent
or representative of the Trustee.
SECTION 10.10. RESIGNATION OF TRUSTEE. The Trustee may resign and be
discharged of the trusts created by this Indenture by executing any instrument
in writing resigning such trust and specifying the date when such resignation
shall take effect, and filing the same with the Issuer, the Company, the
Registrar, the Provider, and the Remarketing Agent not less than 45 days before
the date specified in such instrument when such resignation shall take effect,
and by giving notice of such resignation by Mail not less than three weeks prior
to such resignation date, to all Owners of Bonds. Such resignation shall take
effect on the day specified in such instrument and notice, unless previously a
successor Trustee shall have been appointed as hereinafter provided, in which
event such resignation shall take effect immediately upon the appointment of
such successor Trustee, but in no event shall a resignation take effect earlier
than the date on which a successor Trustee has been appointed and has accepted
its appointment.
SECTION 10.11. REMOVAL OF TRUSTEE.
(a) The Trustee may be removed at any time by filing with the Trustee so
removed and with the Issuer, the Company, the Registrar, the Provider, and the
Remarketing Agent, an instrument or instruments in writing executed by (i) the
Provider, if no Provider Default or Event of Default shall have occurred and be
continuing and if the Trustee has acted or failed to act hereunder in a manner
that is contrary to the standard of care of the Trustee provided for herein, or
(ii) the Owners of not less than a majority in principal amount of the Bonds
then Outstanding and, if no Provider Default shall have occurred and be
continuing, the Provider.
(b) The Issuer may, and, so long as no default or Event of Default is then
existing under Section 7.01 of the Agreement or Section 9.01(a), (b) or (c) of
this Indenture, at the request of the Company will, remove the Trustee if (i)
the Trustee fails to comply with Section 10.13(a), (b), (c) or (e) hereof, (ii)
the Trustee is adjudged a bankrupt or an insolvent, (iii) a receiver or other
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public officer takes charge of the Trustee or its property or (iv) the Trustee
otherwise becomes incapable of acting.
(c) In no event shall a removal take effect earlier than the date on which
a successor Trustee has been appointed and has accepted its appointment.
SECTION 10.12. APPOINTMENT OF SUCCESSOR TRUSTEE. In case at any time the
Trustee shall be removed, or be dissolved, or if its property or affairs shall
be taken under the control of any state or federal court or administrative body
because of insolvency or bankruptcy, or for any other reason, then a vacancy
shall forthwith and ipso facto exist in the office of Trustee and a successor
may be appointed, and in case at any time the Trustee shall resign, then a
successor may be appointed by filing with the Issuer, the Company, the Registrar
and the Remarketing Agent an instrument in writing executed by (i) the Provider,
if no Provider Default shall have occurred and be continuing, or (ii) the Owners
of not less than a majority in principal amount of the Bonds then Outstanding
and, if no Provider Default shall have occurred and be continuing, the Provider,
or (iii) the Company if no default or Event of Default is then existing under
Section 7.01 of the Agreement or Section 9.01(a), (b) or (c) of this Indenture.
Copies of such instrument shall be promptly delivered by the Issuer to the
predecessor Trustee and to the Trustee so appointed.
Until a successor Trustee shall be appointed by the Provider, the Owners
or by the Company as herein authorized, the Issuer, by an instrument authorized
by the governing body of the Issuer, shall appoint a successor Trustee
acceptable to the Company and the Provider. After any appointment by the Issuer,
it shall cause notice of such appointment to be given to the Remarketing Agent
and the Registrar and to be given by Mail to all Owners of Bonds. Any new
Trustee so appointed by the Issuer shall immediately and without farther act be
superseded by a Trustee appointed by the Owners in the manner above provided.
SECTION 10.13. QUALIFICATIONS OF SUCCESSOR TRUSTEE. Every successor Trustee
(a) shall be a national or state bank or trust company that is authorized by law
to perform all the duties imposed upon it by this Indenture, (b) shall have (or,
in the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000 as set forth in its (or its related bank holding company's)
most recent published annual report of condition, (c) shall be permitted under
the Act to perform the duties of Trustee, (d) shall be acceptable to the
Provider, and (e) so long as the Bonds are subject to optional or mandatory
purchase pursuant to the provisions of this Indenture and no book-entry system
for the Bonds is in effect pursuant to Section 2.16 hereof, shall have an office
or agency located in New York, New York, if there can be located, with
reasonable effort, such an institution willing and able to accept the trust on
reasonable and customary terms.
SECTION 10.14. JUDICIAL APPOINTMENT OF SUCCESSOR TRUSTEE. In case at any time
the Trustee shall resign and no appointment of a successor Trustee shall be made
pursuant to the foregoing provisions of this Article X prior to the date
specified in the notice of resignation as the date when such resignation is to
take effect, the resigning Trustee may forthwith apply to a court of competent
jurisdiction for the appointment of a successor Trustee. If no appointment of a
successor Trustee shall be made pursuant to the foregoing provisions of this
Article X within six months after a vacancy shall have occurred in the office of
Trustee, any Owner may apply to any
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court of competent Jurisdiction to appoint a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.
SECTION 10.15. ACCEPTANCE OF TRUSTS BY SUCCESSOR TRUSTEE. Any successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer
an instrument accepting such appointment hereunder, and thereupon such successor
Trustee, without any further act, deed or conveyance, shall become duly vested
with all the estates, property rights, powers, trusts, duties and obligations of
its predecessor in the trust hereunder, with like effect as if originally named
Trustee herein. Upon request of such Trustee, such predecessor Trustee and the
Issuer shall execute and deliver an instrument transferring to such successor
Trustee all the estates, property, rights, powers and trusts hereunder of such
predecessor Trustee and, subject to the provisions of Section 10.04 hereof, such
predecessor Trustee shall pay over to the successor Trustee all moneys and other
assets at the time held by it hereunder.
SECTION 10.16. SUCCESSOR BY MERGER OR CONSOLIDATION. Any corporation into
which any Trustee hereunder may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which any Trustee hereunder shall be a party, or to which all or substantially
all of its corporate trust business shall be transferred, shall be the successor
Trustee under this Indenture, without the execution or filing of any paper or
any further act on the part of the parties hereto, anything in this Indenture to
the contrary notwithstanding, provided, however, if such successor corporation
is not a trust company or state or national bank that has trust powers, the
Trustee shall resign from the trusts hereby created prior to such merger,
transfer or consolidation or the successor corporation shall resign from such
trusts as soon as practicable after such merger, transfer or consolidation.
SECTION 10.17. STANDARD OF CARE. Notwithstanding any other provisions of this
Article X, the Trustee shall, during the existence and prior to the curing of an
Event of Default of which the Trustee has notice as provided in Section 10.05
hereof, exercise such of the rights and powers vested in it by this Indenture
and use the same degree of skill and care in their exercise as a prudent person
would use and exercise under the circumstances in the conduct of his own
affairs.
SECTION 10.18. INTERVENTION IN LITIGATION OF THE ISSUER. In any judicial
proceeding to which the Issuer is a party and which in the opinion of the
Trustee and its counsel has a substantial bearing on the interests of the Owners
of the Bonds, the Trustee may and shall upon receipt of indemnity satisfactory
to it (except against negligence or willful misconduct) at the written request
of the Owners of at least 25% in principal amount of the Bonds then Outstanding
and if permitted by the court having jurisdiction in the premises, intervene in
such judicial proceeding.
SECTION 10.19. REMARKETING AGENT. The Company has covenanted in the Agreement
that at all times while any of the Bonds are Outstanding and are subject to
optional or mandatory purchase pursuant to the provisions hereof there shall be
a Remarketing Agent for the Bonds appointed and acting pursuant to the
provisions of this Indenture. The Remarketing Agent shall designate its
Principal Office to the Trustee, the Company, the Registrar and the Issuer.
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The Issuer shall cooperate with the Trustee, the Registrar and the Company
to cause the necessary arrangements to be made and to be thereafter continued
whereby funds from the sources specified herein and in the Agreement will be
made available for the purchase of Bonds presented at the Delivery Office of the
Trustee and whereby Bonds, executed by the Issuer and authenticated by the
Trustee, shall be made available to the Remarketing Agent to the extent
necessary for delivery pursuant to Section 3.06 hereof.
SECTION 10.20. QUALIFICATIONS OF REMARKETING AGENT. The Remarketing Agent
shall have a capitalization of at least $50,000,000 and be authorized by law to
perform all the duties contemplated by this Indenture to be performed by the
Remarketing Agent and agrees to take all actions required of it under the DTC
Representation Letter while a book-entry system is in effect for the Bonds. The
Remarketing Agent may at any time resign and be discharged of the duties and
obligations contemplated by this Indenture by giving at least 30 days' notice to
the Issuer, the Company, the Registrar and the Trustee. The Remarketing Agent
may be removed at any time, at the direction of the Company, by an instrument,
signed by the Authorized Company Representative, filed with the Issuer, the
Remarketing Agent, the Registrar and the Trustee at least 30 days prior to the
effective date of such removal. Upon the resignation or removal of the
Remarketing Agent, the Company may appoint a new Remarketing Agent.
In the event of the resignation or removal of the Remarketing Agent, the
Remarketing Agent shall pay over, assign and deliver any moneys held by it in
such capacity to its successor or, if there be no successor, to the Trustee.
In the event that the Company shall fail to appoint a Remarketing Agent
hereunder, or in the event that the Remarketing Agent shall resign or be
removed, or be dissolved, or if the property or affairs of the Remarketing Agent
shall be taken under the control of any state or federal court or administrative
body because of bankruptcy or insolvency, or for any other reason, and the
Company shall not have appointed a successor Remarketing Agent, the Trustee,
notwithstanding the provisions of the first paragraph of this Section 10.20,
shall ipso facto be deemed to be the Remarketing Agent for all purposes of this
Indenture until the appointment by the Company of the Remarketing Agent or
successor Remarketing Agent, as the case may be; provided, however, that the
Trustee, in its capacity as Remarketing Agent, shall not be required to sell
Bonds or determine the interest rate on the Bonds pursuant to Article II hereof
on the basis of an examination of Tax-Exempt obligations comparable to the Bonds
but shall determine any applicable alternate interest rate if so required by the
applicable provisions of Article II hereof.
SECTION 10.21. REGISTRAR. Pursuant to the provisions hereof the Trustee is the
initial Registrar for the Bonds. By its execution of this Indenture, the Trustee
signifies its acceptance of the duties of Registrar hereunder. Any successor
Registrar shall designate to the Issuer, the Company and the Remarketing Agent
its office where the registration books shall be kept and signify its acceptance
of the duties imposed upon it hereunder by a written instrument of acceptance
delivered to the Issuer and the Trustee under which such Registrar will agree,
particularly, to keep such books and records as shall be consistent with prudent
industry practice and to make such books and records available for inspection by
the Issuer, the Trustee, the Company, the Provider and the Remarketing Agent at
all reasonable times. So long as the Bonds are subject to optional or mandatory
purchase pursuant to the provisions of this Indenture and no
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book-entry system for the Bonds is in effect pursuant to Section 2.16 hereof,
the Registrar shall maintain in New York, New York, an office or agency for the
exchange, registration and registration of transfer of the Bonds.
The Issuer shall cooperate with the Trustee, the Remarketing Agent and the
Company to cause the necessary arrangements to be made and to be thereafter
continued whereby Bonds, executed by the Issuer and authenticated by the
Registrar, shall be made available for exchange, registration and registration
of transfer at the Principal Office of the Registrar. The Issuer shall cooperate
with the Trustee, the Registrar, the Company and the Remarketing Agent to cause
the necessary arrangements to be made and thereafter continued whereby the
Trustee and the Remarketing Agent shall be furnished such records and other
information, at such times, as shall be required to enable the Trustee and the
Remarketing Agent to perform the duties and obligations imposed upon them
hereunder.
SECTION 10.22. QUALIFICATIONS OF REGISTRAR; RESIGNATION; REMOVAL. The
Registrar shall be a corporation duly organized under the laws of the United
States of America or any state or territory thereof, having a combined capital
surplus and retained earnings of at least $10,000,000 and authorized by law to
perform all the duties imposed upon it by this Indenture. The Registrar may at
any time resign and be discharged of the duties and obligations created by this
Indenture by giving at least 45 days' notice to the Issuer, the Trustee, the
Remarketing Agent and the Company. The Registrar may be removed at any time by
an instrument signed by the Authorized Company Representative and filed with the
Issuer, the Registrar, the Trustee, and the Remarketing Agent. Upon the
resignation or removal of the Registrar, the Company shall appoint a new
Registrar.
In the event of the resignation or removal of the Registrar, the Registrar
shall deliver any Bonds held by it in such capacity to its successor or, if
there be no successor, to the Trustee.
In the event that the Company shall fail to appoint a Registrar hereunder,
or in the event that the Registrar shall resign or be removed, or be dissolved,
or if the property or affairs of the Registrar shall be taken under the control
of any state or federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, and the Company shall not have appointed
its successor as Registrar, the Trustee shall ipso facto be deemed to be the
Registrar for all purposes of this Indenture until the appointment by the
Company of the Registrar or successor Registrar, as the case may be.
