Exhibit 10.66
EXECUTION
COPY
TRUST INDENTURE
BETWEEN
ALLIANCEAIRPORT AUTHORITY, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
Dated as of April 1, 1996
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ALLIANCEAIRPORT AUTHORITY, INC.
SPECIAL FACILITIES REVENUE BONDS, SERIES 1996
(FEDERAL EXPRESS CORPORATION PROJECT)
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TRUST INDENTURE
TABLE OF CONTENTS
(This Table of Contents appears here for convenience only and shall not be
considered part of the Indenture.)
PAGE
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Parties 1
Recitals 1
Granting Clause 2
ARTICLE I. Acceptance of Trust; Instruments
of Further Assurance; Recording
(A) Acceptance of Trust 2
(B) Instruments of Further
Assurance 2
(C) Protection of Lien 2
(D) Continuation Statements 2
(E) Assignment of Special Facilities Rentals 3
ARTICLE II. The Bonds
(A) Designation, Initial Date, Denominations,
Numbers and Maturities of Bonds 3
(B) DTC Book-Entry 3
(C) Interest 4
(D) Redemption 4
(E) Characteristics of the Bonds 8
(F) Form of Bonds 10
(G) Damaged, Mutilated, Lost, Stolen or
Destroyed Bonds 10
(H) Effect of Exchange or Transfer 11
(I) Covenants Regarding Tax Exemption 11
ii
ARTICLE III. Establishment of Construction Fund,
Debt Service Fund and Special
Rebate Fund
(A) Proceeds from Delivery of the Bonds 11
(B) Construction Fund 11
(C) Payments from Special Facilities
Construction Allowance Account 11
(D) Surplus Construction Funds 12
(E) Debt Service Fund 13
(F) Special Rebate Fund 14
(G) Net Proceeds Account 15
(H) Investments 15
(I) Security for Funds 16
ARTICLE IV. Accounts and Records
(A) Separate Records 16
(B) Report of Trustee 16
(C) Inspection 17
(D) Registration Books 17
ARTICLE V. Enforcement of Rights in Case of Default
(A) Trustee is Agent 17
(B) Restriction on Bondholder's
Action 17
(C) Events of Default 17
(D) Acceleration 18
(E) Action by Trustee 18
(F) Remedies Nonexclusive 18
(G) Trustee's Discretion 18
(H) Disposition of Money 18
(I) Intervention by Trustee 19
(J) Possession of Bonds
Unnecessary 19
(K) Bondholder's Directions 19
(L) Trustee's Notice of
Default 19
(M) Bonds Owned by Authority
or Company 19
(N) Trustee's Standard of
Conduct with Respect to
iii
Event of Default 20
(O) Bondholder Remedy - Ongoing
Disclosure Under Rule 15c2-12 20
ARTICLE VI. Concerning the Trustee
(A) Negligence or Misconduct 20
(B) Accountability for Funds 21
(C) Reliance on Communications 21
(D) Proof of Facts 21
(E) Limited Responsibilities 21
(F) Performance through Attorneys, Accountants,
Agents, Receivers or Employees 21
(G) Trustee as Bondholder 22
(H) Execution of Documents 22
(I) Fees 22
(J) Recitals 22
(K) Responsibility of Trustee Generally 22
(L) Additional Rights of Trustee 22
ARTICLE VII. Successor Trustee
(A) Resignation and Removal of Trustee 23
(B) Appointment of Successor 23
(C) Qualification of Successor 24
(D) Merger or Consolidation
of Trustee 24
ARTICLE VIII.Release of Indenture
(A) Satisfaction of Indebtedness
and Release of Indenture 24
(B) Payment, Advance Funding
and Defeasance 25
(C) Reinvestment 25
(D) Use of Moneys and Government
Obligations Set Aside 26
(E) No Amendment 26
(F) Additional Conditions to Defeasance
and Reinvestment 26
ARTICLE IX. Amendments
(A) Amendments without Bondholder Consent 26
(B) Consent of Majority of Bondholders 27
iv
(C) Consent of All Bondholders 27
(D) Effective Date of Amendment 27
(E) Opinion of Bond Counsel 28
ARTICLE X. Miscellaneous Provisions
(A) Proof of Execution 28
(B) Proof of Ownership 28
(C) Action Binding on Successor 28
(D) Nonpresentment and Unclaimed
Funds 28
(E) Destruction of Bonds 29
(F) No Third-Party
Beneficiaries 29
(G) Severability 29
(H) Governing Law 29
(I) Addresses 29
(J) Notice to Department of Commerce 29
(K) Counterparts 29
(L) Captions 29
(M) Company Direction 30
SIGNATURES
Exhibit A Form of Bond
v
TRUST INDENTURE
THE STATE OF TEXAS :
ALLIANCEAIRPORT AUTHORITY, INC. :
THIS TRUST INDENTURE (hereinafter called the "Indenture"), dated as of April
1, 1996, executed by and between ALLIANCEAIRPORT AUTHORITY, INC. (hereinafter
called the "Authority"), a nonstock, nonprofit industrial development
corporation, created to act on behalf of the CITY OF FORT WORTH, TEXAS, a home-
rule city and a political subdivision of the State of Texas (the "City"),
pursuant to the Constitution and laws of the State of Texas, including
particularly Article 5190.6, V.A.T.C.S., as amended (hereinafter called the
"Act"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association
organized and existing under the laws of the United States of America, and
having its Designated Trust Office in Chicago, Illinois, as Trustee (hereinafter
called the "Trustee");
WITNESSETH THAT
WHEREAS, a Land and Special Facilities Lease Agreement dated as of April 1,
1996 (hereinafter called the "Facilities Agreement"), has been duly executed
between the Authority and FEDERAL EXPRESS CORPORATION, a corporation organized
and existing under the laws of the State of Delaware, and duly qualified to do
business under the laws of the state of texas (hereinafter called the
"Company");
WHEREAS, the capitalized terms of this Indenture shall have the same
meanings, and shall be defined, as set forth in the Facilities Agreement;
WHEREAS, the Board of Directors of the Authority duly adopted a "RESOLUTION
AUTHORIZING THE ISSUANCE OF ALLIANCEAIRPORT AUTHORITY, INC. SPECIAL FACILITIES
REVENUE BONDS, SERIES 1996 (FEDERAL EXPRESS CORPORATION PROJECT), THE EXECUTION
OF A LAND AND SPECIAL FACILITIES LEASE AGREEMENT, A TRUST INDENTURE AND AN
UNDERWRITING AGREEMENT, AND THE USE OF A PRELIMINARY OFFICIAL STATEMENT AND AN
OFFICIAL STATEMENT" (hereinafter called the "Bond Resolution");
WHEREAS, the Bond Resolution authorized the issuance of ALLIANCEAIRPORT
AUTHORITY, INC. SPECIAL FACILITIES REVENUE BONDS, SERIES 1996 (FEDERAL EXPRESS
CORPORATION PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$250,000,000 (the "Bonds");
WHEREAS, a certified copy of the Bond Resolution has been duly filed with
the Trustee;
WHEREAS, pursuant to authority granted in the Bond Resolution, the Bonds
were sold to Goldman, Sachs & Co., on its behalf and as representative for
Morgan Keegan & Company, Inc., Morgan Stanley & Co. Inc., Pryor, McClendon,
Counts & Co., Inc., BA Securities, Inc., and J.P. Morgan Securities Inc.
(collectively, the "Underwriters"), in accordance with the terms and conditions
of an Underwriting Agreement by and between the Authority and the Underwriters
(the "Underwriting Agreement"), a Letter of Representations executed by the
Company pursuant to the terms and conditions of the Underwriting Agreement and
the Bond Resolution;
WHEREAS, the Bonds, and the interest thereon, are and shall be payable from
and secured by a first lien on and pledge of the payments to be made by the
Company pursuant to the Facilities Agreement, designated as the "Special
Facilities Rentals", which Special Facilities Rentals shall be in amounts
sufficient to pay and redeem, and provide for the payment of the principal of,
premium, if any, and interest on the Bonds, when due;
WHEREAS, to induce the Authority to issue the Bonds, and the Underwriters to
purchase the Bonds, the Company and the Trustee have entered into a Guaranty of
even date herewith (the "Guaranty") pursuant to which the Company
unconditionally guarantees the payment of the principal of, premium, if any, and
interest on the Bonds when due; and
WHEREAS, the Trustee has accepted the trusts created by this Indenture, and
in evidence thereof has joined in the execution hereof.
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
That the Authority, 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 registered owners thereof, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, and for the purpose
of securing the payment of the principal of, premium, if any, and interest on
the Bonds at any time issued and outstanding, has granted, assigned,
transferred, pledged, set over, and confirmed, and by these presents does grant,
assign, transfer, pledge, set over, and confirm unto the Trustee, and to its
successor or successors in the said trust, and to its or their assigns, all and
singular, a first lien on and pledge of (i) the interest of the Authority in the
Construction Fund and the Debt Service Fund created herein, and (ii) all of its
right, title and interest in and to the Facilities Agreement relating to the
Bonds (other than the Authority's rights to fees, expenses and indemnification
pursuant to the terms of the Facilities Agreement), including specifically all
of its right, title and interest in and to the Special Facilities Rentals under
the Facilities Agreement (the "Trust Estate"), and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes
hereinafter expressed. The Authority and the Trustee have agreed, and they
hereby
agree and covenant with the respective registered owners from time to time of
the Bonds then Outstanding, as follows, to-wit:
ARTICLE I
ACCEPTANCE OF TRUST;
INSTRUMENTS OF FURTHER ASSURANCE;
RECORDING
(A) Acceptance of Trust. The Trustee hereby accepts the trusts, duties,
obligations, and requirements imposed on it by this Indenture, and agrees,
subject to the terms and provisions of Article VI hereof, to carry out and
perform, punctually and effectively, such trusts, duties, obligations, and
requirements, including the duties as paying agent and as bond registrar for
the Bonds, for the benefit of the Authority and the Bondholders.
(B) Instruments of Further Assurance. The Authority covenants that it will
do, execute, acknowledge, and deliver, or cause to be done, executed,
acknowledged, and delivered, such indenture or indentures supplemental hereto
and such further acts, instruments, and transfers as the Trustee may reasonably
require for the better assigning, pledging, and confirming unto the Trustee the
trusts, duties, obligations, and requirements imposed on it by this Indenture
and the revenues pledged hereunder.
(C) Protection of Lien. The Authority covenants that (1) upon the execution
and delivery of this Indenture and thereafter, from time to time, it shall cause
the Facilities Agreement and this Indenture, and each amendment and supplement
to each of such instruments (or a memorandum with respect to such instrument,
amendment, or supplement) to be maintained for inspection, filed, registered,
and recorded and to be maintained for inspection, refiled, reregistered, and
rerecorded in such manner and in such places as may be required by any present
or future law in order to publish notice of and fully to protect the lien of
this Indenture and to publish notice of and to protect the validity of the
Facilities Agreement and of the rights and security of the Bondholders and the
rights of the Trustee hereunder and thereunder and (2) it shall perform or cause
to be performed from time to time any other act as required by law, and it will
execute or cause to be executed any and all instruments of further assurance
(including financing statements with respect to any of such instruments) that
may be necessary for such publication and protection.
(D) Continuation Statements. The Trustee agrees that, at the expense of
the Company, it will execute and file all continuation statements at such times
and in such places as may be prescribed by the Texas Uniform Commercial Code and
any other instruments necessary to maintain, protect, or preserve the interests
of the Authority assigned to the Trustee under this Indenture.
(E) Assignment of Special Facilities Rentals. The Trustee hereby
acknowledges that all of the rights, title and interests of the Authority in and
to the Special Facilities Rentals have been assigned to the Trustee, and the
Authority hereby acknowledges that in connection with the performance of its
duties, obligations, and requirements imposed on it by this Indenture, the
Trustee may exercise any rights or remedies available to the Trustee under the
terms of the Facilities Agreement or the Guaranty.
ARTICLE II
THE BONDS
(A) Designation, Initial Date, Denominations, Numbers, and Maturities of
Bonds. (1) Initially there shall be issued, sold and delivered hereunder fully
registered Bonds, known as "ALLIANCEAIRPORT AUTHORITY, INC. SPECIAL FACILITIES
REVENUE BONDS, SERIES 1996 (FEDERAL EXPRESS CORPORATION PROJECT)", in the
aggregate principal amount of $249,540,000, without interest coupons, dated
April 1, 1996, in the denomination of $5,000 or any integral multiple thereof,
numbered consecutively from R-1 upward, and said Bonds shall mature and be
payable on April 1, 2021.
(2) The Bonds shall be executed on behalf of the Authority with the manual
or facsimile signature of the President or Vice President and the Secretary of
the Board of Directors of the Authority and shall have impressed or imprinted
thereon the official seal of the Authority or a facsimile thereof. All
authorized facsimile signatures shall have the same force and effect as if
manually signed. In case any official whose signature or a facsimile of whose
signature shall appear on the Bonds shall cease to be such official before the
delivery of such Bonds, such signature or such facsimile shall nevertheless be
valid and sufficient for all purposes, the same as if such official had remained
in office until delivery. The Bonds may be signed on behalf of the Authority by
such persons who, at the time of the execution of such Bonds, are duly
authorized or hold the appropriate office of the Authority although on the date
of the authentication and delivery of the Bonds such persons were not so
authorized or did not hold such offices.
(3) The obligation to pay the principal of, premium, if any, and interest
on the Bonds is a special obligation of the Authority, and is payable solely
from the Special Facilities Rentals to be made by the Company pursuant to the
terms of the Facilities Agreement. No other public entity, including the State
of Texas, any other political subdivisions thereof, or any other public body, is
obligated, directly, indirectly, contingently, or in any other manner to pay
such principal, premium, if any, or interest from any source whatsoever. The
Bonds shall not be considered general obligations of the Board of Directors of
the Authority (either individually or collectively), the City, the State of
Texas, or any other political subdivision thereto.
The registered owners of the Bonds shall never have the right to demand payment
of the Bonds out of any funds raised or to be raised by taxation, or from any
other funds except the sources described herein. No property shall be encumbered
by any lien or security interest for the benefit of the registered owners of the
Bonds.
(4) Upon the execution and delivery of this Indenture, the Authority shall
execute and deliver to the Trustee the Bonds and the Trustee shall deliver the
Bonds to the Underwriters as directed by the Authority. Prior to the delivery
of any of the Bonds to the Underwriters there shall be filed with the Trustee an
opinion of Bond Counsel to the effect that interest on the Bonds is excludable
from the gross income of the owners thereof for federal income tax purposes
(other than any owner who is a "substantial user" or "related person" of such
substantial user, within the meaning of the Code), other than any interest which
may be includable as a preference item or an adjustment item in computing any
minimum tax. Delivery of the Bonds shall be done in a manner consistent with
the provisions of Paragraph (B) below.
(B) DTC Book-Entry. The Bonds shall be initially issued in the name of Cede
& Co., as nominee of DTC, as registered owner of the Bonds, and held in the
custody of DTC. Two certificates will be issued and delivered to DTC for the
Bonds. One of the certificates will be issued in the principal amount of
$200,000,000; the other certificate will be issued in the principal amount equal
to the difference between $249,540,000 and $200,000,000. Beneficial owners of
Bonds will not receive physical delivery of Bond certificates except as provided
hereinafter. For so long as DTC shall continue to serve as securities
depository for the Bonds as provided herein, all transfers of beneficial
ownership interests will be made by book-entry only, and no investor or other
party purchasing, selling or otherwise transferring beneficial ownership of
Bonds is to receive, hold or deliver any Bond certificate, and Cede & Co. shall
be deemed the registered owner of the Bonds for all purposes under this
Indenture.