SECTION 10.23. PAYING AGENTS. The Company, with the written approval of the
Trustee and the Issuer, may appoint and at all times have one or more paying
agents in such place or places as the Company may designate, for the payment of
the principal of, and premium, if any, and the interest on, the Bonds. Each such
paying agent shall have the power to hold moneys in trust. It shall be the duty
of the Trustee to make such arrangements with any such paying agent as may be
necessary to assure, to the extent of the moneys held by the Trustee for such
payment, the prompt payment of the principal of, and premium, if any, and
interest on, the Bonds presented at either place of payment. The Paying Agent
initially appointed hereunder is the Trustee, and the place of payment shall be
the Delivery Office of the Trustee.
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SECTION 10.24. ADDITIONAL DUTIES OF TRUSTEE. The Trustee shall:
(a) hold all Bonds delivered to it hereunder for the account of and
for the benefit of the respective Owners which shall have so delivered
such Bonds pursuant to Section 3.01 or Section 3.02 until moneys
representing the purchase price of such Bonds shall have been delivered to
or for the account of or to the order of such Owners;
(b) hold all moneys delivered to it hereunder for the purchase of
Bonds for the benefit of the person or entity which shall have so
delivered such moneys until the Bonds purchased with such moneys shall
have been delivered to or for the account of such person or entity;
(c) keep such books and records with respect to the Bonds as shall
be consistent with prudent industry practice and to make such books and
records available for inspection by the Issuer, any Paying Agent, the
Company and the Remarketing Agent at all reasonable times; and
(d) as long as a book-entry system is in effect for the Bonds, the
Trustee will comply with the DTC Representation Letter and perform all
duties required of it thereunder.
ARTICLE XI
EXECUTION OF INSTRUMENTS BY OWNERS
AND PROOF OF OWNERSHIP OF BONDS
Any request, direction, consent or other instrument in writing required or
permitted by this Indenture to be signed or executed by the Owners or on their
behalf by an attorney-in-fact may be in any number of concurrent instruments of
similar tenor and may be signed or executed by the Owners in person or by an
agent or attorney-in-fact appointed by an instrument in writing or as provided
in the Bonds. Proof of the execution of any such instrument and of the ownership
of Bonds shall be sufficient for any purpose of this Indenture and shall be
conclusive in favor of the Trustee with regard to any action taken by it under
such instrument if made in the following manner:
(a) The fact and date of the execution by any person of any such
instrument may be proved by the certificate of any officer in any
jurisdiction who, by the laws thereof, has power to take acknowledgments
within such Jurisdiction, to the effect that the person signing such
instrument acknowledged before him the execution thereof, or by an
affidavit of a witness to such execution.
(b) The ownership of Bonds shall be proved by the registration books
kept under the provisions of Section 2.12 hereof.
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Nothing contained in this Article XI shall be construed as limiting the
Trustee to such proof, it being intended that the Trustee may accept any other
evidence of matters herein stated which it may deem sufficient. Any request by
or consent of any Owner shall bind every future Owner of the same Bond or any
Bond or Bonds issued in lieu thereof or upon registration of transfer thereof in
respect of anything done by the Trustee or the Issuer in pursuance of such
request or consent.
ARTICLE XII
MODIFICATION OF THIS INDENTURE AND THE AGREEMENT
SECTION 12.01. SUPPLEMENTAL INDENTURES WITHOUT OWNER CONSENT. The Issuer and
the Trustee may, from time to time and at any time, without the consent of the
Owners, enter into a Supplemental Indenture as follows:
(a) to cure any formal defect, omission, inconsistency or ambiguity
in this Indenture;
(b) to add to the covenants and agreements of the Issuer contained
in this Indenture or of the Company or of the Provider contained in any
document, other covenants or agreements thereafter to be observed, or to
assign or pledge additional security for any of the Bonds, or to surrender
any right or power reserved or conferred upon the Issuer or the Company,
which in the judgment of the Trustee is not materially adverse to the
Owners of the Bonds;
(c) to confirm as further assurance, any pledge of or lien on the
Revenues or any other moneys, securities or funds subject or to be
subjected to the lien of this Indenture;
(d) to comply with the requirements of the Trust Indenture Act of
1939, as from time to time amended, if applicable to this Indenture;
(e) to modify, alter, amend or supplement this Indenture or any
Supplemental Indenture in any other respect which in the judgment of the
Trustee is not materially adverse to the Owners of the Bonds;
(f) to implement a conversion of the interest rate on the Bonds;
(g) to provide for a Change of Credit Facility;
(h) to provide for a depository to accept Bonds in lieu of the
Trustee;
(i) to modify or eliminate the book-entry registration system for
any of the Bonds;
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(j) to provide for uncertificated Bonds or for the issuance of
coupons and bearer Bonds or Bonds registered only as to principal but only
to the extent that such would not adversely affect the Tax-Exempt status
of the Bonds;
(k) to secure or maintain ratings on the Bonds from Moody's and/or
S&P;
(1) to provide demand purchase obligations to cause the Bonds to be
authorized purchases for investment companies;
(m) to provide for the appointment of a Remarketing Agent or a
successor Trustee, Registrar, Paying Agent or Remarketing Agent;
(n) to provide the procedures required to permit any Owner to
separate the right to receive interest on the Bonds from the right to
receive principal thereof and to sell or dispose of such right as
contemplated by Section 1286 of the Code (or similar successor provision);
(o) to provide for any additional procedures, covenants or
agreements necessary to maintain the Tax-Exempt status of the Bonds; and
(p) to modify, alter, amend or supplement this Indenture in any
other respect, including amendments which would otherwise be described in
Section 12.02 hereof, if the effective date of such supplement or
amendment is a date on which all Bonds affected thereby are subject to
mandatory purchase pursuant to Section 3.02 hereof or if notice by Mail of
the Proposed amendment or supplement is given to Owners of the Bonds at
least thirty (30) days before the effective date thereof and, on or before
such effective date, such Owners have the right to require purchase of
their Bonds pursuant to Section 3.01 hereof.
Before the Issuer and the Trustee shall enter into any Supplemental
Indenture pursuant to this Section 12.01, (1) in the case of a Supplemental
Indenture entered into pursuant to clauses (l), (n) or (p) of this Section and
provided that no Provider Default shall have occurred and be continuing, there
shall have been delivered to the Trustee and the Company, the written consent of
the Provider, and (2) in all cases, there shall have been delivered to the
Trustee, the Provider and the Company, a Favorable Opinion of Bond Counsel with
respect to such Supplemental Indenture and further stating that such
Supplemental Indenture is authorized or permitted by this Indenture and will,
upon the execution and delivery thereof, be valid and binding upon the Issuer in
accordance with its terms. Neither the Issuer nor the Trustee will be obligated
to enter into any such Supplemental Indenture that would materially alter their
respective rights, duties or immunities under this Indenture, under the
Agreement or otherwise.
The Trustee shall provide written notice of any Supplemental Indenture
described in this Section 12.01 to Moody's, S&P, the Provider, the Remarketing
Agent and the Owners of all Bonds then Outstanding at least 15 days prior to the
effective date of such Supplemental Indenture. Such notice shall state the
effective date of such Supplemental Indenture and shall briefly describe the
nature of such Supplemental Indenture and shall state that a copy thereof is on
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file at the Principal Office of the Trustee for inspection by the parties
mentioned in the preceding sentence.
SECTION 12.02. SUPPLEMENTAL INDENTURES REQUIRING OWNER CONSENT.
(a) Except for any Supplemental Indenture entered into pursuant to Section
12.01 hereof, subject to the terms and provisions contained in this Section
12.02 and not otherwise, the Provider (unless a Provider Default shall have
occurred and be continuing), together with the Owners of not less than 60% in
aggregate principal amount of the Bonds then Outstanding shall have the right
from time to time to consent to and approve the execution and delivery by the
Issuer and the Trustee of any Supplemental Indenture deemed necessary or
desirable by the Issuer for the purposes of modifying, altering, amending,
supplementing or rescinding, in any particular, any of the terms or provisions
contained in this Indenture; provided however, that, unless approved in writing
by the Provider (unless a Provider Default shall have occurred and be
continuing) and the Owners of all the Bonds then affected thereby, nothing
herein contained shall permit, or be construed as permitting, (i) a change in
the times, amounts or currency of payment of the principal of, or premium if
any, or interest on, any Outstanding Bond, a change in the terms of the purchase
thereof by the Trustee, or a reduction in the principal amount or redemption
price of any Outstanding Bond or the rate of interest thereon, or (ii) the
creation of a claim or lien upon, or a pledge of, the Revenues ranking prior to
or on a parity with the claim, lien or pledge created by this Indenture (except
as referred to in Section 10.04 hereof), or (iii) a reduction in the aggregate
principal amount of Bonds the consent of the Owners of which is required for any
such Supplemental Indenture or which is required, under Section 12.06 hereof,
for any modification, alteration, amendment or supplement to the Agreement.
(b) If at any time the Issuer shall request the Trustee to enter into any
Supplemental Indenture for any of the purposes of this Section 12.02, the
Trustee shall cause notice of the proposed Supplemental Indenture to be given by
Mail to Moody's, S&P, the Provider, the Remarketing Agent and all Owners of
Outstanding Bonds. Such notice shall briefly set forth the nature of the
proposed Supplemental Indenture and shall state that a copy thereof is on file
at the Principal Office of the Trustee for inspection by the Owners, Moody's,
S&P, the Provider and the Remarketing Agent.
(c) Within two years after the date of the mailing of such notice, the
Issuer and the Trustee may enter into such Supplemental Indenture in
substantially the form described in such notice, but only if there shall have
first been delivered to the Trustee (i) the required consents, in writing, of
the Owners and the Provider and (ii) a Favorable Opinion of Bond Counsel with
respect to such Supplemental Indenture and further stating that such
Supplemental Indenture is authorized or permitted by this Indenture and will,
upon the execution and delivery thereof, be valid and binding upon the Issuer in
accordance with its terms. Neither the Issuer nor the Trustee will be obligated
to enter into any such Supplemental Indenture that would materially alter their
respective rights, duties or immunities under this Indenture, under the
Agreement or otherwise.
(d) If Owners of not less than the percentage of Bonds required by this
Section 12.02 shall have consented to and approved the execution and delivery of
a Supplemental Indenture as herein provided, no Owner shall have any right to
object to the execution and delivery of such
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Supplemental Indenture, or to object to any of the terms and provisions
contained therein or the operation thereof, or in any manner to question the
propriety of the execution and delivery thereof, or to enjoin or restrain the
Issuer or the Trustee from executing and delivering the same or from taking any
action pursuant to the provisions thereof.
SECTION 12.03. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution and
delivery of any Supplemental Indenture pursuant to the provisions of this
Article XII, this Indenture shall be, and be deemed to be, modified and amended
in accordance therewith, and the respective rights, duties and obligations under
this Indenture shall thereafter be determined, exercised and enforced under this
Indenture subject in all respects to such modifications and amendments.
SECTION 12.04. CONSENT OF THE COMPANY AND THE PROVIDER. No Supplemental
Indenture under this Article XII and no amendment of the Agreement shall become
effective unless the Company shall have consented thereto in writing.
Any provision of this Indenture expressly recognizing or granting rights
in or to the Provider may not be amended in any manner which affects the rights
of the Provider hereunder without the prior written consent of the Provider.
SECTION 12.05. AMENDMENT OF AGREEMENT WITHOUT OWNER CONSENT. Without the
consent of or notice to the Owners, the Issuer and the Company may, with the
consent of the Provider (unless a Provider Default shall have occurred and be
continuing) modify, alter, amend or supplement the Agreement, and the Trustee
may consent thereto, as may be required:
(a) by the provisions of the Agreement and this Indenture;
(b) for the purpose of curing any formal defect, omission,
inconsistency or ambiguity therein;
(c) in connection with any other change therein which in the
judgment of the Trustee is not materially adverse to the Owners;
(d) to secure or maintain ratings on the Bonds from Moody's and/or
S&P;
(e) to add to the covenants and agreements of the Issuer contained
in the Agreement or of the Company or of the Provider contained in any
document, other covenants or agreements thereafter to be observed, or to
assign or pledge additional security for any of the Bonds, or to surrender
any right or power reserved or conferred upon the Issuer or the Company,
which shall not materially adversely affect the interest of the Owners of
the Bonds;
(f) to provide demand purchase obligations to cause the Bonds to be
authorized purchases for investment companies;
(g) to provide the procedures required to permit any Owner to
separate the right to receive interest on the Bonds from the right to
receive principal thereof and to sell
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or dispose of such right as contemplated by Section 1286 of the Code (or
similar successor provision);
(h) to provide for any additional procedures, covenants or
agreements necessary to maintain the Tax-Exempt status of interest on the
Bonds;
(i) to implement a conversion of the interest rate on the Bonds or
in connection with the appointment of a Remarketing Agent;
(j) to provide for a Change of Credit Facility; and
(k) to modify, alter, amend or supplement the Agreement in any other
respect, including amendments which would otherwise be described in
Section 12.06 hereof, if the effective date of such supplement or
amendment is a date on which all Bonds affected thereby are subject to
mandatory purchase pursuant to Section 3.02 hereof or if notice by Mail of
the proposed amendment or supplement is given to Owners of the Bonds at
least thirty (30) days before the effective date thereof and, on or before
such effective date-, such Owners have the right to demand purchase of
their Bonds pursuant to Section 3.01 hereof.