The Authority and the Trustee may treat DTC (or its nominee) as the sole and
exclusive owner of the Bonds registered in its name for the purpose of payment
of the principal of or interest or premium, if any, on the Bonds, giving any
notice permitted or required to be given to Bondholders hereunder, registering
the transfer of Bonds, obtaining any consent or other action to be taken by
Bondholders and for all other purposes whatsoever, and shall not be affected by
any notice to the contrary. The Authority and the Trustee shall not have any
responsibility or obligation to any Direct Participant, Indirect Participant,
any person claiming a beneficial ownership interest in the Bonds under or
through DTC or any Direct Participant, Indirect Participant, or any other person
which is not shown on the Registration Books of the Authority (kept by the
Trustee as Registrar) as being a Bondholder, with respect to: the accuracy of
any records maintained by DTC or any Direct Participant or Indirect Participant;
the payment by DTC or any Direct Participant or Indirect Participant of any
amount in respect of the principal of or interest or premium, if any, on the
Bonds; any notice which is permitted or required
to be given to Bondholders thereunder or under the conditions to transfers or
exchanges adopted by the Authority or the Trustee; or any consent given or other
action taken by DTC as a Bondholder.
Replacement Bonds may be issued directly to beneficial owners of Bonds other
than DTC, or its nominee, but only in the event that (i) DTC determines, after
reasonable notice given to the Authority, the Company and the Trustee, not to
continue to act as securities depository for the Bonds; or (ii) the Authority
(at the request of the Company) has advised DTC of the Company's determination
(which determination is conclusive as to DTC and beneficial owners of the Bonds)
that DTC is incapable of discharging its duties as securities depository for the
Bonds; or (iii) the Company has determined (which determination is conclusive as
to DTC and the beneficial owners of the Bonds) that it is in the best interest
of the Company or the beneficial owners of the Bonds to discontinue such book-
entry only system of transfer. Upon occurrence of any of the events specified
in clauses (i) or (ii), the Company may attempt to locate another qualified
securities depository. If the Company is unable to locate another qualified
securities depository to replace DTC or determines not to seek such a
replacement, or upon the occurrence of the event specified in clause (iii)
above, the Company shall notify the Authority, the Trustee and the beneficial
owners of Bonds by mailing an appropriate notice to DTC, and the Trustee shall
cause to be authenticated and delivered replacement Bonds, in certificate form,
to the Direct Participants as shown on the records of DTC and provided to the
Trustee. Notwithstanding the foregoing, neither the Company nor the Authority
undertakes any obligation to make any investigation to determine the occurrence
of any events that would permit the Company to make any such determination.
Whenever, so long as the Bonds are outstanding, the beneficial ownership
thereof is determined by a book entry at DTC or another qualified securities
depository, the requirements in this Indenture of holding, delivering or
transferring Bonds shall be deemed modified to require the appropriate Person to
meet the requirements of DTC or another qualified securities depository as to
registering or transferring the book entry to produce the same effect.
As used herein, the term "Direct Participants" shall mean those securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations which deposit securities with DTC; and the term "Indirect
Participants" shall mean those securities brokers and dealers, banks, and trust
companies that clear through or maintain a custodial relationship, either
directly or indirectly, with a Direct Participant.
If at any time, DTC ceases to hold the Bonds, all references herein to DTC
shall be of no further force or effect.
(C) Interest. The Bonds shall bear interest from their date, as described
in Paragraph (A) above, to their respective date or dates of maturity or
redemption
prior to maturity at a fixed rate of 6.375% per annum. Interest on
the unpaid principal amount of the Bonds will be payable on October 1, 1996 and
on each April 1 and October 1 thereafter until maturity or redemption prior to
maturity.
(D) Redemption. The Bonds shall be subject to optional and mandatory
redemption in the manner described below.
(1) Optional Redemption. The Bonds are subject to optional redemption by
the Authority, at the direction of the Company, on and after April 1, 2006, at
any time and from time to time, in whole or in part, upon written notice of the
exercise of the option to redeem delivered to the Authority and the Trustee by
the Company, at the redemption price (expressed as a percentage of principal
amount) applicable to such redemption date as set forth in the table below plus
accrued interest to the date fixed for redemption:
Redemption Period
(all dates inclusive) Redemption Price (%)
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April 1, 2006 to March 31, 2007 102
April 1, 2007 to March 31, 2008 101
April 1, 2008 and thereafter 100
(2) Extraordinary Optional Redemption. The Bonds are subject to redemption
by the Authority, at the direction of the Company, at any time and from time to
time, in whole or in part as described below, at a redemption price equal to
100% of the principal amount thereof, without premium, plus accrued interest
thereon to the date fixed for redemption, upon the occurrence of any of the
following events:
(a) the Company shall have determined, as evidenced by a resolution
adopted by the Company's board of directors, that the continued operation of
the Special Facilities is impractical, uneconomical or undesirable for any
reason, including, without limitation, the imposition upon the Company with
respect to the Special Facilities or the operation thereof of unreasonable
burdens or excessive liabilities, which shall be deemed to include, without
limitation, the imposition or substantial increase of ad valorem property
taxes or taxes on the leasing or use of the Special Facilities or on amounts
payable with respect thereto; or
(b) all or substantially all of the Special Facilities shall have been
damaged, destroyed, condemned or taken by eminent domain; or
(c) the construction or operation of the Special Facilities shall have
been enjoined or prevented 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.
To exercise any such option the Authority, at the direction of the Company,
shall give written notice to the Trustee, which notice shall specify a
redemption date, which date may not be more than 120 days nor less than 45 days
after said notice is given, and shall further specify that, as determined by the
Company, one or more of such events has occurred or one or more of such
conditions is continuing, and such determination shall be conclusive.
(3) Extraordinary Mandatory Redemption. The Bonds shall be redeemed by the
Authority in whole at a redemption price equal to 100% of the principal amount
thereof, without premium, plus accrued interest to the redemption date, within
90 days following receipt by the Trustee of written notice from a current or
former registered owner thereof or the Company of (a) the issuance of a
published or private ruling or a technical advice memorandum by the Internal
Revenue Service in which the Company has participated or has been given the
opportunity to participate, and which ruling or memorandum the Company, in its
discretion, does not contest or from which no further right of judicial review
or appeal exists, or (b) a final determination from which no further right of
appeal exists of any court of competent jurisdiction in the United States in a
proceeding in which the Company has participated or has been a party, or has
been given the opportunity to participate or be a party (either such event
being a "Determination of Taxability"), in either case, to the effect that, as
a result of a failure to observe any covenant or agreement in the Facilities
Agreement or the inaccuracy of any representation or warranty therein, the
interest payable on the Bonds is included in the gross income of the holders
thereof for federal income tax purposes, other than a person who is a
"substantial user" or a "related person" of such substantial user within the
meaning of the Code; provided, however, that no such Determination of
Taxability shall be considered to exist unless (i) the registered owner or
former registered owner of the Bond involved in such proceeding or action (a)
gives the Company and the Trustee prompt notice of the commencement thereof and
(b) (if the Company agrees to pay all expenses in connection therewith) offers
the Company the opportunity to control unconditionally the defense thereof and
(ii) either (a) the Company does not agree, within 30 days of receipt of such
offer, to pay such expenses and liabilities and to control such defense or (b)
the Company shall exhaust or choose not to exhaust all available proceedings
for the contest, review, appeal or rehearing of such decree, judgment or action
which the Company determines to be appropriate. No Determination of Taxability
described above will result from the inclusion of interest on any Bond in the
computation of minimum or indirect taxes. All of the Bonds shall be redeemed
upon a Determination of Taxability as described above, unless, if in the
opinion of Bond Counsel, or such other nationally recognized bond counsel as
may be mutually acceptable to the Authority and the Company, a copy of which
shall be delivered to the Trustee, redemption of a portion of the Bonds, the
amount of such portion being specified in said opinion, would have the result
that interest payable on the
remaining Bonds Outstanding after such redemption would not be so included in
any such gross income, in which case only such portion shall be redeemed.
(4) [Intentionally Omitted].
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(5) Redemption Notice. (a) At least thirty (30) days but not more than
sixty (60) days before the redemption date of any Bonds, whether such redemption
be in whole or in part, the Trustee on behalf of the Authority shall cause a
notice of any such redemption signed by the Trustee to be mailed, postage
prepaid, to all Bondholders owning Bonds to be redeemed in whole or in part.
Such notice shall also be sent by first-class mail, postage prepaid, by
facsimile transmission, or by overnight delivery service, at least thirty-five
(35) days prior to redemption to registered securities depositories and two or
more nationally recognized municipal bond services designated by the Authority
to the Trustee. Such notice shall be mailed a second (2nd) time to any
Bondholder owning Bonds that have been called for redemption if such Bondholder
has not presented such Bonds for payment of the redemption price within sixty
(60) days after the redemption date. Failure to mail any such notice to any
Bondholder or aforementioned depositories and municipal bond services, or any
defect in any notice so mailed shall not affect the validity of the proceedings
for the redemption of the Bonds of any other Bondholders. Each such notice
shall set forth: the CUSIP numbers and bond certificate numbers of the Bonds to
be redeemed, the interest rate of the Bonds to be redeemed, the date and the
date of issuance of the Bonds to be redeemed, the date fixed for redemption, the
redemption price to be paid, the maturity of the Bonds to be redeemed and, in
the case of Bonds to be redeemed in part only, the portion of the principal
amount thereof to be redeemed and, in the case that less than the entire
principal amount of any one bond certificate is redeemed, the portion of the
principal amount thereof to be redeemed, the address and phone number of the
Trustee, the date of the redemption notice, the date of publication of the
notice referred to in subparagraph (b) (iii) hereof, that on the redemption date
the Bonds called for redemption will be payable at the Designated Trust Office
of the Trustee, that from that date interest will cease to accrue and be payable
and that no representation is made as to the accuracy or correctness of the
CUSIP numbers printed therein or on the Bonds. If any Bond is to be redeemed in
part only, the notice of redemption shall state also that on or after the
redemption date, upon surrender of such Bond, a new Bond in principal amount
equal to the unredeemed portion of such Bond will be issued.
(b) The Trustee shall also take the following actions with respect to such
notice of redemption:
(i) At least two (2) Business Days before the date of publication required by
subparagraph (b) (iii) hereof, such notice shall be given by (A) registered or
certified mail, postage prepaid, (B) telephonically confirmed facsimile
transmission or (C) overnight delivery service to each of the following
securities depositories at the address and transmission numbers given, or such
other address or transmission
number as may have been delivered in writing to the Trustee for such purpose not
later than the close of business on the day before such notice is given:
1. The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530
Facsimile transmission:
(516) 227-4039
(516) 227-4190
2. Philadelphia Depository Trust Company
Reorganization Division
1900 Market Street
Philadelphia, Pennsylvania 19103
Facsimile transmission:
(215) 496-5058
(ii) At least two (2) Business Days before the date of publication required
by subparagraph (b) (iii) hereof, such notice shall be given by (A) registered
or certified mail, postage prepaid, (B) facsimile transmission or (C) overnight
delivery service to at least two (2) of the following services selected by the
Trustee:
1. Financial Information, Inc's Daily Called Bond Service;
2. Kenny Information Service's Called Bond Service;
3. Moody's Municipal and Government Called Bond Record; or
4. Standard & Poor's Corporation Called Bond Record.
(iii) At least thirty (30) days prior to the redemption date, such notice
shall be published one (1) time in The Bond Buyer or, if such publication is no
longer in existence, in some other financial newspaper or journal which
regularly carries notices of redemption of other obligations similar to the
Bonds.
(c) Neither failure to receive any notice nor any defect in such notice so
given shall affect the sufficiency of the proceedings for the redemption of such
Bonds. Each check or other transfer of funds issued by the Trustee for the
purpose of redeeming Bonds shall bear, to the extent practicable, the CUSIP
number identifying the Bonds being redeemed with the proceeds of such check or
other transfer.
(d) Notice of redemption of Bonds shall be given by the Trustee, at the
expense of the Company.
(e) Failure by the Trustee to give notice pursuant to subparagraph (b) (i) or
(b) (ii) hereof to any one (1) or more of the securities depositories or
information services named therein shall not affect the sufficiency of the
proceedings for redemption. Failure of the Trustee to give notice to a
Bondholder or any defect in
such notice shall not affect the validity of the proceedings for redemption of
any other Bonds.
(f) By the date fixed for any such redemption, due provision shall be made
with the Trustee for the payment of the principal amount of the Bonds which are
to be so redeemed, accrued interest thereon to the date fixed for redemption,
and any premium. If notice of redemption is given to the registered owners
described in subparagraph (a) above as provided herein and if sufficient funds
are on deposit with the Trustee to provide for the payment of the principal of,
premium, if any, and interest on the Bonds to be so redeemed, the Bonds which
are to be redeemed thereby automatically shall be deemed to have been redeemed
prior to their scheduled maturity, and they shall not bear interest after the
date fixed for redemption, and they shall not be regarded as being Outstanding
except for the right of the registered owner to receive the principal amount of
the Bonds which are to be so redeemed, accrued interest thereon to the date
fixed for redemption, and any required premium from the Trustee out of the funds
provided for such payment. If any Bond called for redemption shall not be paid
upon surrender thereof for redemption, as a result of the Trustee not having
received funds sufficient to pay the redemption price of the Bonds, such Bond
shall continue to bear interest until paid and, to the extent permitted by law,
interest on any overdue payment of principal of, premium, if any, or interest on
such Bond shall be paid at the rate borne by such Bond. If a portion of any
Bond shall be redeemed, a substitute Bond or Bonds having the same maturity
date, bearing interest at the same rate, in any denomination or denominations in
any integral multiple of $5,000, at the written request of the registered owner,
and in aggregate principal amount equal to the unredeemed portion thereof, will
be issued to the registered owner upon the surrender thereof for cancellation,
at the expense of the Company, all as provided below.
(6) Funds Available for Redemption. With respect to any optional redemption
of the Bonds, as described above, unless moneys sufficient to pay the principal
of and premium, if any, and interest on the Bonds to be redeemed shall have been
received by the Trustee prior to the giving of such notice of redemption, such
notice shall state that said redemption shall be conditional upon the receipt of
such moneys by the Trustee on or prior to the date fixed for such redemption.
If such moneys are not received, such notice shall be of no force and effect,
the Authority shall not redeem such Bonds and the Trustee shall give notice, in
the manner in which the notice of redemption was given, that such moneys were
not so received and that such Bonds shall not be so redeemed.
(7) Partial Redemption. If less than all of the Bonds are to be called for
redemption under any redemption provision set forth herein permitting such
partial redemption, the particular Bonds to be redeemed shall be selected by the
Trustee by lot or such other customary method chosen by the Trustee, in the
principal amounts (in integral multiples of $5,000) designated to the Trustee by
the Company on behalf of the Authority. The foregoing notwithstanding, during
any
period in which ownership of the Bonds is determined only by a book-entry at
a securities depository for the Bonds, the particular Bonds to be so redeemed
shall be selected in accordance with the arrangements between the Authority and
the securities depository.