A revision of Exhibit A to the Agreement in accordance with Section 3.04
of the Agreement shall not be deemed a modification, alteration, amendment or
supplement to the Agreement, or to this Indenture, for any purpose of this
Indenture.
Before the Issuer shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Agreement pursuant to
this Section 12.05, there shall have been delivered to the Issuer, the Provider
and the Trustee a Favorable Opinion of Bond Counsel with respect to such
modification, alteration, amendment or supplement and further stating that such
modification, alteration, amendment or supplement is authorized or permitted by
the Agreement or this Indenture and will, upon the execution and delivery
thereof, be valid and binding upon the Issuer in accordance with its terms.
Neither the Issuer nor the Trustee will be obligated to enter into or consent to
any such modifications, alterations, amendments or supplements to the Agreement
that would materially alter their respective rights, duties or immunities under
this Indenture, under the Agreement or otherwise.
SECTION 12.06. AMENDMENT OF AGREEMENT REQUIRING OWNER CONSENT. Except in the
case of modifications, alterations, amendments or supplements referred to in
Section 12.05 hereof, the Issuer shall not enter into, and the Trustee shall not
consent to, any amendment, change or modification of the Agreement without the
written approval or consent of the Provider (unless a Provider Default shall
have occurred and be continuing) and the Owners of not less than 60% in
aggregate principal amount of the Bonds then Outstanding, given and procured as
provided in Section 12.02 hereof, provided, however, that, unless approved in
writing by the Provider (unless a Provider Default shall have occurred and be
continuing) and the Owners of all Bonds affected thereby, nothing herein
contained shall permit, or be construed as permitting, a change in the
obligations of the Company under Section 4.01 and Section 4.02 of the Agreement.
If at any time the Issuer or the Company shall request the consent of the
Trustee to any such proposed
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modification, alteration, amendment or supplement permitted under this Section
12.06, the Trustee shall cause notice thereof to be given in the same manner as
provided by Section 12.02 hereof with respect to Supplemental Indentures. Such
notice shall briefly set forth the nature of such proposed modification,
alteration, amendment or supplement and shall state that copies of the
instrument embodying the same are on file at the Principal Office of the Trustee
for inspection by all Owners. The Issuer may enter into, and the Trustee may
consent to, any such proposed modification, alteration, amendment or supplement
subject to the same conditions and with the same effect as provided in Section
12.02 hereof with respect to Supplemental Indentures.
Before the Issuer shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Agreement pursuant to
this Section 12.06, there shall have been delivered to the Issuer, the Provider
and the Trustee a Favorable Opinion of Bond Counsel with respect to such
modification, alteration, amendment or supplement and further stating that such
modification, alteration, amendment or supplement is authorized or permitted by
the Agreement or this Indenture and will, upon the execution and delivery
thereof, be valid and binding upon the Issuer in accordance with its terms.
Neither the Issuer nor the Trustee will be obligated to enter into any such
modifications, alterations, amendments or supplements to the Agreement that
would materially alter their respective rights, duties or immunities under this
Indenture, under the Agreement or otherwise.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. SUCCESSORS OF THE ISSUER. In the event of the dissolution of
the Issuer, all the covenants, stipulations, promises and agreements in this
Indenture contained, by or on behalf of, or for the benefit of the Issuer, shall
bind or inure to the benefit of the successors of the Issuer from time to time
and any entity, officer, board, commission, agency or instrumentality to whom or
to which any power or duty of the Issuer shall be transferred.
SECTION 13.02. PARTIES IN INTEREST. Except as herein otherwise specifically
provided, nothing in this Indenture expressed or implied is intended or shall be
construed to confer upon any person, firm or corporation other than the Issuer,
the Remarketing Agent, the Registrar, the Paying Agent, the Company, the
Trustee, the Provider and the Owners of Bonds any right, remedy or claim under
or by reason of this Indenture, this Indenture being intended to be for the sole
and exclusive benefit of the Issuer, the Remarketing Agent, the Registrar, the
Paying Agent, the Company, the Trustee, the Provider and the Owners of Bonds.
The Trustee shall have no fiduciary duty to any entity other than the Owner of
any Bond as such and only in accordance with, into the extent of, the terms and
provisions hereunder.
SECTION 13.03. SEVERABILITY. In case any one or more of the provisions of
this Indenture or of the Agreement or of the Bonds shall for any reason, be held
to be illegal or invalid, such illegality or invalidity shall not affect any
other provisions of this Indenture, the Agreement, or of the Bonds, and this
Indenture, the Agreement and the Bonds shall be construed and enforced as if
such illegal or invalid provisions had not been contained herein or therein.
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SECTION 13.04. NO PERSONAL LIABILITY OF ISSUER OFFICIALS. No representation,
warranty, covenant or agreement contained in the Bonds or in this Indenture or
in any of the documents or certificates related thereto shall be deemed to be
the representation, warranty, covenant or agreement of any official, officer,
agent, counsel or employee of the Issuer in his or her individual capacity, and
neither the members of the Issuer nor any official executing the Bonds shall be
liable personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof.
SECTION 13.05. BONDS OWNED BY THE ISSUER OR THE COMPANY. In determining
whether the Owners of the requisite aggregate principal amount of the Bonds have
concurred in any direction, consent or waiver under this Indenture, Bonds which
are owned by the Issuer or the Company or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company (unless the Issuer, the Company or such person owns all Bonds which are
then Outstanding, determined without regard to this Section 13.05) shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Bonds which the Trustee actually knows are so owned shall be so disregarded.
Bonds so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Bonds and that the pledgee is not
the Issuer or the Company or any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. In
case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
SECTION 13.06. COUNTERPARTS. This Indenture may be executed in any number of
counterparts, each of which, when so executed and delivered, shall be an
original; but such counterparts shall together constitute but one and the same
Indenture.
SECTION 13.07. GOVERNING LAW. This Indenture shall be governed by and
construed in accordance with the laws of the State; provided, however, that the
rights, protections and immunities of the Trustee shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 13.08. NOTICES. Except as otherwise provided in this Indenture, all
notices, certificates, requests, requisitions, directions or other
communications by the Issuer, the Company, the Trustee, the Registrar, the
Paying Agent, the Provider or the Remarketing Agent, pursuant to this Indenture
shall be in writing and shall be sufficiently given and shall be deemed given
when mailed by Mail or by certified or registered mail postage prepaid, or by
overnight delivery service, addressed as follows (and, if by overnight delivery
service and required by the chosen delivery service, with then-current telephone
numbers of the addressees):
if to the Issuer, to: City of Forsyth, Montana
City Hall
Forsyth, Montana 59327
Attention: Mayor
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if to the Trustee, to: Chase Manhattan Bank and Trust Company,
National Association
101 California Street, Suite 2725
San Francisco, California 94111
Attention: Corporate Trust Administration
if to the Company, to: Avista Corporation
1411 East Mission Avenue
Spokane, Washington 99220
Attention: Treasurer
if to the Provider, to: Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: General Counsel
if to the Registrar or the Paying Agent, to such address as is designated in
writing by it to the Trustee and the Issuer; if to any Auction Agent, at the
address specified in the Auction Agreement; and if to any Remarketing Agent, at
the address specified in the Remarketing Agreement. Any of the foregoing may, by
notice given hereunder to each of the others, designate any further or different
addresses to which subsequent notices, certificates, requests or other
communications shall be sent hereunder. Any communications required to be given
hereunder by the Company shall be given by an Authorized Company Representative.
SECTION 13.09. HOLIDAYS. If the date for making any payment or the last
date for performance of any act or the exercising of any right, as provided
in this Indenture, shall not be a Business Day, such payment may, unless
otherwise provided in this Indenture or the Agreement, be made or act
performed or right exercised on the next succeeding Business Day with the
same force and effect as if done on the nominal date provided in this
Indenture, and no interest shall accrue for the period after such nominal
date.
SECTION 13.10. PURCHASE OF BONDS BY TRUSTEE AND REMARKETING AGENT. The
Trustee and the Issuer agree that in connection with the purchase of any
Bonds pursuant to this Indenture, the Trustee and the Remarketing Agent are
acting solely on behalf of the Company.
SECTION 13.11. NOTICES TO MOODY'S AND S&P. The Trustee shall provide prior
written notice to Moody's (if the Bonds are then rated by Moody's) and to S&P
(if the Bonds are then rated by S&P) of (a) the payment of the principal of all
of the Bonds, (b) the resignation or removal of the Trustee or the Remarketing
Agent, (c) any modifications, alterations, amendments or supplements of this
Indenture, the Agreement and the Remarketing Agreement, and (d) the conversion
under Article II hereof of the method by which interest on the Bonds is
determined.
The agreement of the Trustee herein to give notices to Moody's and S&P has
been made as a matter of courtesy and accommodation only and the Trustee shall
not be liable to any Person for any failure to give any such notice.
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SECTION 13.12. RIGHTS OF PROVIDER. Upon a Change of Credit Facility, all
rights provided herein to a Provider other than its right of subrogation
pursuant to Section 2.17(f) shall be of no force and effect with respect to the
Provider and Credit Facility which has been replaced and shall apply only to the
new Provider and Credit Facility.
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IN WITNESS WHEREOF, CITY OF FORSYTH, MONTANA, has caused this Indenture to
be signed in its name and behalf by the Mayor, and its official seal to be
hereunto affixed and attested by the City Clerk-Treasurer and to evidence its
acceptance of the trusts hereby created the Trustee has caused this Indenture to
be signed in its name and behalf by one of its Assistant Vice Presidents, all as
of September 1, 1999.
CITY OF FORSYTH, MONTANA
By:
-------------------------------------
Mayor
[SEAL]
ATTEST:
- --------------------------------
City Clerk-Treasurer
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------
Assistant Vice President
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EXHIBIT A
[FORM OF BOND]
STATEMENT OF INSURANCE
Municipal Bond Insurance Policy No. __________ (the "Policy") with respect
to payments due for principal of and interest on this bond has been issued by
Ambac Assurance Corporation ("Ambac Assurance"). The Policy has been delivered
to the United States Trust Company of New York, New York, New York, as the
Insurance Trustee under said Policy and will be held by such Insurance Trustee
or any successor insurance trustee. The Policy is on file and available for
inspection at the principal office of the Insurance Trustee and a copy thereof
may be secured from Ambac Assurance or the Insurance Trustee. All payments
required to be made under the Policy shall be made in accordance with the
provisions thereof. The owner of this bond acknowledges and consents to the
subrogation rights of Ambac Assurance as more fully set forth in the Policy.
REGISTERED REGISTERED
No. R-__ $_________
UNITED STATES OF AMERICA
STATE OF MONTANA
CITY OF FORSYTH, MONTANA
POLLUTION CONTROL REVENUE REFUNDING BONDS
(AVISTA CORPORATION COLSTRIP PROJECT)
SERIES 1999A
MATURITY DATE ISSUE DATE CUSIP NO.
October 1, 2032 September ___, 1999 ____________
[FLEXIBLE INTEREST RATE: ________________________________
LAST DAY OF FLEXIBLE SEGMENT: ___________________________
NUMBER OF DAYS IN FLEXIBLE SEGMENT: _____________________
AMOUNT OF INTEREST TO ACCRUE DURING FLEXIBLE SEGMENT: ___]*
- --------
* To be included only in Bonds bearing interest at a Flexible Interest Rate and
not registered in the book-entry system pursuant to Section 2.16 of the
Indenture.
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Registered Owner: ______________________________________
Principal Amount: -----------------------------DOLLARS-------------------------
CITY OF FORSYTH, MONTANA (the "Issuer"), a political subdivision duly
organized and existing under the Constitution and laws of the State of Montana,
for value received, hereby promises to pay (but only out of the source
hereinafter provided) to the registered owner identified above, or registered
assigns, on October 1, 2032, the principal amount set forth above and to pay
(but only out of the sources hereinafter provided) interest on the balance of
said principal amount from time to time remaining unpaid from the Interest
Payment Date (as defined in the Indenture) next preceding the date of
registration and authentication hereof unless this Bond (as hereinafter defined)
is registered and authenticated after a Record Date (as defined in the
Indenture) and on or prior to the related Interest Payment Date, in which event
this Bond shall bear interest from such Interest Payment Date, or unless this
Bond is registered and authenticated before the Record Date for the first
Interest Payment Date, in which event this Bond shall bear interest from the
Issue Date set forth above (the "Issue Date"); provided, however, that if, as
shown by the records of the Paying Agent (as hereinafter defined), interest on
the Bonds (as hereinafter defined) shall be in default, Bonds issued in exchange
for Bonds surrendered for registration of transfer or exchange shall bear
interest from the last date to which interest has been paid in full or duly
provided for on the Bonds, or, if no interest has been paid or duly provided for
on the Bonds, from the Issue Date, until payment of said principal amount has
been made or duly provided for, at the rates and on the dates determined as
described herein and in the Indenture (as hereinafter defined), and to pay (but
only out of the sources hereinafter provided) interest on overdue principal and,
to the extent permitted by law, on overdue interest at the rate then borne by
this Bond, except as the provisions hereinafter set forth with respect to
redemption, purchase or acceleration prior to maturity may become applicable
hereto. The principal of and premium, if any, on this Bond are payable in lawful
money of the United States of America at the principal corporate trust office in
San Francisco, California, of Chase Manhattan Bank and Trust Company, National
Association, or its successors and assigns, as Paying Agent (the "Paying
Agent"). Interest payments on this Bond shall be made by the Paying Agent to the
registered owner hereof as of the close of business on the Record Date with
respect to each Interest Payment Date and shall be paid:
(a) in respect of any Bond that is registered in the book-entry system,
pursuant to the Indenture, in immediately available funds by no later than 2:30
p.m., New York, New York time, and
(b) in respect of any Bond that is not registered in the book-entry
system,
(i) by bank check mailed by first-class mail on the Interest Payment
Date to the registered owner hereof at its address as it appears on the
registration books of Chase Manhattan Bank and Trust Company, National
Association, as registrar (the "Registrar") or at such other address as is
furnished in writing by such registered owner to the Registrar, or
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(ii) during any Rate Period (as defined in the Indenture) other than
a Term Interest Rate Period (as defined in the Indenture), in immediately
available funds on the Interest Payment Date (by wire transfer or by
deposit to the account of the registered owner of this Bond if such
account is maintained with the Paying Agent),
but in respect of any registered owner of any Bond or Bonds in a PARS Rate
Period (as defined in the Indenture) or a Daily Interest Rate Period (as defined
in the Indenture) or a Weekly Interest Rate Period (as defined in the Indenture)
or a Flexible Interest Rate Period (as defined in the Indenture), only to any
registered owner that owns Bonds in an aggregate principal amount of at least
$1,000,000 on such Record Date, according to the written instructions given by
the registered owner hereof to the Paying Agent or, if no such instructions have
been provided as of the Record Date, by bank check mailed by first-class mail on
the Interest Payment Date to the registered owner at such registered owner's
address as it appears as of the Record Date on the registration books of the
Registrar. Notwithstanding the foregoing, interest in respect of any Bond
bearing a Flexible Rate (as defined in the Indenture) shall be paid only upon
presentation to Chase Manhattan Bank and Trust Company, National Association, as
Trustee (the "Trustee") of the Bond on which such payment is due.
THIS BOND AND ALL OTHER BONDS OF THE ISSUE OF WHICH IT FORMS A PART SHALL
BE A LIMITED OBLIGATION OF THE ISSUER, SHALL NOT CONSTITUTE NOR GIVE RISE TO A
GENERAL OBLIGATION OR LIABILITY OF THE ISSUER OR A CHARGE AGAINST ITS GENERAL
CREDIT OR TAXING POWERS, AND SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE ISSUER
OR OF THE STATE OF MONTANA, OR A LOAN OF CREDIT THEREOF WITHIN THE MEANING OF
ANY CONSTITUTIONAL OR STATUTORY PROVISION.
This Bond is one of the duly authorized Pollution Control Revenue
Refunding Bonds (Avista Corporation Colstrip Project) Series 1999A of the
Issuer, originally issued in the aggregate principal amount of $66,700,000 (the
"Bonds"), issued pursuant to proper action duly adopted by the Issuer on May 11,
1999 and May 18, 1999, and the applicable provisions of Sections 90-5-101 to
90-5-114, inclusive, Montana Code Annotated, as amended (the "Act"), and
executed under a Trust Indenture, dated as of September 1, 1999 (the
"Indenture"), between the Issuer and Chase Manhattan Bank and Trust Company,
National Association, as trustee (the "Trustee," which term shall include any
successor Trustee), for the purpose of providing the funds necessary for the
refunding of certain pollution control revenue bonds previously issued by the
Issuer to finance certain pollution control facilities owned by Avista
Corporation, a Washington corporation (the "Company"). Pursuant to the Loan
Agreement, dated as of September 1, 1999 (the "Loan Agreement"), between the
Issuer and the Company, the proceeds of the Bonds have been loaned to the
Company.
This Bond and all other Bonds of the issue of which it forms a part are
issued pursuant to and in full compliance with the Constitution and laws of the
State of Montana, particularly the Act, and pursuant to further proceedings
adopted by the governing authority of the Issuer, which proceedings authorize
the execution and delivery of the Indenture. This Bond and the issue of which it
forms a part are limited and not general obligations of the Issuer payable
solely from the Revenues (as defined in the Indenture) and amounts derived under
the Loan Agreement and pledged under the Indenture consisting of all amounts
payable from time to time by the Company
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in respect of the indebtedness under the Loan Agreement and all receipts of the
Trustee credited under the provisions of the Indenture against said amounts
payable. No Owner of any Bond issued under the Act has the right to compel any
exercise of the taxing power of the Issuer to pay the Bonds, or the interest or
premium if any, thereon. The Bonds shall not constitute an indebtedness or a
general obligation of the Issuer or a loan of credit thereof within the meaning
of any constitutional or statutory provision, nor shall any of the Bonds
constitute or give rise to a pecuniary liability of the Issuer or a charge
against its general credit or taxing powers.
Any term used herein as a defined term but not defined herein shall be
defined as in the Indenture.
In the manner hereinafter provided and subject to the provisions of the
Indenture, the term of the Bonds will be divided into consecutive Rate Periods
during each of which the Bonds shall bear interest at the lesser of (a) Maximum
Interest Rate (as defined in the Indenture) or (b) either the PARS Rate (the
"PARS Rate Period"), the Daily Interest Rate (the "Daily Interest Rate Period"),
the Weekly Interest Rate (the "Weekly Interest Rate Period"), the Term Interest
Rate (the "Term Interest Rate Period") or the Flexible Interest Rate (the
"Flexible Interest Rate Period"). Rate Periods for this Bond shall be determined
in accordance with the Indenture.
This Bond shall bear interest from the Interest Payment Date next
preceding the date of registration and authentication hereof unless it is
registered and authenticated after a Record Date and on or prior to the related
Interest Payment Date, in which event this Bond shall bear interest from such
Interest Payment Date, or unless this Bond is registered and authenticated
before the Record Date for the first Interest Payment Date, in which event this
Bond shall bear interest from the Issue Date; provided, however, that if, as
shown by the records of the Paying Agent, interest on the Bonds shall be in
default, Bonds issued in exchange for Bonds surrendered for transfer or exchange
shall bear interest from the last date to which interest has been paid in full
or duly provided for on the Bonds, or, if no interest has been paid or duly
provided for on the Bonds, from the Issue Date. Interest shall be computed, (a)
in the case of a PARS Rate Period, on the basis of a 360-day year for the actual
number of days elapsed except that interest during a six-month Auction Period
shall be calculated on the basis of a 360-day year composed of twelve 30-day
months, (b) in the case of a Term Interest Rate Period, on the basis of a
360-day year consisting of twelve 30-day months, and (c) in the case of any
other Rate Period, on the basis of a 365 or 366 day year, as appropriate, for
the actual number of days elapsed. The term "Interest Payment Date" means (i)
with respect to any PARS Rate Period, the Business Day immediately following the
Initial Period and (y) when used with respect to any Auction Period other than a
daily Auction Period, the Business Day immediately following such Auction Period
and (z) when used with respect to a daily Auction Period, the first Business Day
of the month immediately succeeding such Auction Period, (ii) with respect to
any Daily or Weekly Interest Rate Period, the first Business Day of each
calendar month, (iii) with respect to any Term Interest Rate Period, the first
day of the sixth month following the commencement of the Term Interest Rate
Period and the first day of each sixth month thereafter, and the day following
the last day of a Term Interest Rate Period, (iv) with respect to any Flexible
Segment, the Business Day next succeeding the last day thereof, and (v) with
respect to any Rate Period, the day next succeeding the last day thereof. The
term "Business Day" means any day except a Saturday, Sunday or other day (a) on
which commercial banks located in the cities in which the Principal Office of
the Trustee, the Principal
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Office of the Company, the Principal Office of the Remarketing Agent or the
Principal Office of the Paying Agent are located are required or authorized by
law to remain closed or are closed, or (b) on which The New York Stock Exchange
is closed.
The Bonds shall be deliverable in the form of registered Bonds without
coupons in the following denominations: (i) $25,000 or any integral multiple of
$25,000 when the Bonds bear interest at a PARS Rate; (ii) $100,000 or any
integral multiple of $100,000 when the Bonds bear interest at a Daily or Weekly
Interest Rate; (iii) $100,000 or any integral multiple of $5,000 in excess of
$100,000 when the Bonds bear interest at a Flexible Interest Rate; and (iv)
$5,000 or integral multiples of $5,000 when the Bonds bear interest at a Term
Interest Rate (such denominations being referred to herein as ("Authorized
Denominations").
As provided in the Loan Agreement, the Company may, at its option, provide
for a Change of Credit Facility (as defined in the Indenture), which includes
the delivery or termination (or a combination thereof) of one or more letters of
credit, bond insurance policies, standby bond purchase agreements, lines of
credit, first mortgage bonds or other security instruments or liquidity devices.
During each PARS Rate Period, the Bonds shall bear interest, determined in
accordance with the provisions of the Indenture, by the Auction Agent for each
Auction Period.
During each Daily Interest Rate Period, the Bonds shall bear interest at a
Daily Interest Rate, determined in accordance with the provisions of the
Indenture by the Remarketing Agent on each Business Day for such Business Day.
If the Remarketing Agent shall not have determined a Daily Interest Rate for any
day by 10:00 a.m., New York, New York time, the Daily Interest Rate for such day
shall be the same as the Daily Interest Rate for the immediately preceding day.
During each Weekly Interest Rate Period, the Bonds shall bear interest at
a Weekly Rate, determined in accordance with the provisions of the Indenture by
the Remarketing Agent no later than the first day of such Weekly Interest Rate
Period and thereafter no later than Tuesday of each week during such Weekly
Interest Rate Period, unless any such Tuesday shall not be a Business Day, in
which event the Weekly Interest Rate shall be determined by the Remarketing
Agent no later than the Business Day next preceding such Tuesday.
During each Term Interest Rate Period, the Bonds shall bear interest at
the Term Interest Rate, determined in accordance with the provisions of the
Indenture by the Remarketing Agent on a Business Day selected by the Remarketing
Agent but no more than 60 days prior to and not later than the effective date of
such Term Interest Rate Period.
During each Flexible Interest Rate Period, each Bond shall bear interest
during each Flexible Segment for such Bond at the Flexible Interest Rate for
such Bond as described in the Indenture. Each Flexible Segment and Flexible
Interest Rate shall be determined in accordance with the provisions of the
Indenture by the Remarketing Agent. Each Flexible Segment shall be a period of
not less than one nor more than 270 days.
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At the times and subject to the conditions set forth in the Indenture, the
Company may elect that the Bonds shall bear interest at an interest rate, and
for a period, different from those then applicable. The Trustee shall give
notice of any such adjustment to the owners of the Bonds not less than 15 days
prior to the effective date of such adjustment.
During any Daily Interest Rate Period, any Bond or portion thereof in an
Authorized Denomination shall be purchased at the option of the Owner thereof on
any Business Day at a purchase price equal to 100% of the principal amount
thereof plus accrued interest, if any, from the Interest Payment Date next
preceding the date of purchase to the date of purchase (unless the date of
purchase shall be an Interest Payment Date, in which case the purchase price
shall be equal to the principal amount thereof) upon (a) delivery to the Trustee
at the Delivery Office of the Trustee, by not later than 11:00 a.m., New York,
New York time, on such Business Day, of an irrevocable written notice or
irrevocable notice by telephone, which states the principal amount and the
certificate number (if the Bonds are not then held in book entry form) of such
Bond and the date on which the same shall be purchased, and (b) except when a
book-entry system is in effect for the Bonds, delivery of such Bond to the
Trustee at the Delivery Office of the Trustee, accompanied by an instrument of
transfer thereof, in a form satisfactory to the Trustee, executed in blank by
the owner thereof with the signature of such owner guaranteed by a member or
participant in a "signature guarantee program" as provided in the form of
assignment attached to such Bond, at or prior to 1:00 p.m., New York, New York
time, on the date specified in such notice.