(E) Characteristics of the Bonds. (1) Registration and Transfer. The
Authority shall keep or cause the Trustee, acting as registrar, to keep and
maintain a register of the registered owners of the Bonds (the "Registration
Books"), and the Authority hereby appoints the Trustee as its registrar and
transfer agent to keep such books or records and make such transfers and
registrations under such reasonable regulations as the Authority and Trustee may
prescribe; and the Trustee shall make such transfers and registrations as herein
provided. The Trustee agrees to cause to be maintained in Texas a current copy
of the Registration Books. The Trustee shall obtain and record in the
Registration Books the address of the registered owner of each Bond to which
payments with respect to the Bonds shall be mailed, as herein provided; but it
shall be the duty of each registered owner to notify the Trustee in writing of
the address to which payments shall be mailed, and such interest payments shall
be mailed to such address which has been given to the Trustee by each such
registered owner. The Authority, the Company and the registered owners of not
less than 25% in aggregate principal amount of Bonds at any time Outstanding
shall have the right, upon reasonable notice and subject to reasonable
regulations established in writing by the Trustee, to inspect the Registration
Books during regular business hours of the Trustee, but otherwise the Trustee
shall keep the Registration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other entity. Registration of each
Bond may be transferred in the Registration Books only upon presentation and
surrender of such Bond to the Designated Trust Office of the Trustee for
transfer of registration and cancellation, together with proper written
instruments of assignment, in form and with a guarantee of signatures
satisfactory to the Trustee, evidencing the assignment of the Bond, or any
portion thereof in any integral multiple of $5,000, to the new registered
owner(s) thereof. Such assignment may be presumptively evidenced by the due
execution of the form of assignment to be printed or endorsed on each Bond which
shall be executed by the registered owner or its duly authorized attorney or
representative to evidence an assignment thereof. Upon the assignment and
transfer of any Bond or any portion thereof, a new substitute Bond or Bonds
shall be issued in conversion and exchange therefor in the manner herein
provided. Each Bond issued and delivered in conversion of and exchange for any
Bond or portion thereof shall be in any denomination or denominations of any
integral multiple of $5,000 (subject to the requirement hereinafter stated that
each substitute Bond shall have a single stated principal maturity date), shall
be in the form prescribed in the FORM OF BOND attached hereto as Exhibit A, and
shall have the characteristics, and may be assigned, transferred, and converted
as provided in this Indenture. Each Bond issued in exchange therefor shall have
a single stated principal maturity date corresponding to the maturity date of
the principal of the Bond for which the substitute Bond is being exchanged; and
each such Bond shall bear interest at the single rate
applicable to and borne by the Bond for which it is being exchanged. Upon
surrender of any Bonds or any portion or portions thereof for transfer of
registration, an authorized representative of the Trustee shall record such
transfer in the Registration Books, and shall deliver a new fully registered
substitute Bond or Bonds, having the characteristics herein described, payable
to such new registered owner(s) (and to the previous registered owner in case
only a portion of a Bond is being assigned and transferred), all in conversion
of and exchange for said assigned Bond or Bonds or any portion or portions
thereof, in the same form and manner, and with the same effect, as provided in
subparagraph (4) below, for the conversion and exchange of Bonds by any
registered owner of a Bond. The Company shall pay the Trustee's standard or
customary fees and charges for making such transfer and delivery of a substitute
Bond or Bonds, but the Person requesting such transfer shall pay any taxes or
other governmental charges required to be paid with respect thereto. The Trustee
shall not be required to make transfers of registration of any Bond or any
portion thereof called for redemption prior to maturity, (a) within 45 days
prior to its redemption date or (b) during the 15 day period preceding the
mailing of notice of redemption of the Bonds of the same maturity.
(2) Ownership of Bonds. The Person in whose name any Bond shall be
registered in the Registration Books at any time shall be deemed and treated as
the absolute owner thereof for all purposes of this Indenture, whether or not
such Bond shall be overdue, and the Authority, the Company, and the Trustee
shall not be affected by any notice to the contrary; and payment of, or on
account of, the principal of, premium, if any, and interest on any such Bond
shall be made only to such registered owner. All such payments shall be valid
and effectual to satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
(3) Payment of Bonds and Interest. The Authority hereby further appoints the
Trustee to act as the paying agent for paying the principal of, premium, if any,
and interest on the Bonds, as such payments are scheduled to occur or upon the
redemption of any of the Bonds, all as provided in this Indenture. The Trustee
shall keep proper records of all payments made by the Company on behalf of the
Authority into the Debt Service Fund created in Article III hereof, and all
payments made by the Trustee with respect to the Bonds, and of all conversions
and exchanges of Bonds, and all replacements of Bonds, as provided in this
Indenture. Payment of principal of, premium, if any, and interest on the Bonds
shall be paid by check or draft mailed to the registered owner thereof at his
address as it appears on the Registration Books at the close of business on the
Record Date. Upon written request of a registered owner of at least $1,000,000
in principal amount of Bonds, all payments of the principal of, premium, and
interest on the Bonds shall be paid by wire transfer in immediately available
funds to an account in the continental United States designated by such
registered owner; provided, that no such payment shall be made by wire transfer
unless the Trustee has on file such a written request executed by such
registered owner. If the date payment of principal, premium, if any, or
interest on the Bonds is due is not a Business Day,
then such payment shall be made on the next succeeding Business Day and no
additional interest shall accrue as a result thereof. The foregoing
notwithstanding, for so long as the Bonds are held in the custody of DTC, the
payment of the principal of, premium, if any, and interest on the Bonds shall be
governed by the requirements of DTC.
(4) Conversion and Exchange or Replacement; Authentication. Each Bond issued
and delivered pursuant to this Indenture, to the extent of the unpaid or
unredeemed principal balance or principal amount thereof, upon surrender of such
Bond at the Designated Trust Office of the Trustee, together with a written
request therefor duly executed by the registered owner, or their duly authorized
attorneys or representatives, with guarantee of signatures satisfactory to the
Trustee, may, at the option of the registered owner, be converted into and
exchanged for fully registered bonds, without interest coupons, in the form
prescribed in the FORM OF BOND attached hereto as Exhibit A, in the denomination
of $5,000 or any integral multiple thereof, as requested in writing by such
registered owner, in an aggregate principal amount equal to the unpaid or
unredeemed principal balance or principal amount of any Bond or Bonds so
surrendered, and payable to the appropriate registered owner. If any Bond is
assigned and transferred or converted, each substitute Bond issued in exchange
for such Bond or any portion thereof shall have a single stated principal
maturity date corresponding to the maturity date of the principal of the Bond
for which the substitute Bond is being exchanged; and each such Bond shall bear
interest at the rate applicable to and borne by the Bond for which it is being
exchanged. If a portion of any Bond shall be redeemed prior to its scheduled
maturity, the Trustee shall issue to the registered owner a substitute Bond or
Bonds having the same maturity date, bearing interest at the same rate, in the
denomination or denominations of any multiple of $5,000 at the request of the
registered owner, and in an aggregate principal amount equal to the unredeemed
portion thereof, upon surrender thereof for cancellation. Each substitute Bond
shall bear a letter and/or number to distinguish it from each other Bond. It is
specifically provided that any Bond authenticated in conversion of and exchange
for or replacement of another Bond on or prior to the first scheduled Record
Date for the Bonds initially issued and delivered pursuant to this Indenture
shall bear interest from the date of the Bonds initially issued and delivered
pursuant to this Indenture, but each substitute Bond so authenticated after such
first scheduled Record Date shall bear interest from the interest payment date
next preceding the date on which such substitute Bond was so authenticated,
unless such Bond is authenticated after any Record Date but on or before the
next following interest payment date, in which case it shall bear interest from
such next following interest payment date; provided, however, that if at the
time of delivery of any substitute Bond the interest on the Bond for which it is
being exchanged is due but has not been paid, then such Bond shall bear interest
from the date to which such interest has been paid in full. Except as otherwise
provided in subparagraph (5) below, on each of the Bonds initially issued and
delivered hereunder and on each substitute Bond issued in conversion of and
exchange for or replacement of any Bond or Bonds issued hereunder there shall be
printed a Trustee's Authentication
Certificate, in the form set forth in the FORM OF BOND attached hereto as
Exhibit A.
An authorized representative of the Trustee shall, before the delivery of any
such substitute Bond, date and manually sign said Authentication Certificate,
and no such substitute Bond shall be deemed to be issued or Outstanding unless
said Authentication Certificate is so executed. The Trustee promptly shall
cancel all Bonds surrendered for conversion and exchange or replacement. No
additional ordinances, orders, or resolutions need be passed or adopted by the
governing body of the Authority or any other body or person so as to accomplish
the foregoing conversion and exchange or replacement of any Bond or portion
thereof, and the Trustee shall provide for the preparation, execution, and
delivery of the substitute Bonds. Pursuant to Vernon's Ann. Tex. Civ. St. Art.
717k-6, and particularly Section 6 thereof, the duty of conversion and exchange
or replacement of Bonds as aforesaid is hereby imposed upon the Trustee, and,
upon the execution of said Authentication Certificate, the converted and
exchanged or replaced Bond shall be valid, incontestable, and enforceable in the
same manner and with the same effect as the Bonds which initially were issued
and delivered pursuant to this Indenture.
(5) Initial Bond(s) Registered. Notwithstanding any other provision hereof,
the Bond or Bonds initially delivered pursuant to the terms hereof shall be
approved by the Attorney General of the State of Texas and thereafter registered
with the Comptroller of Public Accounts of the State of Texas. If so registered
by the Comptroller of Public Accounts, said Bond or Bonds need not contain the
Trustee's Authentication Certificate referred to in subparagraph (4) above, and
if such Authentication Certificate does appear on said Bonds, it need not be
authenticated by the Trustee if the Comptroller's Registration Certificate has
been executed by the Comptroller of Public Accounts of the State or the designee
thereof.
(F) Form of Bonds. The form of the Bonds, including the form of Trustee's
Authentication Certificate, the form of Assignment and, if applicable, the form
of Registration Certificate of the Comptroller of Public Accounts of the State
of Texas to be attached to the Bonds initially issued and delivered pursuant to
this Indenture, shall be, respectively, substantially as set forth in the FORM
OF BOND attached hereto as Exhibit A.
(G) Damaged, Mutilated, Lost, Stolen, or Destroyed Bonds. (1) In the event
any Bond is damaged, mutilated, lost, stolen or destroyed, the Trustee shall
cause to be prepared, executed and delivered a new Bond of the same principal
amount, maturity and interest rate, as the damaged, mutilated, lost, stolen or
destroyed Bond, in replacement for such Bond in the manner hereinafter provided.
(2) Application for exchange and substitution of damaged, mutilated, lost,
stolen, or destroyed Bonds shall be made to the Trustee. In every case, the
applicant for a substitute Bond shall furnish to the Authority and to the
Trustee such security or indemnity as may be required by them to save each of
them
harmless. In every case of loss, theft, or destruction of a Bond, the applicant
shall also furnish to the Authority and to the Trustee evidence to their
satisfaction of the loss, theft, or destruction of such Bond. In the case of
damage or mutilation of a Bond, the applicant shall surrender the Bond so
damaged or mutilated to the Trustee.
(3) Notwithstanding the foregoing provisions of this Paragraph (G), in the
event any such Bond shall have matured, and no default has occurred which is
then continuing in the payment of the principal of, premium, if any, or interest
on such Bond, the Authority may authorize the payment of the same (without
surrender thereof except in the case of a damaged or mutilated Bond) instead of
issuing a substitute Bond provided security or indemnity is furnished as above
provided in this Paragraph (G).
(4) Upon the issuance of any such substitute Bond, the Authority and the
Trustee shall charge the registered owner of such Bond with all expenses in
connection therewith. Every substitute Bond issued pursuant to the provisions of
this Section by virtue of the fact that any Bond is lost, stolen, or destroyed
shall constitute a contractual obligation of the Authority, whether or not the
lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionally with any and all other Bonds duly issued under this Indenture.
(5) In accordance with Section 6 of Art. 717k-6 of Vernon's Ann. Tex. Civ.
St., this Indenture shall constitute sufficient authority for the issuance of
any such substitute Bond without necessity of further action by the Board of
Directors of the Authority or any other body or person, and the issuance of such
substitute Bonds by the Trustee is hereby authorized, notwithstanding any other
provisions of this Indenture.
(H) Effect of Exchange or Transfer. Each Bond delivered pursuant to any
provision of this Indenture in exchange or substitution for, or upon the
transfer of, another Bond shall carry all of the rights to interest accrued and
unpaid and to accrue which were carried by such other Bond, and notwithstanding
anything contained in this Indenture, such Bond shall be so dated or bear such
notation, that neither gain nor loss in interest shall result from any such
exchange, substitution, or transfer.
(I) Covenants Regarding Tax Exemption. The Authority covenants to refrain
from any action which would adversely affect, or to take such action reasonably
available to the Authority to assure, the treatment of the Bonds as obligations
described in section 103(a) of the Code, the interest on which is not includable
in the "gross income" of the holder (other than the income of a "substantial
user" of the Special Facilities or a "related person" to such substantial user,
within the meaning of the Code) for purposes of federal income taxation. It is
the understanding of the parties hereto that the covenants contained herein are
intended to assure compliance with the provisions of the Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury
pursuant thereto pertaining to obligations described in section 103(a) of the
Code. In the event that regulations or rulings are hereafter promulgated which
modify or expand provisions of the Code, as applicable to the Bonds, the parties
hereto will not be required to comply with any covenant contained herein to the
extent that such modification or expansion, in the opinion of Bond Counsel, will
not adversely affect the exemption from federal income taxation of interest on
the Bonds under section 103 of the Code. In the event that regulations or
rulings are hereafter promulgated which impose additional requirements which are
applicable to the Bonds, the parties hereto agree to comply with the additional
requirements to the extent necessary, in the opinion of Bond Counsel, to
preserve the exemption from federal income taxation of interest on the Bonds
under section 103 of the Code.
ARTICLE III
ESTABLISHMENT OF CONSTRUCTION FUND,
DEBT SERVICE FUND AND
SPECIAL REBATE FUND
(A) Proceeds from Delivery of the Bonds. The net proceeds from the sale of
the Bonds shall be deposited by the Trustee to the credit of the funds and
accounts created herein as follows:
(1) $397,704.38, representing accrued interest, to the Debt Service Fund;
(2) $29,571,555.18, representing capitalized interest, to the Capitalized
Interest Account of the Construction Fund; and
(3) the balance of the proceeds to the Special Facilities Construction
Allowance Account of the Construction Fund.
(B) Construction Fund. A separate and special trust fund called the
"Construction Fund" (consisting of three accounts, the "Capitalized Interest
Account", the "Special Facilities Construction Allowance Account", and the "Net
Proceeds Account", respectively) is hereby created and established by the
Authority with the Trustee. The Trustee shall transfer moneys on deposit in the
Capitalized Interest Account to pay interest coming due on the Bonds, as
provided in Paragraph (E) below. The Trustee shall draw on and use the Special
Facilities Construction Allowance Account and the Net Proceeds Account solely
for the purposes provided below.
(C) Payments from Special Facilities Construction Allowance Account. (1)
Concurrently with, or as soon as practicable after, the delivery of the Bonds,
the Trustee shall make an initial payment, if requested by the Company in the
manner
described below for payments from the Special Facilities Construction Allowance
Account of the Construction Fund, to reimburse the Company or its designee for
any cost of acquisition, construction, equipment and furnishing of the Land and
the Special Facilities, paid, or provided to the Authority, by the Company on or
after January 4, 1994, and prior to such date of delivery. The Trustee shall
make such initial payment, if requested, and shall make any subsequent payments,
from the Special Facilities Construction Allowance Account of the Construction
Fund for any Cost of the Special Facilities, from time to time upon receipt by
the Trustee of a Disbursement Request signed by an Authorized Lessee
Representative.
(2) The Trustee and the Authority shall rely fully on any such Disbursement
Request delivered by the Company and shall not be required to make any
investigation in connection therewith; provided, however, that within a
reasonable time after the submission of any such Disbursement Request and after
payment of the amounts requested, the duly authorized representatives of the
Authority may inspect the invoices and statements which are the basis for
payment requested by the Company. If amounts paid by the Trustee with respect
to any portion of the Special Facilities exceed the cost thereof, the Company
shall promptly repay such overpayment into the Construction Fund.
(D) Surplus Construction Funds. (1) If, upon the completion of the Special
Facilities, as evidenced by the delivery to the Trustee and the Authority of the
certificate executed by an Authorized Company Representative described in
Section 305 of the Facilities Agreement, there shall be any surplus funds
remaining in the Special Facilities Construction Allowance Account of the
Construction Fund not required to provide for the payment of the Costs of the
Special Facilities, such funds shall, upon the written request of the Authorized
Company Representative, either be applied, in whole or in part, (a) to purchase
Bonds for cancellation at such times, prices and amounts as determined by the
Authorized Company Representative, which price, however, shall not exceed the
principal amount thereof plus accrued interest thereon; or (b) if the Bonds are
then subject to redemption, to redeem Bonds in such amounts and at such times as
directed by an Authorized Company Representative; provided that prior to any
such application under clause (a) above, the Authority and the Trustee shall
have been furnished with an unqualified opinion of Bond Counsel, to the effect
that the expenditure of monies from the Special Facilities Construction
Allowance Account of the Construction Fund for such purpose will not impair the
exclusion of interest on the Bonds from the gross income of the holders thereof
for federal income tax purposes. Any of such surplus funds not to be applied
for the purposes set forth in clauses (a) or (b) above shall be deposited in an
escrow account (outside the Debt Service Fund) and moneys on deposit in such
escrow account shall be applied to pay the principal of Bonds upon redemption
thereof on the earliest possible redemption date; provided that any moneys held
in such escrow account may not be invested to produce a yield greater than the
yield on the Bonds. The Trustee shall be entitled to rely upon a written
certificate executed by an Authorized Company Representative which sets forth
the yield on the Bonds. In lieu of treating the Construction Fund surpluses as
set forth above, upon the written request of the Authorized Company
Representative such funds shall either be deposited or disbursed in any manner
designated in writing by the Authorized Company Representative if, in the
opinion of Bond Counsel, such deposit or disbursement will not impair the
exclusion of interest on any Bonds from the gross income of the holders thereof
for federal income tax purposes and is permissible under the Act.