During any Weekly Interest Rate Period, any Bond or portion thereof in an
Authorized Denomination shall be purchased at the option of the Owner thereof on
any Business Day at a purchase price equal to 100% of the principal amount
thereof plus accrued interest, if any, from the Interest Payment Date next
preceding the date of purchase to the date of purchase (unless the date of
purchase shall be an Interest Payment Date, in which case the purchase price
shall be equal to the principal amount thereof), upon (a) delivery to the
Trustee at the Delivery Office of the Trustee of an irrevocable written notice
or an irrevocable notice by telephone (promptly confined by telecopy or other
writing), by 5:00 p.m., New York, New York time, on any Business Day, which
states the principal amount of such Bond and the certificate number (if the
Bonds are not held in book-entry form) and the date on which the same shall be
purchased, which date shall not be prior to the seventh day next succeeding the
date of the delivery of such notice to the Trustee, and (b) except when a
book-entry system is in effect for the Bonds, delivery of such Bond to the
Trustee at the Delivery Office of the Trustee, accompanied by an instrument of
transfer thereof, in a form satisfactory to the Trustee, executed in blank by
the Owner thereof with the signature of such Owner guaranteed by a member or
participant in a "signature guarantee program" as provided in the form of
assignment attached to such Bond, at or prior to 1:00 p.m., New York, New York
time, on the date specified in such notice.
Any bond or portion thereof in an Authorized Denomination shall be
purchased at the option of the Owner thereof on the first day of any Term
Interest Rate Period which is preceded by a Term Interest Rate Period of equal
duration at a purchase price equal to 100% of the principal amount thereof, upon
(i) delivery to the Trustee at the Delivery Office of the Trustee accompanied by
an instrument of transfer thereof in a form satisfactory to the Trustee of an
irrevocable notice in writing by 5:00 p.m., New York, New York time, on any
Business Day not
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less than fifteen days before the purchase date, which states the principal
amount and certificate number (if the Bonds are not then held in book-entry
form) of such Bond to be purchased and (ii) except when a book-entry system is
in effect for the Bonds, delivery of such Bond to the Trustee at the Delivery
Office of the Trustee, accompanied by an instrument of transfer thereof, in a
form satisfactory to the Trustee, executed in blank by the Owner thereof with
the signature of such Owner guaranteed by a member or participant in a
"signature guarantee program" as provided in the form of assignment attached to
such Bond, at or prior to 1:00 p.m., New York, New York time, on the purchase
date.
"Record Date" means (a) with respect to a PARS Rate Period other than a
daily Auction Period, the second Business Day preceding an Interest Payment Date
therefor and during a daily Auction Period, the last Business Day of the month
preceding an Interest Payment Date therefor, (b) with respect to any Interest
Payment Date in respect of any Daily Interest Rate Period, Weekly Interest Rate
Period or Flexible Segment, the Business Day next preceding such Interest
Payment Date, (c) with respect to any Interest Payment Date in respect of any
Term Interest Rate Period, the fifteenth day of the month preceding such
Interest Payment Date (except as provided in the following clause (d); and (d)
for any Interest Payment Date established pursuant to clause (e) of the
definition of "Interest Payment Date" in Section 1.01 of the Indenture in
respect of a Term Interest Rate Period, the Business Day next preceding such
Interest Payment Date.
In each case in which a portion of a Bond is purchased, both the portion
so purchased and the portion of such Bond not so purchased shall be in
Authorized Denominations.
This Bond shall be subject to mandatory purchase at a purchase price equal
to 100% of the principal amount thereof to the purchase date plus accrued
interest, if any, to the purchase date: (a) on the effective date of any change
in a Rate Period with respect to this Bond other than the effective date of a
Term Interest Rate Period which was preceded by a Term Interest Rate Period of
the same duration; (b) during any Flexible Interest Rate Period, on the day next
succeeding the last day of any Flexible Segment thereof; and (c) in connection
with a Change of Credit Facility, as provided in Section 3.02(a)(iii) of the
Indenture.
The Bonds are also subject to mandatory purchase during any Term Interest
Rate Period on a day that the Bonds would be subject to optional redemption
pursuant to Section 4.02(b)(iv) of the Indenture, at a purchase price equal to
100% the principal amount thereof plus an amount equal to any premium which
would have been payable on such redemption date had the Bonds been redeemed if
the Company gives notice to the Trustee on or before the Business Day prior to
the redemption date that it elects to have the Bonds purchased in lieu of
redemption. If the Bonds are purchased on or prior to the Record Date, the
purchase price shall include accrued interest from the Interest Payment Date
next preceding the date of purchase to the date of purchase (unless the date of
purchase shall be an Interest Payment Date, in which case the purchase price
shall be equal to the amount specified in the preceding sentence). If the Bonds
are purchased after the Record Date, the purchase price shall not include
accrued interest.
BY ACCEPTANCE OF THIS BOND, THE REGISTERED OWNER HEREBY AGREES THAT, IF
THIS BOND IS TO BE PURCHASED AND IF MONEYS SUFFICIENT TO PAY THE PURCHASE PRICE
SHALL BE HELD BY THE TRUSTEE ON THE DATE THIS BOND IS TO BE PURCHASED, THIS BOND
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SHALL BE DEEMED TO HAVE BEEN PURCHASED AND SHALL BE PURCHASED ACCORDING OF THE
INDENTURE, WHETHER OR NOT THIS BOND SHALL HAVE BEEN DELIVERED TO THE TRUSTEE,
AND THE OWNER OF THIS BOND SHALL HAVE NO CLAIM HEREON, UNDER THE INDENTURE OR
OTHERWISE, FOR ANY AMOUNT OTHER THAN THE PURCHASE PRICE HEREOF.
The Bonds shall be redeemed in whole or in part, and if in part by lot, at
any time at a redemption price equal to the principal amount thereof plus
accrued interest to the redemption date upon receipt by the Trustee of a written
notice from the Company stating that any of the following events has occurred
and that the Company therefore intends to exercise its option to prepay the
payments due under the Loan Agreement in whole or in part and thereby effect the
redemption of Bonds in whole or in part to the extent of such prepayments: (a)
the Company shall have determined or concurred in a determination that the
continued operation of the Plant is impracticable, uneconomical or undesirable
for any reason; (b) all or substantially all of the Plant shall have been
condemned or taken by eminent domain; (c) the operation of the Plant shall have
been enjoined or shall have otherwise been prohibited by, or shall conflict
with, any order, decree, rule or regulation of any court or of any federal,
state or local regulatory body, administrative agency or other governmental
body; (d) unreasonable burdens or excessive liabilities shall have been imposed
upon the Company in respect of all or a part of the Pollution Control Facilities
or the Plant including, without limitation, federal, state or other ad valorem,
property, income or other taxes not being imposed on the date of the Loan
Agreement, as well as any statute or regulation enacted or promulgated after the
date of the Loan Agreement that prevents the Company from deducting interest in
respect of the Agreement for federal income tax purposes; or (e) all or
substantially all of the Project shall be transferred or sold to any entity
other than an affiliate of the Company; provided, however, that in the case of a
redemption under this paragraph, the redemption price of the Bonds shall be
equal to 101% of the principal amount thereof, plus accrued interest to the date
of redemption, unless a smaller or no premium would be due upon optional
redemption of the Bonds as described in the following paragraph.
The Bonds shall be subject to redemption upon prepayment of the Loan
Payments at the option of the Company, in whole, or in part by lot, prior to
their maturity, as follows:
(a) While the Bonds bear interest at a PARS Rate, the Bonds shall be
subject to such redemption on the date next succeeding the last day of any
PARS Rate Period at a redemption price equal to 100% of the principal
amount thereof plus accrued interest, if any, to the redemption date.
(b) While the Bonds bear interest at a Flexible Interest Rate or
Rates, each Bond shall be subject to such redemption on the day next
succeeding the last day of each Flexible Segment for such Bond at a
redemption price equal to 100% of the principal amount thereof.
(c) While the Bonds bear interest at a Daily Interest Rate or a
Weekly Interest Rate, the Bonds shall be subject to such redemption on any
Business Day at a redemption price equal to 100% of the principal amount
thereof, plus accrued interest, if any, to the redemption date.
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(d) While the Bonds bear interest at a Term Interest Rate, the Bonds
shall be subject to such redemption (1) on the day next succeeding the
last day of each Term Interest Rate Period at a redemption price equal to
the principal amount of the Bonds being redeemed plus accrued interest, if
any, to the redemption date and (2) either (i) on the redemption dates and
at the redemption prices specified by the Company pursuant to the next
succeeding paragraph or (ii) during the redemption periods specified
below, in each case in whole or in part, at the redemption prices
(expressed as percentages of principal amount) hereinafter indicated plus
accrued interest, if any, to the redemption date:
LENGTH OF TERM
INTEREST RATE PERIOD REDEMPTION DATES AND PRICES
-------------------- ---------------------------
Greater than or equal to 11 At any time on or after the first day of
years the calendar month following the tenth
anniversary of the effective date at
102% declining 1% annually to 100%
Less than 11 years Not redeemable
With respect to any Term Interest Rate Period, the Company may specify in
a notice given to the Trustee redemption provisions, prices and periods other
than those set forth above; provided, however, that such notice shall be
accompanied by a Favorable Opinion of Bond Counsel to the effect that the
proposed action is not prohibited by the laws of the State and the Indenture and
will not adversely affect the Tax-Exempt status of the Bonds.
The Bonds shall be redeemed in whole on any date from amounts which are to
be prepaid by the Company under the Loan Agreement, at a redemption price equal
to 100% of the principal amount thereof plus interest accrued, if any, to the
redemption date within 180 days after the occurrence of a Determination of
Taxability; provided that if, in the Favorable Opinion of Bond Counsel delivered
to the Trustee, the redemption of a specified portion of the Bonds outstanding
would have the result that interest payable on the Bonds remaining outstanding
after such redemption would remain Tax-Exempt, then the Bonds shall be redeemed
in part by lot (in Authorized Denominations), in such amount as Bond Counsel in
such opinion shall have determined is necessary to accomplish that result.
A "Determination of Taxability" shall be deemed to have occurred if as a
result of the Company's failure to observe any covenant, agreement or
representation in the Loan Agreement, a final decree or judgment of any federal
court or a final action of the Internal Revenue Service determines that interest
paid or payable on any Bond is or was includible in the gross income of an Owner
of the Bonds for federal income tax purposes under the Code (other than an Owner
who is a "substantial user" or "related person" within the meaning of Section
103(b)(13) of the 1954 Code. However, no such decree or action will be
considered final for this purpose unless the Company has been given written
notice and, if it is so desired and is legally allowed, has been afforded the
opportunity to contest the same, either directly or in the name of any Owner of
a Bond, and until conclusion of any appellate review, if sought.
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Notice of any optional or mandatory redemption shall be given by
first-class mail not less than 15 days nor more than 60 days prior to the date
fixed for redemption to the Owners of Bonds at the address shown on the
registration books of the Registrar on the date such notice is mailed. If less
than all of the Bonds are called for redemption, the Trustee shall select the
Bonds or any given portion thereof from the outstanding Bonds or such given
portion thereof not previously called for redemption, by lot. For the purpose of
any such selection the Trustee shall assign a separate number for each minimum
Authorized Denomination of each Bond of a denomination of more than such
minimum; provided that, following any such selection, both the portion of such
Bond to be redeemed and the portion remaining shall be in Authorized
Denominations.
Subject to the limitations and upon payment of the charges, if any,
provided in the Indenture, Bonds may be exchanged at the Principal Office of the
Registrar for a like aggregate principal amount of Bonds of the same tenor and
of Authorized Denominations.
This Bond is transferable by the person in whose name it is registered, in
person, or by its attorney duly authorized in writing, at the Principal Office
of the Registrar, but only in the manner, subject to the limitations and upon
payment of the charges provided in the Indenture, and upon surrender and
cancellation of this Bond accompanied by a written instrument of transfer in a
form approved by the Registrar, duly executed. Upon such transfer a new fully
registered Bond or Bonds in Authorized Denominations, for the same aggregate
principal amount, will be issued to the transferee in exchange therefor.
The Issuer, the Registrar, the Trustee and any agent of the Issuer, the
Registrar or the Trustee may treat the person in whose name this Bond is
registered as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Bond be overdue, and
neither the Issuer, the Registrar, the Trustee, any paying agent nor any such
agent shall be affected by notice to the contrary.
The Bonds are equally and ratably secured, to the extent provided in the
Indenture, by the pledge thereunder of the "Revenues," which term is used herein
as defined in the Indenture and which as therein defined means all moneys paid
or payable to the Trustee for the account of the Issuer in accordance with the
Loan Agreement and all receipts credited under the provisions of the Indenture
against such payments; provided, however, that "Revenues" shall not include
moneys held by the Trustee to pay the purchase price of Bonds subject to
purchase pursuant to the Indenture. The Issuer has also pledged and assigned to
the Trustee as security for the Bonds all other rights and interests of the
Issuer under the Loan Agreement (other than its rights to indemnification and
certain administrative expenses and certain other rights).
The Owner of this Bond shall have no right to enforce the provisions of
the Indenture, or to institute action to enforce the covenants therein, or to
take any action with respect to any Event of Default under the Indenture, or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.
With certain exceptions as provided therein, the Indenture and the Loan
Agreement may be modified or amended only with the consent of the Provider
(unless a Provider Default as
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specified in the Indenture shall have occurred and be continuing) and the Owners
of not less than 60% in aggregate principal amount of all Bonds then Outstanding
under the Indenture.
Reference is hereby made to the Indenture, the Loan Agreement, the Credit
Facility and the Tax Certificate, copies of which are on file with the Trustee,
for the provisions, among others, with respect to the nature and extent of the
rights, duties and obligations of the Issuer, the Company, the Trustee, the
Registrar, the Remarketing Agent and the Owners of the Bonds. The Owner of this
Bond, by the acceptance hereof, is deemed to have agreed and consented to and to
be bound by the terms and provisions of the indenture, the Loan Agreement and
the Tax Certificate.
The Indenture prescribes the manner in which it may be discharged,
including (a) a provision that the Bonds shall be deemed to be paid if moneys
sufficient to pay the principal of, premium, if any, and interest on the Bonds
and all necessary and proper fees, compensation and expenses of the Trustee, the
Registrar, the Provider and the Remarketing Agent, shall have been deposited
with the Trustee, after which the Bonds shall no longer be secured by or
entitled to the benefits of the Indenture, except for the purposes of
registration and exchange of Bonds and of delivery of the Bonds to the Trustee
for purchase, and (b) a provision that, if the Bonds mature or are called for
redemption prior to the next date upon which the Bonds are subject to purchase
pursuant to the Indenture, and if the Company waives its right to convert the
interest rate borne by the Bonds, the Bonds shall be deemed to be paid if
Government Obligations, as defined therein, maturing as to principal and
interest in such amounts and at such times as to insure the availability of
sufficient moneys to pay the principal of, premium, if any, and interest on the
Bonds and all necessary and proper fees, compensation and expenses of the
Trustee and the Registrar, shall have been deposited with the Trustee, after
which the Bonds shall no longer be secured by or entitled to the benefits of the
Indenture, except for the purposes of registration and exchange of Bonds and of
such payment.
No recourse shall be had for the payment of the principal of, premium, if
any, or interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in the Indenture contained, against any past,
present or future officer, elected official agent or employee of the Issuer, or
any incorporator, officer, director or member of any successor corporation, as
such, either directly or through the Issuer or any successor corporation, under
any rule of law or equity, statute or constitution or by the enforcement of any
assessment or penalty or otherwise, and all such liability of any such
incorporator, officer, director or member is hereby expressly waived and
released as a condition of and in consideration for the execution of the
Indenture and the issuance of any of the Bonds.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required
by law, and that the issuance of this Bond and the issue of which it forms a
part, together with all other obligations of the Issuer, does not exceed or
violate any constitutional or statutory limitation of indebtedness.
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This Bond shall not be entitled to any security or benefit under the
Indenture, or be valid or become obligatory for any purpose, until this Bond
shall have been authenticated by the execution by the Registrar of the
certificate of authentication inscribed hereon.
IN WITNESS WHEREOF, CITY OF FORSYTH, MONTANA, has caused this Bond to be
executed in its name with the signature of its Mayor and attested by the
signature of its City Clerk-Treasurer, all as of the Issue Date specified above.
CITY OF FORSYTH, MONTANA
By:
--------------------------------------
Mayor
[SEAL]
ATTEST:
- ----------------------------------
City Clerk-Treasurer
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[FORM OF TRUSTEE'S CERTIFICATE]
CERTIFICATE OF AUTHENTICATION
This is to certify that this Bond is one of the Bonds of the Series
described in the within-mentioned Indenture.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Registrar
By:
--------------------------------------
Authorized Signatory
Date of registration and authentication: ___________________________
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[FORM OF ASSIGNMENT]
The following abbreviations, when used in the inscription on the face the
within Bond shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT--
TEN ENT -- as tenants by the entirety _______ Custodian _______
JT TEN -- as joint tenants with (Cust) (Minor)
right of survivorship and under Uniform Gifts to Minors Act
not as tenants in common of _______________________________
(State)
Additional abbreviations may also be used though not in the list above.
For value received _____________________________________________ hereby
sells, assigns and transfers unto
INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________
________________________________________________________________________________
(Please Print or Typewrite Name and Address of Assignee)
the within Bond of the CITY OF FORSYTH, MONTANA, and hereby irrevocably
constitutes and appoints ____________________________________ attorney to
register the transfer of said Bond on the books kept for registration thereof
with full power of substitution in the premises.
Dated: _____________________________Signature: ______________________________
SIGNATURE GUARANTEED:
_____________________________________
NOTICE: Signature(s) must be guaranteed by an "eligible guarantor
institution" that is a member of or a participant in a "signature guarantee
program" (e.g., the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange, Inc. Medallion
Signature Program).
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without alteration
or enlargement or any change whatever.
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EXHIBIT B
PARS AUCTION PROCEDURES
SECTION 1.01. AUCTION PROCEDURES. While the Bonds bear interest at the PARS
Rate, Auctions shall be conducted on each Auction Date (other than the Auction
Date immediately preceding (i) each Rate Period commencing after the ownership
of the Auction Rate Bonds is no longer maintained in the Book-Entry System; (ii)
each Rate Period commencing after the occurrence and during the continuance of a
Payment Default; or (iii) any Rate Period commencing less than two Business Days
after the cure of a Payment Default). If there is an Auction Agent on such
Auction Date, Auctions shall be conducted in the manner set forth in this
Exhibit B.
SECTION 1.02. ORDERS BY EXISTING OWNERS AND POTENTIAL OWNERS.
(a) Prior to the Submission Deadline on each Auction Date:
(i) each Existing Owner may submit to a Broker-Dealer, in writing or
by such other method as shall be reasonably acceptable to such
Broker-Dealer, information as to:
(A) the principal amount of the PARS Rate Bonds, if any, held
by such Existing Owner which such Existing Owner irrevocably commits
to continue to hold for the next succeeding Auction Period without
regard to the rate determined by the Auction Procedures for such
Auction Period,
(B) the principal amount of the PARS Rate Bonds, if any, held
by such Existing Owner which such Existing Owner irrevocably commits
to continue to hold for the next succeeding Auction Period if the
rate determined by the Auction Procedures for such Auction Period
shall not be less than the rate per annum then specified by such
Existing Owner (and which such Existing Owner irrevocably offers to
sell on the next succeeding Interest Payment Date (or the same day
in the case of a daily Auction Period) if the rate determined by the
Auction Procedures for the next succeeding Auction Period shall be
less than the rate per annum then specified by such Existing Owner),
and/or
(C) the principal amount of the PARS Rate Bonds, if any, held
by such Existing Owner which such Existing Owner irrevocably offers
to sell on the next succeeding Interest Payment Date (or on the same
day in the case of a daily Auction Period) without regard to the
rate determined by the Auction Procedures for the next succeeding
Auction Period; and
(ii) for the purpose of implementing the Auctions and thereby to
achieve the lowest possible interest rate on the PARS Rate Bonds, the
Broker-Dealers shall contact Potential Owners, including Persons that are
Existing Owners, to determine the principal amount of the PARS Rate Bonds,
if any, which each such Potential Owner irrevocably
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offers to purchase if the rate determined by the Auction Procedures for
the next succeeding Auction Period is not less than the rate per annum
then specified by such Potential Owner.
For the purposes hereof, an Order containing the information referred to
in clause (i)(A) of this subsection (a) is herein referred to as a "Hold Order",
an Order containing the information referred to in clause (i)(B) or (ii) of this
subsection (a) is herein referred to as a "Bid", and an Order containing the
information referred to in clause (i)(C) of this subsection (a) is herein
referred to as a "Sell Order."
(b) (i) A Bid by an Existing Owner shall constitute an irrevocable offer
to sell:
(A) the principal amount of the PARS Rate Bonds specified in
such Bid if the rate determined by the Auction Procedures on such
Auction Date shall be less than the rate specified therein; or
(B) such principal amount or a lesser principal amount of the
PARS Rate Bonds to be determined as set forth in subsection (a)(v)
of Section 1.05 hereof if the rate determined by the Auction
Procedures on such Auction Date shall be equal to such specified
rate; or
(C) a lesser principal amount of the PARS Rate Bonds to be
determined as set forth in subsection (b)(iv) of Section 1.05 hereof
if such specified rate shall be higher than the Maximum PARS Rate
and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Owner shall constitute an
irrevocable offer to sell:
(A) the principal amount of the PARS Rate Bonds specified in
such Sell Order; or
(B) such principal amount or a lesser principal amount of the
PARS Rate Bonds as set forth in subsection (b)(iv) of Section 1.05
hereof if Sufficient Clearing Bids do not exist.
(iii) A Bid by a Potential Owner shall constitute an irrevocable
offer to purchase:
(A) the principal amount of the PARS Rate Bonds specified in
such Bid if the rate determined by the Auction Procedures on such
Auction Date shall be higher than the rate specified therein; or
(B) such principal amount or a lesser principal amount of the
PARS Rate Bonds as set forth in subsection (a)(vi) of Section 1.05
hereof if the rate determined by the Auction Procedures on such
Auction Date shall be equal to such specified rate.
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(c) Anything herein to the contrary notwithstanding:
(i) for purposes of any Auction, any Order which specifies the PARS
Rate Bonds to be held, purchased or sold in a principal amount which is
not $25,000 or an integral multiple thereof shall be rounded down to the
nearest $25,000, and the Auction Agent shall conduct the Auction
Procedures as if such Order had been submitted in such lower amount;
(ii) for purposes of any Auction other than during a daily Auction
Period, any portion of an Order of an Existing Owner which relates to a
PARS Rate Bond which has been called for redemption on or prior to the
Interest Payment Date next succeeding such Auction shall be invalid with
respect to such portion and the Auction Agent shall conduct the Auction
Procedures as if such portion of such Order had not been submitted;
(iii) for purposes of any Auction other than during a daily Auction
Period, no portion of a PARS Rate Bond which has been called for
redemption on or prior to the Interest Payment Date next succeeding such
Auction shall be included in the calculation of Available Bonds for such
Auction;
(iv) the Auction Procedures shall be suspended during the period
commencing on the date of the Auction Agent's receipt of notice from the
Trustee or the Issuer of the occurrence of an Event of Default resulting
from a failure to pay principal, premium or interest on any PARS Rate Bond
when due (provided however that for purposes of this provision only
payment by the Provider of the Credit Facility shall be deemed to cure
such Event of Default and no such suspension of the Auction Procedures
shall occur) but shall resume two Business Days after the date on which
the Auction Agent receives notice from the Trustee that such Event of
Default has been waived or cured, with the next Auction to occur on the
next regularly scheduled Auction Date occurring thereafter; and
(v) while the PARS Rate Bonds are in a PARS daily Auction Period,
all PARS will be Tranche I PARS.
SECTION 1.03. SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT.
(a) Each Broker-Dealer shall submit to the Auction Agent in writing or by
such other method as shall be reasonably acceptable to the Auction Agent, prior
to the Submission Deadline on each Auction Date, all Orders obtained by such
Broker-Dealer and specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate principal amount of the PARS Rate Bonds that are
the subject of such Order;
(iii) to the extent that such Bidder is an Existing Owner:
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(A) the principal amount of the PARS Rate Bonds, if any,
subject to any Hold Order placed by such Existing Owner;
(B) the principal amount of the PARS Rate Bonds, if any,
subject to any Bid placed by such Existing Owner and the rate
specified in such Bid; and
(C) the principal amount of the PARS Rate Bonds, if any,
subject to any Sell Order placed by such Existing Owner; and
(iv) to the extent such Bidder is a Potential Owner, the rate
specified in such Bid.
(b) If any rate specified in any Bid contains more than three figures to
the right of the decimal point, the Auction Agent shall round such rate up to
the next highest one thousandth of one percent (0.001%).
(c) If an Order or Orders covering all of the PARS Rate Bonds held by an
Existing Owner is not submitted to the Auction Agent prior to the Submission
Deadline, the Auction Agent shall deem a Hold Order to have been submitted on
behalf of such Existing Owner covering the principal amount of the PARS Rate
Bonds held by such Existing Owner and not subject to Orders submitted to the
Auction Agent; provided, however, that if there is a conversion from one Auction
Period to another Auction Period and Orders have not been submitted to the
Auction Agent prior to the Submission Deadline covering the aggregate principal
amount of the PARS Rate Bonds held by such Existing Owner, the Auction Agent
shall deem a Sell Order to have been submitted on behalf of such Existing Owner
covering the principal amount of the PARS Rate Bonds held by such Existing Owner
not subject to Orders submitted to the Auction Agent.