(2) If the Trustee shall declare the principal of the Bonds and the interest
accrued thereon immediately due and payable as the result of an Event of Default
specified in this Indenture, or if the Bonds shall be redeemed as a whole in
accordance with their terms, or if the Facilities Agreement is terminated in
accordance with its terms prior to the completion of the Special Facilities, to
the extent the Company does not otherwise direct, any proceeds of the Bonds
remaining in the Special Facilities Construction Allowance Account of the
Construction Fund shall, subject to the provisions of subparagraph (5) of
Paragraph (F) and Article V(H) below, be immediately deposited into the Debt
Service Fund and used by the Trustee for the purpose of paying principal of,
premium, if any, and interest on the Bonds when due. In connection with release
of this Indenture under the terms hereof, any proceeds of the Bonds remaining in
the Special Facilities Construction Allowance Account of the Construction Fund
shall be either (a) immediately deposited by the Trustee into the Debt Service
Fund and shall be applied to reduce the amount of the next succeeding Special
Facilities Rentals by the Company if, in the opinion of Bond Counsel, such
application will not adversely affect the exclusion from gross income for
federal income tax purposes of the interest on the Bonds, or (b) upon the
written request of the Company, applied to the purchase, at a price not in
excess of the principal amount thereof, of Bonds in the open market, which Bonds
shall thereupon be cancelled. The Trustee shall have the right to take
appropriate action by judicial proceedings or otherwise to enforce this
Paragraph (D).
(E) Debt Service Fund. (1) A separate and special trust fund called the
"Debt Service Fund" is hereby created and established by the Authority with the
Trustee, and shall be maintained as provided in this Indenture, as long as any
Bond is Outstanding and unpaid.
(2) Pursuant to the Facilities Agreement, the Authority has directed the
payment by the Company to the Trustee of the Special Facilities Rentals, all as
described in the Facilities Agreement, which shall be deposited by the Trustee
to the credit of the Debt Service Fund. The Trustee shall deposit such Special
Facilities Rentals into the Debt Service Fund as follows, upon the receipt
thereof from the Company on the dates set forth below:
(i) On or before each date on which interest is due and payable on the
Bonds, an amount which, together with any other amounts then on deposit
therein and available for such purpose, will be sufficient to pay the
interest coming due on the Bonds on such date; and
(ii) On or before each date on which principal of the Bonds is scheduled to
mature, an amount which, together with any other amounts then on deposit
therein and available for such purpose, will be sufficient to pay the
principal of the Bonds scheduled to mature on such date; and
(iii) On or before any date on which Bonds shall have been called for
redemption and subject to the conditions specified in this Indenture, an
amount which, together with any other amounts then on deposit and
available for such purposes, will be sufficient to pay the principal,
premium, if any, and accrued interest, specified therein; and
(iv) On any date on which the Bonds are declared to be immediately due and
payable pursuant to Article V of this Indenture, an amount which,
together with any other amounts then on deposit and available for such
purposes, will be sufficient to pay the principal of all Bonds then
Outstanding, any applicable premium thereon, the interest accrued
thereon and interest due on overdue principal or premium, if any, or (to
the extent permitted by law) interest.
In addition, upon the receipt of a Disbursement Request executed by an
Authorized Company Representative, the Trustee shall transfer from the
Capitalized Interest Account to the Debt Service Fund moneys sufficient from
time to time to make the payments described in clause (i) above.
(3) On or before the tenth Business Day prior to each date upon or before
which each payment is required by the Facilities Agreement to be paid to the
Trustee by the Company for deposit into the Debt Service Fund, the Trustee shall
give written notice to the Company, by first class mail, postage prepaid, by
Federal Express priority delivery, or by hand delivery, at such address as the
Company shall from time to time designate and file in writing with the Trustee,
of the amount, if any, of each such payment required to be made to the Trustee
by the Company and deposited by the Trustee into the Debt Service Fund on or
before such date. Such notice shall give a brief statement of the manner in
which the amount or amounts due were calculated, including a showing of all
credits on account of earnings from the time deposit or investment of the Debt
Service Fund. If such payment required to be paid by the Company under the
Facilities Agreement is not received by the Trustee on the date such payment is
required to be made in accordance with the terms of the Facilities Agreement,
then the Trustee promptly shall give telephone notice to the Company, confirmed
in writing in the manner provided above, of such failure to receive such payment
from the Company. The failure of the Trustee to give, or of the Company to
receive, any such notice shall not relieve the Company of its unconditional duty
and obligation to make to the Trustee all deposits or payments of such payments,
as required by the Facilities Agreement.
(4) The moneys on deposit in the Debt Service Fund shall be used by the
Trustee to pay the principal of, premium, if any, and interest on the Bonds,
when due; and the Trustee shall make available to itself, in its capacity as
paying agent, out of the Debt Service Fund, the amounts required to pay or
redeem the principal of, premium, if any, and interest on the Bonds when due, as
well as such other amounts described in Article V(D) hereof.
(5) In any case where the date for any scheduled Special Facilities Rentals
to be deposited to the credit of the Debt Service Fund shall not be a Business
Day, then the date for payment of such Special Facilities Rentals shall be the
next succeeding day which is a Business Day, and no additional interest shall
accrue as a result.
(6) In addition to the foregoing, all funds received by the Trustee under the
Guaranty shall be deposited to the credit of the Debt Service Fund, for use as
herein provided.
(F) Special Rebate Fund. A separate and special trust fund to be designated
and known as the "Special Rebate Fund" is hereby established by the Authority
with the Trustee for the benefit of the United States of America and of the
Company, as their interests may appear pursuant to this Indenture and the
Facilities Agreement, and maintained as provided herein, as long as any of the
Bonds, or interest thereon, is Outstanding and unpaid.
(1) Payments into the Special Rebate Fund. The Trustee shall pay into the
Special Rebate Fund all payments received from the Company pursuant to Section
615 of the Facilities Agreement.
To the extent that, following any disbursements of amounts from the Special
Rebate Fund in accordance with subparagraph (2) following, the amount then on
deposit in the Special Rebate Fund exceeds the Tentative Rebate Amount
(hereinafter defined) determined as of the computation date immediately
preceding such disbursement (adjusted for the amount then disbursed), the
Trustee shall transfer such excess (i) to the Debt Service Fund, or (ii)
directly to the Company, as the Company shall direct.
(2) Disbursement of the Special Rebate Fund. The amounts in the Special
Rebate Fund shall be used solely for the payment to the United States of amounts
described under section 148(f) of the Code, and the Regulations thereunder, all
as may be applicable to the Bonds. Such payment shall be made by the Trustee in
accordance with written instructions from an Authorized Company Representative,
and the requirements of section 148(f)(3) of the Code, and the Regulations, the
first installment of such payment to be made by the Trustee within thirty days
after the fifth anniversary of the date of issuance of the Bonds, with each
subsequent installment of such payment to be made within thirty days following
each successive five year anniversary of the date of issuance of the Bonds, and
with the
last installment of such payment to be made within thirty days after the final
retirement of the Bonds.
(3) Company Determination. The amounts to be paid, deposited or disbursed
hereunder shall be determined by the Company. Within thirty days following each
fifth anniversary date of the date of issuance of the Bonds, the Company shall
furnish to the Trustee and the Authority a copy of computations made in
accordance with the provisions of section 148(f) of the Code and the Regulations
promulgated thereunder, showing the amount (the "Tentative Rebate Amount" in
respect of such anniversary date) which would be payable to the United States
pursuant to section 148(f)(3) of the Code were the Bonds to have been finally
retired on such anniversary.
(4) Special Rebate Fund Records. The Trustee shall maintain a record of all
investments and disbursements from the funds, and of the periodic determinations
by the Company of the Tentative Rebate Amount, for a period beginning on the
fifth anniversary date of the issuance of the Bonds and ending on the date six
years after the final retirement of the Bonds. Such records shall state each
such anniversary date and summarize the manner in which the Tentative Rebate
Amount, if any, was determined. In addition, upon request, the Trustee will
provide to the Company all investment records and other information required by
the Company for the making of such determinations.
(5) Disposition of Construction Fund upon Acceleration and Redemption. If
the Trustee shall declare the principal of the Bonds and the interest accrued
thereon immediately due and payable as the result of an Event of Default
specified in this Indenture, or if the Bonds are mandatorily redeemed prior to
maturity as a whole in accordance with their terms, any amounts remaining in the
Construction Fund shall be transferred to the Special Rebate Fund to the extent
that the amount therein is less than the Tentative Rebate Amount computed by the
Company as of the date of such acceleration or redemption.
(6) Deemed Satisfaction of Rebate Requirements; Penalties in Lieu of Rebate.
Anything contained herein to the contrary notwithstanding, the requirements of
Article III(F)(1), (2), (3) and (5) hereof shall be deemed satisfied if the
Company delivers to the Trustee and the Authority a certificate, together with
an opinion of Bond Counsel stating that based on the representations in the
certificate, the requirements of section 148(f)(2) of the Code need not be met
with respect to the Bonds by reason of any of the exceptions afforded a tax-
exempt issue under section 148(f) of the Code.
(G) Net Proceeds Account. Any Net Proceeds generated as a result of damage
to or destruction of, or the condemnation of, all or any part of the Special
Facilities, all as provided in Sections 1101 and 1102 of the Facilities
Agreement, shall be deposited to the credit of the Net Proceeds Account. The
Trustee shall disburse any moneys on deposit in the Net Proceeds Account upon
the written direction of
the Company, as approved in writing by the Authority, for the purposes described
in Sections 1101 and 1102 of the Facilities Agreement. Any moneys held by the
Trustee in the Net Proceeds Account shall be invested in accordance with the
provisions of Paragraph (H) below. The Company shall forthwith pay to the
Trustee the amount of any net losses with respect to principal in such
investments.
(H) Investments. (1) The Authority hereby directs the Trustee to invest or
reinvest such moneys in the manner provided below. Money in the Construction
Fund and the Debt Service Fund, respectively, held by the Trustee may be
invested or reinvested by the Trustee at the telephonic direction of the Company
(such oral direction subsequently confirmed in writing by the Company) in
Qualified Investments, defined below (provided that the Company shall not be
entitled to direct that any investment be made in violation of any applicable
law), in such a manner as will, in the opinion and within the discretion of the
Company, produce the maximum yield reasonably obtainable (subject to the
provisions of Article VIII of this Indenture). Money so invested or reinvested
shall be invested or reinvested in accordance with the laws of the State of
Texas.
(2) The securities purchased with the moneys in the Debt Service Fund or the
Construction Fund, respectively, shall be deemed a part of such respective Fund,
and, for the purpose of determining the amount of money therein, the securities
therein shall be valued at their cost or market value, whichever is lower. The
value of such securities shall be established annually during the last month of
each fiscal year of the Company. The income and profits, including realized
discount on securities purchased, received on all such securities (after
deduction for accrued interest and premium paid therefrom at the time of
purchase) shall be deposited in or credited to the Debt Service Fund or the
Construction Fund, respectively, and all losses thereon shall be charged against
the Debt Service Fund or the Construction Fund, respectively. Neither the
Authority nor the Trustee shall be liable or responsible for any loss resulting
from any such investment as herein authorized, such liability and responsibility
to be that of the Company. If at any time it shall become necessary that some
or all of the securities purchased with the moneys in the Debt Service Fund or
the Construction Fund be redeemed or sold to raise moneys necessary to comply
with the provisions of this Indenture, the Trustee may, after consultation with
an Authorized Company Representative, effect such redemption or sale, employing,
in the case of a sale, any commercially reasonable method of effecting the same,
including, without limitation, the sale thereof to the Company upon its written
request.
(3) As used in this Indenture, the term "Qualified Investments" shall mean
(i) obligations of the United States or its agencies and instrumentalities;
direct obligations of the State of Texas or its agencies and instrumentalities;
collateralized mortgage obligations directly issued by a federal agency or
instrumentality of the United States (the underlying security for which is
guaranteed by an agency or instrumentality of the United States); other
obligations, the principal and interest of which are unconditionally guaranteed
or insured by, or backed by the full faith and
credit of Texas or the United States or their respective agencies and
instrumentalities; and obligations of states, agencies, counties, cities and
other political subdivisions of any state rated as to investment quality by a
nationally recognized investment rating firm not less than A or its equivalent
(collectively herein "Government Obligations"); (ii) certificates of deposit (1)
issued by a state or national bank or a savings and loan association domiciled
in Texas, and (2) guaranteed or insured by the Federal Deposit Insurance
Corporation or its successor, secured by Government Obligations or secured in
any other manner and amount provided by law for deposits of the Trustee; (iii)
fully collateralized repurchase agreements which (1) have a defined termination
date, (2) are secured by obligations of the United States or its agencies and
instrumentalities, (3) require the securities being purchased by the Trustee to
be pledged to the Trustee, held in the Trustee's name and deposited at the time
the investment is made with the Trustee or with a third party selected and
approved by the Trustee, and (4) are placed through a primary government
securities dealer, as defined by the Federal Reserve, or a financial institution
doing business in Texas, provided that, the term of any reverse security
repurchase agreement may not exceed 90 days after the date the reverse security
repurchase agreement is delivered and, provided further, that "repurchase
agreement" means a simultaneous agreement to buy, hold for a specified time and
sell back at a future date obligations of the United States or its agencies and
instrumentalities at a market value at the time the funds are disbursed of not
less than the principal amount of the funds disbursed; (iv) bankers' acceptances
which (1) have a stated maturity of 270 days or fewer from the date of issuance,
(2) will be liquidated in full at maturity, (3) are eligible for collateral for
borrowing from a Federal Reserve Bank, and (4) are accepted by a bank organized
and existing under the laws of the United States or any state, if the short-term
obligations of the bank, or of a bank holding company of which the bank is the
largest subsidiary, are rated not less than A-1 or P-1 or an equivalent rating
by at least one nationally recognized credit rating agency; (v) commercial paper
which (1) has a stated maturity of 270 days or fewer from the date of its
issuance and (2) is rated not less the A-1 or P-1 or an equivalent rating by at
least two nationally recognized credit rating agencies, or one nationally
recognized credit rating agency and is fully secured by an irrevocable letter of
credit issued by a bank organized and existing under the laws of the United
States or any state; and (vi) no-load money market mutual funds which (1) are
regulated by the Securities and Exchange Commission, (2) have a dollar-weighted
average stated maturity of 90 days or fewer, and (3) include in the investment
objectives of such mutual fund the maintenance of a stable net asset value of $1
of each share, provided however, that the Trustee is not authorized to invest in
the aggregate more than 80% of its monthly average fund balance, excluding bond
proceeds and reserves and other funds held for debt service, in money market
mutual funds or to invest an amount that would exceed 10% of the total assets of
any such mutual fund.
(4) The Trustee, when authorized by the Company, may trade with itself in
the purchase and sale of securities for such investment. Although the Authority
recognizes that it may obtain a broker confirmation or written statement
containing
comparable information at no additional cost, the Authority hereby agrees that
confirmations of investments made by the Trustee pursuant to this Paragraph (H)
are not required to be issued by the Trustee for each month in which a monthly
statement is rendered. No such statement need be rendered pursuant to the
provisions hereof if no activity occurred in the fund or account during such
preceding month.
(I) Security for Funds. All Funds created by this Indenture shall be
secured in the manner required by Texas law for the security of public funds,
and such Funds shall be used only for the purposes and in the manner permitted
or required by this Indenture and the Facilities Agreement.
ARTICLE IV
ACCOUNTS AND RECORDS
(A) Separate Records. The Trustee shall keep proper books of records and
accounts, separate from all other records and accounts, in which complete and
correct entries shall be made of all transactions relating to the receipt of the
Special Facilities Rentals to be made by the Company to pay the principal of,
premium, if any, and the interest on the Bonds, the Construction Fund, the Debt
Service Fund and the Special Rebate Fund. The Trustee shall furnish to the
Authority and the Company no less often than monthly a copy of such records and
transactions as hereinabove described.
(B) Report of Trustee. Within 90 days after the close of each calendar
year, the Trustee shall furnish to the Authority, the Company, and the
Bondholders who may so request, a copy of a report by the Trustee covering such
calendar year, showing the following information:
(1) A detailed statement concerning the receipt and disposition of all
Special Facilities Rentals to be made by the Company under the terms
of the Facilities Agreement to pay the principal of, premium, if any,
and the interest on the Bonds;
(2) A detailed statement concerning the disposition of the amounts in the
Construction Fund (until the Construction Fund shall have been fully
disposed of); and
(3) An asset statement of the Debt Service Fund as of the end of said
calendar year.
(C) Inspection. The Authority, the Bondholders owning 25% or more of the
Outstanding principal amount of Bonds (as shown in the Registration Books) and
the Company shall have the right at all reasonable times pursuant to the
reasonable
regulations established in writing by the Trustee to inspect all records,
accounts, and data of the Trustee relating to the Debt Service Fund, and to
obtain copies of the same at the expense of such inspecting party.
(D) Registration Books. So long as any of the Bonds shall remain
Outstanding, the Trustee shall maintain Registration Books for the registration
and transfer of Bonds upon the terms and subject to the conditions contained
herein.
ARTICLE V
ENFORCEMENT OF RIGHTS IN CASE OF DEFAULT
(A) Trustee is Agent. The Trustee is hereby irrevocably appointed the
special agent and representative of the Bondholders and vested with full power
to act on their behalf to effect and enforce the Facilities Agreement, the
Guaranty and this Indenture, for their benefit as provided herein; but anything
in this Indenture contained to the contrary notwithstanding, Bondholders of a
majority in principal amount of the Bonds then Outstanding, in case of any
existing Event of Default (hereinafter defined), shall have the right from time
to time to direct and control the Trustee in connection with the enforcement of
any of the provisions of the Facilities Agreement, the Guaranty and this
Indenture, and any other proceedings taken by virtue of any provisions of the
aforesaid instruments, including the right to have withdrawn and discontinued at
any stage thereof any proceedings taken hereunder by the Trustee, provided that
the Event of Default upon which such proceedings were based and all other Events
of Default hereunder shall have been remedied and made good. Anything contained
in this Indenture to the contrary notwithstanding, each Bondholder shall have a
right of action to enforce the payment of the principal of, premium, if any, and
interest on any Bond owned thereby on or after the same shall have become due at
the place, from the sources, and in the manner expressed in Article III hereof.
(B) Restriction on Bondholders' Action. Except as otherwise provided in
this Article V, all rights of action with respect to this Indenture shall be
exercised only by the Trustee and no Bondholder shall have any right to
institute any suit, action, or proceeding at law or equity for the appointment
of a receiver or for any other remedy hereunder or by reason hereof unless and
until, in addition to the fulfillment of all other conditions precedent
specified in this Indenture, the Trustee shall have received the written request
of Bondholders of not less than 25% in principal amount of the Bonds then
Outstanding to institute such suit, action, or proceeding and shall have been
offered reasonable indemnity and shall have refused, or for 30 days thereafter
neglected, to institute such suit, action, or proceeding; and it is hereby
declared that the making of such request and the furnishing of such indemnity
are in each case conditions precedent to the execution and enforcement by any
Bondholder of the powers and remedies given to the Trustee hereunder and to the
institution and maintenance by any Bondholder of any action or cause of
action for the appointment of a receiver or for any other remedy hereunder; but
the Trustee may, in its discretion, or when thereunto duly requested in writing
by Bondholders of not less than 25% in principal amount of the Bonds then
Outstanding, and upon being furnished indemnity satisfactory to the Trustee
against expenses, charges, and liability, forthwith shall, take such appropriate
action by judicial proceedings or otherwise to enforce the covenants of the
Company or the Authority as the Trustee may deem expedient in the interest of
the Bondholders.
(C) Events of Default. Any one or more of the following events shall
constitute and hereinafter shall be called "Events of Default":
(1) Failure to pay when due, at maturity or upon redemption, the
principal of or, premium, if any, on any Bond;
(2) Failure to pay interest on any Bond on the Business Day immediately
following the date such payment of interest is scheduled to be due;
(3) The occurrence of an "Event of Default" as defined in Section 1401 of
the Facilities Agreement;
(4) A default in the performance or observance of any other of the
covenants, agreements or conditions on the part of the Authority in this
Indenture and the continuance thereof for a period of 60 days after written
notice thereof is given to the Authority and the Company by the Trustee,
provided, however, that no Event of Default shall be deemed to have occurred
if the Company or the Authority is diligently proceeding to cure or correct
such default; and
(5) The occurrence of a "Guaranty Event of Default" as defined in Section
2.4(a) of the Guaranty.
(D) Acceleration. Upon the occurrence and continuation of any Event of
Default as defined in this Indenture (except as described in Article V(C)(3)
hereof), the Trustee may, and upon the written request of the registered owners
of not less than 25% in aggregate principal amount of Bonds then Outstanding,
the Trustee shall, by notice in writing delivered to the Company with a copy of
such notice being sent to the Authority, declare the principal of all Bonds then
Outstanding and the interest accrued thereon immediately due and payable, and
such principal and interest thereon shall thereupon become and be immediately
due and payable.
If, after the principal of all Bonds then Outstanding shall have been so
declared to be due and payable, all arrears of interest upon such Bonds, and
interest on overdue installments of principal or premium, if any, and interest
(to the extent permitted by law) at the rate borne by the Bonds, and the
principal of and premium, if any, on all Bonds then Outstanding that shall have
become due and payable
otherwise than by acceleration, and all other sums payable under this Indenture
other than the principal of and interest on the Bonds which by such declaration
of acceleration shall have become due and payable, shall have been paid by or on
behalf of the Authority, together with the reasonable fees and expenses of the
Trustee and of the registered owners of the Bonds, including reasonable
attorneys' fees and expenses paid or incurred, and all other defaults then
existing hereunder shall have been cured or waived in accordance with the
provisions hereof, then and in every such case, the Trustee shall annul such
declaration of maturity and its consequence, which annulment shall be binding
upon all registered owners of Bonds; provided, however, that if the registered
owners of not less than 25% in aggregate principal amount of the Bonds then
Outstanding shall have made the written request as described above directing the
Trustee to declare such acceleration of maturity, the Trustee shall not annul
such declaration and its consequences without the prior consent of the
registered owners of not less than a majority in aggregate principal amount of
the Bonds then Outstanding, and provided further that no such annulment shall
extend to or affect any subsequent default or impair any right or remedy
consequent thereon.
(E) Action by Trustee. Upon the happening of any Event of Default, the
Trustee may, in its discretion, or, upon the written request of Bondholders of
not less than 25% in principal amount of the Bonds then Outstanding, and upon
being indemnified to the satisfaction of the Trustee, shall take such
appropriate action by judicial proceedings or otherwise to cure the Event of
Default and to require the Company or the Authority to carry out its or their
covenants and obligations hereunder and with respect to the Facilities
Agreement, including, but without limitation, the use and filing of actions for
specific performance and mandamus proceedings in any court of competent
jurisdiction, against the Authority or the Company, and to obtain judgments
against the Company for, or seek the appointment of a receiver in equity to
collect, any Special Facilities Rentals due but unpaid into the Debt Service
Fund, or for any other amounts due hereunder or under the Facilities Agreement,
including all of the principal amount of the Bonds then outstanding if declared
due and payable as provided herein, premium, if any, and interest on such Bonds
and interest on overdue payments of principal, premium, and interest, as further
provided herein.
(F) Remedies Nonexclusive. No remedy herein conferred upon or reserved to
the Trustee is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or under the Bonds, or now and
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon the happening of any Event of Default
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or acquiescence therein,
and every such right and power may be exercised from time to time and so often
as may be deemed expedient.
(G) Trustee's Discretion. In the event the Trustee shall receive
conflicting or inconsistent requests and indemnity from two or more groups of
Bondholders, each representing less than a majority of the principal amount of
Bonds then Outstanding, the Trustee in its sole discretion may determine what
action, if any, shall be taken.
(H) Disposition of Money. All money collected by the Trustee pursuant to
the exercise of the remedies and powers in this Article V, together with all
other sums which then may be held by the Trustee under any provision of this
Indenture as security for the Bonds, shall be applied as follows:
FIRST: to the payment of the costs and expenses of the proceedings
whereunder such money was collected, including a reasonable compensation to
the Trustee, its agents, attorneys, and all other necessary or proper
expenses, liabilities, and advances incurred or made by the Trustee under
this Indenture relating to such collection.
SECOND: to the payment of matured interest on the Bonds and interest on
overdue interest (to the extent permitted by law).
THIRD: to the payment of principal of and premium, if any, on the Bonds
which have become due pursuant to their terms as permitted or required by
this Indenture as provided thereby.
FOURTH: to the payment of any amounts due the Authority under the
Facilities Agreement.
FIFTH: to the payment of the surplus, if any, to the Company, or as a
court of competent jurisdiction may otherwise direct.
If in making distribution pursuant to the order above stated, the amount
available for distribution in a particular classification is insufficient to pay
in full all of the items in such classification, the amount available for
distribution to items in such classification shall be prorated among such items
in the proportion that the amount of each item bears to the total of all such
items.
(I) Intervention by Trustee. In any judicial proceeding in which the
Authority is a party and which, in the opinion of the Trustee and its counsel,
has a substantial bearing on the interests of the Bondholders, the Trustee, if
permitted by the court having jurisdiction over such proceeding, may, in its
discretion, or, upon the written request of Bondholders of not less than 25% in
principal amount of the Bonds then Outstanding, and upon being indemnified to
the satisfaction of the Trustee, shall intervene on behalf of the Bondholders to
assert the rights of the Bondholders.
(J) Possession of Bonds Unnecessary. All rights of action or other rights
under this Indenture or otherwise may be enforced by the Trustee without the
possession
of any of the Bonds, or the production thereof on the trial or other proceedings
relative thereto.
(K) Bondholder's Directions. It is expressly provided, however, that
Bondholders of a majority in principal amount of the Bonds then Outstanding, or
a committee representing, pursuant to a written appointment filed with the
Trustee, Bondholders of a majority in principal amount of the Bonds then
Outstanding, shall have the right, at any time, by an instrument or instruments,
in writing executed and delivered to the Trustee, to direct the method and place
of conducting all proceedings to be taken in connection with the enforcement of
the Trustee's rights and remedies under the Facilities Agreement or the
Guaranty, or the Bondholders' or the Trustee's rights and remedies under this
Indenture, and may exercise any right or perform any action hereunder with the
same effect as the Trustee under this Indenture, provided, that such direction
shall not be otherwise than in accordance with the provisions of law and of this
Indenture, and provided that the Trustee shall be indemnified to its
satisfaction.
(L) Trustee's Notice of Default. The Trustee shall not be required to take
notice nor be deemed to have notice of any Event of Default specified in this
Indenture, except for those Events of Default specified in subparagraphs (1) and
(2) of Paragraph (C) above, or the occurrence of an Act of Bankruptcy, unless
specifically notified in writing of such Event of Default by the Authority, the
Company, or Bondholders of not less than 25% in principal amount of the Bonds
then Outstanding. At such time as the Trustee has or is deemed to have notice
of any Event of Default specified in this Indenture, the Trustee shall notify
the registered owners of such Event of Default. With respect to an Event of
Default as described in Article V(C)(3), such notice shall contain language to
the effect that the remedy of acceleration is not available. Notice shall be
given in the same manner as is required with respect to giving notice of
redemption pursuant to Article II(C)(5).
(M) Bonds Owned by Authority or Company. In determining whether the
Bondholders of a requisite aggregate principal amount of Bonds then Outstanding
have concurred in any request, demand, authorization, direction, notice,
consent, or waiver under this Indenture, Bonds owned by or for the account of
the Company or the Authority, or any person controlled by, controlling, or under
common control of either of them, shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, except to the extent that
the Company owns all of the Bonds then Outstanding; provided, however, that for
the purpose of determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, or
waiver, only Bonds of which the Trustee has actual knowledge of such ownership
shall be so disregarded.
(N) Trustee's Standard of Conduct with Respect to Event of Default. (1)
Except during the continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and certificates or opinions
furnished to it and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(2) Notwithstanding any other provisions of this Article V, the Trustee
shall, during the existence of an Event of Default known to the Trustee, and
upon receipt of indemnification reasonably satisfactory to the Trustee, 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 in a like
situation would ordinarily use and exercise under the circumstances; provided,
that nothing contained herein shall be construed to entitle the Trustee to
demand indemnification as a condition precedent to the exercise of its duties
under Article V(D) above.
(3) No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(a) this subparagraph shall not be construed to limit the effect of
subparagraph (1) of this Paragraph (N);
(b) the Trustee shall not be liable for any error of judgment made in good
faith thereby, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) 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 Bondholders in principal amount of the Bonds, relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture with respect to the Bonds.
(O) Bondholder Remedy - Ongoing Disclosure Under Rule 15c2-12. In addition
to the foregoing, a Bondholder or a beneficial owner of a Bond demonstrating
ownership for the purpose of this Paragraph (O) in accordance with Section 616
of the Facilities Agreement may institute any suit, action or proceeding at law
or in equity for the enforcement of any covenant contained in such Section 616
or for any remedy for breach thereof, as specified in and subject to the
limitations of Section 616 of the Facilities Agreement, with respect to
compliance with the Rule.
Neither the Authority, the City nor the Trustee has assumed or will assume any
responsibility with respect to any covenant contained in Section 616 of the
Facilities Agreement or said Rule.
ARTICLE VI
CONCERNING THE TRUSTEE
The Trustee accepts the trust imposed upon it by this Indenture, but only
upon and subject to the following express terms and conditions:
(A) Negligence or Misconduct. In no event shall the Trustee be liable
except for its negligence or willful misconduct in relation to its duties under
this Indenture. The Trustee shall not be responsible for any recitals herein,
in the Bonds, the Facilities Agreement, or for the sufficiency of the security
for the Bonds, or for monitoring compliance by the Company of its obligations
under the Facilities Agreement, or for reviewing and approving any required
insurance coverage as described in the Facilities Agreement. The Trustee shall
have no responsibility hereunder except to the extent of the duties placed upon
the Trustee to hold, administer, deposit, secure, invest, and use the
Construction Fund, the Debt Service Fund and the Special Rebate Fund as
required, to the extent funds for such purposes are received by the Trustee, and
to perform the other express covenants and agreements made by the Trustee under
the provisions of this Indenture.
(B) Accountability for Funds. The Trustee shall not be accountable for the
use of any of the proceeds of such Bonds except the portion thereof deposited
with the Trustee, and the Trustee shall not be liable for any loss from the
investment (made in accordance with the terms of this Indenture) of any funds it
holds pursuant to this Indenture.
(C) Reliance on Communications. The Trustee shall not be liable in acting
in accordance with the provisions of this Indenture upon any notice,
requisition, request, consent, certificate, order, affidavit, letter, telegram,
or other paper or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, and the Trustee shall not
be bound to recognize any person as a Bondholder or to take any action at his
request, unless the ownership of such Bond or Bonds is indicated in the
Registration Books. Any action taken by the Trustee pursuant to this Indenture
upon the request or authority or consent of any person who, at the time of
making such request, or giving such authority or consent, is the Bondholder of
any Bond secured hereby, shall be conclusive and binding upon all future
Bondholders of the same Bond or any Bond issued in substitution or replacement
therefor.
(D) Proof of Facts. Notwithstanding anything elsewhere in this Indenture
contained, the Trustee shall have the right, but shall not be required, to
demand
before the disbursement of any cash or in respect of any action whatsoever
within the purview of this Indenture, any showings, certificates, opinions,
appraisals, or other information, or action or evidence thereof, in addition to
that required by the terms hereof which the Trustee believes to be necessary or
desirable.