(d) If one or more Orders covering in the aggregate more than the principal
amount of the Outstanding PARS Rate Bonds held by any Existing Owner are
submitted to the Auction Agent, such Orders shall be considered valid as
follows:
(i) all Hold Orders shall be considered Hold Orders, but only up to
and including in the aggregate the principal amount of the PARS Rate Bonds
held by such Existing Owner;
(ii) (A) any Bid of an Existing Owner shall be considered valid as a
Bid of an Existing Owner up to and including the excess of the principal
amount of the PARS Rate Bonds held by such Existing Owner over the
principal amount of the PARS Rate Bonds subject to Hold Orders referred to
in paragraph (i) above;
(B) subject to clause (A), all Bids of an Existing Owner with
the same rate shall be aggregated and considered a single Bid of an
Existing Owner up to and including the excess of the principal
amount of the PARS Rate Bonds held by such Existing Owner over the
principal amount of the PARS Rate Bonds held by such Existing Owner
subject to Hold Orders referred to in paragraph (i) above,
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(C) subject to clause (A), if more than one Bid with different
rates is submitted on behalf of such Existing Owner, such Bids shall
be considered Bids of an Existing Owner in the ascending order of
their respective rates up to the amount of the excess of the
principal amount of the PARS Rate Bonds held by such Existing Owner
over the principal amount of the PARS Rate Bonds held by such
Existing Owner subject to Hold Orders referred to in paragraph (i)
above, and
(D) the principal amount, if any, of such PARS Rate Bonds
subject to Bids not considered to be Bids of an Existing Owner under
this paragraph (ii) shall be treated as the subject of a Bid by a
Potential Owner; and
(iii) all Sell Orders shall be considered Sell Orders, but only up to
and including a principal amount of the PARS Rate Bonds equal to the
excess of the principal amount of the PARS Rate Bonds held by such
Existing Owner over the sum of the principal amount of the PARS Rate Bonds
considered to be subject to Hold Orders pursuant to paragraph (i) above
and the principal amount of the PARS Rate Bonds considered to be subject
to Bids of such Existing Owner pursuant to paragraph (ii) above.
(e) If more than one Bid is submitted on behalf of any Potential Owner,
each Bid submitted with the same rate shall be aggregated and considered a
single Bid and each Bid submitted with a different rate shall be considered a
separate Bid with the rate and the principal amount of the PARS Rate Bonds
specified therein.
(f) Any Bid submitted by an Existing Owner or a Potential Owner specifying
a rate lower than the Minimum PARS Rate shall be treated as a Bid specifying the
Minimum PARS Rate.
(g) Neither the Company, the Issuer, the Trustee nor the Auction Agent
shall be responsible for the failure of any Broker-Dealer to submit an Order to
the Auction Agent on behalf of any Existing Owner or Potential Owner.
SECTION 1.04. DETERMINATION OF PARS RATE.
(a) Not later than 9:30 a.m., New York, New York time, on each Auction
Date, the Auction Agent shall advise the Broker-Dealers and the Trustee by
telephone of the Minimum PARS Rate, the Maximum PARS Rate and the PARS Index.
(b) Promptly after the Submission Deadline on each Auction Date, the
Auction Agent shall assemble all Orders submitted or deemed submitted to it by
the Broker-Dealers (each such Order as submitted or deemed submitted by a
Broker-Dealer being hereinafter referred to as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order," as the case may be, and
collectively as a "Submitted Order") and shall determine (i) the Available
Bonds, (ii) whether there are Sufficient Clearing Bids, and (iii) the Auction
Rates.
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(c) Promptly after the Auction Agent has made the determinations pursuant
to subsection (b) above, the Auction Agent shall advise the Trustee by telephone
(promptly confirmed in writing), telex or facsimile transmission of the Auction
Rates and the aggregate principal amount of each Tranche for the next succeeding
Auction Period.
(d) In the event the Auction Agent shall fail to calculate, or for any
reason fail to timely provide the Auction Rates for any Auction Period, the PARS
Rate for such Auction Period shall be the applicable No Auction Rate provided,
however, that if the Auction Procedures are suspended pursuant to Section
1.02(iv), the PARS Rates for the next succeeding Auction Period shall be the
Maximum PARS Rate.
(e) In the event of a failed conversion to a Daily Interest Rate Period, a
Weekly Interest Rate Period, a Flexible Interest Rate Period or a Term Interest
Rate Period or in the event of a failure to change the length of the current
Auction Period due to the lack of Sufficient Clearing Bids at the Auction on the
Auction Date for the first new Auction Period, the PARS Rate for the next
Auction Period shall be the Maximum PARS Rate and the Auction Period shall be a
seven-day Auction Period.
SECTION 1.05. ALLOCATION OF THE PARS RATE BONDS.
(a) In the event of Sufficient Clearing Bids, subject to the further
provisions of subsections (c) and (d) below, Submitted Orders shall be accepted
or rejected as follows in the following order of priority:
(i) the Submitted Hold Order of each Existing Owner shall be
accepted, thus requiring each such Existing Owner to continue to hold the
PARS Rate Bonds that are the subject of such Submitted Hold Order;
(ii) the Submitted Sell Order of each Existing Owner shall be
accepted and the Submitted Bid of each Existing Owner specifying any rate
that is higher than the Winning Bid Rate shall be rejected, thus requiring
each such Existing Owner to sell the PARS Rate Bonds that are the subject
of such Submitted Sell Order or Submitted Bid;
(iii) the Submitted Bid of each Existing Owner specifying any rate
that is lower than the Winning Bid Rate shall be accepted, thus requiring
each such Existing Owner to continue to hold the PARS Rate Bonds that are
the subject of such Submitted Bid;
(iv) the Submitted Bid of each Potential Owner specifying any rate
that is lower than the Winning Bid Rate shall be accepted, thus requiring
each such Potential Owner to purchase the PARS Rate Bonds that are the
subject of such Submitted Bid;
(v) the Submitted Bid of each Existing Owner specifying a rate that
is equal to the Winning Bid Rate shall be accepted, thus requiring each
such Existing Owner to continue to hold the PARS Rate Bonds that are the
subject of such Submitted Bid, but only up to and including the principal
amount of the PARS Rate Bonds obtained by multiplying (A) the aggregate
principal amount of the Outstanding PARS Rate Bonds
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which are not the subject of Submitted Hold Orders described in paragraph
(i) above or of Submitted Bids described in paragraphs (iii) or (iv) above
by (B) a fraction the numerator of which shall be the principal amount of
the Outstanding PARS Rate Bonds held by such Existing Owner subject to
such Submitted Bid and the denominator of which shall be the aggregate
principal amount of the Outstanding PARS Rate Bonds subject to such
Submitted Bids made by all such Existing Owners that specified a rate
equal to the Winning Bid Rate, and the remainder, if any, of such
Submitted Bid shall be rejected, thus requiring each such Existing Owner
to sell any excess amount of the PARS Rate Bonds;
(vi) the Submitted Bid of each Potential Owner specifying a rate
that is equal to the Winning Bid Rate shall be accepted, thus requiring
each such Potential Owner to purchase the PARS Rate Bonds that are the
subject of such Submitted Bid, but only in an amount equal to the
principal amount of the PARS Rate Bonds obtained by multiplying (A) the
aggregate principal amount of the Outstanding PARS Rate Bonds which are
not the subject of Submitted Hold Orders described in paragraph (i) above
or of Submitted Bids described in paragraphs (iii), (iv) or (v) above by
(B) a fraction the numerator of which shall be the principal amount of the
Outstanding PARS Rate Bonds subject to such Submitted Bid and the
denominator of which shall be the sum of the aggregate principal amount of
the Outstanding PARS Rate Bonds subject to such Submitted Bids made by all
such Potential Owners that specified a rate equal to the Winning Bid Rate,
and the remainder of such Submitted Bid shall be rejected; and
(vii) the Submitted Bid of each Potential Owner specifying any rate
that is higher than the Winning Bid Rate shall be rejected.
(b) In the event there are not Sufficient Clearing Bids, subject to the
further provisions of subsections (c) and (d) below, Submitted Orders shall be
accepted or rejected as follows in the following order of priority:
(i) the Submitted Hold Order of each Existing Owner shall be
accepted, thus requiring each such Existing Owner to continue to hold the
PARS Rate Bonds that are the subject of such Submitted Hold Order;
(ii) the Submitted Bid of each Existing Owner specifying any rate
that is not higher than the Maximum PARS Rate shall be accepted, thus
requiring each such Existing Owner to continue to hold the PARS Rate Bonds
that are the subject of such Submitted Bid;
(iii) the Submitted Bid of each Potential Owner specifying any rate
that is not higher than the Maximum PARS Rate shall be accepted, thus
requiring each such Potential Owner to purchase the PARS Rate Bonds that
are the subject of such Submitted Bid;
(iv) the Submitted Sell Orders of each Existing Owner shall be
accepted as Submitted Sell Orders and the Submitted Bids of each Existing
Owner specifying any rate that is higher than the Maximum PARS Rate shall
be deemed to be and shall be accepted as Submitted Sell Orders, in both
cases only up to and including the principal amount of
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the PARS Rate Bonds obtained by multiplying (A) the aggregate principal
amount of the PARS Rate Bonds subject to Submitted Bids described in
paragraph (iii) of this subsection (b) by (B) a fraction the numerator of
which shall be the principal amount of the Outstanding PARS Rate Bonds
held by such Existing Owner subject to such Submitted Sell Order or such
Submitted Bid deemed to be a Submitted Sell Order and the denominator of
which shall be the principal amount of the Outstanding PARS Rate Bonds
subject to all such Submitted Sell Orders and such Submitted Bids deemed
to be Submitted Sell Orders, and the remainder of each such Submitted Sell
Order or Submitted Bid shall be deemed to be and shall be accepted as a
Hold Order and each such Existing Owner shall be required to continue to
hold such excess amount of the PARS Rate Bonds; and
(v) the Submitted Bid of each Potential Owner specifying any rate
that is higher than the Maximum PARS Rate shall be rejected.
(c) If, as a result of the procedures described in subsection (a) or (b)
above, any Existing Owner or Potential Owner would be required to purchase or
sell an aggregate principal amount of the PARS Rate Bonds which is not an
integral multiple of $25,000 on any Auction Date, the Auction Agent shall by
lot, in such manner as it shall determine in its sole discretion, round up or
down the principal amount of the PARS Rate Bonds to be purchased or sold by any
Existing Owner or Potential Owner on such Auction Date so that the aggregate
principal amount of the PARS Rate Bonds purchased or sold by each Existing Owner
or Potential Owner on such Auction Date shall be an integral multiple of
$25,000, even if such allocation results in one or more of such Existing Owners
or Potential Owners not purchasing or selling any the PARS Rate Bonds on such
Auction Date.
(d) If, as a result of the procedures described in subsection (a) above,
any Potential Owner would be required to purchase less than $25,000 in principal
amount of the PARS Rate Bonds on any Auction Date, the Auction Agent shall by
lot, in such manner as it shall determine in its sole discretion, allocate the
PARS Rate Bonds for purchase among Potential Owners so that the principal amount
of PARS purchased on such Auction Date by any Potential Owner shall be an
integral multiple of $25,000, even if such allocation results in one or more of
such Potential Owners not purchasing the PARS Rate Bonds on such Auction Date.
SECTION 1.06. NOTICE OF PARS RATE.
(a) On each Auction Date, the Auction Agent shall notify by telephone each
Broker-Dealer that participated in the Auction held on such Auction Date and
submitted an Order on behalf of any Existing Owner or Potential Owner of:
(i) the PARS Rate fixed for the succeeding Auction Period or, in the
case of PARS Rate Bonds in a daily Auction Period, the PARS Rate on the
PARS Rate Bonds fixed for the current Auction Period;
(ii) whether Sufficient Clearing Bids existed for the determination
of the Winning Bid Rate;
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(iii) if such Broker-Dealer submitted a Bid or a Sell Order on behalf
of an Existing Owner, whether such Bid or Sell Order was accepted or
rejected, in whole or in part, and the principal amount of the PARS Rate
Bonds, if any, to be sold by such Existing Owner;
(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential
Owner, whether such Bid was accepted or rejected, in whole or in part, and
the principal amount of the PARS Rate Bonds, if any, to be purchased by
such Potential Owner;
(v) if the aggregate principal amount of the PARS Rate Bonds to be
sold by all Existing Owners on whose behalf such Broker-Dealer submitted
Bids or Sell Orders is different from the aggregate principal amount of
the PARS Rate Bonds to be purchased by all Potential Owners on whose
behalf such Broker-Dealer submitted a Bid, the name or names of one or
more Broker-Dealers (and the Agent Member, if any, of each such other
Broker-Dealer) and the principal amount of the PARS Rate Bonds to be (A)
purchased from one or more Existing Owners on whose behalf such other
Broker-Dealers submitted Bids or Sell Orders or (B) sold to one or more
Potential Owners on whose behalf such Broker-Dealer submitted Bids; and
(vi) the immediately succeeding Auction Date.
(b) On each Auction Date, each Broker-Dealer that submitted an Order on
behalf of any Existing Owner or Potential Owner shall:
(i) advise each Existing Owner and Potential Owner on whose behalf
such Broker-Dealer submitted a Bid or Sell Order whether such Bid or Sell
Order was accepted or rejected, in whole or in part;
(ii) instruct each Potential Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, to
instruct such Potential Owner's Agent Member to pay to such Broker-Dealer
(or its Agent Member) through the Securities Depository the amount
necessary to purchase the principal amount of the PARS Rate Bonds to be
purchased pursuant to such Bid (including, with respect to the PARS Rate
Bonds in a daily Auction Period, accrued interest if the purchase date is
not an Interest Payment Date for such PARS Rate Bond) against receipt of
such the PARS Rate Bonds;
(iii) instruct each Existing Owner on whose behalf such
Broker-Dealer submitted a Sell Order that was accepted or a Bid that was
rejected, in whole or in part, to instruct such Existing Owner's Agent
Member to deliver to such Broker-Dealer (or its Agent Member) through the
Securities Depository the principal amount of the PARS Rate Bonds to be
sold pursuant to such Bid or Sell Order against payment therefor;
(iv) advise each Existing Owner on whose behalf such Broker-Dealer
submitted an Order and each Potential Owner on whose behalf such
Broker-Dealer submitted a Bid of the PARS Rate for the next succeeding
Auction Period;
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(v) advise each Existing Owner on whose behalf such Broker-Dealer
submitted an Order of the Auction Date of the next succeeding Auction or,
in the case of PARS Rate Bonds in a daily Auction Period, the PARS Rate
for the current Auction Period; and
(vi) advise each Potential Owner on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, of the Auction
Date of the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to paragraph
(a) above, each Broker-Dealer that submitted a Bid or Sell Order shall allocate
any funds received by it pursuant to subparagraph (b)(ii) above, and any PARS
Rate Bonds received by it pursuant to (b)(iii) above, among the Potential
Owners, if any, on whose behalf such Broker-Dealer submitted Bids, the Existing
Owners, if any, on whose behalf such Broker-Dealer submitted Bids or Sell
Orders, and any Broker-Dealer identified to it by the Auction Agent pursuant to
subparagraph (a)(v) above.
(d) On the Business Day after the Auction Date or, in the case of PARS Rate
Bonds in a daily Auction Period, on such Auction Date, the Securities Depository
shall execute the transactions described above, debiting and crediting the
accounts of the respective Agent Members as necessary to effect the purchase and
sale of PARS Rate Bonds as determined in the Auction.
SECTION 1.07. PARS INDEX.
(a) the PARS Index on any Auction Date with respect to the PARS Rate Bonds
in any Auction Period other than a six-month Auction Period shall be the
Seven-Day "AA" Composite Commercial Paper Rate on such date. The PARS Index
respect to the PARS Rate Bonds in a six-month Auction Period shall be the
Six-Month Treasury Bill Rate, as last published in The Bond Buyer. If either
rate is unavailable, the PARS Index shall be a rate agreed to by all
Broker-Dealers and consented to by the Issuer.
"Seven-Day `AA' Composite Commercial Paper Rate" on any date of
determination, means the interest equivalent of the seven-day rate on commercial
paper placed on behalf of issuers whose corporate bonds are rated AA by S&P, or
the equivalent of such rating by S&P, as made available on a discount basis or
otherwise by the Federal Reserve Bank of New York for the Business Day
immediately preceding such date of determination, or (B) if the Federal Reserve
Bank of New York does not make available any such rate, then the arithmetic
average of such rates, as quoted on a discount basis or otherwise, by Goldman,
Sachs & Co., Lehman Commercial Paper Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated or, in lieu of any thereof, their respective affiliates or
successors which are commercial paper dealers (the "Commercial Paper Dealers"),
to the Auction Agent for the close of business on the Business Day immediately
preceding such date of determination.
For purposes of the definitions of Seven-Day "AA" Composite Commercial
Paper Rate, the "interest equivalent" means the equivalent yield on a 360-day
basis of a discount-basis security to an interest-bearing security. If any
Commercial Paper Dealer does not quote a commercial paper rate required to
determine the Seven-Day "AA" Composite Commercial Paper Rate, the
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Seven-Day "AA" Composite Commercial Paper Rate shall be determined on the basis
of the quotation or quotations furnished by the remaining Commercial Paper
Dealer or Commercial Paper Dealers and any substitute commercial paper dealer
not included within the definition of Commercial Paper Dealer above, which may
be CS First Boston Corporation or Morgan Stanley Dean Witter or their respective
affiliates or successors which are commercial paper dealers (a "Substitute
Commercial Paper Dealer") selected by the Trustee (who shall be under no
liability for such selection) to provide such commercial paper rate or rates not
being supplied by any Commercial Paper Dealer or Commercial Paper Dealers, as
the case may be, or if the Trustee does not select any such substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers.
(b) If for any reason on any Auction Date the PARS Index shall not be
determined as hereinabove provided in this Section, the PARS Index shall be the
PARS Index for the Auction Period ending on such Auction Date.
(c) The determination of the PARS Index as provided herein shall be
conclusive and binding upon the Issuer, the Company, the Trustee, the
Broker-Dealers, the Auction Agent and the Owners and Beneficial Owners of the
PARS Rate Bonds.
SECTION 1.08. MISCELLANEOUS PROVISIONS REGARDING AUCTIONS.
(a) In this Exhibit B, each reference to the purchase, sale or holding of
"PARS Rate Bonds" shall refer to beneficial interests in the PARS Rate Bonds,
unless the context clearly requires otherwise.
(b) During a PARS Rate Period, the provisions of Section 1.02 hereof and
this Exhibit B may be amended pursuant to Section 12.02 of the Indenture by
obtaining the consent of the Provider of the Credit Facility and the owners of
all Outstanding PARS Rate Bonds bearing interest at the PARS Rates as follows.
If on the first Auction Date occurring at least 20 days after the date on which
the Trustee mailed notice of such proposed amendment to the Owners of the
Outstanding PARS as required by Section 12.02, (i) Sufficient Clearing Bids have
been received or all of the PARS are subject to Submitted Hold Orders, and (ii)
there is delivered to the Issuer and the Trustee a Favorable Opinion of Bond
Counsel with respect to such amendment, the proposed amendment shall be deemed
to have been consented to by the owners of all Outstanding PARS. Notwithstanding
the foregoing, for so long as Goldman, Sachs & Co. is a Broker-Dealer, there may
not be a change in the definitions of Broker-Dealer Rate, Tranche I PARS or
Tranche II PARS without the consent of Goldman, Sachs & Co.
(c) During a PARS Rate Period, so long as the ownership of the PARS Rate
Bonds is maintained in book-entry form by the Securities Depository, an Existing
Owner or a beneficial owner may sell, transfer or otherwise dispose of a the
PARS Rate Bond only pursuant to a Bid or Sell Order in accordance with the
Auction Procedures or to or through a Broker-Dealer or to a Person that has
delivered a signed copy of a Master Purchaser's Letter to the Auction Agent,
provided that (i) in the case of all transfers other than pursuant to Auctions
such Existing Owner or its Broker-Dealer or its Agent Member advises the Auction
Agent of such transfer and (ii) a sale, transfer or other disposition of the
PARS Rate Bonds from a customer of a Broker-Dealer
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who is listed on the records of that Broker-Dealer as the Owner of such PARS
Rate Bonds to that Broker-Dealer or another customer of that Broker-Dealer shall
not be deemed to be a sale, transfer or other disposition for purposes of this
Section 1.08 if such Broker-Dealer remains the Existing Owner of the PARS Rate
Bonds so sold, transferred or disposed of immediately after such sale, transfer
or disposition.
SECTION 1.09. CHANGES IN AUCTION PERIOD OR AUCTION DATE.
(a) Changes in Auction Period.
(i) During any PARS Rate Period, the Company, may, from time to time
on any Interest Payment Date, change the length of the Auction Period with
respect to the PARS Rate Bonds between daily, seven days, 28 days, 35 days
and six months in order to accommodate economic and financial factors that
may affect or be relevant to the length of the Auction Period and the
interest rate borne by such PARS Rate Bonds. The Company shall initiate
the change in the length of the Auction Period by giving written notice to
the Issuer, the Trustee, the Auction Agent, the Broker-Dealers, the
Provider of the Credit Facility and the Securities Depository that the
Auction Period will change if the conditions described herein are
satisfied and the proposed effective date of the change, at least 10
Business Days prior to the Auction Date for such Auction Period.
(ii) Any such changed Auction Period shall be for a period of one
day, seven days, 28 days, 35 days or six months and shall be for all of
the PARS Rate Bonds in a PARS Rate Period.
(iii) The change in the length of the Auction Period shall not be
allowed unless Sufficient Clearing Bids existed at both the Auction before
the date on which the notice of the proposed change was given as provided
in this subsection (a) and the Auction immediately preceding the proposed
change.
(iv) The change in length of the Auction Period shall take effect
only if Sufficient Clearing Bids exist at the Auction on the Auction Date
for such first Auction Period. For purposes of the Auction for such first
Auction Period only, each Existing Owner shall be deemed to have submitted
Sell Orders with respect to all of its the PARS Rate Bonds except to the
extent such Existing Owner submits an Order with respect to such Bonds. If
the condition referred to in the first sentence of this paragraph (iv) is
not met, the Auction Rate for the next Auction Period shall be the Maximum
PARS Rate, and the Auction Period shall be a seven-day Auction Period.
(v) On the conversion date for the PARS Rate Bonds selected for
conversion from one Auction Period to another, any PARS Rate Bonds which
are not the subject of a specific Hold Order or Bid will be deemed to be
subject to a Sell Order.
(b) Changes in Auction Date. During any PARS Rate Period, the Auction
Agent, with the written consent of the Issuer, may specify an earlier Auction
Date (but in no event more than five Business Days earlier) than the Auction
Date that would otherwise be determined in
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accordance with the definition of "Auction Date" in order to conform with then
current market practice with respect to similar securities or to accommodate
economic and financial factors that may affect or be relevant to the day of the
week constituting an Auction Date and the interest rate borne on the PARS Rate
Bonds. The Issuer shall not consent to such change in the Auction Date unless it
shall have received from the Auction Agent not less than three days nor more
than 20 days prior to the effective date of such change a written request for
consent together with a certificate demonstrating the need for change in
reliance on such factors. The Auction Agent shall provide notice of its
determination to specify an earlier Auction Date for an Auction Period by means
of a written notice delivered at least 45 days prior to the proposed changed
Auction Date to the Trustee, the Company, the Issuer, the Broker-Dealers and the
Securities Depository.
(c) Changes Conditioned on Ratings. Notwithstanding anything herein to the
contrary, prior to any change in the duration of an Auction Period, the Trustee
shall receive written evidence from Moody's, if the Bonds are then rated by
Moody's, and from S&P, if the Bonds are then rated by S&P, in each case to the
effect that such rating agency has reviewed the proposed Change of Credit
Facility and that such Change of Credit Facility will not, by itself, result in
a reduction, suspension or withdrawal of its rating or ratings of the Bonds.
SECTION 1.10. AUCTION AGENT.
(a) The initial Auction Agent shall be IBJ Whitehall Bank & Trust Company,
New York, New York, or any successor appointed by the Trustee, at the written
direction of the Company, to perform the functions specified herein. The Auction
Agent shall designate its Principal Office and signify its acceptance of the
duties and obligations imposed upon it hereunder by a written instrument,
delivered to the Issuer, the Trustee, the Company and each Broker-Dealer which
will set forth such procedural and other matters relating to the implementation
of the Auction Procedures as shall be satisfactory to the Issuer and the
Trustee.
(b) Subject to any applicable governmental restrictions, the Auction Agent
may be or become the owner of or trade in the PARS Rate Bonds with the same
rights as if such entity were not the Auction Agent.
SECTION 1.11. QUALIFICATIONS OF AUCTION AGENT: RESIGNATION; REMOVAL. The
Auction Agent shall be (a) a bank or trust company organized under the laws of
the United States or any state or territory thereof having a combined capital
stock, surplus and undivided profits of at least $30,000,000, or (b) a member of
NASD having a capitalization of at least $30,000,000 and, in either case,
authorized by law to perform all of the duties imposed upon it by this Indenture
and a member of or a participant in, the Securities Depository. The Auction
Agent may at any time resign and be discharged of the duties and obligations
created by this Indenture by giving at least ninety (90) days notice to the
Issuer, the Company, the Trustee and the Provider. The Auction Agent may be
removed at any time by the Company by written notice, delivered to the Auction
Agent, the Company, the Trustee and the Provider. Upon any such resignation or
removal, the Trustee shall, at the direction of the Company, appoint a successor
Auction Agent meeting the requirements of this Section. In the event of the
resignation or removal of the Auction Agent, the Auction Agent shall pay over,
assign and deliver any moneys and the PARS Rate Bonds held by it in such
capacity to its successor. The Auction Agent shall continue to perform its
duties
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hereunder until its successor has been appointed by the Issuer. In the event
that the Auction Agent has not been compensated for its services, the Auction
Agent may resign by giving thirty (30) days notice to the Issuer, the Company,
the Trustee and the Provider even if a successor Auction Agent has not been
appointed.
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