(E) Limited Responsibilities. The responsibilities of the Trustee elsewhere
set forth herein shall be further limited as follows:
FIRST: 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 a direction of
Bondholders pursuant to any provision of this Indenture relating to the time,
method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
SECOND: No provision of this Indenture shall require the Trustee (1) 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, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, nor (2) to take any action, whether or not
directed to take such action by any Bondholder, pursuant to this Indenture,
which in the judgment of the Trustee would conflict with any rule of law, or
with the terms of this Indenture, or would be unjustly prejudicial to the
Bondholders not taking part in such direction. When acting pursuant to the
direction of any Bondholder pursuant to this Indenture, the Trustee may take
other action deemed proper by the Trustee which is not inconsistent with such
direction; provided, however, that the terms of this subparagraph SECOND
shall not impose any additional duties or responsibilities upon the Trustee
and shall not be construed to limit the effect of subparagraph FIRST of this
Paragraph (E).
(F) Performance through Attorneys, Accountants, Agents, Receivers or
Employees.
(1) The Trustee may execute any of the trusts or powers hereof and perform
the duties required of it hereunder by or through attorneys, accountants,
agents, receivers or employees and shall be entitled to advice of counsel
concerning all matters of trust hereof and its duties hereunder, and may in all
cases pay such reasonable compensation as it shall deem proper to all such
persons as reasonably may be required and employed in connection with the trusts
hereof.
(2) The Trustee shall not be liable for the default or misconduct of any such
attorney, agent, accountant or employee selected by it with reasonable care.
(3) The Trustee may act upon the opinion or advice of any attorney selected
by it with reasonable care, and the Trustee shall not be responsible for
anything done or not done in good faith in accordance with any such opinion or
advice.
(G) Trustee as Bondholder. The Trustee may become the Bondholder of any of
the Bonds secured by this Indenture with the same rights which it would have if
not the Trustee. Nothing herein contained shall be construed to prohibit the
Trustee, either as principal or agent, from engaging in or being interested in
any financial or other transaction with the Authority or the Company or from
acting as depository, trustee, or agent for any committee or body of Bondholders
of the Bonds or of other obligations of the Authority as freely as if it were
not the Trustee.
(H) Execution of Documents. The Trustee agrees to execute any documents
reasonably requested by the Company in connection with any action taken by the
Company under the Facilities Agreement.
(I) Fees. The fees and expenses of the Trustee incurred in connection with
its performance hereunder shall be payable by the Company, as set forth in
Section 615 of the Facilities Agreement.
(J) Recitals. The recitals, statements and representations in the documents
executed to facilitate the issuance of the Bonds except only the Trustee's
authentication of the Bonds and the Trustee's representations of trust powers
and the Trustee's acceptance of the trusts hereunder, shall not be taken as made
by the Trustee, and the Trustee does not assume any responsibility for the
correctness thereof. The foregoing notwithstanding, the Trustee does represent
and warrant that it is duly qualified under Texas law to administer the trusts
created hereunder.
(K) Responsibility of Trustee Generally. 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 its duties under the documents
executed to facilitate the issuance of the Bonds except at the direction of the
registered owners pursuant to any provision of this Indenture and upon receipt
of indemnification satisfactory to the Trustee; provided, that nothing contained
herein shall be construed to enable the Trustee to demand indemnification as a
condition precedent to the exercise of its duties under Article V(D) above.
(L) Additional Rights of Trustee.
(1) The Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties.
(2) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an instrument executed by an Authorized Company
Representative and any resolution of the Company may be sufficiently evidenced
by a certified copy executed by the Secretary or an Assistant Secretary of the
Board of Directors of the Company.
(3) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Bondholders pursuant to this Indenture, unless such Bondholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(4) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may 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.
ARTICLE VII
SUCCESSOR TRUSTEE
(A) Resignation and Removal of Trustee.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Paragraph (B) below.
(2) The Trustee may resign at any time, with or without reason, by giving
written notice thereof to the Authority and the Company, and to each of the
Bondholders. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee, at the expense of the Company, may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(3) The Trustee may be removed at any time by the registered owners of at
least a majority in principal amount of the Outstanding Bonds, by a written
request for removal delivered to the Authority and the Company.
(4) If at any time:
(a) The Trustee shall cease to be eligible under Paragraph (B) below and
shall fail to resign after written request therefor by the Authority, or by
any Bondholder who has been a bona fide holder of a Bond for at least 6
months, or
(b) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (x) the Authority may remove the Trustee, or (y) any
Bondholder who has been a bona fide holder of a Bond for at least 6 months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(5) So long as there is no Event of Default under the Facilities Agreement or
this Indenture, the Trustee may be removed at any time, for any reason, by an
instrument in writing, executed by the Company, and delivered to the Trustee and
the Authority. The Company shall mail to all Bondholders notice of such removal
and, subject to the provisions of clause (1) of this Paragraph (A), such removal
shall be effective 60 days after such notice is mailed unless 25% in aggregate
principal amount of the Bondholders object in writing to such removal.
(6) If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, the Authority
shall promptly appoint a successor Trustee. If no successor Trustee shall have
been so appointed by the Authority and accepted appointment in the manner
hereinafter provided, any Bondholder who has been a bona fide holder of a Bond
for at least 6 months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(7) The successor Trustee shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee (other than
pursuant to Paragraph (D) below) by mailing written notice of such event to the
holders of the Bonds and to the parties to the documents relating to the Bonds.
Each notice shall include the name of the successor Trustee and the address of
its principal corporate trust office.
(B) Appointment of Successor. In case the Trustee hereunder shall resign or
be removed, or be dissolved, or shall be in course of dissolution or
liquidation, or otherwise become incapable of acting hereunder, or in case the
Trustee shall be taken under the control of any public officer or officers, or
of a receiver appointed by a court, a successor shall be appointed by the
Authority by an instrument executed
by authority of a resolution of its Board, signed by the President or Vice
President and by the Secretary of the Board of Directors of the Authority. The
foregoing notwithstanding, so long as the Company is not in default under the
terms of the Facilities Agreement, the Company may appoint any successor
Trustee, by delivering to the Authority an instrument executed on behalf of the
Company by an Authorized Company Representative. In the selection of any such
successor Trustee, the Company shall advise and consult with the Authority and
shall give due consideration to suggestions and input which may be offered by
the Authority prior to the Company making the final decision with respect to
such selection. Every such successor Trustee shall be a trust company or bank in
good standing, located in the United States of America, and having a capital and
surplus of not less than One Hundred Million Dollars ($100,000,000), if there be
such a trust company or bank willing, qualified, and able to accept the trust
upon reasonable or customary terms. In the event that no appointment of a
successor Trustee shall be made pursuant to the foregoing provisions of this
Article within 60 days after a vacancy in the office of Trustee shall have
occurred, any Bondholder or any retiring Trustee may apply to any court of
competent jurisdiction for the appointment of a successor Trustee, and such
court may thereupon, after such notice, if any, as it shall deem proper,
prescribe or appoint a successor Trustee. Within 30 days of the resignation or
removal of a Trustee and the appointment of a successor, such successor Trustee
shall cause a written notice of such occurrence to be (i) published one time in
each of two consecutive weeks in a financial newspaper or journal which is of
general circulation in the Borough of Manhattan in The City of New York, New
York, and is customarily published at least once a day for at least five days in
each calendar week; and (ii) mailed, postage prepaid, to each registered owner
of Bonds, at its address appearing in the Registration Books.
(C) Qualification of Successor. Every successor Trustee appointed hereunder
shall execute, acknowledge, and deliver to its predecessor, the Authority and
the Company, an instrument in writing accepting such appointment hereunder, and
thereupon such successor Trustee, without any further act, deed, or conveyance,
shall become fully vested with all the estates, rights, powers, trusts, duties,
and obligations hereunder and under the Guaranty of its predecessor; but such
predecessor shall nevertheless, on the written request of the Authority, execute
and deliver instruments, including, without limitation any statement of
assignment permitted to be filed by the Texas Uniform Commercial Code,
transferring to such successor Trustee all the estates, rights, powers, and
trusts of such predecessor hereunder; and every predecessor Trustee shall
deliver all securities and money held by it to its successor; provided, however,
that before any such delivery is required or made, all reasonable, customary,
and legally accrued fees, advances, and expenses of such predecessor Trustee
shall be paid in full. Should any deed, assignment, or instrument in writing
from the Authority be required by any successor Trustee for more fully and
certainly vesting in such Trustee the estates, rights, powers, and duties hereby
vested or intended to be vested in the predecessor Trustee, any and all such
deeds, assignments, and instruments in
writing shall, on request, be executed, acknowledged, and delivered by the
Authority.
(D) Merger or Consolidation of Trustee. Any corporation or association into
which the Trustee, or any successor to it in the trusts created by this
Indenture, may be merged or converted or with which it or any successor to it
may be consolidated, or any corporation or association resulting from any
merger, conversion, or consolidation to which the Trustee or any successor to it
shall be a party, shall be the successor Trustee under this Indenture without
the execution or filing of any paper or any other act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
ARTICLE VIII
RELEASE OF INDENTURE
(A) Satisfaction of Indebtedness and Release of Indenture. If the Authority
shall pay or cause to be paid to the registered owner of any Bond secured hereby
the principal of, 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 a
principal amount equal to the minimum denomination then authorized under this
Indenture or any integral multiple thereof, such Bond or portion thereof shall
cease to be entitled to any lien, benefit or security under this Indenture. If
the Authority shall pay or cause to be paid to the registered owners of all the
Bonds secured hereby the principal of, premium, if any, and interest due and
payable, and thereafter to become due and payable, thereon, and shall pay or
cause to be paid all other sums payable hereunder by the Authority, and all
accrued fees and expenses of the Trustee, 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 and this Indenture and the lien hereby created
shall be discharged and satisfied. In such event, the Trustee shall assign,
transfer and turn over to the Company the Trust Estate, including, without
limitation, any surplus funds then held by the Trustee hereunder. Upon the
discharge and satisfaction of this Indenture and the termination of the Trust
Estate, the Bonds shall no longer be subject to redemption pursuant to Article
II(C) hereof (other than any redemption as described in Article VIII(B)(i),
which shall survive any such discharge and termination).
(B) Payment, Advance Funding, and Defeasance. All or any portion of
Outstanding Bonds, or portions of Outstanding Bonds in principal amounts equal
to the minimum denomination, then authorized under this Indenture or any
integral multiple thereof, shall prior to the maturity or redemption date
thereof be deemed to have been paid within the meaning and with the effect
expressed in this Article VIII when:
(i) in the event said Bonds or portions thereof have been selected for
redemption, the Trustee shall have given, or the Company shall have given to
the Trustee in form satisfactory to it, irrevocable instructions to give
notice of redemption of such Bonds or portions thereof in accordance with the
provisions of this Indenture;
(ii) there shall have been deposited with the Trustee either moneys in an
amount which shall be sufficient, or Government Obligations (a) which shall
not contain provisions permitting the redemption thereof at the option of the
issuer thereof, (b) which mature no later than the earlier of (1) the date
fixed for the redemption of the Bonds or (2) the maturity date of the Bonds,
and (c) the principal of and the interest on which, when due, and without any
regard to reinvestment thereof, will provide moneys which, together with the
moneys, if any, deposited with or held by the Trustee, shall be sufficient,
to pay when due, the principal of, premium, if any, and interest due and to
become due on said Bonds or portions thereof on and prior to the redemption
date or maturity date thereof, as the case may be; and
(iii) in the event said Bonds or portions thereof do not mature and are
not to be redeemed within the next succeeding sixty (60) days, 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, a notice to the registered owners of said Bonds or
portions thereof that the deposit required by clause (ii) 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.
As used in this Indenture, the term "Government Obligations" shall mean
noncallable, direct general obligations of, or obligations the full and timely
payment of the principal of and interest on which are unconditionally guaranteed
by, the United States of America; provided, that said term may include
noncallable, indirect obligations of the United States of America if, in the
opinion of Bond Counsel, such indirect obligations are eligible under State law
to discharge obligations such as the Bonds; and provided further, if, in the
opinion of Bond Counsel, such obligations hereinafter described are eligible
under State law to discharge obligations such as the Bonds, that said term may
include obligations described in clause (xii) of Article III (H)(3) hereof that
are noncallable obligations and that bear a rating in the highest rating
category by Standard & Poor's Ratings Group or Moody's Investors Service.
In addition, upon the defeasance of the Bonds, any rights to redeem the Bonds
not exercised prior to such defeasance shall be extinguished.
(C) Reinvestment. Neither the Government Obligations nor moneys deposited
with the Trustee pursuant to this Article VIII nor principal or interest
payments on
any such Government Obligations shall be withdrawn or used for any
purpose other than, and shall be held in trust for, the payment of the principal
of, premium, if any, and interest on said Bonds or portions thereof; provided,
that, any cash received from such principal or interest payments on such
Government Obligations deposited with the Trustee, if not then needed for such
purpose, may, to the extent practicable, be invested in Government Obligations
of the type and tenor described in clause (ii) of Paragraph (B) of this Article
VIII and interest earned from such reinvestments shall be paid over to the
Company, as received by the Trustee, free and clear of any trust, lien or
pledge. The foregoing notwithstanding, the agreement pursuant to which such
cash and/or Government Obligations are held by the Trustee may provide for the
ability to sell or otherwise dispose of all or part of the Government
Obligations and the reinvestment of the proceeds thereof, together with all or
any part of any cash held thereunder, in Government Obligations.
(D) Use of Moneys and Government Obligations Set Aside. Notwithstanding any
provision of any other Article of this Indenture which may be contrary to the
provisions of this Article VIII, all money or Government Obligations set aside
and held in trust pursuant to the provisions of this Article VIII for the
payment of Bonds, the premium, if any, and interest thereon, shall be applied to
and used solely for the payment of the particular Bonds, the premium, if any,
and interest thereon with respect to which such money or Government Obligations
have been so set aside in trust.
(E) No Amendment. Notwithstanding anything elsewhere contained in this
Indenture, if money or Government Obligations have been deposited or set aside
with the Trustee pursuant to this Article VIII for the payment of Bonds and such
Bonds shall not have in fact been actually paid in full, no amendment to the
provisions of this Article VIII shall be made without the consent of each
Bondholder affected thereby.
(F) Additional Conditions to Defeasance and Reinvestment. Prior to any
defeasance being deemed to have occurred hereunder, or prior to any reinvestment
of Government Obligations, as described in Paragraphs (B) and (C) above, the
Trustee shall receive the following:
(1) an opinion by an independent certified public accountant that after
such reinvestment the principal amount of substituted securities, together
with the interest thereon and any other available cash held by the Trustee,
will be sufficient to pay the principal of, and interest on, the Bonds which
have not previously been paid, and
(2) an unqualified opinion of Bond Counsel to the effect that (i) such
investment will not cause the Bonds to be "arbitrage bonds" within the
meaning of section 148 of the Code, and the Regulations in effect on the date
of such investment, or otherwise make the interest on the Bonds subject to
Federal income taxation, and (ii) such reinvestment is not inconsistent with
the
laws of the State of Texas and with all relevant documents relating to the
issuance of the Bonds.
ARTICLE IX
AMENDMENTS
(A) Amendments without Bondholder Consent. With the consent of the Trustee
(unless such consent specifically is not required by the Facilities Agreement),
the parties to the Guaranty or the Facilities Agreement may, and the parties to
this Indenture, with the consent of the Company, may, without the consent of, or
notice to, any of the registered owners of the Bonds, enter into any amendments
to the Guaranty or the Facilities Agreement or enter into any indentures
supplemental to this Indenture for any one or more of the following purposes:
(1) to cure any ambiguity, formal defect, omission or inconsistent
provision herein or therein;
(2) to grant to the Trustee for the benefit of the registered owners of
the Bonds any additional revenues, properties or collateral, or any
additional rights, remedies, powers or authority that may lawfully be granted
to the registered owners of the Bonds or the Trustee;
(3) to add to the covenants and agreements of the parties hereto or
thereto other covenants and agreements of, or conditions or restrictions
upon, such parties or to eliminate any right or power conferred upon the
Company;
(4) to evidence any succession otherwise permitted hereunder or thereunder
to any parties hereto or thereto and the assumption by such successor of the
covenants and agreements of its predecessor hereunder or thereunder;
(5) to modify the Facilities Agreement to amend the definition of "Special
Facilities" therein, or to modify this Indenture to amend the definition of
"Qualified Investments" as set forth in Article III herein, which
modification does not, in the opinion of the Trustee, materially and
adversely affect the interest of the registered owners of the Bonds;
(6) to modify, amend or supplement this Indenture or any indenture
supplemental hereto in such manner as to permit the qualification hereof and
thereof under the Trust Indenture Act of 1939 or any similar federal statute
hereafter in effect or to permit the qualification of the Bonds for sale
under the securities laws of the United States of America or any of the
states of the United States of America, and to add to this Indenture or any
indenture
supplemental thereto such other terms, conditions and provisions as
may be permitted by said Trust Indenture Act of 1939 or similar federal
statute;
(7) to modify or amend such provisions herein or therein in a manner in
which, in the opinion of Bond Counsel, is necessary in order to assure the
exclusion from gross income of interest on the Bonds pursuant to section
103(a) of the Code; or
(8) to make any other change herein or therein which does not, in the
opinion of the Trustee, materially and adversely affect the interest of the
registered owners of the Bonds, except that any such change to the Guaranty
will not be effective unless, in the opinion of counsel delivered to the
Trustee, such change will not materially and adversely affect the interest of
the registered owners of the Bonds.
(B) Consent of Majority of Bondholders. With the consent of the Company,
the parties to this Indenture may, or with the consent of the Trustee, the
parties to the Facilities Agreement may, at any time, enter into indentures
supplemental to this Indenture or amendments to this Indenture or the Facilities
Agreement amending, modifying, adding to or eliminating any of the provisions
hereof or thereof but, if such supplement or amendment is not of the character
described in Paragraph (A) above, only with the consent of the registered owners
of not less than a majority of the aggregate principal amount of the Outstanding
Bonds.
(C) Consent of All Bondholders. Notwithstanding the foregoing, no
supplement or amendment to this Indenture or amendment to the Guaranty or the
Facilities Agreement shall, without the consent of the registered owner of each
Outstanding Bond so affected, (i) extend the maturity date of any Bond, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof, or reduce any premium payable upon the redemption
thereof, or extend or reduce the amount of any mandatory redemption requirement,
or change the method of calculation of interest on the Bonds, (ii) deprive such
registered owner of the lien hereof on the revenues pledged hereunder and on the
Trust Estate, (iii) decrease the amounts payable by the Company under Section
502 of the Facilities Agreement or under the terms of the Guaranty, (iv) reduce
the aggregate principal amount of Bonds the registered owners of which are
required to approve any such supplement to this Indenture or amendment to this
Indenture or the Facilities Agreement or the Guaranty, (v) increase the
percentage of the aggregate principal amount of Bonds the registered owners of
which are required to direct the Trustee to accelerate the maturity of the
Bonds, or (vi) provide a privilege or priority of any Bond over any other Bond.
In addition to the foregoing, this Indenture shall not be amended in
contravention of the provisions of Article VIII(E) hereof.
(D) Effective Date of Amendment. The Trustee shall establish a record date
for purposes of approval of any such amendment or supplement described in
Paragraphs (B) and (C) of this Article, and shall cause notice of such record
date and such proposed amendment to be given in the same manner as notices of
redemption are given by the Trustee. Such notice shall briefly set forth the
nature of the proposed amendment and shall state that copies thereof are on file
at the Designated Trust Office for inspection by all registered owners. If,
within 60 days (or such longer period as shall be prescribed by the Company)
following the mailing of such notice, the registered owners of the requisite
aggregate principal amount of the Bonds Outstanding at the time of the record
date established for such purpose shall have consented to and approved such
amendment, no registered owner of any Bond shall have any right to object to any
of the terms and provisions contained therein, or the operation thereof, or in
any manner to question the propriety of the execution thereof, or to enjoin or
restrain the parties to such amendment from adopting the same or from taking any
action pursuant to the provisions thereof. Upon receipt of the consent of the
registered owners of the requisite aggregate principal amount of the Bonds
Outstanding, the relevant parties may execute such amendment.
The consent of a registered owner shall be evidenced by an instrument
executed by such registered owner, delivered to the Trustee, which instrument
shall refer to the proposed amendment described in said notice and shall
specifically consent to and approve such amendment. Any consent given by a
registered owner as of such record date shall be irrevocable for a period of six
months from the date such consent is given, and shall be conclusive and binding
upon all future registered owners of the same Bond during such period. Such
consent may be revoked at any time after six months from the date such consent
was given by such registered owner, or by a successor in title, by filing notice
thereof with the Authority, the Company and the Trustee, but such revocation
shall not be effective if the registered owners of the requisite aggregate
principal amount of the Bonds Outstanding have, prior to the attempted
revocation, consented to and approved such amendment.
(E) Opinion of Bond Counsel. Prior to executing any amendment to this
Indenture, the Trustee shall receive an opinion of Bond Counsel substantially to
the effect that such amendment (i) does not violate the laws of the State of
Texas and (ii) will not materially adversely affect the treatment of the
interest on the Bonds as excludable from the gross income of the Bondholders
under applicable provisions of the Code.
ARTICLE X
MISCELLANEOUS PROVISIONS
(A) Proof of Execution. Any request, direction, consent, or other
instrument required by this Indenture to be signed or executed by Bondholders
may be in any number of concurrent writings of similar tenor and may be signed
or executed by
such Bondholders in person or by an agent appointed in writing. Proof of the
execution of any such instrument, or of the writing appointing such agent, if
made in the following manner, 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. The fact, date, and due authorization
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) Proof of Ownership. The fact of ownership of the Bonds by any
Bondholder, the amount and numbers of such Bonds, and the date of his holding
same shall be conclusively proved by the appropriate entries in the Registration
Books.
(C) Action Binding on Successor. Unless otherwise provided in this
Indenture, any request or consent of any Bondholder shall bind every future
Bondholder of the same Bond, or any Bond issued in substitution or replacement
therefor, in respect of anything done by the Trustee in pursuance of such
request or consent. In the event of the dissolution of the Authority, all of the
covenants, stipulations, promises, and agreements in this Indenture contained
by, on behalf of, or for the benefit of the Authority, shall bind or inure to
the benefit of the successor or successors of the Authority from time to time
and any officer, board, or commission to whom or to which any power or duty
affecting such covenants, stipulations, promises, and agreements shall be
transferred by or in accordance with law.
(D) Nonpresentment and Unclaimed Funds. If any Bond shall not be presented
for payment when the principal thereof becomes due, either at maturity or at the
date fixed for redemption thereof or otherwise, all liability of the Authority
and the Company to the owners thereof and to the Trustee for the payment of such
Bond shall forthwith cease, determine, and be completely discharged whenever
funds sufficient to pay for the principal of, premium, if any, and interest on
such Bond shall be paid, or caused to be paid to the Trustee by the Company as
provided in this Indenture, and such funds shall be segregated by the Trustee
and held in trust for the benefit of the registered owner of such Bond, who
shall thereafter be restricted exclusively to such funds for the satisfaction of
any claim of whatever nature relating to such Bond. Any money deposited with the
Trustee in trust for the payment of the principal of, premium, if any, or
interest on any Bond remaining unclaimed for three years after such principal
of, premium, if any, or interest on such Bond has become due and payable shall,
subject to any unclaimed property laws of the State of Texas, and upon receipt
of indemnification reasonably satisfactory to the Trustee, be paid to the
Company; provided, however, that before the Trustee shall be required to make
any such repayment, the Trustee may at the expense of the Company cause to be
published at least once, in a financial
newspaper or journal which is of general circulation in the Borough of Manhattan
in The City of New York, New York, and is customarily published at least once a
day for at least five days in each calendar week, a notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company. After the payment of
such unclaimed moneys to the Company, the owner of such Bond shall thereafter
look (to the extent of any amount so repaid to the Company) only to the Company
for the payment thereof, and all liability of the Trustee with respect to such
money shall thereupon cease, and the Company shall not be liable for any
interest thereon and shall not be regarded as a trustee of such moneys.
(E) Destruction of Bonds. Upon the surrender to the Trustee of any Bonds
acquired or redeemed or paid at maturity by the Authority, the same shall
forthwith be cancelled and destroyed by the Trustee in accordance with its
customary procedures, and the Trustee shall, from time to time, deliver its
certificate of such destruction to the Authority and the Company.
(F) No Third-Party Beneficiaries. Except as herein otherwise expressly
provided, nothing in this Indenture express or implied is intended or shall be
construed to confer upon any person, firm, or corporation other than the
Company, the Authority, the Trustee, and the Bondholders, any right, remedy, or
claim, legal or equitable, under or by reason of this Indenture or any covenant,
condition, or stipulation contained herein.
(G) Severability. In case any one or more of the provisions of this
Indenture or of the Bonds shall be held to be invalid or ineffective as to any
person or circumstance, the remainder thereof and the application of such
provision to persons or circumstances other than those as to which it is held
invalid shall not be affected thereby.
(H) Governing Law. The validity, interpretation, and performance of this
Indenture shall be governed by the laws of the State of Texas.
(I) Addresses. All notices, certificates, requests, or other communications
hereunder shall be sufficiently given and shall be deemed given, unless
otherwise required by this Indenture, when delivered by United States mail,
first-class, postage prepaid, or Federal Express overnight priority delivery, or
such other method as may be agreed upon by the parties to such notice, addressed
as follows: if to the Authority, 1000 Throckmorton, Fort Worth, Texas 76102,
Attention: City Manager; if to the City, 1000 Throckmorton, Fort Worth, Texas
76102, Attention: City Attorney; if to the Company, Federal Express
Corporation, 2007 Corporate Avenue, Memphis, Tennessee 38132, Attention: Vice
President and Treasurer, with a copy of such notice to be sent in the same
manner to Federal Express Corporation, 1980 Nonconnah Blvd., Memphis, Tennessee
38132, Attention: Legal Department, Managing Director, Contracts and Business
Transactions, and to
Federal Express Corporation, 2003 Corporate Avenue, Memphis, Tennessee 38132,
Attention: Vice President, Properties; and if to the Trustee, One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust
Services Division. A duplicate copy of each notice, certificate, request, or
other communication given hereunder to the Authority, the City, the Company, or
the Trustee shall also be given to the others. The Company, the City, the
Authority, and the Trustee may, by notice given hereunder, designate any further
or different addresses to which subsequent notices, certificates, requests or
other communications shall be sent.
(J) Notice to Department of Commerce. If (i) the Company fails to timely
make or pay any Special Facilities Rental under the Facilities Agreement, (ii)
an Event of Default has occurred, or (iii) upon receiving notice that the
interest on the Bonds is, or may be, subject to federal income taxation, the
Trustee promptly shall inform the Department of such an occurrence, by sending
written notice to the following address:
Texas Department of Commerce
Attention: Executive Director
P. O. Box 12728
Austin, Texas 78711
or the latest address specified by the Department.
(K) Counterparts. This Indenture may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same instrument.
(L) Captions. In this Indenture, unless the context otherwise requires:
(1) The terms "hereby", "hereof", "hereto", "hereunder", and any similar
terms, as used in this Indenture, refer to this Indenture, and the term
"hereafter" shall mean after, and the "heretofore" shall mean before the date
of this Indenture.
(2) Words of the masculine gender shall mean and include correlative words
of the feminine and neuter genders and words importing the singular number
shall mean and include the plural number and vice versa.
(3) Any headings preceding the texts of the several Articles and
Paragraphs of this Indenture, and any table of contents appended hereto,
shall be solely for convenience of reference and shall not constitute a part
of this Indenture, nor shall they affect its meaning, construction or effect.
(4) All references herein to particular Articles or Paragraphs are
references to the Articles or Paragraphs of this Indenture, and reference
herein to any exhibit means an exhibit attached to this Indenture.
(5) Reference to any documents means that document as amended or
supplemented from time to time in accordance with its terms and, where
applicable, the Facilities Agreement, and reference to any party to a
documents means that party and its permitted successors and assigns.
(M) Company Direction. Whenever, so long as there is no Event of Default
which has occurred and is continuing under the Facilities Agreement, after a
reasonable request by the Company, the Authority shall fail, refuse or neglect
to give any direction to the Trustee or to require the Trustee to take any other
action that the Authority is required to have the Trustee take pursuant to the
provisions of the Facilities Agreement or this Indenture, the Company instead of
the Authority may give any such direction to the Trustee or require the Trustee
to take any such action. Upon receipt by the Trustee of a written notice signed
by an Authorized Company Representative stating that the Company has made
reasonable request of the Authority, and that the Authority has failed, refused
or neglected to give any direction to the Trustee or to require the Trustee to
take any such action, the Trustee is hereby irrevocably empowered and directed
to accept such direction from the Company as sufficient for all purposes of this
Indenture. Except with respect to the Authority's rights to fees, expenses and
indemnification pursuant to Section 901 of the Facilities Agreement, the Company
shall have the direct right to cause the Trustee to comply with any of the
Trustee's obligations under this Indenture to the same extent that the Authority
is empowered so to do, and the Trustee shall incur no liability for action taken
by it in good faith in accordance with the Company's directions pursuant to this
Paragraph.
[THE REMAINDER OF THIS PAGE HAS BEEN
LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the Authority, acting through its Board of Directors, has
caused this Indenture to be executed in its name, and for and on its behalf, by
the President or Vice President of the Authority and attested by the Secretary
of the Authority, and its corporate seal to be hereunto affixed; and the
Trustee, to evidence its acceptance of the trusts hereby created and vested in
it, has caused this Indenture to be executed in its name, and for and on its
behalf by an Assistant Vice President, all as of the date first above written.
ALLIANCEAIRPORT AUTHORITY, INC.,
ISSUER
By /s/ James Lane
--------------------------------
President
ATTEST:
/s/ Jewel Woods
----------------------------
Secretary
(SEAL)
THE FIRST NATIONAL BANK OF
OF CHICAGO, TRUSTEE
By /s/ Leland Hansen
---------------------------------
Title: Assistant Vice President
EXHIBIT A
FORM OF BOND
NO. R-_____________ PRINCIPAL
AMOUNT
$_______
UNITED STATES OF AMERICA
STATE OF TEXAS
ALLIANCEAIRPORT AUTHORITY, INC.
SPECIAL FACILITIES REVENUE BOND, SERIES 1996
(FEDERAL EXPRESS CORPORATION PROJECT)
INTEREST RATE DATED DATE MATURITY DATE CUSIP NO.
- ------------- ---------- ------------- ---------
_______% APRIL 1, 1996 ______________ __________
ON THE MATURITY DATE specified above, ALLIANCEAIRPORT AUTHORITY, INC. (the
"Authority"), being a nonstock, nonprofit industrial development corporation
organized and existing under the laws of the State of Texas, including
particularly the Development Corporation Act of 1979, Article 5190.6,
V.A.T.C.S., as amended (the "Act"), and acting on behalf of the City of Fort
Worth, Texas (the "City") hereby promises to pay to
(hereinafter called the "registered owner") the principal amount of
DOLLARS
and to pay interest on the unpaid principal amount hereof from the Dated Date
set forth above, on October 1, 1996 and semiannually thereafter on each April 1
and October 1 to the Maturity Date specified above, or the date fixed for
redemption prior to maturity, and on such Maturity Date, at the Interest Rate
per annum specified above; except that if the date of the authentication of this
Bond is later than the first Record Date (hereinafter defined), such principal
amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is after any Record
Date but on or before the next following interest payment date, in which case
such unpaid principal amount shall bear interest from such next following
interest payment date. Interest on this Bond shall be calculated on the basis
of a year of 360 days and twelve 30-day months.
THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON this Bond are payable in
lawful money of the United States of America, without exchange or collection
charges. Payment of principal of, premium, if any, interest on this Bond shall
be made by The First National Bank of Chicago (the "Trustee") in its capacity
as the paying agent for this Bond to the registered owner hereof appearing on
the Registration Books, as hereinafter described, on the fifteenth day of the
month next preceding each such interest payment date (the "Record Date"), by
check or draft mailed, to such registered owner, at its address as it appears on
the Registration Books kept by the Trustee, in its capacity as registrar for
this Bond, as hereinafter described, at the close of business on the Record
Date; provided, however, upon the written request of any registered owner of at
least $1,000,000 in principal amount of Bonds, given in accordance with the
terms of the hereinafter defined Indenture, all payments of principal, premium,
if any, and interest on the Bonds shall be paid by wire transfer in immediately
available funds to an account in the continental United States designated by the
registered owner. It shall be the duty of each registered owner to notify the
Trustee in writing of the address to which payment shall be mailed. For so long
as the registered owner of a Bond is determined in accordance with the book-
entry-only system of The Depository Trust Company ("DTC"), payments of
principal, premium, if any, and interest on the Bond shall be made in accordance
with the arrangements between DTC and the Authority, all in accordance with the
terms of the Indenture. If the registered owner of a Bond is determined to be
any other securities depository, payments of principal, premium, if any, and
interest on the Bonds shall be made in accordance with the arrangements between
such securities depository and the Authority, all in accordance with the terms
of the Indenture.
THIS BOND is one of a Series of bonds dated as of the Dated Date (the
"Bonds"), authorized and issued in an aggregate principal amount of $___,000,000
FOR THE PURPOSE OF PROVIDING A PORTION OF THE COST OF THE ACQUISITION,
CONSTRUCTION, EQUIPPING AND FURNISHING OF AN EXPRESS CARGO PACKAGE SORTING AND
DISTRIBUTION FACILITY AT ALLIANCE AIRPORT (THE "SPECIAL FACILITIES") WITHIN THE
BOUNDARIES OF THE CITY FOR USE BY FEDERAL EXPRESS CORPORATION, A DELAWARE
CORPORATION (THE "COMPANY").
THE OBLIGATION to pay the principal of, premium, if any, and interest on
this Bond from the sources described below is solely and exclusively a special
obligation of the Authority. No other public entity, including the State of
Texas, or any other political subdivision of the State of Texas, or any other
public body, is obligated, directly, indirectly, contingently, or in any other
manner, to pay such principal, premium, or interest from any source whatsoever
and that neither the full faith and credit nor the taxing power of the State of
Texas, the City, or any other political subdivision of the State of Texas, is
pledged to the payment of the principal or the interest on the Bonds. The
registered owner hereof shall never have the right to demand payment of this
Bond or the interest hereon out of any funds raised or to be raised by taxation,
or from any other funds, and no representation is made herein with respect to
the anticipated sufficiency of such sources. No property is encumbered by any
lien or security interest for the benefit of the registered owner of this Bond.
THE BONDS are subject to optional redemption by the Authority, at the
direction of the Company, on and after April 1, 2006, at any time and from time
to time, in whole or in part, upon written notice of the exercise of the option
to redeem delivered to the Authority and the Trustee by the Company, at the
redemption price (expressed as a percentage of principal amount) applicable to
such redemption date as set forth in the table below plus accrued interest to
the date fixed for redemption:
Redemption Period
(all dates inclusive) Redemption
- ------------------------------------ ------------
Price (%)
------------
April 1, 2006 to March 31, 2007 102
April 1, 2007 to March 31, 2008 101
April 1, 2008 and thereafter 100
THE BONDS are subject to redemption by the Authority, at the direction of the
Company, at any time and from time to time, in whole or in part as described
below, at a redemption price equal to 100% of the principal amount thereof,
without premium, plus accrued interest thereon to the date fixed for redemption,
upon the occurrence of any of the following events:
(a) the Company shall have determined, as evidenced by a resolution
adopted by the Company's Board of Directors, that the continued operation of
the Special Facilities is impractical, uneconomical or undesirable for any
reason, including, without limitation, the imposition upon the Company with
respect to the Special Facilities or the operation thereof of unreasonable
burdens or excessive liabilities, which shall be deemed to include, without
limitation, the imposition or substantial increase of ad valorem property
taxes or taxes on the leasing or use of the Special Facilities or on amounts
payable with respect thereto;
(b) all or substantially all of the Special Facilities shall have been
damaged, destroyed, condemned or taken by eminent domain; or
(c) the construction or operation of the Special Facilities shall have
been enjoined or prevented 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.
To exercise any such option the Authority, at the direction of the Company,
shall give written notice to the Trustee, which notice shall specify a
redemption date, which date may not be more than 120 days nor less than 45 days
after said notice is given, and shall further specify that, as determined by the
Company, one
or more of such events has occurred or one or more of such conditions is
continuing, and such determination shall be conclusive.
THE BONDS shall be redeemed by the Authority in whole at a redemption price
equal to 100% of the principal amount thereof, without premium, plus accrued
interest to the redemption date, within 90 days following receipt by the Trustee
of written notice from a current or former registered owner thereof or the
Company of (a) the issuance of a published or private ruling or a technical
advice memorandum by the Internal Revenue Service in which the Company has
participated or has been given the opportunity to participate, and which ruling
or memorandum the Company, in its discretion, does not contest or from which no
further right of judicial review or appeal exists, or (b) a determination from
which no further right of appeal exists of any court of competent jurisdiction
in the United States in a proceeding in which the Company has participated or
has been a party, or has been given the opportunity to participate or be a party
(either such event being a "Determination of Taxability"), in either case, to
the effect that, as a result of a failure to observe any covenant or agreement
in the Facilities Agreement (hereinafter defined) or the inaccuracy of any
representation or warranty therein, the interest payable on the Bonds is
included in the gross income, of the holders thereof for federal income tax
purposes, other than a person who is a "substantial user" or a "related person"
of such substantial user within the meaning of the Internal Revenue Code of
1986, as amended (the "Code"); provided, however, that no such Determination of
Taxability shall be considered to exist unless (i) the registered owner or
former registered owner of the Bond involved in such proceeding or action (a)
gives the Company and the Trustee prompt notice of the commencement thereof and
(b) (if the Company agrees to pay all expenses in connection therewith) offers
the Company the opportunity to control unconditionally the defense thereof and
(ii) either (a) the Company does not agree within 30 days of receipt of such
offer to pay such expenses and liabilities and to control such defense or (b)
the Company shall exhaust or choose not to exhaust all available proceedings for
the contest, review, appeal or rehearing of such decree, judgment or action
which the Company determines to be appropriate. No Determination of Taxability
described above will result from the inclusion of interest on any Bond in the
computation of minimum or indirect taxes. All of the Bonds shall be redeemed
upon a Determination of Taxability as described above, unless, if in the opinion
of Bond Counsel, or such other nationally recognized bond counsel as may be
mutually acceptable to the Authority and the Company, redemption of a portion of
the Bonds would have the result that interest payable on the remaining Bonds
outstanding after the redemption would not be so included in any such gross
income, only such portion shall be redeemed.
PRIOR TO THE DATE FIXED FOR ANY REDEMPTION of Bonds prior to their scheduled
maturity, the Trustee shall cause a notice of such redemption to be given in the
manner described in the Indenture.
WITH RESPECT TO any optional redemption of the Bonds, as described above,
unless moneys sufficient to pay the principal of, premium, if any, and interest
on the Bonds to be redeemed shall have been received by the Trustee prior to the
giving of such notice of redemption, such notice shall state that said
redemption shall be conditional upon the receipt of such moneys by the Trustee
on or prior to the date fixed for such redemption. If such moneys are not
received, such notice shall be of no force and effect, the Authority shall not
redeem such Bonds and the Trustee shall give notice, in the manner in which the
notice of redemption was given, that such moneys were not so received and that
the Bonds were not so redeemed.
IF LESS THAN ALL the Bonds are to be called for redemption under any
redemption provision set forth herein permitting such partial redemption, the
particular Bonds to be redeemed shall be selected by the Trustee by lot or such
other customary method chosen by the Trustee, in the principal amounts (in
integral multiples of $5,000) designated to the Trustee by the Company on behalf
of the Authority or otherwise required by the Indenture.
IF THE DATE FOR THE PAYMENT of the principal of, premium, if any, or interest
on this Bond shall be a Sunday, a Saturday, a legal holiday, or a day on which
banking institutions in the City of New York, New York, the City of Memphis,
Tennessee, or the city where the Designated Trust Office of the Trustee is
located are authorized by law or executive order to close, then the date for
such payment shall be the next succeeding day which is not such a day; payment
on such date shall have the same force and effect as if made on the scheduled
date of payment; and no interest shall accrue and be payable in respect of such
payment from the scheduled date of payment to such date.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF
$5,000 may be assigned and shall be transferred only in the Registration Books
upon the terms and conditions set forth in the Indenture. Among other
requirements for such assignment and transfer, this Bond must be presented and
surrendered to the Trustee at its Designated Trust Office, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory
to the Trustee, evidencing assignment of this Bond or any portion or portions
hereof in any integral multiple of $5,000 to the assignee or assignees in whose
name or names this Bond or any such portion or portions hereof is or are to be
transferred and registered. The form of Assignment printed or endorsed on this
Bond shall be executed by the registered owner, or its duly authorized attorney
or representative, and may be deemed to conclusively evidence the assignment
hereof. A new Bond or Bonds payable to such assignee or assignees, or to the
previous registered owner in the case of the assignment and transfer of only a
portion of this Bond, may be delivered by the Trustee in conversion of and
exchange for this Bond, all in the form and manner as provided in the next
paragraph hereof for the conversion and exchange of other Bonds. The registered
owner of this Bond shall be deemed and treated by the Authority, the Company,
and the Trustee as the absolute owner hereof for all purposes, including payment
and discharge of liability upon this Bond to the extent of such payment, and the
Authority, the Company and the Trustee shall not be affected by any notice to
the contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds,
without interest coupons, in the denomination of any integral multiple of
$5,000. As provided in the Indenture, this Bond, or any unredeemed portion
hereof, may, at the request of the registered owner or the assignee or assignees
hereof, be converted into and exchanged for a like aggregate principal amount of
fully registered bonds, without interest coupons, payable to the appropriate
registered owner, assignee, or assignees, as the case may be, having the same
maturity date, and bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000 as requested in writing by the
appropriate registered owner, assignee, or assignees, as the case may be, upon
surrender of this Bond to the Trustee for cancellation, all in accordance with
the form and procedures set forth in the Indenture. The Company shall pay the
Trustee's standard or customary fees and charges for transferring, converting,
and exchanging any Bond or portion thereof, but the one requesting such
transfer, conversion, or exchange shall pay any taxes or governmental charges
required to be paid with respect thereto as a condition precedent to the
exercise of such privilege of transfer, conversion or exchange. The Trustee
shall not be required to make any such transfer, conversion, or exchange with
respect to any Bond or any portion thereof called for redemption prior to
maturity, within 45 days prior to its redemption date.
WHENEVER the beneficial ownership of this Bond is determined by a book entry
at a securities depository for the Bonds, the foregoing requirements of holding,
delivering or transferring this Bond shall be modified to require the
appropriate person or entity to meet the requirements of the securities
depository as to registering or transferring the book entry to produce the same
effect.
IN THE EVENT any Trustee for the Bonds is removed, resigns, or otherwise
ceases to act as such, the Indenture provides procedures for the appointment of
a successor therefor, and for written notice thereof to be mailed to the
registered owners of the Bonds.
IT IS HEREBY certified and covenanted that this Bond has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things
required or proper to be performed, exist, and be done precedent to or in the
authorization, issuance, and delivery of this Bond have been performed, existed,
and have been done in accordance with law; that this Bond is a special revenue
obligation of the Authority, with the principal of, premium, if any, and
interest on this Bond being payable solely from (except to the extent payable
from amounts attributable to proceeds of the Bonds), and secured by a first lien
on and pledge of, the Trust Estate, as defined in the Indenture, including
specifically the payments (the "Special Facilities Rentals") to be made by the
Company pursuant to the Land and Special
Facilities Lease Agreement between the Authority and the Company, dated as of
April 1, 1996 (the "Facilities Agreement") and held under the Indenture. The
Company has agreed and is unconditionally obligated to make Special Facilities
Rentals to the Trustee for deposit into the Debt Service Fund created pursuant
to the Indenture in amounts sufficient to pay and redeem, or provide for the
payment and redemption of, the principal of, premium, if any, and interest on
this Bond, and the Series of which it is a part.
THE BONDS are secured by a Trust Indenture, dated as of April 1, 1996 (the
"Indenture"), whereunder the Trustee, or its successor, is custodian of the Debt
Service Fund and is obligated to enforce the rights of the owners of the Bonds
and to perform other duties in the manner and under the conditions stated in the
Indenture and in the Resolution. In case an "Event of Default", as defined in
the Indenture, shall occur, the principal of the Bonds then outstanding may be
declared to be due and payable immediately upon the conditions and in the manner
provided in the Indenture. The registered owner of this Bond shall have no right
to enforce the provisions of the Indenture, or to institute an action, suit, or
proceeding at law or in equity to enforce the covenants therein, or to
institute, appear in, or defend any action, suit, or proceeding with respect
thereto, except as provided in the Indenture. Anything in the Indenture to the
contrary notwithstanding, the registered owner of this Bond shall have a right
of action to enforce the payment of the principal of, premium, if any, and
interest on this Bond on or after the same shall have become due at the place,
from the sources, and in the manner expressed in the Indenture. In addition,
the registered owners shall be entitled to the benefits of a Guaranty from the
Company to the Trustee, dated as of April 1, 1996 (the "Guaranty"). Reference
is hereby made to the Indenture for the provisions with respect to the nature
and extent of the security for the Bonds; the rights, duties, and obligations of
the Authority, the Trustee, the Company, and the registered owners of the Bonds;
the terms upon which such Bonds are issued and secured; and the modification of
any of the foregoing.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Indenture, agrees to be
bound by such terms and provisions, acknowledges that the Facilities Agreement,
the Guaranty and the Indenture are available for inspection at the Designated
Trust Office in Chicago, Illinois of the Trustee, and agrees that the terms and
provisions of this Bond, the Facilities Agreement and the Indenture constitute a
contract between each registered owner hereof and the Authority.
THE AUTHORITY has reserved the right to amend the Indenture and the
Facilities Agreement, and the Guaranty may be amended by the parties thereto,
with the approval in some, but not all circumstances, of the registered owners
of at least a majority in aggregate principal amount of the outstanding Bonds
secured by the Indenture, all as provided in and subject to the provisions of
the Indenture.
IN WITNESS WHEREOF, this Bond has been signed with the (manual) (facsimile)
signature of the President or Vice President of the Board of Directors of the
Authority, and countersigned with the (manual) (facsimile) signature of the
Secretary of the Board of Directors of the Authority, and the official seal of
the Authority has been duly impressed, or placed in facsimile, on this Bond.
____________________________ ______________________________
Secretary, President,
Board of Directors Board of Directors
(Authority's Seal)
FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE
--------------------------------------------
TRUSTEE'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of
the Indenture described in the text of this Bond; and that this Bond has been
issued in conversion of and exchange for or replacement of a Bond, Bonds, or a
portion of a Bond or Bonds of an issue authorized by the Indenture described in
the text of this Bond; and that the Indenture authorizing this Bond and other
proceedings relating thereto were approved by the Attorney General of the State
of Texas.
Dated The First National Bank of Chicago,
as Trustee
_________________
By ____________________________
Authorized Representative
FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE
----------------------------------------------
TO BE ATTACHED TO INITIAL BONDS
-------------------------------
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.________
I hereby certify that there is on file and of record in my office a
certificate to the effect that this Bond has been examined, certified as to
validity, and approved by the Attorney General of the State of Texas, and
further that this Bond has been registered by the Comptroller of Public Accounts
of the State of Texas.
Witness my signature and seal this ___________________.
________________________________
Comptroller of Public Accounts
of the State of Texas
(Comptroller's Seal)
FORM OF ASSIGNMENT
------------------
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto:
________________________________________________________________________
(Please insert Social Security or Taxpayer
Identification Number of Transferee)
________________________________________________________________________
(Please print or typewrite name and address,
including zip code of Transferee)
________________________________ the within Bond and all rights thereunder, and
hereby irrevocably constitutes and appoints __________________________________,
attorney, to register the transfer of the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
________________________________________________ ______________________________________________________
NOTICE: Signature(s) must be guaranteed by an NOTICE: The signature above must correspond
"eligible guarantor institution" meeting the require- with the name of the registered owner as it appears
ments of the Trustee, which requirements include upon the front of this Bond in every particular, with-
membership or participation in STAMP or such other out alteration or any change.
"signature guaranty program" as may be determined
by the Trustee in addition to or in substitution for
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
THE FOLLOWING LEGEND SHALL BE PLACED ON THE BONDS AS THE AGGREGATE PRINCIPAL
AMOUNT OF THE BONDS EXCEEDS $200 MILLION:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.